<PAGE>   1


                     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 October 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.)

                        3489 West Cahuenga Blvd., Suite D
                           Hollywood, California 90068
                     (Address of principal executive office)

Issuer's telephone number:  (323) 512-5045

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 December 15, 1999 the registrant had 3,482,019 shares of its common stock
outstanding.

Transitional Small Business Disclosure Format:  YES [ ]    NO [X]


<PAGE>   2


PART I - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS

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

<TABLE>
<CAPTION>
                                                                       AS OF
                                                                   OCT. 31, 1999
                                                                   ------------
<S>                                                                <C>
ASSETS

   Cash and Cash Equivalents                                       $      8,736
   Accounts Receivable, net of allowance of $32,630                     164,694
   Film Costs, net of amortization of $168,424,493                      172,675
   Investment in Immediate Entertainment Group                          838,518
   Other Investments                                                  1,000,000
   Prepaid Expenses                                                      13,251
   Fixed Assets                                                           6,199
   Other Assets                                                          53,405
                                                                   ------------
TOTAL ASSETS                                                       $  2,257,478
                                                                   ============

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES

   Accounts Payable                                                $    251,411
   Accrued Expenses                                                      32,224
   Note Payable to Related Parties                                      210,803
   Convertible Note Payable                                           1,000,000
   Note Payable                                                         250,000
   Deferred Revenue                                                       2,775
                                                                   ------------
     TOTAL LIABILITIES                                                1,747,213

COMMITMENTS AND CONTINGENCIES                                                 0

STOCKHOLDERS' EQUITY

   Common Stock, $.01 par value, 12,000,000 shares
      authorized, 3,481,310 shares issued and outstanding                34,820
   Additional Paid-In Capital                                        24,734,382
   Deficit                                                          (24,258,937)
                                                                   ------------
     TOTAL STOCKHOLDERS' EQUITY                                         510,265
                                                                   ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                         $  2,257,478
                                                                   ============
</TABLE>


The accompanying notes are an integral part of these consolidated financial
statements.


                                       2
<PAGE>   3


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


<TABLE>
<CAPTION>
                                                            THREE MONTHS                         SIX MONTHS
                                                            ENDED OCT. 31,                      ENDED OCT. 31,
                                                       1999              1998              1999               1998
                                                    -----------       -----------       -----------       -----------
<S>                                                 <C>               <C>               <C>               <C>
REVENUES
  Feature Films                                     $   198,575       $    72,247       $   290,440       $   222,164
  Interest Income                                             0            34,452               413            66,699
                                                    -----------       -----------       -----------       -----------
                                                        198,575           106,699           290,853           288,863

COSTS AND EXPENSES
  Costs Related to Revenue                               34,966             1,500            34,966             8,857
  Selling Expenses                                        3,756            21,008             5,207            29,473
  General & Administrative Expenses                     200,375           167,324           476,842           312,587
  Interest                                               26,571                 0            52,430                 0
                                                    -----------       -----------       -----------       -----------
                                                        265,668           189,832           569,445           350,917
                                                    -----------       -----------       -----------       -----------
  OPERATING LOSS                                        (67,093)          (83,133)         (278,592)          (62,054)

OTHER EXPENSES
  Equity in Losses of Affiliates                        958,768                 0         1,196,617                 0
  Adjustment in Valuation of Other Investments          150,000                 0           250,000                 0
                                                    -----------       -----------       -----------       -----------
                                                      1,108,768                 0         1,446,617                 0

  LOSS BEFORE INCOME TAXES                           (1,175,861)          (83,133)       (1,725,209)          (62,054)

Provision for Income Taxes                                  136               174               246           (18,940)
                                                    -----------       -----------       -----------       -----------
  NET LOSS                                          ($1,175,997)      ($   83,307)      ($1,725,455)      ($   43,114)
                                                    ===========       ===========       ===========       ===========

  Net Loss Per Share - Basic                        ($     0.34)      ($     0.04)      ($     0.50)      ($     0.02)
                                                    ===========       ===========       ===========       ===========

  Weighted Average Number of Common
  Shares - Basic                                      3,482,019         1,911,748         3,478,177         1,911,748
                                                    ===========       ===========       ===========       ===========

  Net Loss Per Share - Diluted                      ($     0.34)      ($     0.04)      ($     0.50)      ($     0.02)
                                                    ===========       ===========       ===========       ===========

  Weighted Average Number of Common Shares
  and Common Share Equivalents - Diluted              3,482,019         1,911,748         3,478,177         1,911,748
                                                    ===========       ===========       ===========       ===========
</TABLE>


The accompanying notes are an integral part of these consolidated financial
statements.


                                       3

<PAGE>   4


                 KINGS ROAD ENTERTAINMENT, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                     Common            Common           Additional        Retained             Total
                                     Stock             Stock             Paid-In          Earnings/        Stockholders'
                                     Shares            Amount            Capital          (Deficit)            Equity
                                  ------------      ------------      ------------      ------------       ------------
<S>                                  <C>            <C>               <C>               <C>                <C>
Balance,
   April 30, 1998                    1,911,748      $     19,118      $ 21,117,200      ($17,996,623)      $  3,139,695
   Issuance of Stock for
     Investment in Immediate         1,477,567            14,775         3,029,016              --            3,043,791
   Issuance of Convertible
      Note                                --                --             427,185              --              427,185
   Net Loss                               --                --                --          (4,536,859)        (4,536,859)
                                  ------------      ------------      ------------      ------------       ------------
Balance,
   April 30, 1999                    3,389,315            33,893        24,573,401       (22,533,482)         2,073,812
   Issuance of Stock
     for Cash                           92,704               927           160,981              --              161,908
   Net Loss                               --                --                --          (1,725,455)        (1,725,455)
                                  ------------      ------------      ------------      ------------       ------------
Balance,
   October 31, 1999                  3,482,019      $     34,820      $ 24,734,382      ($24,258,937)      $    510,265
                                  ============      ============      ============      ============       ============
</TABLE>



The accompanying notes are an integral part of these consolidated financial
statements.


                                       4
<PAGE>   5


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


<TABLE>
<CAPTION>
                                                                FOR THE SIX MONTHS
                                                                 ENDED OCTOBER 31,
                                                              1999              1998
                                                          -----------       -----------
<S>                                                       <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net Loss                                             ($1,725,455)      ($   43,114)
     Adjustments to reconcile Net Loss to Net Cash
     Provided by/(Used in) Operating Activities:
          Depreciation and Amortization                        37,223            12,974
          Equity in Losses of Affiliates                    1,196,617                 0
          Adj. in Valuation of Other Investments              250,000                 0
     Change in Assets and Liabilities:
          Decrease in Restricted Cash                       1,000,000                 0
          Decrease/(Increase) in Accounts Receivable          167,648           (23,496)
          Increase in Amount Due from Related Party           (93,210)                0
          Decrease/(Increase) in Prepaid Expenses               2,983            (9,558)
          Decrease in Other Assets                             87,774                 0
          Decrease in Accounts Payable                        (19,565)         (105,958)
          Decrease in Accrued Expenses                        (59,428)           (6,840)
          Decrease in Deferred Revenue                         (4,500)           (1,200)
                                                          -----------       -----------
     NET CASH AND CASH EQUIVALENTS PROVIDED BY/
     (USED IN) OPERATING ACTIVITIES                           840,087          (177,192)

CASH FLOWS FROM INVESTING ACTIVITIES:
     Purchase of Other Investments                         (1,250,000)                0
     Gross Additions to Film Cost                             (50,154)          (20,580)
     Disposal/(Purchase) of Fixed Assets                        1,312            (4,560)
                                                          -----------       -----------
     NET CASH AND CASH EQUIVALENTS USED
     IN INVESTING ACTIVITIES                               (1,298,842)          (25,140)

CASH FLOWS FROM FINANCING ACTIVITIES:
     Issuance of Stock                                        161,908                 0
     Issuance of Note Payable                                 250,000                 0
                                                          -----------       -----------
     NET CASH AND CASH EQUIVALENTS PROVIDED
     BY FINANCING ACTIVITIES                                  411,908                 0
                                                          -----------       -----------
NET DECREASE IN CASH AND CASH EQUIVALENTS                     (46,847)         (202,332)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD               55,583         2,658,500
                                                          -----------       -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                $     8,736       $ 2,456,168
                                                          ===========       ===========
</TABLE>


The accompanying notes are an integral part of these consolidated financial
statements.


                                       5
<PAGE>   6


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

NOTE A - BASIS OF PRESENTATION

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 financial statements and
related footnotes for the year ended April 30, 1999 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 October 31, 1999 and the results of operations and cash flows for
the three and six month periods ended October 31, 1999 and 1998 have been
included.

The results of operations for the three and six month periods ended October 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, 1999.

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.

As has been widely reported, many computer systems process dates based on two
digits for the year of a transaction and may be unable to correctly process
dates in the year 2000 and beyond. The Company believes that all of its computer
systems are year 2000 compliant. Although the Company does not expect year 2000
compliance to have a material adverse effect on its internal operations, it is
possible that year 2000 compliance problems could have a significant adverse
effect on the Company's suppliers and their ability to service the Company and
to accurately process payments received.

Certain amounts for the three and six month periods ended October 31, 1998 have
been reclassified to conform to the presentation of the October 31, 1999
amounts. The reclassifications have no effect on the net loss for the quarter
ended October 31, 1999.



                                       6

<PAGE>   7


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

NOTE B - FILM COSTS

Film costs consist of:

                                                           As Of
                                                       Oct. 31, 1999
                                                       -------------
           Released Films, less amortization               $15,551
           Films in Development                            157,124
                                                          --------
                                                          $172,675
                                                          ========

NOTE C - INVESTMENT IN IMMEDIATE ENTERTAINMENT GROUP

On November 9, 1998, the Company acquired 2,393,235 shares of Immediate
Entertainment Group, Inc. ("Immediate"), approximately 19% of Immediate's
outstanding common stock, for an aggregate of $2,300,000 in cash, 1,477,567
newly issued shares of the Company's common stock and a note payable to the
sellers of the stock for $210,803. The Company's investment in Immediate has
been accounted for using the equity method. The Company's investment in
Immediate also includes $240,210 of amounts advanced to Immediate or payments
made to third parties on Immediate's behalf. 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.

The Company has evaluated the recoverability of its investment in Immediate and
recorded a valuation allowance of approximately $959,000 during the quarter
ended October 31, 1999. Immediate has experienced recurring operating losses and
has a working capital deficit. Immediate's management is presently pursuing
plans to increase sales, reduce administrative costs, improve cash flow and
obtain additional financing. Immediate's ability to achieve its operating goals
and to obtain additional financing is uncertain.

NOTE D - OTHER INVESTMENTS

On May 12, 1999, the Company acquired 140 shares of Star TV AG ("Star"),
approximately 19% of Star's outstanding common stock for $1,000,000 in cash. The
Company's investment in Star has been accounted for using the cost method. Star
is a developing cable television network based in Switzerland.

NOTE E - NOTES PAYABLE

On November 9, 1998, the Company acquired 2,393,235 shares of Immediate,
approximately 19% of Immediate's outstanding common stock, from FAB Capital
Corporation ("FAB"), MBO Music Verlag GmbH ("MBO") and West Union Leasing Ltd.
("West") for an aggregate of $2,300,000 in cash, 1,477,567 newly issued shares
of the Company's common stock and a note payable to the sellers of the stock for
$210,803 bearing interest at 5% per annum due upon demand but in no event
earlier that April 30, 2000 ("Note"). Pursuant to such transaction, FAB, MBO and
West are due $93,175, $82,424, and $35,204, respectively, under the Note. The
accrued and unpaid interest balance at October 31, 1999 was $10,310.


                                       7
<PAGE>   8


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

NOTE E - NOTES PAYABLE (CONTINUED)

On April 26, 1999, the Company issued a convertible note ("Convertible Note") to
Tresor Worldwide Limited ("Tresor") in the principal amount of $1,000,000. The
Convertible Note bears interest at the rate of 8% per annum, payable quarterly
on July 1, 1999, October 1, 1999 and January 1, 2000. Tresor has the right to
convert, in whole or in part, any outstanding and unpaid principal and interest
into fully paid and non-assessable shares of the Company's common stock at the
lower of (i) $2.06 per share or (ii) 70% of the average closing bid price for
the five (5) trading days immediately preceding the date of conversion but in no
event less than $1.00 ("Conversion Price"). The Conversion Price is subject to
reduction of 3% per month beginning on the six month anniversary of the
Convertible Note if any portion of the securities issuable upon conversion have
not been registered under the Securities Act of 1933, as amended. The Company
has entered into a Registration Rights Agreement with Tresor wherein the
Company, as soon as practicable, has agreed to register the securities issuable
upon conversion. The accrued and unpaid interest balance at October 31, 1999 was
$6,795. The Company is currently in default of the Convertible Note. Upon
written notice to the Company, Tresor, the Convertible Note holder, may
immediately demand repayment of all amounts due under the Convertible Note. At
the present time, the Company does not have the resources to repay amounts due
under the Convertible Note if such a demand is made.

On May 17, 1999, the Company entered into a Loan Agreement ("Star Loan
Agreement") with Star whereby the Company borrowed $250,000 from Star ("Star
Loan") bearing interest at 6% per annum. The Star Loan was originally due July
19, 1999. By agreement dated July 22, 1999, the due date was extended until
August 19, 1999. By further agreement, the due date was extended until December
22, 1999. The accrued and unpaid interest balance at October 31, 1999 was
$6,788.

NOTE F - 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, the Company
believes such contingencies will not have a materially adverse impact on the
Company's financial position or results of operations.

NOTE G - 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:

<TABLE>
<CAPTION>
                                            Six Months Ended   Six Months Ended
                                              Oct. 31, 1999      Oct. 31, 1998
                                              -------------      -------------
<S>                                             <C>                <C>
Computed Expected Tax at Statutory Rate         ($260,590)         ($ 21,098)
State and Local Taxes                                 112                  0
Benefit of Prior Years Amended Returns                  0            (19,286)
Foreign Taxes                                         134                346
Valuation Allowance                               260,590             21,098
                                                ---------          ---------
                                                $     246          ($ 18,940)
                                                =========          =========
</TABLE>


                                       8
<PAGE>   9


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

NOTE G - INCOME TAXES (CONTINUED)

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 quarter ended July 31, 1998.

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 $19,496,000 (expiring between 2001 and 2016)
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:


<TABLE>
<CAPTION>
                                                                  As Of
                                                              Oct. 31, 1999
                                                              -------------
<S>                                                           <C>
     Deferred Revenue                                         $      3,000
     Film Cost Amortization                                          8,000
     Net Operating Loss Carryforwards                            7,799,000
     Investment Tax Credit Carryforwards                         2,166,000
     Foreign Tax Credit Carryforwards                              400,000
                                                              ------------
                                                                10,376,000
     Valuation Allowance                                       (10,376,000)
                                                              ------------
                                                              $          0
                                                              ============
</TABLE>

A valuation allowance of $10,376,000 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. In addition, as a result of a change in control of the
Company that occurred in November 1998, Internal Revenue Code section 382
significantly limits the Company's ability to utilize its net operating loss
carryforwards. As a result of this limitation, the Company expects that its
investment tax credit and foreign tax credit carryforwards as well as a
significant amount of its net operating loss carryforwards will expire prior to
utilization by the Company.


                                       9
<PAGE>   10


ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION 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 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 that 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,
MBO, West and RAS Securities, Inc. 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. 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.
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 2,393,235 shares of
Immediate, approximately 19% of Immediate's outstanding common stock, for an
aggregate of $2,300,000 in cash, 1,477,567 newly issued shares of the Company's
common stock and a note payable to the sellers of the stock for $210,803.
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.

         On May 12, 1999, the Company acquired 140 shares of Star TV AG
("Star"), approximately 19% of Star's outstanding common stock for $1,000,000 in
cash. Star is a developing cable television network based in Switzerland.

RESULTS OF OPERATIONS

THE THREE MONTHS ENDED OCTOBER 31, 1999 VS. THE THREE MONTHS ENDED OCTOBER
31, 1998

         For the quarter ended October 31, 1999 feature film revenues were
approximately $199,000 as compared to approximately $72,000 for the quarter
ended October 31, 1998. The increase in feature film revenues of approximately
$127,000 results primarily from revenue generated by the initial release of "All
of Me", "The Best of Times" and "The Big Easy" to the DVD market pursuant to an
agreement between Trimark Pictures and the Company. The Company


                                       10
<PAGE>   11

had no interest income for the quarter ended October 31, 1999 versus
approximately $34,000 during the same quarter last year, reflecting the
substantial decrease in cash and marketable securities held during the quarter
ended October 31, 1999 versus the same period last year.

         Costs related to revenue for the quarter ended October 31, 1999
increased to approximately $35,000 versus approximately $2,000 for the quarter
ended October 31, 1998. This increase results primarily from a reserve for
abandoned development projects of approximately $20,000 recorded by the Company
during the quarter ended October 31,1999. Selling expenses decreased to
approximately $4,000 during the quarter ended October 31, 1999 versus
approximately $21,000 during the same quarter last year. This decrease results
primarily from decreased distribution expenses related to the Company's
agreement with Trimark Pictures to release seventeen (17) of the Company's films
to the DVD and home videocassette markets.

         General and administrative costs increased by approximately 20% to
approximately $200,000 during the quarter ended October 31, 1999 versus
approximately $167,000 during the same period last year. This increase results
primarily from increased professional fees and financing costs partially offset
by decreases in employee salary expenses. Interest expense during the quarter
ended October 31, 1999 was approximately $27,000 reflecting the interest
incurred by the Company on its outstanding notes payable. During the quarter
ended October 31, 1998, the Company had no interest expense.

         Equity in losses of affiliates was approximately $959,000 during the
quarter ended October 31, 1999 resulting from a valuation allowance recorded by
the Company to reflect the Company's evaluation of the recoverability of its
investment in Immediate. Immediate has experienced recurring operating losses
and has a working capital deficit. Immediate's management is presently pursuing
plans to increase sales, reduce administrative costs, improve cash flow and
obtain additional financing. Immediate's ability to achieve its operating goals
and to obtain additional financing is uncertain.

         During the quarter ended October 31, 1999, the Company incurred a net
loss of approximately $1,176,000 versus a net loss of approximately $83,000 for
the quarter ended October 31, 1998. This increased loss results primarily from
(i) a valuation allowance of approximately $150,000 recorded to reflect the
Company's uncertainty in fully recovering a certain investment, and (ii) a
valuation allowance of approximately $959,000 recorded to reflect the Company's
uncertainty in fully recovering its investment in Immediate. During the quarters
ended October 31, 1999 and 1998, the Company had no significant provision for
income taxes.

THE SIX MONTHS ENDED OCTOBER 31, 1999 VS. THE SIX MONTHS ENDED OCTOBER 31, 1998

         For the six months ended October 31, 1999 feature film revenues were
approximately $290,000 as compared to approximately $222,000 for the six months
ended October 31, 1998. This increase in feature film revenues of approximately
$68,000 results primarily from revenue generated by the initial release of "All
of Me", "The Best of Times" and "The Big Easy" to the DVD market pursuant to an
agreement between Trimark Pictures and the Company. During the six months ended
October 31, 1999, interest income was approximately $1,000 versus approximately
$67,000 during the same quarter last year, reflecting the substantial decrease
in cash and marketable securities held during the six months ended October 31,
1999 versus the same period last year.

         Costs related to revenue for the six months ended October 31, 1999
increased to approximately $35,000 versus approximately $9,000 for the six
months ended October 31, 1998. This increase results primarily from a reserve
for abandoned development projects of


                                       11
<PAGE>   12

approximately $20,000 recorded by the Company during the six months ended
October 31, 1999. Selling expenses decreased to approximately $5,000 during the
six months ended October 31, 1999 versus approximately $29,000 during the same
period last year. This decrease results primarily from decreased distribution
expenses related to the Company's agreement with Trimark Pictures to release
seventeen (17) of the Company's films to the DVD and home videocassette markets.

         General and administrative costs increased by approximately 53% to
approximately $477,000 during the six months ended October 31, 1999 versus
approximately $313,000 during the same period last year. This increase results
primarily from increases in professional fees (accounting and consultants),
investor relations costs, financing costs associated with the Convertible Note
and the write-off of certain amounts advanced to third parties partially offset
by a decrease in employee salary expenses. Interest expense during the six
months ended October 31, 1999 was approximately $52,000 reflecting the interest
incurred by the Company on its outstanding notes payable. During the six months
ended October 31, 1998, the Company had no interest expense.

         Equity in losses of affiliates was approximately $1,197,000 during the
six months ended October 31, 1999 resulting primarily from a valuation allowance
of approximately $959,000 recorded by the Company to reflect the Company's
evaluation of the recoverability of its investment in Immediate. Immediate has
experienced recurring operating losses and has a working capital deficit.
Immediate's management is presently pursuing plans to increase sales, reduce
administrative costs, improve cash flow and obtain additional financing.
Immediate's ability to achieve its operating goals and to obtain additional
financing is uncertain.

         During the six months ended October 31, 1999, the Company incurred a
net loss of approximately $1,725,000 versus a net loss of approximately $43,000
for the six months ended October 31, 1998. This loss results primarily from (i)
a valuation allowance of approximately $250,000 recorded to reflect the
Company's uncertainty in fully recovering a certain investment, (ii) a valuation
allowance of approximately $959,000 recorded to reflect the Company's
uncertainty in fully recovering its investment in Immediate (iii) the Company's
share of losses incurred by Immediate, and (iv) increased general and
administrative and interest expenses. During the six month periods ended October
31, 1999 and 1998, the Company had no significant provision for income taxes.

LIQUIDITY AND CAPITAL RESOURCES

         The Company's principal sources of working capital during the three and
six month periods ended October 31, 1999 were motion picture licensing income,
the proceeds from the Star Loan and the proceeds from a Regulation S offering to
offshore investors. Except for the financing of film production costs and the
repayment of the Convertible Note, management believes that its existing cash
resources will be sufficient to fund its ongoing operations.

         For the six months ended October 31, 1999, the Company's net cash flow
provided by its operating activities was approximately $840,000, an increase of
approximately $1,017,000 as compared to approximately $177,000 of net cash flow
used in operating activities during the quarter ended October 31, 1998. During
the six months ended October 31, 1999, the Company used its cash flow from
operations plus approximately $412,000 of cash flow provided by financing
activities to make investments of $1,250,000. SEE NOTE D - INVESTMENT IN STAR
TV. As of October 31, 1999, the Company had cash and cash equivalents of
approximately $9,000 as compared to approximately $2,456,000 at October 31,
1998.


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<PAGE>   13


FUTURE COMMITMENTS

         On May 12, 1999, the Company used the proceeds from the Convertible
Note to purchase approximately 19% of the outstanding common stock of Star TV AG
("Star") through the Company's wholly owned subsidiary, Orwell Properties, Inc.
("Orwell"). Pursuant to a Pledge and Security Agreement between the Convertible
Note holder and Orwell, the Convertible Note is secured by Orwell's investment
in Star. In addition, Orwell has agreed to guarantee the obligations of the
Company under the Convertible Note.

         The Company is currently in default of the Convertible Note. Upon
written notice to the Company, Tresor, the Convertible Note holder, may
immediately demand repayment of all amounts due under the Convertible Note. At
the present time, the Company does not have the resources to repay amounts due
under the Convertible Note if such a demand is made. If the Company's default is
not cured or waived or if the Convertible Note is not converted, the Company
will need to secure financing to repay the Convertible Note. There can be no
assurance that such financing can be secured by the Company. SEE NOTE E - NOTES
PAYABLE.

         On May 17, 1999, the Company entered into the Star Loan Agreement
whereby the Company borrowed $250,000 from Star bearing interest at 6% per
annum. The Star Loan was originally due July 19, 1999. By agreement dated July
22, 1999, the due date was extended until August 19, 1999. By further agreement,
the due date was extended until December 22, 1999.

         The Company does not have any other material future commitments.

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.


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<PAGE>   14


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 5 - OTHER INFORMATION

         In October 1999, the Company's common stock was de-listed from the
NASDAQ SmallCap Market because the Company failed to meet certain minimum
listing maintenance criteria. The Company's common stock subsequently began
trading on the OTC Bulletin Board.

ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

(a)  EXHIBITS (NUMBERED IN ACCORDANCE WITH ITEM 601 OF REGULATION S-B)

      3.1      Restated Certificate of Incorporation of Registrant. (1)

      3.2      Bylaws of Registrant. (2)

      27       Financial Data Schedule. (3)

      ---------------
      (1) Incorporated by reference to Form 10-KSB for the fiscal year ended
          April 30, 1998.
      (2) Incorporated by reference to Form 10-K for the fiscal year ended April
          30, 1988.
      (3) Filed electronically with Securities and Exchange Commission, omitted
          in copies distributed to shareholders or other persons.

(b)  FORMS 8-K

      On September 15, 1999, the Company filed a Form 8-K reporting under Item 4
      thereof a change in the Company's independent auditors and under Item 5
      thereof the possible de-listing of the Company's common stock from the
      NASDAQ SmallCap Market.


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<PAGE>   15


                                   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:  December 15, 1999                    KINGS ROAD ENTERTAINMENT, INC.


                                            By: /s/Christopher M. Trunkey
                                                -----------------------------
                                                Christopher M. Trunkey,
                                                Chief Financial Officer

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