FORM 10-KSB

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20524

[X]      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934 [FEE REQUIRED]

                    For the fiscal year ended: June 30, 1997

                                       OR

[ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
         EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

                       Commission file number: 33-19598-D

                             SUNLIGHT SYSTEMS, LTD.
             (Exact name of registrant as specified in its charter)

Nevada                                                    84-0992908
(State or other jurisdiction of                           (I.R.S. employer
incorporation or organization)                            identification number)

5222 South Holly, Greenwood Village, Colorado                           80111
(Address of principal executive offices)                              (Zip Code)

Registrant's telephone number, including area code:  303-779-1900

Securities registered pursuant to Section 12(b) of the Act:   None

           Securities registered pursuant to Section 12(g) of the Act:

                                  COMMON $0.001
                                (Title of class)

         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
Company was  required to file such  reports),  and (2) has been  subject to such
filing requirements for the past 90 days. Yes  X   No
                                             ----    ----


<PAGE>


         Indicate by check mark if disclosure of delinquent  filers  pursuant to
Rule 405 of Regulation S-K is not contained herein and will not be contained, to
the  best  of the  Company's  knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K. [x]


     As of June 30, 1997,  there were Eleven  Million Five Hundred  Thousand and
     Sixty-Four  (11,500,064)  common  shares  outstanding,  Two  million,  Five
     Hundred and Ninety-One Thousand,  Forty-Two  (2,591,042) of which were held
     by  non-affiliates.  The market as of that date for the common stock of the
     Registrant was $.18 bid, $.75 asked. Therefore,  the aggregate market value
     of the  non-affiliated  common shares,  as of that date, was  approximately
     $2,070,012.








                                       2
<PAGE>


                                     PART I

                                     ITEM 1.

                                    BUSINESS

(a)      GENERAL DEVELOPMENT OF BUSINESS
         -------------------------------

         Sunlight Systems, Ltd. (the "Company") is a Nevada corporation.  It was
formerly known as  Mendell-Denver  Corporation.  The Company was incorporated on
June 25, 1996 as a Nevada  corporation in order to change the corporate domicile
of the former Mendell-Denver Corporation, a Colorado corporation,  and to effect
a corporate reorganization with Mendell-Denver Corporation.

         On July 17,  1996,  the Company  became a wholly  owned  subsidiary  of
Mendell-Denver  Corporation  ("Mendell").   Pursuant  to  shareholder  approval,
Mendell  merged into the Company on July 22,  1996,  pursuant to the laws of the
State of Nevada, with the Company being the surviving entity.

         As a result of the Merger,  the Company  exchanged one (1) share of its
common stock for each five (5) shares of the issued and outstanding common stock
of Mendell,  on the effective date of the Merger.  As a result of this exchange,
the  Company,   as  the  surviving  entity  of  the  Merger,  had  Two  Million,
Ninety-Eight  Thousand,  Three Hundred and Twelve  (2,098,312) shares issued and
outstanding.

         Subsequent  to the  Merger,  the  Company  issued an  additional  Eight
Million, Nine Hundred and One Thousand,  Seven Hundred and Fifty-Two (8,901,752)
restricted  shares  to  subscribers.  As a  result  of both the  Merger  and the
issuance of the additional  restricted  shares,  the Company,  as of the date of
this  Report  has  approximately   Eleven  Million  Five  Hundred  Thousand  and
Sixty-Four (11,500,064) shares issued and outstanding.

         From May 1, 1992 to June 30, 1996, Mendell was essentially inactive and
its activities were primarily  devoted to "winding up" operations as a result of
the sale of its oil and gas properties.  The former Mendell  operated,  from its
inception on July 22, 1985, as an independent oil and gas company engaged in the
business of developing  and producing  crude oil and natural gas reserves in the
United States,  primarily in the Watenberg Field,  Denver Julesburg Basin,  Weld
County,  Colorado,  until  May  1,1992  when  it  sold  all of its  oil  and gas
properties and effectively ceased operations.

         SINCE THE  FORMER  MENDELL  HAS NOT BEEN  ENGAGED  IN ANY  SIGNIFICANT,
OPERATIONAL  ACTIVITIES FOR THE PAST TWO YEARS PRECEDING JUNE 30, 1996 AND SINCE
THE PRINCIPAL BUSINESS  ACTIVITIES OF THE COMPANY, AS DESCRIBED IN THIS ITEM ARE
MATERIALLY  DIFFERENT FROM THE PRIOR ACTIVITIES,  ANY DISCLOSURE RELATING TO THE
PRIOR HISTORICAL  ACTIVITIES OF MENDELL IS CONSIDER IMMATERIAL AND IRRELEVANT TO
AN INFORMED  UNDERSTANDING  OF THE COMPANY AND  THEREFORE,  IS OMITTED.  PERSONS
INTERESTED IN SUCH PREVIOUS HISTORICAL  INFORMATION SHOULD CONSULT PRIOR FILINGS
MADE BY MENDELL-DENVER  CORPORATION WITH THE SECURITIES EXCHANGE COMMISSION.

In  connection  with the Merger,  the Company  also has elected new officers and
directors. (See Item 10.)

                                       3

<PAGE>

(b)      FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS
         ---------------------------------------------

         The  Company  has been  involved  in one  industry  segment and line of
business,  namely  the sale and  distribution  of a  skylight,  known as the Sun
Tunnel(R)  in the  natural  lightning  industry.  The sun  Tunnel  is  primarily
utilized in the  residential  housing  industry.  (See NARRATIVE  DESCRIPTION OF
BUSINESS AND  FINANCIAL  STATEMENTS.)  Since this line of business  failed to be
profitable, the Company discontinued it and sold its related assets.

(c)(1)   NARRATIVE DESCRIPTION OF BUSINESS
         ---------------------------------

         The Company was engaged in the marketing and sale of a skylight,  known
as  the  Sun  Tunnel(R).  The  Company  had  two  (2)  Dealer  Agreements  and a
Distributorship   Agreement  with  Sun  Tunnel   Systems,   Inc.,  a  California
corporation. This business segment was continued as of November 1, 1996.

         The Company's  present  business  activities are to locate and evaluate
business opportunities for potential merger or acquisition.

         (i)   THE PRINCIPAL PRODUCTS PRODUCED AND SERVICES RENDERED

         The  Company  is  currently  not  marketing  any  products   since  the
discontinuance of its skylight activities.

         (ii)  SOURCES AND AVAILABILITY OF RAW MATERIALS

         The Company is does not require raw materials since the  discontinuance
of its skylight activities.

 .        (iii) PATENTS, TRADEMARKS, LICENSES, FRANCHISES AND CONCESSIONS HELD

         The Company has no intellectual property rights.

         (v)   WORKING CAPITAL ITEMS

         The Company is not required to carry significant  working capital since
business  activities  are to locate  and  evaluate  business  opportunities  for
potential merger.

         (vi)     MAJOR CUSTOMERS

         The Company is not dependent upon any one or a few specific customers.

         (vii)    RENEGOTIATION OR TERMINATION OF GOVERNMENT CONTRACTS

         No portion of the Company's business,  in its current state, is subject
to  renegotiation  of profits or termination of contracts or subcontracts at the
election of the Government.

                                       4

<PAGE>

         (viii)  COMPETITIVE CONDITIONS

         Since  business   activities  are  to  locate  and  evaluate   business
opportunities  for  potential  merger the company is not subject to  competitive
conditions.

         (ix)    RESEARCH AND DEVELOPMENT ACTIVITIES

         The Company does not engage in any research and development  activities
and does not contemplate engaging in such activities in the future.

         (x)     ENVIRONMENTAL COMPLIANCE

         The Company in its  business is not subject to any  federal,  state and
local  material  provisions  which have been enacted or adopted  regulating  the
discharge  of  materials  into the  environment  or  otherwise  relating  to the
protection of the environment which require capital  expenditures or which would
have an impact on the earnings or competitive portion of the Company.

         (xi)    EMPLOYEES

         As of June 30, 1997 , the Company has no employees  except  Patricia E.
Johnston, President and Chief Executive Officer of the Company.

(d)      FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC OPERATIONS AND EXPORT
         ----------------------------------------------------------------------
         SALES
         -----

         The  Company  does not have  sales to  customers  outside of the United
States.







                                       5
<PAGE>


                                     ITEM 2.

                                   PROPERTIES

OFFICE FACILITIES
-----------------

         The Company has no principal executive offices. The Company's president
utilizes an office at her  residence  at 5222 South  Holly,  Greenwood  Village,
Colorado  80111 at no cost to the  Company.  The phone number for this office is
303-779-1900.










                                       6
<PAGE>

                                     ITEM 3.

                                LEGAL PROCEEDINGS

         No legal  proceedings  to which the Company (or any officer or director
of the Company,  or any  affiliate or owners of record or  beneficially  of more
than 5% of the common stock) to Management's  knowledge,  is a party or to which
the property of the Company is subject,  is pending and no such  proceedings are
known by Management of the Company to be contemplated.








                                       7
<PAGE>

                                     ITEM 4.

               SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         The   shareholders  of  the  former   Mendell-Denver   Corporation  and
Mendell-Denver  Corporation as the sole  shareholder of the Company prior to the
Merger,  described in Item 1 convened a meeting on July 18, 1996 to vote upon or
consent to the Merger. The Merger was approved by the necessary vote and consent
of the shareholders of both corporations.








                                       8
<PAGE>
                                     PART II

                                     ITEM 5

                      MARKET FOR REGISTRANT'S COMMON EQUITY
                         AND RELATED STOCKHOLDER MATTERS

         The common  stock of the Company has only  recently  been  approved for
trading and consequently  trading activity is extremely  limited.  The Company's
common stock is traded on the NASDAQ  Bulletin  Board,  under the symbol "SUNY".
While a limited market did exist for the Company's common stock under its former
name of Mendell-Denver  Corporation, it was so insignificant as to not be a true
market.  Accordingly,  any  information  relating to former  market  activity is
deemed immaterial and irrelevant.

         The  Company  has paid no  dividends  on its common  stock and does not
expect to pay dividends in the foreseeable  future. All revenues received by the
Company will be reinvested into the business.

         As  of  June  30,  1997,  the  Company  had   eighty-two   (82)  record
shareholders  of  the  Eleven  Million  Five  Hundred  Thousand  and  Sixty-Four
(11,500,064) shares of its common stock.








                                       9
<PAGE>
<TABLE>
<CAPTION>
                                                       ITEM 6

                                               SELECTED FINANCIAL DATA


                                     1997                   1996                   1995                    1994
                                     ----                   ----                   ----                    ----
<S>                                <C>                     <C>                   <C>                     <C>
For the year:
Oil and gas sales                  $   -0-                 $  -0-                $   -0-                 $   -0-
Other revenues                        4,274                 8,993
Earnings (loss)                    (487,092)               (3,577)               (12,316)                (33,320)
Earnings  (loss) per common
  share                              (.0461)               (.0007)                (.0022)                 (.0061)

At June 30:
Total Assets                       $270,070                $  407                $ 6,229                 $28,450
Stockholders' Equity                238,570                   407                  3,884                  16,200
Working Capital                     (13,584)                  407                  3,884                  16,200

The Company has no long term debt.
</TABLE>









                                                        10
<PAGE>



                                     ITEM 7

           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

FISCAL YEAR 1997 COMPARED TO FISCAL YEAR 1996.
---------------------------------------------

(a)      LIQUIDITY.
         ---------

         At  June  30,  1997,  the  Company  had  negative  working  capital  of
$(13,584).  This negative  position is from the operating  losses exceeding cash
proceeds  from the sale of stock.  At June 30, 1996,  the Company had a positive
working  capital of $407.  This position was accounted for by the receipt option
revenue, interest income and a tax refund.

         Cash  Flow  from  Operations  was  ($402,134)  in 1997 as  compared  to
($1,777) in 1996.

(b)      CAPITAL RESOURCES.
         -----------------

         Total  assets  of the  Company  as of June 30,  1997 were  $270,070  as
compared  to $407 at June 30,  1996.  The  increase  in the assets the  reflects
acquisition the assets acquired  through the issuance of stock and from the sale
of discontinued operation.

         Stockholder's  equity of  $238,570  at June 30,  1997,  as  compared to
stockholder's  equity of $407 at June 30, 1996,  is the result of issuing  stock
less operating losses. The Company had no capital commitments at June 30, 1997.

(c)      RESULTS OF OPERATIONS.
         ---------------------

         The Company had sales of $37,894  during the period  until  November 1,
1996 when the company discontinued its operations as a dealer and distributor of
skylights.  Revenues  since  November 1, 1996 were $4,274  from  amortizing  the
discount of the notes receivable and $31,781 from the sale of securities held as
investments.

         The Company  discontinued its operations as a dealer and distributor of
skylights on November 1, 1996. The company  recognized a loss of $(173,911) from
operating  this business  segment and  recognized a loss of $(134,947)  from the
sale of its assets.

          General and  administrative  expenses  of $214,289  for the year ended
June 30, 1997 were due to  initiating  the  Company's  business  activities as a
dealer and  distributor  of skylights  and seeking other  acquisition  or merger
opportunities.  Depreciation and  amortization  expenses in 1997 were $4,104 and
$5,600, respectively. Depreciation and amortization were entirely related to the
discontinued business segment.


                                       11

<PAGE>


         The Company had no revenues from the sale of oil and gas for the fiscal
year ended June 30, 1996.  Revenues as  previously  mentioned  were derived from
option revenues,  interest income and a tax refund. The funds realized from such
revenues were used to pay general  administrative  costs and to fund the buy-out
of an option. Total expenses were $12,570 resulting in a net loss for the fiscal
year ended June 30, 1996 of ($2,464).

         At  June  30,  1996,  the  Company  had   substantially   finished  the
discontinuation of its oil and gas activities. There were no Production Costs in
1996.  There was no Depreciation,  Depletion and  Amortization  Expense in 1996,
since the  Company  owned no oil and gas  properties,  real  estate of any type,
furniture or equipment.

FISCAL YEAR 1996 COMPARED TO FISCAL YEAR 1995.
----------------------------------------------

(a)      LIQUIDITY.
         ---------
         At June 30, 1996, the Company had positive  working capital of $407.00.
This  positive  position  is  accounted  for by the  receipt of option  revenue,
interest  income and a tax refund.  At June 30, 1995, the Company had a positive
working capital of $3,884.00.  This position was accounted for by the receipt of
severance payments in 1994 in the amount of $2,084.00

         Cash  Flow from  Operations  was  ($1,777.00)  in 1996 as  compared  to
($26,366.00) in 1995.

(b)      CAPITAL RESOURCES.
         -----------------

         Total  assets  of the  Company  as of June 30,  1996  were  $407.00  as
compared to $6,279.00 at June 30, 1995. The decrease in the assets  reflects the
further discontinuance of the Company's oil and gas operations.

         Stockholder's  equity of  $407.00  at June 30,  1996,  as  compared  to
stockholder's  equity  of  $3,884.00  at June  30,  1995,  is  accounted  for by
continuing  operational  losses. The Company had no capital  commitments at June
30,  1996.  The Company was  continuing  to  liquidate  and close its  corporate
affairs as of June 30, 1996.

(c)      RESULTS OF OPERATIONS.
         ---------------------
         The Company had no revenues from the sale of oil and gas for the fiscal
year ended June 30, 1996.  Revenues as  previously  mentioned  were derived from
option revenues,  interest income and a tax refund. The funds realized from such
revenues were used to pay general  administrative  costs and to fund the buy-out
of an option.  Total  expenses were  $12,570.00  resulting in a net loss for the
fiscal year ended June 30, 1996 of ($2,464.00).

         At  June  30,  1996,  the  Company  had   substantially   finished  the
discontinuation of its oil and gas activities. There were no Production Costs in
1996.  There was no Depreciation,  Depletion and  Amortization  Expense in 1996,
since the  Company  owned no oil and gas  properties,  real  estate of any type,
furniture or equipment.


                                       12

<PAGE>

                                     ITEM 8

                   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                             SUNLIGHT SYSTEMS, LTD.

              INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                                                                        PAGE
                                                                        ----

Table of Contents                                                       F-1.01

Independent Auditors' Reports                                           F-1

Balance Sheet - June 30, 1997                                           F-2, F-3

Statements of Operations - For the Years Ended June 30, 1997 and 1996   F-4

Statements of Changes in Stockholders' Equity - For the Years Ended
                                             June 30, 1997 and 1996     F-5

Statements of Cash Flows - For the Years Ended June 30, 1997 and 1996   F-6, F-7

Notes to Financial Statements                                           F-8 to 
                                                                        F-13


                 The  schedules   for  which   provision  is  made  in
                 Regulation   S-X   are   not   required   under   the
                 instructions contained therein, are inapplicable,  or
                 the   information   required  is  in  the   financial
                 statements or footnotes.





                                       13
<PAGE>


                             Sunlight Systems, Ltd..
                      (Formerly Mendell-Denver Corporation)
                              Financial Statements
                                  June 30, 1997

                                Table of Contents



                                                                        Page
                                                                        ----

Independent Auditor's Report                                         F-1

Financial Statements

          Balance Sheet                                              F-2 to F-3
          Statements of Operations                                   F-4
          Statements of Changes in Stockholders' Equity              F-5
          Statements of Cash Flows                                   F-6 to F-7

Notes to Financial Statements                                        F-8 to F-13
























                                     F-1.01

<PAGE>


                           Larry O'Donnell, CPA, P.C.

Telephone 745-4545
                                                           2280 South Xanadu Way
                                                                       Suite 370
                                                          Aurora, Colorado 80014


Board of Directors
Sunlight Systems, Ltd.
Greenwood Village, Colorado


                          Independent Auditor's Report

I have  audited  the  accompanying  balance  sheet  of  Sunlight  Systems,  Ltd.
(formerly  Mendell-Denver  Corporation)  as of June  30,  1997  and the  related
statements of operations, changes in stockholders' equity and cash flows for the
two years then ended.  These financial  statements are the responsibility of the
Company's  management.  My  responsibility  is to  express  an  opinion on these
financial statements based on my audit.

I conducted my audit in accordance with generally  accepted auditing  standards.
Those standards  require that I plan and perform the audit to obtain  reasonable
assurance   about  whether  the  financial   statements  are  free  of  material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing their  accounting  principles  used and significant  estimates made by
management,  as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.

In my opinion, the financial statements referred to above present fairly, in all
material respects,  the financial  position of Sunlight Systems,  Ltd. (formerly
Mendell-Denver  Corporation)  as of  June  30,  1997  and  the  results  of  its
operations  and its cash flows for the two years then ended in  conformity  with
generally accepted accounting principles.


Larry O'Donnell, CPA, PC

September 24, 1997






                                       F-1

<PAGE>

                             Sunlight Systems, Ltd.
                      (Formerly Mendell-Denver Corporation)
                                  Balance Sheet
                                  June 30, 1997

                                     ASSETS

Current assets
      Cash                                                          $  8,128
      Current portion of notes receivable                              9,788
                                                                    --------

      Total current assets                                            17,916
                                                                    --------
Other assets
      Investment in oil and gas properties                           171,970
      Available for sale securities:
           Energy Corporation, common stock
              Unrestricted, including allowance for
                 increase in market value of $31,483                  31,483
           Intercell Corporation, common stock
              Unrestricted, including allowance for
                 increase in market value of $6,800                    6,800
       Notes receivable, discounted for imputed
                 interest at 10%, net of current portion              37,811
      Deposits                                                         4,090
                                                                    --------

                                                                     252,154
                                                                    --------
                                                                    $270,070
                                                                    ========













                        See Notes to Financial Statements

                                       F-2

<PAGE>

                             Sunlight Systems, Ltd.
                      (Formerly Mendell-Denver Corporation)
                            Balance Sheet (Continued)
                                  June 30, 1997

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
       Accounts payable-related party                                $ 31,500
                                                                     --------


       Total current liabilities                                       31,500
                                                                     --------

Stockholders' equity
       Preferred stock, $.0001 par value
            5,000,000 shares authorized, none issued
       Common stock, $.0001 par value
          45,000,000 shares authorized, 11,500,064
          issued and outstanding                                        1,150
       Additional paid in capital                                     686,229
       Unrealized gain on securities available for sale                38,283
       Accumulated deficit                                           (487,092)
                                                                     --------
                                                                      238,570
                                                                     --------
                                                                     $270,070
                                                                     ========













                        See Notes to Financial Statements

                                       F-3

<PAGE>

                             Sunlight Systems, Ltd.
                      (Formerly Mendell-Denver Corporation)
                            Statements of Operations
                       Years ended June 30, 1997 and 1996



                                                     1997           1996
                                                     ----           ----

Revenues                                         $   4,274      $   8,993

General and administrative expenses                214,289         12,570
                                                 ---------      ---------

Loss from continuing operations                   (210,015)        (3,577)
                                                 ---------      ---------

Gain on sale of securities                          31,781

Discontinued Operations
Loss from operations of
     discontinued segment                         (173,911)
Loss on sale of
      discontinued segment                        (134,947)
                                                  --------
                                                  (308,858)
                                                  --------


Net loss                                         $(487,092)     $  (3,577)
                                                 =========      =========

Net loss per common shares                       $  (.0461)     $  (.0007)
                                                 =========      =========


Weighted average number of common
      shares outstanding                         10,554,859     5,491,558
                                                 ==========     =========








                        See Notes to Financial Statements

                                       F-4


<PAGE>
<TABLE>
<CAPTION>
                                                                 Sunlight Systems, Ltd.

                                                      (Formerly Mendell-Denver Corporation)
                                                  Statements of Changes in Stockholders' Equity
                                                        Years Ended June 30, 1997 and 1996

                                                    Sunlight Systems, Ltd.                         Mendell-Denver Corporation
                                ------------------------------------------------------------  --------------------------------------
                                                       Additional   Unrealized
                                   Common Stock         Paid-In       Gain On    Accumulated         Common Stock       Accumulated
                                 Shares    Amount       Capital     Securities     Deficit        Shares       Amount     Deficit

<S>                            <C>         <C>         <C>          <C>         <C>            <C>             <C>         <C>
Balance, June 30, 1995                                                                           5,491,558    $ 5,492     $(1,608)

Sale of common stock                                                                             5,000,000        100      (4,900)

Net loss for the year                                                                                                      (3,577)
                                                                                                                          -------
                                                                                                            
Balance, June 30, 1996                                                                          10,491,558      5,592     (10,085)

Exchange of Mendell-Denver
  Corporation stock for
  Sunlight Systems, Ltd
  stock at 5 for 1              2,098,312  $   210     $      197                              (10,491,558)    (5,592)     10,085

Issuance of common stock
  for cash and other property   9,401,752      940      1,439,312

Net loss for the year                                                            (487,092)

Unrealized gain on securities                                         38,283
                               ----------  -------     ----------    -------    ---------      -----------    -------     -------

Balance, June 30, 1997         11,500,064  $ 1,150     $1,439,509    $38,283    $(487,092)          --        $    --     $   --
                               ==========  =======     ==========    =======    =========      ===========     =======    =======
</TABLE>


                                               See Notes to Financial Statements

                                                              F-5


<PAGE>



                             Sunlight Systems, Ltd.

                      (Formerly Mendell-Denver Corporation)
                            Statements of Cash Flows
                       Years Ended June 30, 1997 and 1996

                                                           1997           1996
                                                           ----           ----
Cash flows from operating activities
Net loss                                                $(487,092)    $  (3,577)
Adjustments to reconcile net loss to net cash
from operating activities
          Loss on sale of long term assets                 52,118
          Depreciation and amortization                     9,704
          Amortized discount on notes receivable           (4,274)
Change in assets and liabilities:
      (Increase) decrease in:
          Accounts and escrow receivable                                  3,032
          Deposits                                         (4,090)
          Income tax refunds receivable                                   1,113
       Increase (decrease) in:
          Accounts payable                                 31,500        (2,345)
                                                        ---------     ---------

Net cash used by operating activities                    (402,134)       (1,777)
                                                        ---------     ---------

Cash flows from investing activities
     Purchase of property and equipment                   (71,172)
     Purchase of distribution and dealerships             (42,546)
     Increase in start-up costs                           (30,627)
     Proceeds from sale of assets                          18,700
     Payments received on notes receivable                 20,500
                                                        ---------

Net cash used by investing activities                    (105,145)
                                                        ---------

Cash flows from financing activities
     Proceeds from sale of common stock                   515,000           100
                                                        ---------     ---------

Net cash flows from financing activities                  515,000           100
                                                        ---------     ---------

Net increase(decrease) in cash flows                        7,721        (1,677)
Cash, beginning                                               407         2,084
                                                        ---------     ---------

Cash ending                                             $   8,128     $     407
                                                        =========     =========

                        See Notes to Financial Statements

                                       F-6

<PAGE>

                             Sunlight Systems, Ltd.
                      (Formerly Mendell-Denver Corporation)
                      Statements of Cash Flows (Continued)
                       Years Ended June 30, 1997 and 1996


Noncash investing and financing activities:

     Assets acquired by issuance of common stock:

         Investment in oil and gas property                           $171,970
         Marketable equity securities
             of Energy Corporation                                    $  --
         Marketable equity securities
             of Intercell Corporation                                 $  --
         Note receivable acquired for
              sale of assets                                          $ 72,053


























                        See Notes to Financial Statements

                                       F-7

<PAGE>

                             Sunlight Systems, Ltd.
                      (Formerly Mendell-Denver Corporation)
                          Notes to Financial Statements
                                  June 30, 1997

1    Organization,  Business  and  Merger of  Mendell-Denver  Corporation  with
     Sunlight Systems, Ltd.

     Mendell-Denver  Corporation  (Mendell)  was formed on July 22, 1985 for the
     purpose of acquiring,  exploring and developing oil and gas properties.  On
     May 1, 1992,  Mendell sold all of its  interests in oil and gas  properties
     and has since had no business operations.

     Sunlight Systems,  Ltd. (Sunlight) was formed on June 22, 1996. On July 17,
     1996 it became a  wholly-owned  subsidiary  of Mendell.  Mendell was merged
     with and into  Sunlight  with  Sunlight  being the  surviving  corporation.
     Shareholders  of Mendell  received  one common  share of Sunlight  for five
     shares of Mendell.

     Sunlight was a dealer in Colorado and Nevada and a distributor in Illinois,
     Ohio,  Michigan  and Indiana of skylights  manufactured  or imported by Sun
     Tunnel  Systems,  Inc.  As  discussed  in Note 4, on  November  1, 1997 the
     Company sold its dealerships and distributorships.  The Company is actively
     seeking business opportunities for potential acquisition or merger.

2.   Significant Accounting Policies

     Inventories -  Inventories  are valued at the lower of cost or market using
     the first-in,  first-out  (FIFO) method for determining  cost.  Inventories
     consist of skylights and components.

     Property and Equipment - Property and equipment are carried at cost.  Major
     additions  and   betterments  are  capitalized   while   replacements   and
     maintenance  and  repairs  that do not  improve  or extend  the life of the
     respective  assets are  expensed.  When  property  is retired or  otherwise
     disposed  of,  the  related   costs  and   accumulated   depreciation   and
     amortization  are  removed  from  the  accounts  and  any  gain  or loss is
     reflected in operations.

     Depreciation  and  amortization of property and equipment are calculated on
     the straight-line  method over the estimated useful lives of three to seven
     years.





                                       F-8

<PAGE>

                             Sunlight Systems, Ltd.
                      (Formerly Mendell-Denver Corporation)
                    Notes to Financial Statements (Continued)
                                  June 30, 1997

2.   Significant Accounting Policies (Continued)

     Intangible  Assets -  Intangible  assets  subject to  amortization  include
     start-up costs and dealer and distributor  costs.  Start-up costs are being
     amortized on a straight-line  basis over five years. Dealer and distributor
     costs are  being  amortized  over the life of the  dealer  and  distributor
     agreements of three years.

     Investment in Marketable Securities - The Company classifies its marketable
     equity  securities  as  "available  for  sale".  Securities  classified  as
     "available for sale" are carried in the financial  statements at fair value
     unless they are restricted from trade. Restricted securities are carried at
     cost. Realized gains and losses,  determined using the first-in,  first-out
     method,  are included in earnings;  unrealized holding gains and losses are
     reported as a separate component of stockholders' equity.

     Oil and Gas Properties - The Company followed the successful efforts method
     of  accounting  for its oil and gas  activities.  Under this method,  costs
     associated  with the  acquisition,  drilling,  and  equipping of successful
     exploratory  wells are capitalized  and amortized  ratably over the life of
     production from related proved reserves.  Geological and geophysical costs,
     delay rentals,  and drilling costs of  unsuccessful  exploratory  wells are
     charged to expense as incurred.  Costs of  drilling,  both  successful  and
     unsuccessful  development wells, are also capitalized and amortized ratably
     over the life of  production  from  related  proved  reserves.  Undeveloped
     properties are assessed  periodically  to determine  whether the properties
     have been impaired, and when impairment occurs, a loss is recognized.

     Property  acquisition  costs  for  unproved  oil  and  gas  properties  are
     initially  capitalized.  The acquisition costs for unproved  properties are
     assessed  at least  annually,  and if  necessary,  an  impairment  in value
     recognized. Proceeds from sales of partial interests in unproved leases are
     accounted for as a recovery of cost without  recognizing  any gain or loss.
     Costs of properties abandoned are expensed on the date of abandonment.

     Loss Per Common  Share - Loss per common  share is computed on the basis of
     the  weighted  average  number  of common  shares  outstanding  during  the
     respective periods.



                                       F-9

<PAGE>

                             Sunlight Systems, Ltd.
                      (Formerly Mendell-Denver Corporation)
                    Notes to Financial Statements (Continued)
                                  June 30, 1997

2.   Significant Accounting Policies (Continued)

     Cash  Equivalents  - For  purposes  of  reporting  cash flow,  the  Company
     considers cash and certificates of deposit with original  maturity of three
     months or less to be cash equivalents.

3.   Investment in Energy Corporation

     The company owned One Hundred and Sixty-Six Thousand, Six Hundred and Sixty
     Seven (166,667) restricted shares of Energy Corporation. Energy Corporation
     is a public company whose stock,  as a result of it's decision to implement
     a voluntary Plan of Liquidation Dissolution, is not currently trading. As a
     result  of  the  sale  of  all  it's   assets  to   Intercell   Corporation
     (NASDAQ;INCE) on July 7, 1996,  Energy  Corporation  received Five Million,
     Four Hundred and Twelve Thousand,  Three Hundred and Fifty Five (5,412,355)
     restricted  shares of  Intercell  Corporation  in exchange for such assets.
     Energy  Corporation and Intercell  Corporation  have agreed to register and
     distribute to the shareholders of Energy Corporation the Five Million, Four
     Hundred  and Twelve  Thousand,  Three  Hundred and  Fifty-Five  (5,412,355)
     shares held by Energy Corporation. All beneficial owners of common stock of
     Energy Corporation,  as of July 8, 1996 will be entitled,  over a three (3)
     year period, in six (6) equal installments, payable in January and April of
     each year  commencing  1997  through  1999,  to  receive  for each share of
     Intercell  Corporation  such  holder  owns,  one (1)  registered  share  of
     Intercell  Corporation.  Intercell  Corporation is currently  preparing the
     Registration   Statement  for  filing  with  the  Securities  and  Exchange
     Commission. On August 25, 1997 the Company received its shares of Intercell
     Corporation.

     The shares of Energy Corporation were acquired in a noncash  transaction in
     exchange  for shares of the  Company.  The shares have been  recorded at no
     cost  because  the  Company  is  unable  to  determine  the cost of  Energy
     Corporation shares of its predecessor owners.








                                      F-10

<PAGE>

                             Sunlight Systems, Ltd.
                      (Formerly Mendell-Denver Corporation)
                    Notes to Financial Statements (Continued)
                                  June 30, 1997

3.    Investment in Energy Corporation (Continued)

     Unrealized gains and losses of marketable  securities available for sale as
     of June 30, 1997 are as follows:

                                                             Gross         Fair
                                        Shares     Cost    Unrealized     Value
     Energy Corporation:                                     Gains
     Shares with restrictions
        lasting more than one year      46,298   $   --    $  15,741    $ 15,741
      Shares with restrictions
        lasting less than one year      92,596   $   --    $  31,483    $ 31,483
      Intercell Corporation             20,000   $   --    $   6,800    $  6,800

     The unrealized loss on shares with  restrictions  lasting for more than one
     year is not being recognized in the financial statements.

4.   Discontinued operations

     On November 1, 1997, the Company sold its dealerships and  distributorships
     in skylights manufactured or imported by Sun Tunnel Systems, Inc. including
     all of its assets. In separate transactions, the Company received 1)$18,700
     in cash 2) a note  receivable  for  $60,000  and 3) a note  receivable  for
     $30,000.  The notes receivable are  collaterialized  by the assets sold and
     require payments of $1,250 and $1,000,  respectively.  The notes receivable
     are discounted to recognize an interest rate of 10%. The Company recognized
     a loss on the sale of  $134,947.  The $30,000 note  receivable  was further
     discounted and collected in full in April, 1997.

5.   Related Party Transactions

     The Company pays a management  fee to Zenith  Petroleum  Corporation  whose
     president and a stockholder  is the President and a beneficial  stockholder
     of the Company. Management fees of $91,000 were recorded for the year ended
     June 30, 1997 of which $31,500 are included in accounts payable at June 30,
     1997.

     The  president  of Energy  Corporation  is a  minority  stockholder  of the
     Company.


                                      F-11

<PAGE>

                             Sunlight Systems, Ltd.
                      (Formerly Mendell-Denver Corporation)
                    Notes to Financial Statements (Continued)
                                  June 30, 1997

6.   Stockholders' Equity

     Sunlight Systems, Ltd. issued stock as follows 

                                                       Shares            Value
     Exchange for 10,491,558 shares
      Mendell-Denver Corporation
      at five shares to one                          2,098,312        $     407
      Cash                                           2,083,960          300,000

     Oil and gas property (valued at the cost of
      the predecessor owner)                         2,083,896          171,970

     166,667 shares of Energy
      Corporation plus $90,000 cash                  2,733,896           90,002

     Cash                                              500,000          125,000

     20,000 shares of Intercell Corporation          2,000,000             --
                                                     ---------         --------

                                                     11,500,064        $687,379
                                                     ==========        ========

7.   Investment in Oil and Gas Properties

     The Company has an  investment  in  overriding  royalty on leases which are
     held by a large independent oil and gas operator. The leases are fully paid
     for the next three years. The leases are presently not producing.









                                      F-12

<PAGE>

                             Sunlight Systems, Ltd.
                      (Formerly Mendell-Denver Corporation)
                    Notes to Financial Statements (Continued)
                                  June 30, 1997

8.   Income Taxes

     Deferred  income  taxes  arise  from  the  temporary   differences  between
     financial  statement and income tax recognition of net operating losses and
     unrealized gain and losses of marketable securities.

     The  components  of  deferred  taxes at June 30,  1997 in the  accompanying
     balance sheet is summarized below:

     Deferred tax assets (liabilities) arising from:
        Net operating loss carryover                       $ 120,000
        Unrealized gains on securities                        (9,000)
        Less valuation allowance                            (111,000)

        Deferred taxes - net                                $    --
                                                            ========

     At June 30, 1997, the Company has approximately  $480,000 of unused Federal
     net operating loss carryforwards, which expire in the year 2012.




















                                      F-13

<PAGE>
<TABLE>
<CAPTION>
                                    PART III

                                     ITEM 10

                 DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY

       NAME AND AGE                   POSITION                           PERIOD OF SERVICE
<S>                           <C>                                       <C> 
Patricia E. Johnston (39)     President,  Chief Executive  Officer,     June 1996 to Present
                              Chief  Financial  Offer,  Treasurer &
                              Director

Cheri L. Perry (49)           Secretary                                 June 1996 to Present

</TABLE>


         The directors hold office until the next annual meeting of shareholders
and until their  successors  have been duly elected and qualified.  The officers
are  elected  by the  Board of  Directors  at its  annual  meeting,  immediately
following the  shareholders  annual meeting and hold office until their death or
until they seek an earlier  resignation  or are removed from office.  No current
director  has any  arrangement  or  understanding  whereby  they  are or will be
selected  as a director  or  nominee.  There are no  written or other  contracts
providing  for the  election of directors or term of  employment  for  executive
officers. No family relationship exists between any director, executive officer,
significant  employee or person  nominated  or chosen by the Company to become a
director or  executive  officer.  The Company has not  established  an executive
committee of the Board of Directors or any  committee  that would serve  similar
functions such as audit, incentive compensation, or nominating committees.

BIOGRAPHICAL INFORMATION ON OFFICERS AND DIRECTORS.
--------------------------------------------------

         PATRICIA  E.  JOHNSTON.  Ms.  Johnston  has been the  President,  Chief
Executive  Officer,  Chief  Financial  Officer,  Treasurer and a Director of the
Company since its incorporation on June 25,1996.  From 1991 to the present,  Ms.
Johnston has been a licensed real estate agent with Perry & Butler Realty, Inc.,
she  serves  specifically  as a  residential  Realtor.  She has been  given  the
distinction for four  consecutive  years of the President Club - "Gold" (Perry &
Butler Realty, Inc. recognition of Top Sale Producers).  Prior to that time, she
held various top executive  positions with numerous  publicly traded and private
companies in the oil and gas  investment,  mineral  exploration  and development
industries and was involved in other business  activities in the real estate and
investment industries.

Ms. Johnston  graduated from the University of Wisconsin,  Madison in 1982 where
she received her Bachelor of Science degree.

Ms. Johnston is the sole officer,  director and shareholder of Zenith  Petroleum
Corporation,  the beneficial  owner of more than ten percent (10%) of the issued
and outstanding stock of the Company.


                                       28

<PAGE>

The Company  believes,  because of Ms.  Johnston's  professional  expertise  and
background in the real estate  industry that she enjoys a significant  knowledge
of  features  and  products  considered   attractive  to  home  owners  and  the
construction  industry.  The  Company's  primary  product  is  designed  for the
residential  home  market and is a product  which she as, the  President  of the
Company,  is an unique  position  to sponsor  and market  with  people  actively
engaged in the real estate industry and whose opinions carry significant  weight
with homeowners, builders, remolding and renovation firms and others catering to
the huge housing market industry.

         CHERI L. PERRY.  Ms.  Perry has served as the  Secretary of the Company
since its inception. From February 1993 to May 1996, Ms. Perry was employed as a
Product Manager with Automatic Data Processing at its Denver,  Colorado  office.
From January 1, 1984 to February 1993,  she was employed by Securities  Industry
Software,  Inc.,  as a Conversion  Services  and Product  Manager in its Denver,
Colorado offices.

Prior to that time Ms. Perry was employed by various  brokerage firms located in
the  Denver,  Colorado  area.  She was  Operations  Manager  at  Morris  Bridger
Securities,  Inc. from January 1983 until January 1984.  From  September 1995 to
January 1983,  she was employed as the  Treasurer/Controller  of E.J.  Pittock &
Co.,  Incorporated.  From  May  1968 to  September  1975,  she was  employed  by
Bosworth, Sullivan & Co., in numerous positions.

         Prior to the change in control, which became unconditionally  effective
on  July  22,  1996,  management  of the  company  consisted  of  the  following
individuals in the capacities indicated.

         PAUL E.  MENDELL.  Mr.  Mendell was  Chairman of the Board,  President,
Chief Executive Officer and a Director of the Company from inception on July 22,
1985 to July 22, 1996.

         CHARLES R. RAYMAN. Mr. Rayman was Vice President, Secretary, Treasurer,
Chief  Financial  Officer and Director of the Company from April 1, 1989 to July
22, 1996.

         DAVID M. HEDGES. Mr. Hedges was a Director of the Company from December
8, 1987 to July 22, 1996.





                                       29
<PAGE>


                                     ITEM 11

                             EXECUTIVE COMPENSATION

         No compensation  has been paid to any Executive  Officer or Director or
to them as a group during the fiscal year ended June 30, 1997.  All officers and
Directors  of the Company  prior to the change in control  have  resigned  their
positions and  consequently no compensation  will be paid to them by the Company
in the future.

         Present  members  of  Management  are  currently  serving  without  any
compensation on behalf of the Company. However, Zenith Petroleum Corporation was
paid $91,000 for  consulting  fees as of June 30,  1997.  See Note 5 to Notes to
Financial Statements.

         The Company does intend when operating or other funds are available, to
compensate its Executive  Officers and key employees in a manner equivalent with
the size of the Company and for comparable services rendered for similar type of
services.  The Company further contemplates creating a Compensatory Stock Option
Plan which it intends to register  under Form S-8 for the  benefit of  officers,
directors,  key employees,  consultants  and advisors and others entitled to the
benefit of such plan. At the current time, no options have been granted.

         Any amount  which may have been paid by the  Company in the past fiscal
year or which in the future may be paid,  may  obviously  have certain  personal
benefits for the individual  concerned,  but are not paid in any connection with
any personal  matters but solely in connection with the conduct of the Company's
business.  Such payments are made to facilitate  job  performance  and to reduce
work related  expenses.  Although the amount of such  personal  benefits and the
extent to which they are  related  to job  performance  can not be  specifically
ascertained,  the  Company  has  concluded  that the  aggregate  amount  of such
personal  benefits  will not  exceed 5% of cash  compensation  for any person or
group named.





                                       30
<PAGE>

                                     ITEM 12

                          SECURITY OWNERSHIP OF CERTAIN
                        BENEFICIAL OWNERS AND MANAGEMENT

         Based upon information  which has been made available to the Company by
its Stock Transfer Agent,  the following  tables sets forth, as of September 23,
1997,  the common shares owned by each person,  known by the Company to own more
the 5% of the  outstanding  common stock of the Company and for each officer and
director, and the officers and directors as a group.

NAME & ADDRESS OF                         NUMBER OF SHARES       PERCENTAGE(1)
BENEFICIAL OWNER

Zenith Petroleum Corporation                 2,230,619(2)          19.40%
5222 S. Holly                                         (3)
Greenwood Village, CO 80111

Bert Roosen                                  2,263,117(3)          19.68%
4-4909 32nd Avenue
Surrey, B.C. Canada V4P 1A4


Cheri L. Perry                               1,979,222(3)          17.21%
3236 Jellison Street
Wheat Ridge, CO 80033












------------------
(1) Based upon 11,500,064 shares issued and outstanding on September 23, 1997.

(2) Patricia E. Johnston,  President,  Chief Executive Officer,  Chief Financial
Officer,  Treasurer and a Director of the Company is the Sole Officer,  Director
and Shareholder of Zenith Petroleum Corporation.

(3) Each  person  named has record  and/or  beneficial  ownership  of the shares
indicated and sole voting and dispositive rights.


                                       31
<PAGE>

(b)      EXECUTIVE OFFICERS AND DIRECTORS

NAME & ADDRESS                               NUMBER OF SHARES      PERCENTAGE(1)

Patricia E. Johnston                           2,230,619(2)           19.40%
5222 S. Holly                                           (3)
Greenwood Village, CO 80111

Cheri L. Perry                                 1,979,222(3)           17.21%
3236 Jellison Street
Wheat Ridge, CO 80033

All Officers and Directors as a                 4,209,841             36.61%
   Group (2)












-------------------
(1) Based upon 11,500,064 shares issued and outstanding on September 23, 1997.


(2) Patricia E. Johnston,  President,  Chief Executive Officer,  Chief Financial
Officer,  Treasurer and a Director of the Company is the Sole Officer,  Director
and Shareholder of Zenith Petroleum Corporation.

(3) Each  person  named has record  and/or  beneficial  ownership  of the shares
indicated and sole voting and dispositive rights.

                                       32
<PAGE>

                                     ITEM 13

                 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         In connection  with the corporate  reorganization  disclosed in Item 1,
the Company's existing officers,  directors and principal  stockholders acquired
their controlling  interests in the Company as a result of such  reorganization.
Following the acquisition of control,  certain subscribers consisting of: Zenith
Petroleum   Corporation   and  Cheri  L.  Perry,   each  acquired  Two  Million,
Eighty-Three  Thousand,  Eight  Hundred and  Ninety-Six  (2,083,896)  restricted
shares of the Company's  common stock at an effective per share price of $0.1439
per  share.  Cheri  L.  Perry  paid the sum of Three  Hundred  Thousand  Dollars
($300,000.00)  in cash or cash  equivalent  for  her  shares.  Zenith  Petroleum
Corporation  purchased  its  shares for oil and gas  properties  valued at Three
Hundred  Thousand  Dollars  ($300,000.00).  Bert Roosen  purchased  One Million,
Eighty-Three Thousand,  Eight Hundred and Ninety-Six (1,083,896) in exchange for
restricted  securities of Energy  Corporation  valued at Three Hundred  Thousand
Dollars ($300,000.00).  The evaluation of the securities and the transferred oil
and gas  properties  was  arbitrarily  determined by Management  and there is no
specific  relationship  to any  recognized  criteria  of value.  Cheri L. Perry,
gifted Two Hundred and Eighty-Three  Thousand,  Six Hundred and Ninety (283,690)
restricted  shares  to seven  (7)  persons  (the  children,  godchildren  and an
employee of her husband)  reducing her  ownership to One Million,  Eight Hundred
Thousand  (1,800,000)  shares.  She  subsequently   purchased  One  Hundred  and
Seventy-Nine   Thousand,  Two  Hundred  and  Twenty-Two  (179,222)  shares  from
nonaffiliates  of the  Company,  bringing her  ownership  to One  Million,  Nine
Hundred and Seventy-Nine,  Two Hundred and Twenty-Two  (1,979,222)  shares. Bert
Roosen and Zenith Petroleum Corporation  subsequently  purchased One Hundred and
Seventy-Nine Thousand, One Hundred and Fifty-Seven (179,157) and One Hundred and
Forty-Six   Thousand,   Six  Hundred  and  Fifty-Nine   (146,659)   shares  from
nonaffiliates.  All shares purchased from  nonaffiliates were purchased at $0.20
per share.

         Except  as  disclosed  herein,  there  are  no  other  arrangements  or
transactions  from  which  related  parties  may  receive a benefit  to the best
knowledge of Management. See also Note 5 to Notes to Financial Statements.









                                       33
<PAGE>


                                     PART IV

                                     ITEM 14

                  EXHIBITS, FINANCIAL STATEMENTS SCHEDULES AND
                               REPORTS OF FORM 8-K

a)       The following documents and reports have been filed as a part of this
         report.

         1.       Financial Statements.

                  (a)  Independent Auditors' Reports

                  (b)  Balance Sheet - June 30, 1997

                  (c)  Statements of Operations - For the Two Years Ended
                         June 30, 1997

                  (d)  Statements of Stockholder's Equity -
                         For the Two Years Ended June 30, 1997

                  (e) Statements of Cash Flows -
                         For the Two Years Ended June 30, 1997

                  (f)  Notes to Financial Statements

         2.       Financial Statement Schedules

                  Schedules are omitted as they are not required or are not
                  applicable, or the  required  information  is shown in the
                  Financial Statements or notes thereto.

         3.       Exhibits required by Item 601:

                  No exhibits are required to be filed by Item 601.

         4.       Reports on Form 8-K:

                  No  current  Report  on Form  8-K was  filed  in the last
                  quarter of the Fiscal Year Ended June 30, 1997.






                                       34
<PAGE>



                                   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.

                                     SUNLIGHT SYSTEMS, LTD.
                                     (Registrant)


                                         /s/ Patricia E. Johnston
Date:  September 27, 1997             By: _____________________________________
                                          Patricia E. Johnston,
                                          Chief Executive Officer, President,
                                          Chief Financial Officer, Treasurer, &
                                          Director







 











                                       35