FORM 10-QSB

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                 QUARTERLY REPORT UNDER SECTION 13 OR 15 (D) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                     FOR THE QUARTER ENDED DECEMBER 31, 1996
                        COMMISSION FILE NUMBER 33-19598-D

                             SUNLlGHT SYSTEMS, LTD.
             ------------------------------------------------------
             (Exact Name of Registrant as specified in its charter)


             COLORADO                                84-0992908
--------------------------------                     ----------
( State or other jurisdiction of            (I.R.S. Employer Identification No.)
  incorporation or organization)

5222  South Holly
Greenwood Village, Colorado                                           80111
---------------------------------------                            ----------
(Address of principal executive office)                            (Zip code)

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

Indicate by check whether the registrant  (1) has filed all reports  required to
be filed by section 13 or 15 (D) of the  Securities  Exchange Act of 1934 during
the  preceding 12 months ( or for such shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

                          Yes  X                    No ____

The  number  of  shares  of the  registrant's  $.0001  par  value  common  stock
outstanding as of December 31, 1996, was 11,500,064.




<PAGE>


                             SUNLIGHT SYSTEMS, LTD.

                                      INDEX
                                                                          PAGE

Part I.  FINANCIAL INFORMATION

Item 1.  Balance Sheets
         December 31, 1996 and 1995 ....................................  1-2

         Statements of Operations:
         Quarters and Six Months ended December 31, 1996 and 1995 ......    3

         Statements of Changes in Cash Flows
         Six Months ended December 31, 1996 and 1995 ...................    4

         Notes to Financial Statements .................................  5-7

Item 2.  Management's Discussion and Analysis of
         Financial Condition and Results of Operation ..................    8

Part II  OTHER INFORMATION

Item 1.  Legal Proceedings .............................................    9

Item 2.  Changes in Securities .........................................    9

Item 3.  Defaults Upon Senior Securities ...............................    9

Item 4.  Submission of Matter to a Vote of Security Holders ............    9

Item 5.  Other Information .............................................    9

Item 6.  Exhibits and Reports on Form 8-K ..............................    9

<PAGE>


PART 1.     FINANCIAL INFORMATION

Item 1      Financial Statements

                             Sunlight Systems, Ltd.
                                 Balance Sheets
                                December 31, 1996

                                     ASSETS
                                                               1996        1995
                                                               ----        ----
Current assets
      Cash ...............................................  $  37,063     $1,142
      Current portion of notes receivable ................      9,147
                                                           ----------     ------
      Total current assets ...............................     46,210      1,142
                                                           ----------     ------



Other assets
      Investment in oil and gas properties ...............    300,000
      Available for sale securities:
          Energy Corporation common stock,
              Restricted .................................    500,000
              Unrestricted, including allowance for
                 decrease in market value of $27,776 .....    222,224
           Intercell Corporation, common stock
                Unrestricted .............................     80,000
       Notes receivable, discounted for imputed
                interest at 10%,net of current portion ...     64,112
      Deposits ...........................................      4,090
                                                           ----------

                                                            1,170,426
                                                           ----------

                                                           $1,216,636     $1,142
                                                           ==========     ======




                        See Notes to Financial Statements

                                       -1-

<PAGE>

                             Sunlight Systems, Ltd.
                           Balance Sheets (Continued)
                                December 31, 1996

                      LIABILITIES AND STOCKHOLDERS' EQUITY

                                                             1996        1995
                                                             ----        ----
Current liabilities
   Accounts payable .................................... $     6,017  

                                                         -----------
   Total current liabilities ...........................       6,017
                                                         -----------
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, 11,500,064
      issued and outstanding ............................      1,150
   Additional paid in capital ...........................  1,644,259
   Unrealized loss on securities available for sale .....    (27,776)
   Accumulated deficit ..................................   (407,014)

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, 7,322,007
        shares issued and outstanding ...................              $7,322
   Accumulated deficit ..................................              (6,180)
                                                          ----------  -------
                                                           1,210,619    1,142
                                                          -----------  ------
                                                          $1,216,636   $1,142
                                                          ==========   ======




                        See Notes to Financial Statements

                                       -2-

<PAGE>
<TABLE>
<CAPTION>

                             Sunlight Systems, Ltd.
                            Statements of Operations

                                            Quarters Ended                 Six Months Ended
                                              December 31,                   December 31,
                                      ---------------------------     ----------------------------
<S>                                   <C>             <C>             <C>            <C>
                                            1996             1995          1996            1995
                                            ----             ----          ----            ----

Revenues ..........................   $      1,206    $      1,136    $     1,206    $     3,993

General and administrative
  expenses ........................         83,746           4,293         97,909          5,622
                                      ------------    ------------    -----------    -----------

Loss from continuing operations ...        (82,540)         (3,157)       (96,703)        (1,629)
                                      ------------    ------------    -----------    -----------

Discontinued Operations
Loss from operations of
     discontinued segment .........        (40,654)                      (175,365)
Loss on sale of discontinued
     segment ......................       (134,947)                      (134,947)
                                      ------------                    -----------
                                          (175,601)                      (310,312)
                                      ------------                    -----------

Net loss ..........................   $   (258,141)   $     (3,157)   $  (407,015)   $    (1,629)
                                      ============    ============    ===========    ===========

Net loss per common shares ........   $     (.0254)   $     (.0004)   $    (.0425)   $    (.0002)
                                      ============    ============    ===========    ===========
Weighted average number of common
      shares outstanding ..........     10,147,000       7,322,077      9,576,000      7,322,077
                                      ============    ============    ===========    ===========
</TABLE>








                        See Notes to Financial Statements

                                       -3-

<PAGE>

                             Sunlight Systems, Ltd.
                            Statements of Cash Flows
                   Six Months Ended December 31, 1996 and 1995

                                                            1996         1995
                                                            ----         ----
Cash flows from operating activities
Net loss ...............................................  $(407,015)    $(1,629)
Adjustments to reconcile net loss to net
  cash from operating activities
          Loss on sale of long term assets .............     43,889
          Depreciation and amortization ................      9,704
          Amortized discount on notes receivable .......     (1,206)
Change in assets and liabilities:
      (Increase) decrease in:
          Escrow receivable ............................                  3,032
          Deposits .....................................     (4,090)
       Increase (decrease) in:
           Accounts payable ............................      6,019      (2,345)
                                                          ---------    --------
Net cash used by operating activities ..................   (352,665)       (942)
                                                          ---------
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
                                                          ---------
Net cash used by investing activities ..................   (125,645)
                                                          ---------
Cash flows from financing activities
     Proceeds from sale of common stock ................    515,000
                                                          ---------
Net cash flows from financing activities ...............    515,000
                                                          ---------    --------
Net increase in cash flows .............................     36,656        (942)
Cash, beginning ........................................        407       2,084
                                                          ---------    --------
Cash, ending                                              $  37,063    $  1,142
                                                          =========    ========
Noncash  investing  and  financing  activities:
  Assets  acquired by issuance of common stock:
         Investment in oil and gas property ............  $300,000
         Marketable equity securities
           of Energy Corporation .......................  $750,000
         Marketable equity securities
           Intercell Corporation .......................  $80,000
     Note receivable acquired for sale of assets .......  $72,053


                        See Note to Financial Statements

                                       -4-

<PAGE>

                             Sunlight Systems, Ltd.
                          Notes to Financial Statements
                                December 31, 1996

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,  1996 the  Company  sold its  dealerships  and  distributorships.  The
       Company  is  actively  seeking  business   opportunities   for  potential
       acquisition or merger.

2.     Presentation  of Interim Information

       In the opinion of the management of Sunlight Systems, Ltd. (the Company),
       the  accompanying  unaudited  financial  statements  include  all  normal
       adjustments considered necessary to present fairly the financial position
       as of December 31, 1996,  and the results of operations  for the quarters
       and six months ended  December 31, 1996 and 1995,  and cash flows for the
       six months  ended  December  31, 1996 and 1995.  Interim  results are not
       necessarily indicative of results for a full year.

       The  financial  statements  and notes are  presented as permitted by Form
       10-QSB, and do not contain certain information  included in the Company's
       audited financial statements and notes for the fiscal year ended June 30,
       1996.




                                       -5-

<PAGE>

                             Sunlight Systems, Ltd.
                    Notes to Financial Statements (continued)
                                December 31, 1996

3.      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 Liquidation  Dissolution,  is
        not  currently  trading.  As a  result  of 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 own, 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 December 31, 1996 are
        as follows:

                                                               Gross     Fair
                                       Shares       Cost     Unrealized  Value
                                                              (Losses)
                                       ------       ----     ----------  -----
        Shares with restrictions
        lasting more than one year     111,111    $500,000   $(55,556)  $444,444

        Shares with restrictions
        lasting less than one year      55,556    $250,000   $(27,776)  $222,224

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






                                       -6-

<PAGE>

                             Sunlight Systems, Ltd.
                    Notes to Financial Statements (continued)
                                December 31, 1996

4.      Discontinued operations

        On   November   1,  1996,   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.

5.      Stockholder 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                         2,083,896       300,000

         166,667 shares of Energy
         Corporation plus $90,000 cash               2,733,896       840,002

         Cash                                          500,000       125,000

         20,000 shares of Intercell Corporation      2,000,000        80,000
                                                    ----------   -----------

                                                    11,500,064    $1,645,409
                                                    ==========    ==========








                                       -7-

<PAGE>

Item 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
               CONDITION AND RESULTS OF OPERATION

LIQUIDITY:

        At  December  31,  1996,  the Company had  positive  working  capital of
$40,193.  This  positive  position is from the receipt of cash  proceeds for the
sale of stock less  operating  losses.  At December 31, 1995,  the Company had a
positive  working  capital of $1,142.  This position was from income tax refunds
receivable  and the  receipt  of an escrow  receivable  in  excess  of  accounts
payable.


CAPITAL RESOURCES

        Total  assets of the  Company as of December  31,  1996 were  $1,216,636
which  consisted  principally of $1,102,224 in  investments  acquired for common
stock, and $73,259 notes receivable.

        Total  assets of the Company as of December  31, 1995 were $1,142  which
consisted solely of cash.

        Stockholders'  equity  decreased  during the quarter ended  December 31,
1996 due to losses  recognized  while  operating  through  November  1, 1997 and
selling  on  November  1, 1997 its Sun  Tunnel  Systems,  Inc.  dealerships  and
distributorships.

RESULTS OF OPERATION

        The  Company  had sales of $24,776  and  $37,894 for the quarter and six
months ended December 31, 1996, respectively during the period until November 1,
1996 when the company discontinued its operations as a dealer and distributor of
skylights. For the quarter ended December 31, 1995 revenues were $1,136 from tax
refunds  and  related  interest..  For the six months  ended  December  31, 1995
revenues were $3,993 from tax refunds and related interest.

        General and administrative expenses for the six months and quarter ended
December 31, 1996 $97,909 and $83,746,  respectively  were due to initiating the
Company's  business  activities  as a dealer and  distributor  of skylights  and
seeking other acquisition or merger  opportunities.  General and  administrative
expenses  for the  quarter  and six  months  ended  December  31,  1995 were due
principally to accounting fees.


                                       -8-

<PAGE>

PART II - OTHER INFORMATION

Item 1.       Legal Proceedings
------        -----------------

              None

Item 2.       Change in Securities
------        --------------------

              None

Item 3.       Defaults Upon Senior Securities
------        -------------------------------

              None

Item 4.       Submission of Matters to a Vote of Security Holders
              ---------------------------------------------------

              There were no meetings of security  holders during the period
              covered by this report.


Item 5.       Other Information
------        -----------------
 
               None

Item 6.        Exhibits and Other Reports On Form 8-K
------         --------------------------------------

               None



















                                       -9-

<PAGE>










                                   SIGNATURES



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



Dated:    January 29, 1997             Sunlight Systems, Ltd.
                                           (Registrant)

                                            /s/ Patricia E. Johnston
                                       By:  -----------------------------------
                                            Patricia E. Johnston
                                            Chief Executive Officer, President,
                                            Chief Financial Officer, Treasurer,
                                            And Director












                                      -10-