SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A-2
[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
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
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 (I.R.S. Employer
of incorporation or organization) Identification No.)
5222 South Holly
Greenwood Village, Colorado 80111
-----------------------------------------------------
(Address of principal executive offices and zip code)
(303) 779-1900
----------------------------------------------------
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK, $0.001 PAR VALUE
(Title of Class)
<PAGE>
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 registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. [X] YES [ ] NO
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant'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] YES [ ] NO
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,
which were filed as Exhibit 13.1 to the Company's Annual Report on Form 10-K
filed with the Securities and Exchange Commission on September 26, 1997.
<PAGE>
The Registrant submits its Form 10-K amendment number 2 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:
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
Financial Statements
Balance Sheets F-2 to F-3
Statements of Operation F-4
Statements of Changes in Stockholder's Equity F-5
Statement of Cash Flows F-6 to F-7
Notes to Financial Statements F-8 to F-12
F-1.01
<PAGE>
Larry O'Donnell, CPA, P.C.
2851 South Parker Road Telephone 745-4545
Suite 1040
Aurora, Colorado 80014
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 reasonable 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.
/s/ Larry O'Donnell, CPA, PC
September 14, 1996
<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
Income tax refund receivable .................................. 1,113
-------- -------- --------
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 .......................... 171,970
Available for sale securities of
Energy Corporation common stock,
Restricted ............................................ --
Unrestricted, including allowance
for increase in market value
of $263,891 ....................................... 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
--------
498,390
-------- -------- ---------
$803,575 $ 407 $ 6,229
======== ======== ========
</TABLE>
See Notes to Financial Statements
F-2
<PAGE>
<TABLE>
<CAPTION>
Sunlight Systems, Ltd.
(Formerly Mendell-Denver Corporation)
Balance Sheets (Continued)
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..................................... 561,479
Unrealized gain on securities
available for sale......................................... 263,891
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,-5,491,559.......................... $ 10,492 5,492
Accumulated deficit............................................ (10,085) (1,608)
-------- -------- -------
742,960 407 3,884
------- -------- -------
$803,575 $ 407 $ 6,229
======== ======== ========
</TABLE>
See Notes to Financial Statements
F-3
<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-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 Ended June 30
August 31, 1996 1996 1995 1994
<S> <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.............. $ 171,970
Marketable equity securities of
Energy Corporation.......................... --
</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 expensed. When property is retired or otherwise
disposed of, the related costs and accumulated depreciation and
amortization are removed from the accounts and any gain or loss is
reflected in operations.
Depreciation and amortization of property and equipment are calculated
on the straight-line method over the estimated useful lives of three
to seven years.
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 amortized ratably
over the life of production from related proved reserves. Geological
and geophysical costs, delay rentals, and drilling costs of
unsuccessful exploratory wells are charged to expense as incurred.
Costs of drilling, both successful and unsuccessful development wells,
are also capitalized and amortized ratably over the life of production
from related proved reserves. Undeveloped properties are assessed
periodically to determine whether the properties have been impaired,
and when impairment occurs, a loss is recognized.
Property acquisition costs for unproved oil and gas properties are
initially capitalized. The acquisition costs for unproved properties
are assessed at least annually, and if necessary, an impairment in
value recognized. Proceeds from sales of partial interests in unproved
leases are accounted for as a recovery of cost without recognizing any
gain or loss. Costs of properties abandoned are expensed on the date
of abandonment.
Loss Per Common Share - Loss per common share is computed on the basis
of the weighted average number of common shares outstanding during the
respective periods.
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 to register
F-9
<PAGE>
Sunlight Systems, Ltd.
(formerly Mendell-Denver Corporation)
Notes to Financial Statements
4. Investment in Energy Corporation (continued)
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 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.
The shares of Energy Corporation were acquired in a noncash transaction
in exchange for shares of the Company. The shares have been recorded at
no cost because the Company is unable to determine the cost of Energy
Corporation shares of its predecessor owners.
Unrealized gains and losses of marketable securities available for sale
as of August 31, 1996 are as follows:
Gross
Unrealized Fair
Shares Cost Gains Value
Shares with restrictions
lasting more than one year 111,111 $ -- $527,777 $527,777
Shares with restrictions
lasting less than one year 55,556 $ -- $263,891 $263,891
The unrealized gain on shares with restrictions lasting for more than
one year is not being recognized in the financial statements.
F-10
<PAGE>
Sunlight Systems, Ltd.
(Formerly Mendell-Denver Corporation)
Notes to Financial Statements (continued)
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.
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 at August 31, 1996 in the
accompanying balance sheet is 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.
F-11
<PAGE>
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 (valued at the cost of
the predecessor owner) 2,083,896 171,970
166,667 shares of Energy
Corporation plus $90,000 cash 2,733,896 90,002
--------- ---------
9,000,064 $562,379
========= ========
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
1999 1,000 300
1999 2,000 500
F-12
<PAGE>
Sunlight Systems, Ltd.
(Formerly Mendell-Denver Corporation)
Notes to Financial Statements (continued)
8. Dealer agreement with Sun Tunnel Systems, Inc. (Continued)
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
TheCompany 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.
10. Investment in Oil and Gas Properties
The Company has an investment in overriding royalty on leases which
are held by a large independent oil and gas operator. The leases are
fully paid for the next three years. The leases are presently not
producing.
-13-
<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.
SUNLIGHT SYSTEMS, LTD.
/s/ Patricia E. Johnston
By: ------------------------------------
Patricia E. Johnston,
Chief Executive Officer, President,
Chief Financial Officer, Treasurer
and Director
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S FORM 10-K FOR THE FISCAL YEAR ENDED JUNE 30, 1996 AND IS QUALIFIED
IN ITS ENTIRETY TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C> <C>
<PERIOD-TYPE> 2-MOS 12-MOS
<FISCAL-YEAR-END> JUN-30-1996 JUN-30-1996
<PERIOD-END> AUG-31-1996 JUN-30-1996
<CASH> 56,997 407
<SECURITIES> 0 0
<RECEIVABLES> 87,869 0
<ALLOWANCES> 0 0
<INVENTORY> 92,361 0
<CURRENT-ASSETS> 237,869 407
<PP&E> 69,483 0
<DEPRECIATION> 2,163 0
<TOTAL-ASSETS> 803,575 407
<CURRENT-LIABILITIES> 60,615 0
<BONDS> 0 0
0 0
0 0
<COMMON> 900 5,592
<OTHER-SE> 825,370 0
<TOTAL-LIABILITY-AND-EQUITY> 803,575 407
<SALES> 2,278 8,993
<TOTAL-REVENUES> 2,278 8,993
<CGS> 1,202 0
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 84,326 12,570
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> (83,310) (3,577)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> (83,310) (3,577)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (83,310) (3,577)
<EPS-PRIMARY> (.009) (0.00)
<EPS-DILUTED> (.009) (0.00)
</TABLE>
