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 SEPTEMBER 30, 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)

820 South Colorado Blvd.
Denver, Colorado                                                      80222
---------------------------------------                            ----------
(Address of principal executive office)                            (Zip code)

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


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 September 30, 1996, was 9,000,064.

<PAGE>

                           SUNLIGHT SYSTEMS, LTD.

                                  INDEX
                                                                        PAGE
                                                                        ----
Part I.   Financial Information
          ---------------------

Item 1.   Balance Sheets
          September 30, 1996 and 1995                                    1-2

          Statements of Operations:
          Quarters ended September 30, 1996 and 1995                     3

          Statements of Changes in Cash Flows
          Quarters ended September 30, 1996 and 1995                     4

          Notes to Financial Statements                                  5-6

Item 2.   Management's Discussion and Analysis of
          Financial Condition and Results of Operation                   7

Part II   Other Information
          -----------------

Item 1.   Legal Proceedings                                              8

Item 2.   Changes in Securities                                          8

Item 3.   Defaults Upon Senior Securities                                8

Item 4.   Submission of Matter to a Vote of Security Holders             8

Item 5.   Other Information                                              8

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

<PAGE>

PART 1.   FINANCIAL INFORMATION
          ---------------------

Item 1    Financial Statements

                         Sunlight Systems, Ltd.
                            Balance Sheets
                          September 30, 1996



                               ASSETS

                                                          1996          1995
                                                          ----          ----
Current assets
--------------
      Cash .......................................     $    6,880     $ 4,299
      Stock subscriptions receivable .............         87,233
      Income tax refund receivable ...............                      1,113
      Inventory ..................................        103,001
      Prepaid expenses ...........................          4,532
                                                       ----------     -------
      Total current assets .......................        201,646       5,412
                                                       ----------

Property and equipment, net of
accumulated depreciation of $3,244 ...............         66,578
                                                       ----------

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 decrease in
                market value of $27,776 ..........        222,224
      Start-up costs, net of accumulated
            amortization of $1,531 ...............         29,096
      Dealer and distributor costs, net of
           accumulated amortization of $2,500 ....         27,500
      Deposits ...................................          4,590
                                                       ----------

                                                        1,083,410
                                                       ----------
                                                       $1,351,634     $ 5,412
                                                       ==========     =======

                                     -1-

<PAGE>

                    Liabilities and Stockholders' Equity

                                                     1996                1995
                                                     ----                ----
Current liabilities

       Accounts payable .......................   $    46,252  
       Loan payable ...........................        35,129
       Payroll and sales taxes ................         6,494
                                                  -----------

       Total current liabilities ..............        87,875
                                                  -----------

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 loss on securities
          available for sale ..................       (27,776)
       Accumulated deficit ....................      (148,874)

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,
          5,491,558 shares issued and
          outstanding .........................                           $5492
       Accumulated deficit ....................                             (80)
                                                   ----------            ------
                                                    1,263,759             5,412
                                                   ----------
                                                   $1,351,634            $5,412
                                                   ==========            ======

                          See Notes to Financial Statements

                                        -2-

<PAGE>

                             Sunlight Systems, Ltd.
                            Statements of Operations
                   Quarters Ended September 30, 1996 and 1995

                                                       1996             1995
                                                       ----             ----

Sales .......................................      $    13,118
Cost of sales ...............................            3,685
                                                   -----------

Gross profit ................................            9,433

Revenues ....................................                        $     2,857

General and administrative expenses .........          158,307             1,329
                                                   -----------       -----------

Net income (loss) ...........................      $  (148,874)      $     1,528
                                                   ===========       ===========

Net income (loss) per common shares .........      $   (.04165)      $     .0003
                                                   ===========       ===========
Weighted average number of common
      shares outstanding ....................        9,000,064         5,491,558
                                                   ===========       ===========







                         See Notes to Financial Statements

                                     -3-

<PAGE>

                              Sunlight Systems, Ltd.
                             Statements of Cash Flows
                     Quarter Ended September 30, 1996 and 1995

                                                            1996         1995
                                                            ----         ----
Cash flows from operating activities
Net income (loss) .....................................  $(148,874)   $   1,528
Adjustments to reconcile net loss
      to net cash from operating activities
          Depreciation and amortization ...............      7,275
Change in assets and liabilities:
      (Increase) decrease in:
          Escrow receivable ...........................                   3,032
          Inventory ...................................   (103,000)
          Prepaid expenses ............................     (4,531)
          Deposits ....................................     (4,590)
       Increase (decrease) in:
           Accounts payable ...........................     46,252       (2,345)
           Payroll and sales taxes ....................      6,494
                                                         ---------    ---------
Net cash used by operating activities .................   (200,974)       2,215

Cash flows from investing activities
     Purchase of property and equipment ...............    (69,822)
     Purchase of distribution and dealerships .........    (30,000)
     Increase in start-up costs .......................    (30,627)
                                                         ---------
Net cash used by investing activities .................   (130,449)
                                                         ---------
Cash flows from financing activities
     Proceeds from sale of common stock ...............    302,767
     Increase in loan payable .........................     35,129
                                                         ---------
Net cash flows from financing activities ..............    337,896
                                                         ---------    ---------
Net increase in cash flows ............................      6,473        2,215

Cash, beginning .......................................        407        2,084
                                                         ---------    ---------
Cash, ending ..........................................  $   6,880    $   4,299
                                                         =========    =========

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


                       See Note to Financial Statements

                                   -4-

<PAGE>

                           Sunlight Systems, Ltd.
                       Notes to Financial Statements
                            September 30, 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 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.    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 September 30, 1996,  and the results of operations  for the quarters
      ended  September 30, 1996 and 1995,  and cash flows for the quarters ended
      September  30,  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.

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
      RegistrationStatement   for  filing  with  the   Securities  and  Exchange
      Commission.

                                  -5-

<PAGE>

                          Sunlight Systems, Ltd.
                Notes to Financial Statements (continued)
                            September 30, 1996


3.    Investment in Energy Corporation (Continued)

       Unrealized gains and losses of marketable  securities  available for sale
       as of September 30, 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 gain on shares with restrictions lasting for more than one
       year is not being recognized in the financial statements.

4.     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
                                            ---------              ----------
                                            9,000,064              $1,444,409
                                            =========              ==========

       The Company has a stock subscription note receivable which bears interest
       at 8% and is collateralized by common stock of 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 December 31, 1996.


                                     -6-

<PAGE>

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

LIQUIDITY:
---------

          At September  30, 1996,  the Company had positive  working  capital of
$113,771.  This  positive  position is from the receipt of cash proceeds for the
sale of stock less  operating  losses.  At September 30, 1995, the Company had a
positive  working  capital of $5,412.  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 September  30, 1996 were  $1,351,634
which consisted principally of $1,022,224 in investments,  $103,001 in inventory
and $87,233  stock  subscriptions  receivable  acquired  for common  stock.  The
Company also had trade obligations of $52,246.

         Total assets of the Company as of September  30, 1995 were $5,412 which
consisted of $4,299 in cash and $1,113 in income tax refunds receivable.

         Stockholders'  equity  increased during the quarter ended September 30,
1996  due to the  issuance  of  common  stock  for  cash  $302,767;  investments
$1,050,000; and subscription receivable $87,233 net of a net loss of $148,874.

RESULTS OF OPERATION:
--------------------

         The Company had sales of $13,118 and a gross  profit of $9,433 from the
sale of skylights  during the quarter  ended  September  30,  1996,  the initial
quarter of its business as a dealer and  distributor  of skylights.  Revenues of
$2,857  for the  quarter  ended  September  30,  1995  were  due to tax  refunds
resulting from the Company closing out its oil and gas activities.

          General and  administrative  expenses for the quarter ended  September
30, 1996 of $158,307 were due to initiating the Company's business activities as
a dealer and distributor of skylights.  General and administrative  expenses for
the  quarter  ended  September  30, 1995 were due to cost of  administering  the
termination of the Company's previous oil and gas activities.





                                   -7-

<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.

              The  shareholders  of the former  Mendell-Denver  Corporation  and
Mendell-Denver  Corporation  as sole  shareholder  of the  Company  prior to the
Merger,  described in note 1 to financial  statements 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.

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

Item 6        Exhibits and Other Reports On Form 8-K
              --------------------------------------
              None




                                 -8-

<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:    November 14, 1996           Sunlight Systems, Ltd.
                                      (Registrant)

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






                                      -9-