<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 October 31, 1996     Commission File No.  0-14234



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


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



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


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 December 11, 1996 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
                                                             OCT. 31, 1996
                                                             -------------
<S>                                                           <C>         
ASSETS
   Cash and Cash Equivalents                                  $    213,340
   Marketable Securities, at market value                        5,191,073
   Accounts Receivable, net of allowance of $10,000                571,031
   Film Costs, net of amortization of $167,371,165                 920,125
   Prepaid Expenses                                                 17,739
   Fixed Assets                                                     11,315
   Other Assets                                                      2,500
                                                              ------------
TOTAL ASSETS                                                  $  6,927,123
                                                              ============

LIABILITIES AND SHAREHOLDERS' EQUITY

LIABILITIES
   Accounts Payable                                           $    321,415
   Accrued Expenses                                                  8,000
   Deferred Revenue                                                100,694
                                                              ------------
     TOTAL LIABILITIES                                             430,109

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY
   Common Stock, $.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                                                     (18,450,879)
                                                              ------------
     TOTAL SHAREHOLDERS' EQUITY                                  6,497,014
                                                              ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                    $  6,927,123
                                                              ============
</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 SIX MONTHS
                                         ENDED OCTOBER 31,                       ENDED OCTOBER 31,
                                       1996              1995                1996               1995
                                   -----------        -----------         -----------        -----------
<S>                                <C>                <C>                 <C>                <C>        
REVENUES:
   Feature Films                   $   711,304        $ 1,072,919         $ 1,279,119        $ 2,057,268
   Interest Income                      69,893              5,958             135,012              7,433
   Other Income                          1,349                678               1,349              3,317
                                   -----------        -----------         -----------        -----------
                                       782,546          1,079,555           1,415,480          2,068,018

COSTS AND EXPENSES:
   Costs Related to Revenue            369,468            721,140             743,413          1,627,213
   Selling Expenses                     26,562            179,141              37,682            309,621
   General & Admin. Exp                211,339            229,763             457,211            523,901
   Interest                                  0              1,773                   0             12,392
                                   -----------        -----------         -----------        -----------
                                       607,369          1,131,817           1,238,306          2,473,127

   INCOME/(LOSS) BEFORE
   INCOME TAXES                        175,177            (52,262)            177,174           (405,109)

Provision for Income Taxes               1,480             19,287               3,646             45,544
                                   -----------        -----------         -----------        -----------
   NET INCOME/(LOSS)               $   173,697        ($   71,549)        $   173,528        ($  450,653)
                                   ===========        ===========         ===========        ===========


Net Earnings Per Share             $      0.03        ($     0.01)        $      0.03        ($     0.09)
                                   ===========        ===========         ===========        ===========

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                       -                   -                   -               173,528              173,528
                           ------------        ------------        ------------        ------------         ------------
Balance,
   October 31, 1996           5,120,047        $     45,716        $ 24,902,177        ($18,450,879)        $  6,497,014
                           ============        ============        ============        ============         ============
</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 SIX MONTHS
                                                                  ENDED OCTOBER 31,
                                                             1996                 1995
                                                          -----------         -----------
<S>                                                       <C>                 <C>        
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net Income/(Loss)                                        173,528         ($  450,653)
     Adjustments to reconcile Net Income/(Loss) to
     Net Cash Provided by Operating Activities:
          Depreciation and Amortization                       785,588           1,628,766
     Change in Assets and Liabilities:
          Decrease in Accounts Receivable                      37,088             279,208
          Increase in Prepaid Expenses                        (14,028)            (12,103)
          Decrease in Other Assets                              3,000                   0
          Increase/(Decrease) in Accounts Payable              19,238            (252,129)
          Decrease in Accrued Expenses                        (83,582)           (140,773)
          Decrease in Income Taxes Payable                    (47,941)                  0
          (Decrease)/Increase in Deferred Revenue            (194,320)            345,816
                                                          -----------         -----------
     NET CASH AND CASH EQUIVALENTS
     PROVIDED BY OPERATING ACTIVITIES                         678,571           1,398,132

CASH FLOWS FROM INVESTING ACTIVITIES:
     Purchase of Marketable Securities                       (743,690)           (300,118)
     Purchase of Fixed Assets                                  (1,795)             (9,460)
     Gross Additions to Film Cost                            (125,285)           (312,069)
                                                          -----------         -----------
     NET CASH AND CASH EQUIVALENTS
     USED IN INVESTING ACTIVITIES                            (870,770)           (621,647)

CASH FLOWS FROM FINANCING ACTIVITIES:
     Repayments to Related Party                                    0            (268,132)
                                                          -----------         -----------
     NET CASH AND CASH EQUIVALENTS USED IN
     FINANCING ACTIVITIES                                           0            (268,132)
                                                          -----------         -----------
NET (DECREASE)/INCREASE IN CASH AND
CASH EQUIVALENTS                                             (192,199)            508,353

CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD                                                     405,539             153,920
                                                          -----------         -----------
CASH AND CASH EQUIVALENTS AT END
OF PERIOD                                                 $   213,340         $   662,273
                                                          ===========         ===========
</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 October 31, 1996 and the results
of operations and cash flows for the three and six month periods ended October
31, 1996 and 1995 have been included.

The results of operations for the six month period ended October 31, 1996 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>
                                           October 31, 1996
                                           ----------------
      <S>                                      <C>     
      Released Films, less amortization        $869,181
      Films in Production                             0
      Films in Development                       50,944
                                               --------
                                               $920,125
                                               ========
      </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 and six month
periods ended October 31, 1996 and 1995.

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 October 31, 1996,
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 October 31,
                                                       1996
                                                --------------------
      <S>                                            <C>     
      Computed Expected Tax at Statutory Rate        $ 59,057
      State and Local Income Taxes                          0
      Foreign Taxes                                     1,480
      Valuation Allowance
                                                      (59,057)
                                                     --------
                                                     $  1,480
                                                     ========
      </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

For the three months ended October 31, 1996, the Company reported net income of
approximately $174,000 on revenues of approximately $783,000 compared to a net
loss of approximately $72,000 on revenues of approximately $1,080,000 for the
same period last year. Revenue during the quarter ended October 31, 1996
decreased approximately 28% as compared to the same period last year the due to
the prior sale of the foreign distribution rights to most of the Company's films
to another company during the fiscal year ended April 30, 1996.

For the six months ended October 31, 1996, the Company reported net income of
approximately $174,000 on revenues of approximately $1,425,000 compared to a net
loss of approximately $451,000 on revenues of approximately $2,068,000 for the
same period last year. The change in net income results primarily from
reductions in selling and general and administrative expenses of approximately
$339,000 and the write-down to net realizable value, during the six month period
ended October 31, 1995, in accordance with generally accepted accounting
principles, of the Company's investment in a film produced during a prior fiscal
year.

During the six months ended October 31, 1996, the Company did not produce or
release any new films and primarily recognized revenues from a sale of US and
Canadian television rights to ten of the Company's films and foreign revenues on
the Company's most recently produced films which were not included in the
aforementioned sale of foreign distribution rights. Future revenues of the
Company will be dependent upon the success of the films it produces and on the
Company's ability to continue to generate working capital for the development
and production of new motion picture projects. (SEE "LIQUIDITY AND CAPITAL
RESOURCES").

Costs relating to revenue were approximately $370,000 during the three months
ended October 31, 1996 versus approximately $721,000 during the three months
ended October 31, 1995. These costs relate to amortization of production costs
of films for which revenue was recognized during the period. Selling expenses
decreased to approximately $27,000 during the quarter ending October 31, 1996
versus approximately $179,000 for the same period last year. This decrease
results primarily from the decrease in the Company's sales activities due to the
sale of foreign distribution rights to most of the Company's films to another
Company last year. General and administrative expenses decreased by
approximately $19,000 to approximately $211,000 during the period ending October
31, 1996 from approximately $230,000 during the same period last year. This
decrease in overhead expenditures results primarily from a reduction in the
Company's staff and the relocation of the Company's offices to smaller and more
cost effective office space.

LIQUIDITY AND CAPITAL RESOURCES

The production of motion pictures requires substantial capital. In producing a
motion picture, the Company may expend substantial sums for both the production
and distribution of a picture before any revenues are generated by that film. 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
film's cost. The Company's principal source of 




                                        8
<PAGE>   9

working capital during the quarter ending October 31, 1996 was motion picture
licensing income. Except for the financing of film production costs, management
believes that its existing cash resources will be sufficient to fund its ongoing
operations.

For the six month period ended October 31, 1996, the Company's net cash flow
provided by operating activities was approximately $639,000 compared to
approximately $1,398,000 during the same period last year. Net cash flows of
approximately $831,000 were used in investing activities, primarily the purchase
of marketable securities. During the six month period ending October 31, 1995,
net cash flows of approximately $622,000 were used in investing activities,
primarily the purchase of marketable securities and gross additions to film
costs, and approximately $268,000 was used in financing activities, reflecting
the repayment of certain obligations to an officer of the Company. Cash and cash
equivalents decreased to approximately $213,000 as of October 31, 1996 from
approximately $662,000 as of October 31, 1995 while marketable securities
increased to approximately $5,191,000 as of October 31, 1996 from approximately
$300,000 as of October 31, 1995.

FUTURE COMMITMENTS

The Company's anticipated major financial commitments relate to the production
and release of future motion pictures. The Company's most recent films were "low
budget" films and while the Company may continue producing these types of films,
the Company may pursue projects with higher budgets if sufficient financing from
third parties is available and risk is limited. Although management believes it
will be able to obtain financing for the production of new films, the Company's
financial position and operations have been and will be constrained by the
availability of adequate financing.

On October 4, 1996, Stephen Friedman, the Company's chairman of the board and
chief executive officer died. Kenneth Aguado, an officer of the Company and a
member of its board of directors since 1989, was named chief executive officer
and was elected by the board of directors as its new chairman. Although the
Company's operations are continuing, the death of Mr. Friedman, the Company's
founder and key employee, may significantly affect the Company's financial
position and future results of operations. In light of this event, the Company's
managment is currently re-evaluating its business plan.


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.




                                        9
<PAGE>   10
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K (CONTINUED)

         (B) FORMS 8-K

                  On November 8, 1996, the Company filed a Form 8-K reporting
                  under Item 1 thereof that Stephen Friedman, the beneficial
                  owner of 3,239,871 shares of common stock of the Company, died
                  on October 4, 1996 and that the executors of his estate would
                  be entitled to vote those shares which represent 58% of the
                  issued and outstanding stock of the Company. The Form 8-K also
                  reported under Item 5 thereof that due to Mr. Friedman's
                  death, Susan Aguado, Mr. Friedman's sister had been appointed
                  to serve the remainder of Mr. Friedman's term on the Company's
                  board of directors. Subsequent to Mrs. Aguado's appointment,
                  the board of directors elected Kenneth Aguado, an officer of
                  the Company and the son of Mrs. Aguado, as its new chairman
                  and named Mr. Aguado as president and chief executive officer
                  of the Company.




                                       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: December 11, 1996               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