FORM 10-K/A-1

                       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, 1996

                                       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)

820 S. Colorado Blvd., Denver, CO                                 80222
(Address of principal executive offices)                       (Zip Code)

Registrant's telephone number, including area code:  303-691-1900

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 August 31, 1996, there were Nine Million,  Sixty-Four (9,000,064)
         common shares  outstanding,  Two million,  Five Hundred and  Ninety-One
         Thousand,  Forty-Two  (2,591,042) of which were held by non-affiliates.
         No  market  existed  as of  that  date  for  the  common  stock  of the
         Registrant. Therefore, the aggregate market value of the non-affiliated
         common shares, as of that date, was approximately $0.00.


                       DOCUMENTS INCORPORATED BY REFERENCE

     Financial  Statements  for the  Company's  fiscal year ended June 30, 1995,
included in the Company's Annual Report on Form 10K, dated October 11, 1995.



<PAGE>
     The  Registrant  hereby  submits its Form 10-K amendment to amend Item 8 of
its Annual  Report on Form 10-K for the fiscal year ended June 30, 1996 as filed
with the Securities and Exchange Commission on September 26, 1996 as follows:

                                     ITEM 8

                   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                             Sunlight Systems, Ltd..
                      (Formerly Mendell-Denver Corporation)
                              Financial Statements
                       Three years ended June 30,1996 and
                        two months ended August 31, 1996

                                Table of Contents


                                                                   Page

Independent Auditors Report ....................................   F-1

Financial Statements

          Balance Sheets .......................................   F-2
          Statements of Operation ..............................   F-3
          Statements of Changes in Stockholder's Equity ........   F-4
          Statement of Cash Flows ..............................   F-5 to F-6

Notes to Financial Statements ..................................   F-7 to F-12


                           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.

                           The Company's  Financial  Statements,  for the fiscal
                           year ended June 30,  1995 and prior  years are in the
                           Company's  Annual  Report on Form 10K,  dated October
                           11,  1995  and  have  been  incorporated   herein  by
                           reference. See Cover Page.



                                     F-1.01

<PAGE>

                           LARRY O'DONNELL, CPA, P.C.

                                                                          Office
Office 745-4545                               2851 South Parker Road, Suite 1040
Residence 755-7182                                       Aurora, Colorado  80014

                                                                       Residence
                                                       2383 South Sedalia Circle
                                                         Aurora, Colorado  80013

Board of Directors
Sunlight Systems, Ltd.
Denver, Colorado

                          Independent Auditor's Report

I have audited the accompanying  balance sheet of Sunlight  Systems,  Ltd. as of
August  31,  1996  and  the  related   statements  of  operations,   changes  in
stockholders'  equity  and cash  flows  for the two  months  then  ended and the
accompanying  balance sheets of  Mendell-Denver  Corporation as of June 30, 1996
and 1995 and the related  statements  of  operations,  changes in  stockholders'
equity and cash flows for the years then ended.  These financial  statements are
the responsibility of the Company's.  My responsibility is to express an opinion
on these financial  statements  based on my audit.  The financial  statements of
Mendell-Denver  Corporation as of June 30, 1994,  were audited by other auditors
whose  report date August 23, 1994  expressed  an  unqualified  opinion on those
statements.

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 resonable basis for my opinion.

In my opinion,  the 1996 and 1995 financial statements referred to above present
fairly, in all material  respects,  the financial  position of Sunlight Systems,
Ltd. as of August 31, 1996 and the results of its  operations and its cash flows
for the two  months  then ended and the  financial  position  of  Mendell-Denver
Corporation  as of June 30, 1996, and 1995 and the results of its operations and
its cash flows for the year then ended in  conformity  with  generally  accepted
accounting principles.


Larry O'Donnell, CPA, PC


September 14, 1996


                                      F-1

<PAGE>
<TABLE>
<CAPTION>



                             Sunlight Systems, Ltd.
                      (Formerly Mendell-Denver Corporation)
                                 Balance Sheets

                                     Assets
                                                                                          August 31,    June 30,     June 30,
                                                                                            1996          1996         1995
<S>                                                                                     <C>          <C>          <C> 
Current assets
      Cash ..........................................................................   $   56,997   $      407   $    2,084
      Accounts receivable ...........................................................          636                     3,032
      Stock subscriptions note receivable ...........................................       87,233
      Inventory .....................................................................       92,361
      Prepaid expenses ..............................................................          638                     1,113
       Income tax refund receivable
                                                                                        ----------   ----------   ----------
       Total current assets .........................................................      237,865          407        6,229
                                                                                        ----------   ----------   ----------

 Property and equipment, net of
      accumulated depreciation of $2,163 ............................................       67,320
                                                                                        ----------

Other assets
      Investment in oil and gas properties ..........................................      300,000
      Available for sale securities of
          Energy Corporation common stock,
              Restricted ............................................................      500,000
              Unrestricted, including allowance for
                  increase in market value of $13,891 ...............................      263,891
      Start-up costs, net of accumulated
           amortization of $1,021 ...................................................       29,606
      Dealer and distributor costs, net of
           accumulated amortization of $1,667 .......................................       28,333
      Deposits ......................................................................        4,590
                                                                                        ----------

                                                                                         1,126,420
                                                                                        ----------

                                                                                        $1,431,605   $      407   $    6,229
                                                                                        ==========   ==========   ==========
</TABLE>

                        See Notes to Financial Statements

                                       F-2

<PAGE>
<TABLE>
<CAPTION>

                      Liabilities and Stockholders' Equity
                                                                                      August 31,       June 30,      June 30,
                                                                                         1996             1996         1995
<S>                                                                                  <C>              <C>         <C> 
Current liabilities
      Accounts payable ...........................................................   $    20,761                  $     2,345
       Loan payable ..............................................................        35,129
      Payroll and sales taxes ....................................................         4,725
                                                                                     -----------                  -----------

      Total current liabilities ..................................................        60,615                        2,345
                                                                                     -----------                  -----------

Commitments

Stockholders' equity
Sunlight Systems, Ltd. ...........................................................
      Preferred stock, $.0001 par value
           5,000,000 shares authorized, none issued
      Common stock, $.0001 par value
           45,000,000 shares authorized, 9,000,064
           issued and outstanding ................................................           900
      Additional paid in capital .................................................     1,439,509
      Unrealized gain on securities available for sale ...........................        13,891
      Accumulated deficit ........................................................       (83,310)

Stockholders' equity
Mendell-Denver Corporation
      Preferred stock, $0.01 par value,
           1,000,000 shares authorized, none issued
      Common stock, $0.001 par value,
           25,000,000 shares authorized ,
            shares issued and outstanding,
            1996,-10,491,558, 1995,-5,491,558 ....................................                    $    10,492          5,492
       Accumulated deficit .......................................................                        (10,085)        (1,608)
                                                                                     -----------      -----------    -----------
                                                                                       1,370,990              407          3,884
                                                                                     -----------      -----------    -----------
                                                                                    $  1,431,605      $       407    $     6,229
                                                                                     ===========      ===========    ===========
</TABLE>

                        See Notes to Financial Statements

                                       F-2

<PAGE>
<TABLE>
<CAPTION>



                             Sunlight Systems, Ltd.
                      (Formerly Mendell-Denver Corporation)
                            Statements of Operations



                                                         Two months
                                                            Ended                          Years Ended June 30,
                                                       August 31, 1996               1996          1995           1994
<S>                                                    <C>                      <C>            <C>            <C> 
Sales ...............................................  $      2,278
Cost of sales .......................................         1,202

                                                        -----------
Gross profit ........................................         1,076

Revenues ............................................                           $     8,993    $     6,872    $     2,759

General and administrative expenses .................        84,386                  12,570         16,332         43,194
 Interest expense ...................................                                                3,969
                                                        -----------             -----------    -----------    -----------
Loss from operations ................................       (83,310)                 (3,577)       (13,429)       (40,435)

Provision from income taxes .........................                                               (1,113)        (7,115)
                                                        -----------             -----------    -----------    -----------
Net loss ............................................   $   (83,310)            $    (3,577)   $   (12,316)   $   (33,320)
                                                        ===========             ===========    ===========    ===========
Net loss per common share............................   ($    .0093)            ($    .0007)   ($    .0022)   ($    .0061)
                                                        ===========             ===========    ===========    ===========

Weighted average number of common
     shares outstanding .............................     9,000,064               5,491,558      5,491,558      5,491,558
                                                        ===========             ===========    ===========    ===========
</TABLE>










                        See Notes to Financial Statements

                                       F-3

<PAGE>
<TABLE>
<CAPTION>
                             Sunlight Systems, Ltd.
                      (Formerly Mendell-Denver Corporation)
                  Statement of Changes in Stockholders' Equity

                                                              Sunlight Systems, Ltd.
    -------------------------------------------------------------------------------------------------------------
                                                                       Additional  Unrealized                  
                                               Common Stock              Paid-In     Gain On       Accumulated      
                                         Shares            Amount        Capital    Securities       Deficit       
<S>                                     <C>           <C>            <C>             <C>            <C> 
Balance, June 30, 1993 .............

Net loss for the year
    ended June 30, 1994 ............                                                                                  
                                                                                                                  
Balance June 30, 1994 ..............                                                                                 

Net loss for the year
   ended June 30, 1995 .............                                                                                 
                                                                                                                     
Balance, June 30, 1995 .............                                                                                 

Sale of common stock ...............                                                                                 

Net loss for the year
   ended June 30, 1996 .............                                                                                 
                                                                                                                     
Balance, June 30, 1996 .............
    
Exchange of Mendell-Denver
   Corporation stock for Sunlight
   Systems, Ltd. stock at 5 for 1 ..     2,098,312    $        210   $        197                                    

Issuance of common stock for cash
   and other property ..............     6,901,752             690      1,439,312

Net loss for two months
   ended August 31, 1996............                                                                      (83,310)

Unrealized gain on securities ......                                                       13,891
                                      ------------    ------------   ------------    ------------    ------------    
Balance, August 31, 1996 ...........     9,000,064    $        900   $  1,439,509    $     13,891    ($    83,310)   
                                      ============    ============   ============    ============    ============    
</TABLE>


                                             Mendell-Denver Corporation
                                     -------------------------------------------
                                                                      Retained
                                               Common Stock           Earnings
                                           Shares         Amount      (Deficit)
              
Balance, June 30, 1993 .............     5,491,558   $      5,492  $     44,028

Net loss for the year
   ended June 30, 1994 .............                                    (33,320)
                                      ------------   ------------  ------------
Balance June 30, 1994 .............      5,491,558          5,492        10,708
           
Net loss for the year                                                  
   ended June 30, 1995 .............                                    (12,316)
                                      ------------   ------------  ------------
Balance, June 30, 1995 .............     5,491,558          5,492        (1,608)
                                                                     
Sale of common stock ...............     5,000,000          5,000        (4,900)
                                                               
Net loss for the year                                             
   ended June 30, 1996 .............                                     (3,577)
                                      ------------   ------------   ------------
Balance, June 30, 1996 .............    10,491,558         10,492       (10,085)
                                                              
Exchange of Mendell-Denver                                      
   Corporation stock for Sunlight                               
   Systems, Ltd. stock at 5 for 1 ..   (10,491,558)       (10,492)        10,085
                                                                      
Issuance of common stock for cash                                     
   and other property ............. 
                                                                         
Unrealized gain on securities .....                               
                                      ------------   ------------   ------------
Balance, August 31, 1996 ..........   $          0   $          0   $         0
                                      ============   ============   ============
                                                            
                       See Notes to Financial Statements
                                      F-4
         

<PAGE>
<TABLE>
<CAPTION>

                             Sunlight Systems, Ltd.
                      (Formerly Mendell-Denver Corporation)
                            Statements of Cash Flows

                                                               Two Months
                                                                 Ended              Year  ended June 30,
                                                            August 31, 1996     1996         1995        1994
<S>                                                            <C>          <C>          <C>          <C>

Cash flows from operating activities
Net loss ...................................................   $ (83,310)   $  (3,577)   $ (12,316)   $ (33,320)
Adjustments to reconcile net loss
     to net cash from operating activities
             Depreciation and amortization                         4,851
Change in assets and liabilities:
     (Increase) decrease in:
         Accounts and escrow receivable ....................        (636)       3,032       (3,032)
          Inventory ........................................     (92,361)
         Prepaid expenses ..................................        (638)
         Deposits ..........................................      (4,590)
         Income tax refunds receivable .....................                    1,113       (1,113)
     Increase (decrease) in:
         Accounts payable ..................................      20,763       (2,345)      (9,905)     (21,716)
          Payroll and sales taxes ..........................       4,725
                                                               ---------    ---------    ---------    ---------
Net cash used by operating activities ......................    (151,196)      (1,777)     (26,366)     (55,036)
                                                               ---------    ---------    ---------    ---------
Cash flows from investing activities
     Purchase of property and equipment ....................     (69,483)
     Purchase of distribution, dealerships .................     (30,000)
     Increase in start-up costs ............................     (30,627)
                                                               ---------
Net cash used by investing activities ......................    (130,110)
                                                               ---------
Cash flows from financing activities
     Proceeds from sale of common stock ....................     302,767          100
     Increase in loan  payable .............................      35,129
                                                               ---------    ---------
Net cash flows from financing activities ...................     337,896          100
                                                               ---------    ---------
Net increase( (decrease) in cash flows .....................      56,590       (1,677)     (26,366)     (55,036)
Cash, beginning ............................................         407        2,084       28,450       83,486
                                                               ---------    ---------    ---------    ---------
Cash ending.................................................   $  56,997    $     407    $   2,084    $  28,450
                                                               =========    =========    =========    =========
</TABLE>

                                       F-5

<PAGE>
<TABLE>
<CAPTION>

                                                          Sunlight Systems, Ltd.
                                                  (Formerly Mendell-Denver Corporation)
                                                   Statements of Cash Flows (continued)


                                                       Two Months
                                                         Ended                   Year Ended June 30
                                                     August 31, 1996       1996        1995         1994
<S>                                                    <C>             <C>           <C>          <C>

Supplemental  disclosure of cash flow information
   Cash paid (received) during the period for:
      Income taxes .................................                    $ (1,113)     $ 8,086      $4,116
                                                                        ========      =======      ======
      Interest .....................................                                  $ 3,969
                                                                                      =======
Noncash investing and financing activities:
   Assets acquired by issuance of common stock:
        Stock subscription note receivable .........    $ 87,233
        Investment in oil and gas property .........    $300,000
        Marketable equity securities of
            Energy Corporation .....................    $750,000

</TABLE>




















                       See Notes to Financial Statements

                                       F-6

<PAGE>

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


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 is 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.

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  expenses.  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.

      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.


                                       F-7

<PAGE>


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


2.    Significant Accounting Policies (continued)

      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 amortizated 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.

      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.



                                       F-8

<PAGE>

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

2.    Significant Accounting Policies (continued)

      Income  Taxes  -  Income  taxes  are  provided  for  the  tax  effects  of
      transactions  reported in the  financial  statements  and consist of taxes
      currently  due plus  deferred  taxes  related  when there are  differences
      between the bases of certain assets and  liabilities for financial and tax
      reporting. The deferred taxes represent the future tax return consequences
      of those differences,  which will either be taxable or deductible when the
      assets and liabilities are recovered or settled.

      Use of Estimates - The  preparation of financial  statements in conformity
      with generally accepted accounting  principles requires management to make
      estimates  and  assumptions  that  affect  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.

3.    Property and equipment
                                                                August 31,
                                                                   1996

           Vehicles                                              $51,346
           Office furniture and equipment                          9,434
           Leasehold improvements                                  8,703
                                                                 -------
                                                                  69,483
           Less accumulated depreciation                           2,163
                                                                 -------
                                                                 $67,320
                                                                  ======
4.    Investment in Energy Corporation

      The Company owns 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 Liquidating 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
 

                                       F-9

<PAGE>
                             Sunlight Systems, Ltd.
                 (formerly Mendell-Denver Corporation) Notes to
                              Financial Statements


4.    Investment in Energy Corporation (continued)

      to registerand  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 Energy  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.

      Unrealized gains and losses of marketable securities available for sale as
      of August 31, 1996 are as follows:
                                                              Gross
                                                             Realized     Fair
                                       Shares      Cost       Gains       Value

      Shares with restrictions
        lasting more than one year     111,111   $500,000    $27,777    $527,777

      Shares with restrictions
        lasting less than one year      5,556    $250,000    $13,891    $263,891

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

5.    Operating Lease Commitments

      The Company  leases its  office,  warehouse  and  assembly  facilities  in
      Colorado, Nevada and Indiana under noncancellable operating leases through
      February,   2000.  The  leases  generally  require  the  Company  pay  for
      insurance,  common  area  maintenance  and  utilities.  Two of the  leases
      include  annual  adjustments  to reflect  increases in the consumer  price
      index. Rent expense for the period ended August 31, 1996 was $4,800.

      Future  minimum lease  payments for each of the years ended June 30 are as
      follows: 1997 $29,000; 1998 $29,000; 1999 $28,000; 2000 $11,000.

                                      F-10

<PAGE>

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


6.    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 in the  accompanying  balance sheets are
      summarized below:

       Deferred tax assets (liabilities) arising from:
          Net operating loss carryover                                $20,000
          Unrealized gains on securities                               (4,000)
          Less valuation allowance                                    (16,000)
                                                                    ---------
           Deferred taxes - net                                     $    -
                                                                    =========

      At August  31,  1996,  the  Company  has  approximately  $80,000 of unused
      Federal net operating loss carryforwards, which expire in the year 2012.

7.    Stockholders' Equity

      Sunlight Systems, Ltd. issued stock as follows.

                                                       Shares           Value

          Exchange for 10,491,558 shares
          of Mendell-Denver Corporation
          at five shares for one                      2,098,312     $       407

         Cash                                         2,083,960         300,000

         Oil and gas property                         2,083,896         300,000

         166,667 shares of Energy
         Corporation plus $90,000 cash                2,733,896         840,002
                                                      ---------      ----------
                                                      9,000,064      $1,440,409
                                                      =========      ==========

                                      F-11

<PAGE>

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


7.    Stockholders' equity (continued)

      The Company has a stock  subscription note receivable which bears interest
      at 8% and collateralized by common stock Intercell  Corporation.  The note
      is due  July  18,  1997  but the  shareholder  intends  to  liquidate  the
      Intercell Corporation common stock and pay the note by September 30, 1996.

8.    Dealer agreement with Sun Tunnel Systems, Inc.

      The Company  currently  buys all of its products from Sun Tunnel  Systems,
      Inc under a dealer agreement.

      The Company is required by its dealer  agreement  to meet  quotas.  If the
      quotas are not met, this could invalidate the dealer agreement.  The total
      cost of meeting the quotas could be $800,000. The quotas are s follows:

        Year ended                   Colorado                     Nevada
         June 30                                 (in units)
           1997                         500                          150
           1998                       1,000                          300
           1999                       2,000                          500

      Management  believes that should it not meet the above  quotas,  it may be
      able to retain its dealers status through  negotiations.  Management  also
      believes that should its relationship with Sun Tunnel Systems, Inc. cease,
      it would be able to pursue other business activities though the disruption
      would adversely affect operating results.

9.    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 $14,000 were paid for the period ended
      August 31, 1996.

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

      During the year ended June 30, 1995, the company paid officers  $9,800 for
      accounting and consulting fees.


                                      F-12

<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:  November 1, 1996        By: ___________________________________________
                                   Patricia E. Johnston,
                                   Chief Executive Officer, President,
                                   Chief Financial Officer, Treasurer, &
                                   Director