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, 1997
                        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, 1997, was 11,500,064.

<PAGE>


                             SUNLIGHT SYSTEMS, LTD.

                                      INDEX                                PAGE

Part I.     Financial Information
            ---------------------

Item 1.     Balance Sheets
            December  31, 1997 and 1996                                     1-2

            Statements of Operations:
            Quarters and Six Months ended December 31, 1997 and 1996          3

            Statements of Changes in Cash Flows
            Six Months ended December 31, 1997 and 1996                       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
<TABLE>
<CAPTION>

                             Sunlight Systems, Ltd.
                                 Balance Sheets
                           December 31, 1997 and 1996

                                     ASSETS
                                                                           1997            1996
<S>                                                                     <C>              <C>  
Current assets
      Cash                                                              $  4,077         $ 37,063
      Current portion of notes receivable                                 11,177            9,147
                                                                        --------         --------
      Total current assets                                                15,254           46,210
                                                                        --------         --------

Other assets
      Investment in oil and gas properties                               171,970          171,970
      Available for sale securities:
          Energy Corporation common stock,
              Restricted                                                      --
              Unrestricted, including allowance for
                 increase in market value of $222,224                                     222,224
           Intercell Corporation, common stock
                Unrestricted, including allowance for
                 increase in market value of $2,722 and
                 $80,000                                                   2,722           80,000
       Notes receivable, discounted for imputed
                 interest at 10%,net of current portion                   32,445           64,112
      Deposits                                                             4,090            4,090
                                                                        --------         --------
                                                                         211,227          542,396
                                                                        --------         --------
                                                                        $226,481         $588,606
                                                                        ========         ========

</TABLE>




                        See Notes to Financial Statements
                                       -1-



<PAGE>
<TABLE>
<CAPTION>

                             Sunlight Systems, Ltd.
                           Balance Sheets (Continued)
                           December 31, 1997 and 1996




                      LIABILITIES AND STOCKHOLDERS' EQUITY
                                                                          1997             1996
<S>                                                                     <C>              <C>  
Current liabilities
       Accounts payable                                                                  $  6,017
       Accounts payable-related party                                   $ 70,460
                                                                        --------         --------
       Total current liabilities                                          70,460            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            1,150
       Additional paid in capital                                        686,229          686,229
       Unrealized gain on securities available for sale                    2,722          302,224
       Accumulated deficit                                              (534,080)        (407,014)
                                                                        --------         --------
                                                                         156,021          582,589
                                                                        --------         --------


                                                                        $226,481         $588,606
                                                                        ========         ========

</TABLE>






                        See Notes to Financial Statements
                                       -2-
<PAGE>
<TABLE>
<CAPTION>

                                            Sunlight Systems, Ltd.
                                           Statements of Operations

                                         Quarters Ended                      Six Months Ended
                                          December 31,                          December 31,
                                       1997             1996               1997             1996
<S>                                 <C>              <C>                <C>             <C>
Revenues                            $ 35,157         $   1,206          $ 36,326        $   1,206

General and administrative
 expenses                             49,343            83,746            83,314           97,909
                                    --------         ---------          --------        ---------

Loss from continuing
operations                           (14,186)          (82,540)          (46,988)         (96,703)
                                    --------         ---------          --------        ---------  
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                            $(14,186)        $(258,141)         $(46,988)       $(407,015)
                                    ========         =========          ========        =========


Net loss per common
  shares                             $(.0012)          $(.0254)          $(.0041)         $(.0425)
                                     =======           =======           =======          =======
Weighted average number
 of common shares
    outstanding                   11,500,064        10,147,000        11,500,064        9,576,000
                                  ==========        ==========        ==========        =========

</TABLE>






                        See Notes to Financial Statements
                                       -3-

<PAGE>
<TABLE>
<CAPTION>

                                       Sunlight Systems, Ltd.
                                      Statements of Cash Flows
                             Six Months Ended December 31, 1997 and 1996

                                                                          1997             1996
<S>                                                                     <C>             <C> 
Cash flows from operating activities
Net loss                                                                $(46,988)       $(407,015)
Adjustments to reconcile net loss to net cash
 from operating activities
          Loss on sale of long term assets                                                 43,889
          Gain on sale of investments                                    (32,535)
          Depreciation and amortization                                                     9,704
          Amortized discount on notes receivable                          (2,273)          (1,206)
Change in assets and liabilities:
      (Increase) decrease in:
          Deposits                                                                         (4,090)
       Increase (decrease) in:
           Accounts payable                                               38,960            6,019
                                                                        --------        ---------
Net cash used by operating activities                                    (42,836)        (352,699)
                                                                        --------        ---------
Cash flows from investing activities
     Proceeds from sale of investments                                    32,535
     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                                 6,250
                                                                        --------        ---------
Net cash used by investing activities                                     38,785         (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 (decrease) in cash flows                                     (4,051)          36,656
Cash, beginning                                                            8,128              407
                                                                        --------        ---------
Cash, ending                                                            $  4,077        $  37,063
                                                                        ========        =========
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
</TABLE>



                                  See Note to Financial Statements
                                                 -4-
<PAGE>

                             Sunlight Systems, Ltd.
                          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 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.   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, 1997, and the results of operations for the quarters and
     six months  ended  December  31, 1997 and 1996,  and cash flows for the six
     months  ended  December  31,  1997  and  1996.   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,
     1997.








                                       -5-
<PAGE>

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

3.   Investment in Intercell Corporation

     Unrealized gains and losses of marketable  securities available for sale as
     of December 31, 1997 are as follows:

                                                              Gross        Fair
                                      Shares     Cost       Unrealized     Value
                                                             (Losses)


        Intercell Corporation         23,623                  $2,722      $2,722



 .



                                       -6-

<PAGE>

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

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.
































                                       -7-
<PAGE>

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

LIQUIDITY:
---------

     At  December  31,  1997,  the  Company  had a negative  working  capital of
$(55,206) this position is due to an increase in accounts  payable.  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.


CAPITAL RESOURCES
-----------------

     Total  assets of the Company as of December  31, 1997 were  $226,481  which
consisted  principally  $174,692 in investments and $43,622 in notes receivable.
Total  assets  of the  Company  as of  December  31,  1996 were  $586,606  which
consisted  principally of $474,194 in investments acquired for common stock, and
$73,259 notes receivable.

     Stockholders'  equity  decreased during the quarter ended December 31, 1997
due to general  and  administrative  expense  and costs  which were  principally
incurred in evaluating  potential  acquisitions.  These were partially offset by
revenues  principally  from  the  sale  of  investments.   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
--------------------

     For the  quarter  and six months  ended  December  31, 1997 the Company had
revenues of $35,157 and $36,326,  respectively  which included $32,535 from sale
of investments. 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.

     General and  administrative  expenses  for the quarter and six months ended
December 31, 1997 were due to seeking other acquisition or merger  opportunities
General  and  administrative  expenses  for the six  months  and  quarter  ended
December 31, 1996 of $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.


                                       -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
------        --------------------------------------
 
              (a)  Form 8-K:

                   None

              (b)  Exhibits:

                   Exhibit 27.1 - Financial Data Schedule

















                                       -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:    February 10, 1998        Sunlight Systems, Ltd.
                                   (Registrant)



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












                                      -10-