FORM 10-KSB

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

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[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
     ACT OF 1934 (FEE REQUIRED)

                                       OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934 (NO FEE REQUIRED)


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                           Telco Communications, Inc.

                        formerly Cody Capital Corporation

--------------------------------------------------------------------------------

    Colorado                     33-1933 3-D                        84-1073083
(Incorporation)              (Commission Number)                   (IRS Number)


4 Normandy Drive, Kenner LA                   (504) 466-7004          70065
(Address of principal executive offices)     Telephone number       (Zip Code)

--------------------------------------------------------------------------------


Securities registered pursuant to Section 12(b) of the Act:     None

Securities registered pursuant to Section 12(g) of the Act:     Common Stock


Yes[x] No[ ] (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.)

Not[X] (Indicate by check mark whether if disclosure of delinquent filers
(ss.229.405) is not and will not to the best of Registrant's knowledge be
contained herein, in definitive proxy or information statements incorporated
herein by reference or any amendment hereto.)

As of December 31, 1996, the aggregate number of shares held by non-affiliates
was approximately 2,930,726 shares. Due to the limited market for the Company
securities, no estimate is being supplied herewith of the market value for such
securities.

As of December 31, 1996, the number of shares outstanding of the Registrant's
Common Stock was 50,000,000.


                                               Exhibit Index is found on page 16

                                                                          Page 1
<PAGE>



              APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
                   PROCEEDINGS DURING THE PRECEDING FIVE YEARS

     Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13, or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.

                              Yes[ ]     No[X]


                                                                          Page 2
<PAGE>




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                                     PART I


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                                                                          Page 3

<PAGE>


                                Item 1. Business.


(a)  Historical Information.

     The Registrant Telco Communications, Inc. was incorporated in Colorado on
December 9, 1987, as Cody Capital Corporation. The Registrant was organized to
seek out and complete a merger or acquisition of other companies or businesses.
The Company completed a public offering in 1989 in which it raised a net, after
offering expenses, of $96,631. An investment was made in Telco of Baton Rouge,
which was a provider of long distance telephone services to institutional,
commercial and residential customers located in Louisiana and Texas; however,
the Issuer never realized any return from that investment. In 1994, the Issuer
was forced to file for Chapter 11 Bankruptcy protection. On March 11, 1994, the
Federal Bankruptcy Court for the Middle District of Louisiana appointed a
Trustee for the Bankruptcy Estate of the Registrant, the Court having converted
the case from Chapter 11 to Chapter 7 the preceding day. As a result of that
action, the Trustee in Bankruptcy was placed in control of the affairs of the
Registrant replacing the Board of Directors previously serving.

     On March 26, 1996, upon motion of the Trustee, the Court ordered that the
Corporation be sold to Mr. Miller L. Mays III, with no assets or liabilities
attached thereto. The sale was made pursuant to a Bill of Sale perfected on
April 12, 1996. Mr. Miller was duly appointed and assumed the office of
President and Sole Director of the Issuer and appointed Karl E. Rodriguez to
serve as Secretary, and. additional director. All Directors are to serve until
the next meeting of shareholders.

     (Please see Item 10 for more information about Directors and Executive
Officers.)

     Reference is made to the Registrant's Current Report on Form 8-K
     erroneously dated March 11, 1994, but actually filed and reporting as of
     June 12, 1996, and exhibits thereto for documentation of the emergence from
     Bankruptcy and related matters.

     The Issuer emerged from Bankruptcy with no assets, liabilities and subject
to no claims or litigation, and carried an existing shareholder base of
2,655,726 shares and approximately 270 shareholders, and issued an additional
47,069,274 to persons believed to be affiliates of the Issuer. In connection
with the emergence from Bankruptcy three former convertible debenture holders
elected to convert their holdings to common stock, resulting in an additional
275,000 shares, bringing the post-emergence total, issued and outstanding, to
the present 50,000,000 shares.

     (Please see Exhibit 28.1 for Important Information about events subsequent
     to the date of this Report)

     As of the date of this Report, the Issuer continues to be a development
stage company; however there are certain significant events which have occurred
and are occurring subsequent to the date of this Report.

     (Please see Exhibit 28.1 for Important Information about events subsequent
     to the date of this Report)

(b)  The Business of Registrant.


                                                                          Page 4

<PAGE>


     The Issuer has no current business, and has had no operations since its
emergence from Bankruptcy in 1996. During the period from April 1996 until the
end of the current fiscal year, December 31, 1996, Management has been engaged
int the search for new business opportunities without material results. The
Issuer continues to seek new business opportunities, including business
combinations, associations, joint venture, merger and/or acquisition programs to
achieve profitability for shareholders.

     (Please see Exhibit 28.1 for Information about events subsequent to the
     date of this Report)


                               Item 2. Facilities.

     The Company has no employees or facilities, and enjoys the non-exclusive
office services of its President and Majority Shareholder.


                           Item 3. Legal Proceedings.

     There are no legal proceedings pending against the Company, known or
anticipated, as of the preparation of this Report.


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

     None during the period covered by this Annual Report.

             THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK

                                                                          Page 5


<PAGE>




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                                     PART II


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                                                                          Page 6

<PAGE>


            Item 5. Market for Common Equity and Stockholder Matters.

(a)  Market Information.

     The Registrant Company has one class of securities, Common Voting Equity
Shares ("Common Stock"). The Company's Securities may be quoted in the
over-the-counter market, but there is no current market for them. Quotations
for, and transactions in the Securities are capable of rapid fluctuations,
resulting from the influence of supply and demand on relatively thin volume, and
possibly in response to unsubstantiated rumors.

     Of the Company's issued and outstanding 50,000,000 shares of Common Stock
as of December 31, 1996, all shares, subject to an exception for the 47,069,274
shares believed to be owned by affiliates of the Issuer, may be presently sold
in compliance with Rule 144. Rule 144 provides, among other things, and subject
to certain limitations, that a person holding Restricted Securities for a period
of two years may sell those securities, free of restriction in brokerage
transactions. Further, shares issued pursuant to 1933 Act Registration, again
subject to exceptions for affiliate ownership, are not Restricted Securities,
and are freely tradeable in brokerage transaction. Affiliates are permitted by
Rule 144 to sell affiliate owned securities (Restricted Securities held for more
than one year, and Registered Affiliate Control Securities) in limited amounts.
Possible or actual sales of the Company's Common Stock under Rule 144, or
otherwise, may have a depressive effect upon the price of the Company's Common
Stock.

     By virtue of the matters and history disclosed in this report, the shares
of the Issuer's stock command only a nominal value, and no actual market for the
shares of this Issuer can be said to exist.

(b)  Holders.

     Management calculates that the approximate number of holders of the
Company's Common Stock, as of December 31, 1996 was approximately 270.

(c)  Dividends.

     No cash dividends have been paid by the Company on its Common Stock and no
such payment is anticipated in the foreseeable future.

             THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK

                                                                          Page 7


<PAGE>


                        Item 6. Selected Financial Data.


      The following information is provided as of the Date of this Report:

================================================================================
                                    1996            1995               1994
================================================================================

Total Assets                       $1,000             0                  0
--------------------------------------------------------------------------------

Revenues                                0             0                  0
--------------------------------------------------------------------------------

Operating Expenses                      0             0                  0
--------------------------------------------------------------------------------

Net Earnings or (Loss)                  0             0                  0
--------------------------------------------------------------------------------
Per Share Earnings
  or (Loss)                         (0.00)        (0.00)             (0.00)
--------------------------------------------------------------------------------
Average Common Shares
  Outstanding                  50,000,000     2,655,726          2,655,726
================================================================================


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

(a)  Results of Operations.

     The Issuer has no current business, and has had no operations in the last
fiscal year.

(b)  Liquidity and Capital Resources.

     The Issuer has no capital resource and no liquidity.


              Item 8. Financial Statements and Supplementary Data.


     Reference is made to Auditors Report for the period from April 12, 1996, to
December 31, 1996, filed herewith. Those financial statements, attached thereto
are incorporated herein by this reference as though fully set forth herein.


                                                                          Page 8

<PAGE>


                     Item 9. Change of Registrant's Auditor.

     Frank Chovanetz, CPA, Green & McElreath, 700 Louisiana, Suite 5200,
Houston, TX 77002- 2733 has been designated as the Issuer's Independent Auditor,
on or about August 20, 1997. The Company's previous Audit was conducted by
Gandre & Armstrong P.C and dated September 25, 1989. There has been no
disagreement or dispute of any kind or sort with any auditor as to any matter.

                                                                          Page 9


<PAGE>




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                                    PART III


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                                                                         Page 10

<PAGE>


                   Item 10. Directors and Executive Officers.

     The Directors and Executive Officers of the Company are set forth below.
All Officers and Directors shall serve until the next meeting of shareholders or
until their successors be elected or appointed.


   Miller L. Mays III      James G. Mitchell(1)                Karl E. Rodriguez
   PRESIDENT/DIRECTOR            DIRECTOR           SECRETARY/TREASURER/DIRECTOR


(1)  Mr. Mitchell resigned as Director on or about October 3, 1997.


     (Please see Exhibit 28.1 for Information about events subsequent to the
date of this Report)

     (Please see Exhibit 28.2 for Biography of Miller L. Mays III)

     (Please see Exhibit 29.3 for Biography of Karl E. Rodriguez)


                        Item 11. Executive Compensation.

     None of the Company's Officers or Directors presently receive any
compensation.


    Item 12. Security Ownership of Certain Beneficial Owners and Management.


                                  COMMON STOCK

     To the best of Registrant's knowledge and belief the following disclosure
presents, as of the date of this report, the total beneficial security ownership
of all Directors and Nominees, naming them, and by all Officers and Directors as
a group, without naming them, of Registrant, known to or discoverable by
Registrant, and the total security ownership of all persons, entities and
groups, known to or discoverable by Registrant, to be the beneficial owner or
owners of more than five percent of any voting class of Registrant's stock.
Registrant has only one class of stock, namely Common Voting Equity Shares.


             THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK

                                                                         Page 11

<PAGE>


           SECURITY OWNERSHIP OF OFFICERS AND DIRECTORS AND 5% OWNERS
<TABLE>
<CAPTION>
==============================================================================================
         Name and Address of Beneficial Owner                Amount and Nature       Percent
                                                               of Ownership         of Class
----------------------------------------------------------------------------------------------
<S>                                                               <C>                  <C>  
      MILLER  L. MAYS III  President/Director                     47,069,724           94.14
      4 Normandy Drive
      Kenner LA 70065
----------------------------------------------------------------------------------------------
      KARL E. RODRIGUEZ   Secretary/Treasurer/Director                     0            0.00
      3131  Royal Street
      New Orleans LA 70117
----------------------------------------------------------------------------------------------
      JAMES G. MITCHELL   Director (1)                                     0            0.00
      Novotel Hotel Suite 408
      Conarty County, Guinea West Africa
==============================================================================================
All Officers and Directors as a Group                             47,069,724           94.14
==============================================================================================
Total Shares Issued and Outstanding                               50,000,000          100.00
==============================================================================================
</TABLE>

(1)  Mr. Mitchell resigned as Director on or about October 3, 1997


            Item 13. Certain Relationships and Related Transactions.

                                      None.


             THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK

                                                                         Page 12

<PAGE>




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                                     PART IV

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                                                                         Page 13

<PAGE>


   Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.


(a) Financial  Statements.    Reference is made to Auditors Report for the
                              period from April 12, 1996 to December 31, 1996,
                              filed herewith. Those financial statements,
                              attached thereto are incorporated herein by this
                              reference as though fully set forth herein.

(b) Form 8-K  Reports.        No Reports on Form 8-K were filed during the last
                              quarter covered by this Annual Report.

(c) Exhibits.                 Please see Exhibit Index, following.

                                 ---------------

                 Supplementary Information to be Furnished With
              Reports Filed Pursuant to Section 15(d) of the Act by
                Registrants which Have Not Registered Securities
                       Pursuant to Section 12 of the Act.

     No annual report or proxy material has been sent to security holders.

                                 ---------------


                                                                         Page 14

<PAGE>


                                 Signature Page


     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the individual capacities and on the date indicated.

 Report as of December 31, 1996.
 Executed October 30, 1997



                           Telco Communications, Inc.

                        formerly Cody Capital Corporation


                                       by






---------------------------                       ------------------------------
Miller L. Mays III                                             Karl E. Rodriguez
PRESIDENT/DIRECTOR                                  SECRETARY/TREASURER/DIRECTOR


                                                                         Page 15

<PAGE>


                                  Exhibit Index

                       Financial Statements and Documents
                       Furnished as a part of this Report

================================================================================
Ex #                        FINANCIAL STATEMENTS                      Page #
================================================================================
                           Telco Communications, Inc.

                        formerly Cody Capital Corporation
================================================================================
F1       AUDITED FINANCIAL STATEMENTS for the period from April 12, 1996 to
          December 31, 1996.
================================================================================


             (a-2) OTHER EXHIBITS Furnished as a part of this Report

     Table References refer to the number assigned each category of documents by
Reg ss. 229.601.

<TABLE>
<CAPTION>
================================================================================================================================
   TABLE #        Ex #                     Table Category  /  Description of Exhibit                    Incorp         Page
                                                                                                        By Ref           #
--------------------------------------------------------------------------------------------------------------------------------

<S>               <C>       <C>                                                                         <C>            <C>
     (3)                    ARTICLES OF INCORPORATION AND BY-LAWS:
--------------------------------------------------------------------------------------------------------------------------------
                   3.1      Articles of Incorporation of Cody Capital Corporation
--------------------------------------------------------------------------------------------------------------------------------
                   3.2      Amendment of Articles: Name Change to
                             Telco Communication  April 11, 1989
--------------------------------------------------------------------------------------------------------------------------------
                   3.3      Amendment of Articles: Name Change to
                            Innovest Capital Sources Corporation  January 15, 1997
--------------------------------------------------------------------------------------------------------------------------------
                   3.4      Amendment of Articles: Change to No Par
                            Innovest Capital Sources Corporation  September 25, 1997
--------------------------------------------------------------------------------------------------------------------------------
                   3.5      By-Laws
--------------------------------------------------------------------------------------------------------------------------------
     (4)                    INSTRUMENTS DEFINING RIGHTS OF SECURITY HOLDERS
--------------------------------------------------------------------------------------------------------------------------------
    (28)                    OTHER DOCUMENTS
--------------------------------------------------------------------------------------------------------------------------------
                  28.1      Statement of Material Subsequent Events
--------------------------------------------------------------------------------------------------------------------------------
                  28.2      Biography of Miller L. Mays III
--------------------------------------------------------------------------------------------------------------------------------
                  28.3      Biography of Karl E. Rodriguez
--------------------------------------------------------------------------------------------------------------------------------
                            **********************
================================================================================================================================
</TABLE>


                                                                         Page 16
<PAGE>




                                   Exhibit F1

                AUDITED FINANCIAL STATEMENTS FOR THE PERIOD FROM

                      APRIL 12, 1996, TO DECEMBER 31, 1996


<PAGE>



                           TELCO COMMUNICATIONS, INC.
                          (A DEVELOPMENT STAGE COMPANY)

                               FINANCIAL STATEMENT
                                       AND
                          INDEPENDENT AUDITORS' REPORT

                       APRIL 12, 1996 TO DECEMBER 31, 1996



<PAGE>


                         [LETTERHEAD GREEN & McELREATH]



                          INDEPENDENT AUDITORS' REPORT


To the Board of Directors and Stockholders
Telco Communications, Inc.
Kenner, Louisiana

We have audited the accompanying balance sheet of Telco Communications,  Inc. (a
development stage company) as of December 31, 1996, and the related statement of
operations,  shareholders'  equity, and cash flows for the period from April 12,
1996, to December 31, 1996. This financial  statement is the  responsibility  of
the Company's  management.  Our  responsibility is to express an opinion on this
financial statement based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards  require that we plan and perform the audit to obtain reasonable
assurance   about   whether  the   financial   statement  is  free  of  material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial  statement.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion,  the financial  statement  referred to above presents fairly, in
all material respects,  the financial position of Telco Communications,  Inc. as
of December 31, 1996,  and the results of its  operations and its cash flows for
the period from April 12,  1996,  to  December  31,  1996,  in  conformity  with
generally accepted accounting principles.


October 21, 1997


                                        /s/ Green & McElreath


                       MEMBER OF THE SEC PRACTICE SECTION
           OF THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS


<PAGE>


                           TELCO COMMUNICATIONS, INC.
                          (A DEVELOPMENT STAGE COMPANY)

                                  BALANCE SHEET
                                DECEMBER 31, 1996





                          ASSETS

Value in excess of amounts
   allocable to identifiable assets                                       $1,000
                                                                          ------

    Total assets                                                          $1,000
                                                                          ======




                   SHAREHOLDERS' EQUITY

Common stock                                                              $1,000
Deficit accumulated during the development stage                            --
                                                                          ------

    Total shareholders' equity                                            $1,000
                                                                          ======


                        See notes to financial statement.



<PAGE>



                           TELCO COMMUNICATIONS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                             STATEMENT OF OPERATIONS
             FOR THE PERIOD FROM APRIL 12, 1996 TO DECEMBER 31, 1996




Revenues                                                                   $ --

Expenses                                                                     --
                                                                           -----

Income before income taxes                                                   --

Income taxes                                                                 --

Net income                                                                 $ --
                                                                           =====


                        See notes to financial statement.



<PAGE>



                           TELCO COMMUNICATIONS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                             STATEMENT OF CASHFLOWS
             FOR THE PERIOD FROM APRIL 12, 1996 TO DECEMBER 31, 1996



CASHFLOWS PROVIDED
  BY OPERATING ACTIVITIES-                                                $ --

CASHFLOWS PROVIDED
  BY INVESTING ACTIVITIES -                                                 --

CASHFLOWS PROVIDED
  BY FINANCING ACTIVITIES -                                                 --  
                                                                          ------

NET INCREASE IN CASH                                                        --

CASH AT BEGINNING OF PERIOD                                                 --
                                                                          ------
CASH AT END OF PERIOD                                                     $ --  
                                                                          ======


                        See notes to financial statement.


<PAGE>



                           TELCO COMMUNICATIONS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                        STATEMENT OF SHAREHOLDERS' EQUITY
             FOR THE PERIOD FROM APRIL 12, 1996 TO DECEMBER 31, 1996




                                                                      Deficit
                                                                     Accumulated
                                             Common Stock,            During the
                                       --------------------------    Development
                                         Shares          Amount        Stage
                                         ------          ------        -----

Stock purchased from
   bankruptcy estate                    2,655,726      $    1,000      $ --

Additional issuance                    47,344,374            --          --   
                                       ----------      ----------      ------

Balances at December 31, 1996          50,000,000      $    1,000      $ --   
                                       ==========      ==========      ======


                        See notes to financial statement.


<PAGE>


                           TELCO COMMUNICATIONS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENT
             FOR THE PERIOD FROM APRIL 12, 1996 TO DECEMBER 31, 1996


1.   BASIS OF PRESENTATION

     Telco Communications, Inc. (the "Company"), was incorporated under the name
     of Cody  Capital  Corporation  under the laws of the State of  Colorado  on
     December 9, 1987. The Company completed a public offering in 1988. In 1989,
     Cody Capital  Corporation  acquired all of the issued and outstanding stock
     of Telco of Baton Rouge, Inc. and changed its name to Telco Communications,
     Inc. In 1994,  the Company  filed for Chapter 11 Bankruptcy  protection.  A
     short time later,  the Bankruptcy  Court converted the case from Chapter 11
     to Chapter 7. As a result,  a Trustee  was placed in control of the affairs
     of the Company and replaced the Board of Directors. On April 12, 1996, (the
     date of inception), the Trustee of the bankruptcy estate sold the corporate
     shell of the Company for $1,000 cash,  resulting in a new reporting entity.
     The sale was free and clear of all  assets,  liabilities  and claims of any
     kind. At the time of the sale,  the Company was in  liquidation  and had no
     business operations. On January 15, 1997, the corporate name was changed to
     Innovest Capital Sources Corporation.

     The  Company  recognizes  income  and  expenses  on the  accrual  basis  of
     accounting.

     The Company  considers all highly  liquid  investments  with  maturities of
     three months or less to be cash equivalents.

     The  preparation  of  financial  statement  in  conformity  with  generally
     accepted  accounting  principles  requires management to make estimates and
     assumptions  that affect the reported amounts of assets and liabilities and
     disclosure  of  contingent  assets  and  liabilities  at  the  date  of the
     financial  statement  and the  reported  amounts of revenues  and  expenses
     during  the  reporting  period.  Actual  results  could  differ  from those
     estimates.

     The office of the Company is located in Kenner,  Louisiana. The Company has
     no employees or facilities. The records are maintained by the President and
     majority shareholder at no expense to the Company.


2.   INCOME TAXES

     The  Company  was  inactive  from  April 12,  1996 to  December  31,  1996.
     Therefore,  no provision for current or deferred income tax was recorded in
     the financial statement.  Any future deferred tax asset will be offset by a
     valuation  allowance  until such time as the  Company  demonstrates  future
     profitability.


                                                                     (Continued)


<PAGE>


                           TELCO COMMUNICATIONS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENT
             FOR THE PERIOD FROM APRIL 12, 1996 TO DECEMBER 31, 1996


3.   GOING CONCERN

     The Company has been in the  development  stage since April 12,  1996,  the
     date the Trustee of the  bankruptcy  estate sold the corporate  shell.  The
     Company has been seeking new  business  opportunities,  including  business
     combinations,  associations,  joint  ventures,  merger  and/or  acquisition
     programs to achieve profitability for the shareholders. These factors raise
     issues about the Company's ability to continue as a going concern.


4.   COMMON STOCK

     The Corporation is authorized to issue  50,000,000  shares of stock. At the
     time of the sale of the  corporate  shell on April  12,  1996,  there  were
     2,655,726  shares of stock issued and  outstanding.  Immediately  after the
     sale,   47,344,274  shares  were  issued  bringing  the  total  issued  and
     outstanding  shares to  50,000,000.  The  Articles  of  Incorporation  were
     amended  to change  the par  value  from  $.001  per  share to no par.  All
     references  in the  accompanying  financial  statement and notes to the per
     share amounts have been restated to reflect the change in par value.


5.   SUBSEQUENT EVENTS

     On or about June 23,  1997,  a written  offer to  purchase  the Company was
     entered into.



                                                                     (Concluded)