**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**







**FORM 10-QSB**









x
            **QUARTERLY
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE
                ACT
                OF 1934****For
                the quarter ended July 31,
                2006**


**-OR-**




o
            **TRANSITION
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE
                ACT
                OF 1934****For
                the transition period
                from:           to**




**Commission
      File Number 0-14234**








**KINGS
      ROAD ENTERTAINMENT, INC.**


(Exact
      Name of Registrant as Specified in Its Charter)




**DELAWARE**
            
            **95-3587522**(State
                or other jurisdiction of
            
            (I.R.S.
                Employer Identification No.)incorporation
                or organization)**468
                N. Camden Drive**
              **Beverly
                Hills, California**
            
            **90210**(Address
                of principal executive offices)
            
            (Zip
                Code)




**310-278-9975**


(Registrant’s
      telephone number, including area code)





(Former
      name, former address or former fiscal year, if changed since last
      report)





Check
      whether the issuer: (1) filed all reports required to be filed by
      Section 13 or 15(d) of the Exchange Act during the past 12 months (or
      for such shorter period that the registrant was required to file such reports),
      and (2) has been subject to such filing requirements for the past
      90 days. Yes þ No o





Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, or a non-accelerated filer. See definition of “accelerated
      filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check
      one): Large accelerated filer o Accelerated filer o Non-accelerated filer þ





Indicate
      by check mark whether the registrant is a shell company (as defined in
      Rule 12b-2 of the Exchange).   o Yes þ No





The
      number of shares outstanding of each of the Registrant’s classes of common
      stock, as of July 31, 2006 was 6,957,740 shares, all of one class of $0.01
      par
      value Common Stock. As of April 2nd, 2008 the number of shares outstanding
      of
      each of the Registrant’s classes of common stock was 10,756,493.




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          15




**KINGS
      ROAD ENTERTAINMENT, INC.**


**FORM
      10-QSB**


**Quarter
      Ended July 31, 2006**





**TABLE
      OF CONTENTS**


**FINANCIAL
                  INFORMATION**
              **PAGE**Item
                  1.
              Financial
                  StatementsConsolidated
                  Balance Sheets as of July 31, 2006 and April 30, 2006
              F-1Consolidated
                  Statements of Operations for the Three Months EndedJuly
                  31, 2006 and 2005
              F-2Consolidated
                  Statements of Cash Flows for the Three Months EndedJuly
                  31, 2006 and 2005
              F-3Notes
                  to the Consolidated Financial Statements as of July 31,
                  2006
              F-4-
                  F-8Item
                  2.
              Managements
                  Discussion and Analysis or Plan of Operation
              11Item
                  3.
              Controls
                  and Procedures
              12**PART
                  II—OTHER INFORMATION**Item
                  1.
              Legal
                  Proceedings
              12Item
                  2.
              Unregistered
                  Sales of Equity Securities and Use of Proceeds
              14Item
                  3.
              Defaults
                  upon Senior Securities
              14Item
                  4.
              Submission
                  of Matters to a Vote of Security Holders
              14Item
                  5.
              Other
                  Information
              15Item
                  6.
              Exhibits
                  and Reports on Form 8-K
              15**SIGNATURES**
              **15**




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          15




**PART
      1: FINANCIAL INFORMATION**





**Item
      1. Financial Statements**




**KINGS
      ROAD ENTERTAINMENT, INC.**


**CONSOLIDATED
      BALANCE SHEETS**


**AS
      OF JULY 31, 2006 AND APRIL 30, 2006**




July
                31, 2006
            
            April
                30, 2006**ASSETS**
            
            (unaudited)
            
            (audited)**Current
                assets:**Cash
                and cash equivalents
            
            $
            705,544
            
            $
            735,825Restricted
                cash
            
            
            61,952
            
            
            61,952Accounts
                receivable, trade
            
            
            38,368
            
            
            113,699Prepayments
                and other current assets
            
            
            0
            
            
            0Total
                current assets
            
            
            805,864
            
            
            911,476OTHER
                ASSETSFilm
                development costs, net
            
            
            70,037
            
            
            70,037Total
                Other Assets
            
            
            70,037
            
            
            70,037**TOTAL
                ASSETS**
            
            $
            875,901
            
            $
            981,513**LIABILITIES
                AND STOCKHOLDERS’ EQUITY**Current
                liabilities:Accounts
                payable
            
            $
            130,338
            
            $
            138,624Accrued
                expenses
            
            
            383,771
            
            
            360,508Deferred
                revenue
            
            
            1,020,169
            
            
            1,052,442Line
                of credit
            
            
            60,000
            
            
            60,000Liabilities
                from discontinued operations
            
            
            4,000
            
            
            4,000Total
                current liabilities
            
            
            1,598,278
            
            
            1,615,574Stockholders’
                equity:Common
                stock; 12,000,000 shares authorized at $0.01 par value; 6,957,740
                shares
                issued and outstanding at July 31 and April 30, 2006
            
            
            69,577
            
            
            69,577Additional
                paid-in capital
            
            
            25,211,655
            
            
            25,211,655Accumulated
                deficit
            
            
            (25,915,293
            )
            
            (25,687,802
            )Net
                Profit (Loss) for Period
            
            
            (88,316
            )
            
            (227,491
            )Total
                stockholders’ equity (deficit)
            
            
            (722,377
            )
            
            (634,061
            )**TOTAL
                LIABILITIES AND STOCKHOLDERS’ EQUITY**
            
            $
            875,901
            
            $
            981,513





See
      accompanying notes to consolidated financial statements.




F-1




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          15


**KINGS
      ROAD ENTERTAINMENT, INC.**


**CONSOLIDATED
      STATEMENTS OF OPERATIONS**


**FOR
      THE THREE MONTHS ENDED JULY 31, 2006 AND 2005**


**(Unaudited)**





Three
                months ended July 31,2006
            
            2005**REVENUES**Feature
                films
            
            $
            67,002
            
            $
            96,213**TOTAL
                REVENUE**
            
            
            67,002
            
            
            96,213**OPERATING
                EXPENSES:**General
                and administrative
            
            
            162,218
            
            
            185,215Total
                operating expenses
            
            
            162,218
            
            
            185,215**INCOME
                (LOSS) FROM OPERATIONS**
            
            
            (95,216
            )
            
            (89,002
            )**OTHER
                INCOME (EXPENSE):**Other
                income
            
            
            0
            
            
            13,910Interest
                income
            
            
            6,900
            
            
            890Interest
                expense
            
            
            0
            
            
            (900
            )Total
                Other Income
            
            
            6,900
            
            
            13,900**INCOME
                (LOSS) BEFORE INCOME TAXES**
            
            
            (88,316
            )
            
            (75,102
            )**PROVISION
                FOR INCOME TAXES**
            
            
            0
            
            
            0**NET
                INCOME (LOSS)**
            
            $
            (88,316
            )
            $
            (75,102
            )Net
                income (loss) per share - Basic
            
            $
            (0.01
            )
            $
            (0.01
            )Basic
                weighted average number of shares outstanding during the
                period
            
            
            6,957,740
            
            
            6,957,740





See
      accompanying notes to consolidated financial statements.




F-2




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          15


**KINGS
      ROAD ENTERTAINMENT, INC.**


**CONSOLIDATED
      STATEMENTS OF CASH FLOWS**


**FOR
      THE THREE MONTHS ENDED JULY 31, 2006 AND 2005**


**(Unaudited)**




Three
                months ended July 31,2006
            
            2005**CASH
                FLOWS FROM OPERATING ACTIVITIES:**Income
                (loss) from continuing operations
            
            $
            (88,316
            )
            $
            (75,102
            )Adjustments
                to reconcile income (loss) from continuing operations to net cash
                (used
                in) provided by operating activities:Depreciation
                and amortization
            
            
            0
            
            
            0Change
                in operating assets and liabilities:Accounts
                receivable, trade
            
            
            75,331
            
            
            13,447Prepayments
                and other current assets
            
            
            0
            
            
            4,500Accounts
                payable
            
            
            (8,286
            )
            
            13,313Accrued
                expenses
            
            
            23,263
            
            
            31,722Deferred
                revenue
            
            
            (32,273
            )
            
            (32,932
            )Net
                cash (used in) provided by operating activities
            
            
            (30,281
            )
            
            (45,052
            )**CASH
                FLOWS FROM FINANCING ACTIVITIES:**(Increase)
                decrease in restricted cash
            
            
            0
            
            
            (776
            )Net
                cash provided by (used in) financing activities
            
            
            0
            
            
            (776
            )**NET
                CHANGE IN CASH AND CASH EQUIVALENTS**
            
            
            (30,281
            )
            
            (45,828
            )**CASH
                AND CASH EQUIVALENTS, BEGINNING OF PERIOD**
            
            
            735,825
            
            
            112,114**CASH
                AND CASH EQUIVALENTS, END OF PERIOD**
            
            $
            705,544
            
            $
            66,286




See
      accompanying notes to consolidated financial statements.





F-3




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          5 of
          15




**KINGS
      ROAD ENTERTAINMENT, INC.**


**Notes
      to Consolidated Financial Statements**


**As
      of July 31, 2006**




**NOTE
      1 - NATURE OF OPERATIONS**





Kings
      Road Entertainment, Inc, and its wholly-owned
      subsidiary ( the "Company"
      or "Registrant") , has
      been
      engaged primarily in the development, financing and production of motion
      pictures for subsequent distribution in theaters, to pay, network and syndicated
      television, on home video, and in other ancillary media in the United States
      (the "domestic market") and all other countries and territories of the world
      (the "international market"). Kings Road Entertainment, Inc., incorporated
      in
      Delaware in 1980, began active operations in January 1983 and released its
      first
      motion picture in 1984. There have been 17 additional pictures theatrically
      released in the domestic market, and seven pictures have been released directly
      to the domestic home video or pay television market.





The
      Company’s wholly-owned subsidiary, Ticker, Inc., (a California corporation) was
      inactive during the three months ending July 31, 2006. The consolidated
      financial statements include those of Kings Road Entertainment, Inc. and its
      subsidiary.




**NOTE
      2 - SIGNIFICANT ACCOUNTING POLICIES**





a.
      Basis
      of Presentation





The
      accompanying unaudited consolidated financial statements have been prepared
      in
      accordance with accounting principles generally accepted in the United States
      of
      America 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, 2006, included
      in
      the Kings Road Entertainment, Inc. annual report on Form 10-KSB for that period.





In
      the
      opinion of the Company's management, all adjustments (consisting of normal
      recurring accruals) necessary to present fairly the Company's financial position
      at July 31, 2006, and the results of operations and cash flows for the three
      months ended July 31, 2006 have been included. The results of operations for
      the
      three months ended July 31, 2006, are not necessarily indicative of the results
      to be expected for the full fiscal year. A ll
      inter-company items and transactions have been eliminated in
      consolidation.





b.
      Accounting Method





The
      Company's consolidated financial statements are prepared using the accrual
      method of accounting. The Company has elected an April 30 year-end.





c.
      Use of
      Estimates





The
      preparation of financial statements in conformity with generally accepted
      accounting principles requires management to make estimates and assumptions
      that
      affect the reported amounts of assets and liabilities and disclosure of
      contingent assets and liabilities at the date of the financial statements and
      the reported amounts of revenues and expenses during the reporting period.
      Actual results could differ from those estimates.




F-4




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          6 of
          15




**NOTE
      3 - CURRENT ASSETS**





a.
      Cash
      and Cash Equivalents




Cash
      equivalents consist of cash on hand and cash due from banks. For purposes of
      the
      statements of cash flows, the Company considers all highly-liquid debt
      instruments with original maturities of three months or less to be cash
      equivalents. The Company maintains its cash balances at financial institutions
      that are federally insured. However, at times, these balances could exceed
      federally insured limits.





b.
      Restricted Cash





As
      of
      July 31, 2006, restricted cash totaled $61,952, which was associated with the
      Company’s line of credit. During 2004, the Company entered into a certificate of
      deposit to secure a revolving line of credit. This certificate of deposit had
      a
      beginning principal balance of $60,000 and interest accrued at a rate two
      percent below the rate on the line of credit it secured. Funds contained in
      this
      CD are classified as restricted as long as the related line of credit is
      outstanding.





c.
      Concentration of Credit Risk





The
      Company licenses various rights in its films to distributors throughout the
      world. Generally, payment is received in full or in part prior to the Company's
      delivery of the film to the applicable distributor. Once calculated royalties
      from actual sales have exceeded such an advance, the Company receives royalty
      income at the end of a specific reporting period (usually three, six or twelve
      months) based on actual sales from the preceding reporting period. As of July
      31, 2006, none of the Company's accounts receivable was from foreign
      distributors.


.


**NOTE
      4 - FIXED & OTHER ASSETS**





a.
      Fixed
      Assets





Fixed
      assets of the Company at July 31, 2006, consisted of various items of office
      equipment with a historical cost of $5,993 and a $0 net book value. All of
      these
      items were fully depreciated at July 31, 2006.





b.
      Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed of





The
      Company has adopted the provisions of SFAS No. 121, “Accounting for the
      Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of” and
      SFAS No. 142 "Goodwill and Other Intangible Assets." These statements require
      that long-lived assets and certain identifiable intangibles be reviewed for
      impairment whenever events or changes in circumstances indicate that the
      carrying amount of an asset may not be recoverable. Recoverability of assets
      to
      be held and used is measured by a comparison of the carrying amount of an asset
      to future net cash flows expected to be generated by the asset. If such assets
      are considered to be impaired, the impairment to be recognized is measured
      by
      the amount by which the carrying amounts of the assets exceed their respective
      fair values. Assets to be disposed of are reported at the lower of the carrying
      amount of fair value less the costs to sell.





c.
      Film
      Development Costs





Film
      development costs are costs incurred for movie projects not yet in production. Film
      development costs, including any related interest and overhead, are capitalized
      as incurred. Profit participations and residuals, if any, are accrued in the
      proportion that revenue for a period bears to the estimated future revenues.
      Costs are amortized using the individual film forecast method set forth in
      FASB
      Statement No. 53 ("SFAS 53"), which bases the costs on the ratio of revenue
      earned in the current period to the Company's estimate of total
      revenues to be realized. Management periodically reviews its estimates on a
      film-by-film basis and, when unamortized costs exceed net realizable value
      for a
      film, that film's unamortized costs are written down to net realizable
      value.




F-5




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          7 of
          15




At
      July
      31, 2006, film development costs totaled $70,037, which was net after an
      allowance of $30,000. During the three months ended July 31, 2006, no film
      development costs were determined to be impaired.





**NOTE
      5 - LIABILITIES**





a. Deferred
      Revenue





As
      of
      July 31, 2006, the Company has deferred revenue totaling $1,020,169. The Company
      is following the guidelines of SOP 00-02 for film production and distribution.





b.
      Line
      of Credit ****





On
      March
      2, 2006, the Company renewed its revolving line of credit loan with a beginning
      principal balance of $60,000, secured by a $60,000 certificate of deposit (see
      Note 3). During the period ending July 31, 2006, the line of credit accrued
      interest at a rate of 5.70% per annum. The Company’s credit line will expire on
      March 1, 2007 unless renewed.





c.
      Discontinued Operations





As
      of
      July 31, 2006, the Company has $4,000 of accrued liabilities outstanding for
      its
      discontinued operations.





**NOTE
      6 - COMMITMENTS AND CONTINGENCIES**





a.
      Rent




The
      Company rents a three-room apartment located on Doheny Drive, Beverly Hills,
      California as its registered office. Additionally, the Company rents flexible
      storage space for its archives.  Rent expense for the Company's office and
      archive storage space was $7,661 and $7,078 during the three months ending
      July
      31, 2006 and 2005, respectively.





b.
      Contingent Losses & Litigation





We
      have
      previously disclosed our material litigation and regulatory issues in our Annual
      Report on Form 10-KSB, for the period ended April 30, 2006, and in our
      other filings with the Securities and Exchange Commission pursuant to the
      Securities Exchange Act of 1934, as amended. At
      July
      31, 2006, we were involved with various legal matters, including litigation
      with
      former officers, directors, and related parties. Although the ultimate
      resolution of certain matters cannot be determined at this time, we do not
      believe that such matters, individually or in the aggregate, will have a
      material adverse effect on our future consolidated results of operations, cash
      flows or financial condition.





Legal
      fees associated with litigation are recorded in the period in which they occur. The
      company has not created, and does not intend to create any reserves for
      contingent losses resulting from an unfavorable outcome from any of these legal
      matters.




F-6




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          8 of
          15




c.
      Other
      Commitments and Contingencies





In
      the
      ordinary course of business, the Company may become involved in matters of
      dispute which in the aggregate are not believed by management to be material
      to
      its financial position or results of operations.





**NOTE
      7 - COMMON STOCK**





At
      July
      31, 2006, the Company had 12,000,000 authorized shares of common stock, of
      which
      6,957,740 shares were issued and outstanding. During the three months ended
      July
      31, 2006, no new stock was either issued or authorized.




**NOTE
      8 - RECOGNITION OF REVENUES**





The
      Company’s revenues are derived primarily from distribution agreements in the US
      domestic market place and are amortized during the reporting period for which
      the revenue is applicable. Revenues derived from purchase option agreements
      are
      amortized over the period of the option granted. Revenues from theatrical
      exhibition are recognized on the dates of exhibition. Revenues from
      international, home video, television and pay-television license agreements
      are
      recognized when the license period begins and the film is available for
      exhibition or exploitation pursuant to the terms of the applicable license
      agreement. Once complete, a typical film will generally be made available for
      licensing as follows:




Months
                  After
              ApproximateMarketplace
              Initial
                  Release
              Release
                  PeriodDomestic
                  theatrical
              
              0-3
                  monthsAll
                  international markets
              
              1-12
                  yearsDomestic
                  home video
              3-6
                  months
              3-12
                  monthsDomestic
                  cable/pay television
              12-18
                  months
              18
                  monthsDomestic
                  syndicated/free television
              24-48
                  months
              1-n
                  years


**N0TE
      9 - DEPRECIATION AND AMORTIZATION**





Depreciation
      of fixed assets is computed by the straight-line method over the estimated
      useful lives of the assets ranging from three to five years. Leasehold
      improvements are amortized over the useful life of the improvements or the
      term
      of the applicable lease, whichever is less.




**NOTE
      10 - GOING CONCERN**





The
      Company's consolidated financial statements are prepared using accounting
      principles generally accepted in the United States of America applicable to
      a
      going concern which contemplates the realization of assets and liquidation
      of
      liabilities in the normal course of business. However at July 31, 2006, the
      Company has a deficit in working capital of $792,414, an accumulated deficit
      of
      approximately $25,915,300, and recent losses from operations. These conditions
      raise substantial doubt about the Company's ability to continue as a going
      concern. The Company has discontinued certain operations that historically
      produced negative cash flow and plans to raise capital through equity-based
      investment instruments, which will provide funding for the development of future
      projects and operating expenses.




F-7




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          9 of
          15





**NOTE
      11 - SUBSEQUENT EVENTS**





a. Option/Purchase
      Agreement





Subsequent
      to the period covered by this report, **** on
      October 6, 2006, New Line Cinema paid the Company $90,000 to extend an option
      pertaining to the Company's rights to the movie production, All of Me, for
      an
      additional 18-month period, up to and including April 11, 2008. The $90,000
      option extension fee was split equally with Eclectic Filmworks LLC, as per
      a
      letter of agreement executed on July 1, 2005. The option period was further
      extended to July 21, 2008, pursuant to the Writers’ Guild strike of 2007 and
      2008.





b.
      Settlement of Certain Lawsuits and Entry into a Material Definitive
      Agreement





Subsequent
      to the period covered by this report, on March 19, 2007, the Company entered
      into a Settlement Agreement and Mutual General Release with Michael Berresheim,
      Eric Ottens, et al., ** and
      various entities, including, but not limited to MBO Media GmbH, and other
      individuals and/or entities that may or may not have had a connection to Michael
      Berresheim, Eric Ottens, et al. For further detail s refer to Part II, Item
      1-
      Legal Proceedings. The settlement was published in an 8-K filing on April 23,
      2007.





c.
      Shareholder Complaint against the Company and Derivative Suit





Subsequent
      to this report, on December 16, 2006, a shareholder filed a complaint in the
      State of Delaware to Compel an Annual Meeting of Shareholders. The complaint
      alleged that certain members of the Board of Directors were acting in a manner
      that may be for their own interests and detrimental to that of the shareholders
      at large. Legal counsel for the Company has reviewed the case and deemed that
      the necessary steps have not been completed to effectuate this petition and
      likewise deemed the matter to be inactive at that time. The foregoing event
      was
      reported in an 8-K filed on April 23, 2007





Subsequent
      to this report, the same shareholder filed a complaint in the U.S. District
      Court of California for and on behalf of the Shareholders of Kings Road
      Entertainment, Inc. The complaint brought a derivative suit against four
      Directors of the Company, alleging that they had breached their fiduciary duties
      to the Company and claiming compensatory damages in the amount of $7,500,000.
      The case was dismissed without prejudice pursuant to local rule 7-9 on June
      12,
      2007. The foregoing events were reported in an 8-K filed on June 27,
      2007





Subsequent
      to this report, on July 24, 2007, the same shareholder, in the right and for
      the
      benefit of Kings Road Entertainment Inc., re-filed the above derivative suit
      in
      the Los Angeles Superior Court (against four Directors of the Company as well
      as
      the Company as a nominal defendant. The complaint alleges that the named
      directors breached their fiduciary duties to the Company in conspiring to sell
      a
      majority interest in the Company without the benefit of an evaluation of the
      assets of the Company being performed and at a price considered by Plaintiff
      to
      be unreasonable and detrimental to the company and its shareholders, in that
      the
      price received for the majority interest was far below certain rival offers
      existing at the time of the transaction and claiming compensatory damages in
      the
      amount of $7,500,000.





Subsequent
      to this report, on September 28, 2007, the Company filed a demurrer on the
      grounds that the Plaintiff failed to set forth facts sufficient to state a
      cause
      of action against Defendants or disprove that the Directors acted in valid
      exercise of their business judgment according to Delaware Law. On January
      4,  2008,
      the
      Plaintiff dismissed the case without prejudice.




F-8




Page
          10
          of 15




**ITEM
      2. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF
      OPERATION**





The
      following review concerns the periods ended July 31, 2006 and July 31, 2005,
      which should be read in conjunction with the financial statements and notes
      thereto presented in the Form 10-QSB and the Form 10-KSB for the fiscal year
      ending April 30, 2006.





*Forward
      Looking Statements*





*The
      information in this discussion contains forward-looking statements within the
      meaning of Section 27A of the Securities Act of 1933, as amended, and Section
      21E of the Securities Exchange Act of 1934, as amended. These forward-looking
      statements involve risks and uncertainties, including statements regarding
      our
      capital needs, business strategy and expectations. Any statements contained
      herein that are not statements of historical facts may be deemed to be
      forward-looking statements. In some cases, you can identify forward-looking
      statements by terminology such as "may", "will", "should", "expect", "plan",
      "intend", "anticipate", "believe", “estimate", "predict", "potential" or
      "continue", the negative of such terms or other comparable terminology. Actual
      events or results may differ materially. We disclaim any obligation to publicly
      update these statements, or disclose any difference between its actual results
      and those reflected in these statements. The information constitutes
      forward-looking statements within the meaning of the Private Securities
      Litigation Reform Act of 1995.*





The
      following discussion should be read in conjunction with the Company's financial
      statements and related notes. Certain matters discussed herein may contain
      forward-looking statements that are subject to risks and uncertainties. Such
      risks and uncertainties include, but are not limited to, the following:





-
      the
      volatile and competitive nature of the film industry,


-
      the
      uncertainties surrounding the rapidly evolving markets in which the Company
      competes,


-
      the
      uncertainties surrounding technological change of the industry,


-
      the
      Company's dependence on its intellectual property rights,


-
      the
      success of marketing efforts by third parties,


-
      the
      changing demands of customers and


-
      the
      arrangements with present and future customers and third parties.





Should
      one or more of these risks or uncertainties materialize or should any of the
      underlying assumptions prove incorrect, actual results of current and future
      operations may vary materially from those anticipated.





**Recent
      Developments**





Subsequent
      to the fiscal year ended April 30, 1996, the Company has produced no new films
      and has derived its film revenues almost exclusively from the exploitation
      of
      films produced in prior years. The Company continues to fund and develop motion
      picture projects, with the intention of either producing the motion picture,
      establishing a partnership or joint venture with another film production company
      to develop and/or produce the project or an outright sale of the project.





**Results
      of Operations**





**The
      Three Months Ended July 31, 2006 vs. the Three Months Ended July 31, 2005**





For
      the
      quarter ended July 31, 2006, feature film revenues were $67,002 as compared
      to
      $96,213 for the quarter ended July 31, 2005. The decrease of $29,211 results
      primarily from decreased revenue from distribution of the Company's feature
      film
      library.





Costs
      and
      expenses decreased to $162,218 for the quarter ended July 31, 2006 as compared
      to $185,215 during the quarter ended July 31, 2005. This decrease of $22,997
      primarily results from a decrease in professional fees.




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The
      Company had a net loss of $88,316 for the quarter ended July 31, 2006 as
      compared to a net loss of $75,102 for the quarter ended July 31, 2005. This
      increased loss of $13,214 results primarily from a decrease in film revenues
      which was partially offset by a decrease in professional fees.





**Liquidity
      and Capital Resources**





For
      the
      three months ended July 31, 2006, the Company's net cash used in operating
      activities was $30,281 compared to net cash used in operating activities of
      $45,042 during the comparable period in 2005. At July 31, 2006, the Company
      had
      cash of $705,544 as compared to $66,286 at July 31, 2005.





The
      Company's principal source of working capital during the three month period
      ended July 31, 2006 was motion picture royalty income. The Company does not
      currently have sufficient capital to fund its operations. If the Company fails
      to raise additional capital, increase revenues, or sell certain of its assets,
      the Company will, in all likelihood, be forced to significantly reduce its
      operations or liquidate.





**Future
      Commitments**





The
      Company does not have, nor is it aware of, any other material future
      commitments.




**ITEM
      3. CONTROLS AND PROCEDURES.**





Evaluation
      of Disclosure Controls and Procedures .
      Our
      Chief Executive Officer and Chief Financial Officer performed an evaluation
      of
      our disclosure controls and procedures, which have been designed to permit
      us to
      effectively identify and timely disclose important information. They concluded
      that the controls and procedures were effective as of July 31, 2006 to provide
      reasonable assurance that the information required to be disclosed by the
      Company in reports it files under the Exchange Act is recorded, processed,
      summarized and reported within the time periods specified in the rules and
      forms
      of the SEC. While our disclosure controls and procedures provide reasonable
      assurance that the appropriate information will be available on a timely basis,
      this assurance is subject to limitations inherent in any control system, no
      matter how well it may be designed or administered.





Changes
      in Internal Controls .
      There
      were no changes in our internal control over financial reporting during the
      quarter ended July 31, 2006, that materially affected, or is reasonably likely
      to materially affect, our internal control over financial
      reporting.





**PART
      II - OTHER INFORMATION**





**ITEM
      1.**  **LEGAL
      PROCEEDINGS**





*Claim
      Against Michael Berresheim, Eric Ottens, et al.*





On
      September 9, 2004, the Company filed suit in the Circuit Court of the 17th
      Judicial Circuit in and for Broward County, Florida, against Mr. Michael
      Berresheim, a former officer and director of the Company, Mr. Eric Ottens,
      and
      two company’s under the control of Messrs Berresheim and Ottens (Kings Road
      Entertainment, Inc., a Florida Corporation and Kings Road to Fame, Inc.). The
      suit filed by the Company, was seeking the return of money illegally obtained
      and converted from the Company, an accounting, and an injunction from further
      use of its trade name.





On
      April
      18, 2006, the Court entered a final default judgment in favor of the Company,
      awarded damages in the amount of $332,534 and entered a permanent injunction
      requiring Berresheim to cease and desist from all use of the name Kings Road
      in
      any capacity. Subsequent to this report, Defendant filed an appellate brief
      to
      appeal the judgment on October 25, 2006.




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          12
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Subsequent
      to this report, on March 19, 2007, this matter was resolved with the execution
      of a Settlement Agreement and Mutual General Release (see below: “Settlement of
      Certain Lawsuits and Entry into a Material Definitive Agreement“).





*Claim
      on the Company from MBO Media GmbH*





On
      March
      29, 2005, the Company received a communication from an attorney- representing
      MBO Media GmbH and its managing director Mr. Michael Berresheim (former director
      and officer of the Company) demanding the Company's repayment of leasing costs
      of 179,884 Euro for the video and film editing suite Avid Symphony V 2.0 as
      allegedly paid by her client MBO Media GmbH (formerly MBO Musikverlags GmbH).
      The Company has no record of any such claim, invoice, or corresponding
      leasing/repayment agreement between the parties in its files and has passed
      this
      correspondence on to its counsel, who repudiated this claim on April 4, 2005.
      Subsequent to this report, this claim was included in the counterclaims filed
      by
      defendant Berresheim with his affirmative defenses filed on July 26, 2005 (see
      above Claim against Michael Berresheim, Eric Ottens, et al.).





Subsequent
      to this report, on March 19, 2007, this matter was resolved with the execution
      of a Settlement Agreement and Mutual General Release (see below: “Settlement of
      Certain Lawsuits and Entry into a Material Definitive Agreement“).





*Shareholder
      Demand for Inspection of Company Records*





On
      March
      30, 2005 the Company received a letter dated March 22, 2005 an attorney
      representing Kings Road Enterprises Corp. (formerly Parkland AG, an entity
      controlled by a former Director and Officer of the Company), seeking to inspect
      the Corporation's stock ledger, list of its stockholders, and its other books
      and records and to make copies or extracts there from, all as provided in
      Section 220 of the Delaware General Corporation Law , which states that the
      purpose of the demand and the inspection is (i) to make a determination as
      to
      the value of the Stockholder's stock in the Corporation, (ii) to investigate
      the
      Corporation's compliance with applicable laws, including but not limited to
      applicable corporate and securities laws and its own organizational and
      operational requirements as may be set forth in the books and records, based
      upon a reasonable suspicion of mismanagement and/or self-dealing due, among
      other things, to the apparent sale of stock to certain stockholders for less
      than its actual value. The Company's counsel has complied with this
      demand.





Subsequent
      to this report, on March 19, 2007, this matter was resolved with the execution
      of a Settlement Agreement and Mutual General Release (see below: “Settlement of
      Certain Lawsuits and Entry into a Material Definitive Agreement“).





Settlement
      of Certain Lawsuits and Entry into a Material Definitive
      Agreement





Subsequent
      to the period covered by this report, on March 19, 2007, the Company entered
      into a Settlement Agreement and Mutual General Release (the “Settlement
      Agreement”) with the following parties: MBO Musikverlags GmbH, a German limited
      liability company (“MBO Musikverlag”); MBO Media GmbH, a German limited
      liability company (“MBO Media”) and its new owner, as of March 2006, Tacitus
      Treuhand, Switzerland (“Tacitus”); Fabulous AG, a Nevada corporation
      (“Fabulous”), formerly Kings Road Entertainment Corp. (“KREC”), and prior to
      that Parkland AG (“Parkland”); Metropolitan Worldwide, Inc., a Nevada
      corporation (“Metropolitan”); Donal C. Tunnell (“Tunnell”); William E. Ottens
      (“Ottens”); and Lothar Michael Berresheim (“Berresheim”) individually and in his
      capacity as an officer, director, manager, member and/or shareholder of MBO
      Musikverlag, MBO Media, Tacitus, Fabulous/KREC/Parkland, KRFame, Florida and
      KREN Florida, including any affiliates, subsidiaries, parents and other entities
      controlled, directly or indirectly by Berresheim, (collectively the “Berresheim
      Entities”). A Settlement and Mutual Release was also concluded with Ms. Beate C.
      Mueller.




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The
      Settlement Agreement calls for Berresheim to deliver to the Company three (3)
      original certificate representing One Million Four Hundred Fifty-One Thousand
      Two Hundred Forty-Seven (1,451,247) shares of the Company’s Common Stock
      (“Settlement Shares”), these being all the shares held or beneficially owned by
      Berresheim. Further, the parties agreed to the following: discharges and
      releases of Berresheim, Tunnell, Ottens, the Berrsheim Entities, and their
      officers, directors, managers, members, shareholders, assigns, attorneys,
      agents, representatives, principals, predecessors and successors in interest
      (collectively, the “Berresheim Parties”), from any and all claims, demands,
      obligations, or causes of action of whatever nature or description; Dismissal
      of
      the Fourth DCA Litigation Appeal; Dismissal of the MBO Litigation; Dismissal
      of
      the Tunnell Litigation; Dissolution of KRFame Florida and KREN Florida;
      Withdrawal of Fictitious Name Filing of Regal Productions; Acknowledgement
      and
      Agreement to Refrain from Use of Kings Road Name by Berresheim; Transfer and
      Assignments of any Rights to the Kingsroadentertainment.com Website Ownership
      and Content; Agreement to Refrain from Acquiring Shares of Kings Road Stock
      by
      Berresheim Entities and Berresheim; Agreement to Refrain from Soliciting,
      Enticing, Encouraging or Assisting Claims of Litigation Against Kings Road
      by
      Berresheim and Berresheim Entities; and Non-Solicitation of Vendors, Customers
      or Employees of Kings Road by Berresheim. For consideration of the above,
      including the surrender of the Settlement Shares, the Company will pay Mr.
      Berresheim Sixty Thousand Dollars ($60,000) upon the receipt of the Settlement
      Shares by the Company’s Stock Transfer Agent, U.S. Stock Transfer Corporation;
      the transfer and quitclaim from the Company to Berresheim of the rights to
      the
      script entitled “Babylon Blues;” Agreement to refrain from opposing Berresheim’s
      motion to vacate the KREN Litigation; Dismissal of the MBO Litigation; Agreement
      to Refrain from Acquiring Shares of Metropolitan; Agreement to Refrain from
      Soliciting, Enticing, Encouraging or Assisting Claims of Litigation Against
      Berresheim.





The
      foregoing event was reported in an 8-K filed on April 23, 2007




Claim
      against the Company by Beate C. Mueller




On
      March
      8, 2006, the Company was served with a complaint dated December 12, 2005 filed
      with the Frankfurt District Court against the Company and company officer
      Geraldine Blecker individually by Ms. Beate C. Mueller, demanding payment of
      the
      total sum of Euro 20,000, plus 10.5% interest as from May 11, 2004. This claim
      is based on an invoice relating to legal costs incurred in representing Michael
      Berresheim, a former officer and director of the Company, individually in
      litigation pertaining to the Company. On March 9, 2006, the Company’s German
      counsel repudiated this claim.





Subsequent
      to this report, on March 21, 2007, this matter was resolved with the execution
      of a Settlement Agreement and Mutual General Release between the parties.





The
      foregoing event was reported in an 8-K filed on April 23, 2007





**Other
      litigation**





As
      of
      July 31, 2006, the Company was not aware of any pending claims or assessments,
      other than as described above or related to the matters described above, which
      may have a material adverse impact on the Company's financial position or
      results of operations.





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





None
      in
      the three month period ending July 31, 2006





**ITEM
      3.**  **DEFAULTS
      UPON SENIOR SECURITIES**





None





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





No
      matter
      was submitted to a vote of our shareholders during the quarter ended July 31,
      2006.




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          14
          of 15




**ITEM
      5.**  **OTHER
      INFORMATION**





None.





**ITEM
      6.**  **EXHIBITS**





**INDEX
      TO EXHIBITS**


**OF**


**KINGS
      ROAD ENTERTAINMENT INC.**





31.1
            Rule
                13a-14 (a)/15d-14 (a) Certification of President.31.2
            Rule
                13a-14 (a)/15d-14 (a) Certification of Chief Financial
                Officer.32
            Section
                1350 Certifications.





**SIGNATURES**





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




**KINGS
                ROAD ENTERTAINMENT, INC.**
              (Registrant)Date:
              July 23,
              2008
            By:
            /s/ Philip
              HolmesPhilip Holmes,
              President




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