FORM 10-QSB

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

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           [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)


                 for the quarterly period ending: June 30, 1997


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                           Telco Communications, Inc.

                        formerly Cody Capital Corporation
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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)

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

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


Yes[ ] No[x] (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 June 30, 1997, the aggregate number of shares held by non-affiliates was
approximately 2,061,000 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 June 30, 1997, the number of shares outstanding of the Registrant's Common
Stock was 49,836,000.

           Telco Communications, Inc. June 30, 1997 Form 10-KSB   Page 1

<PAGE>



                          PART I: FINANCIAL INFORMATION
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                          Item 1. Financial Statements

     As of June 30, 1997, Management reports the financial information per
attachemt hereto.


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

Financial Condition and Results of Operations

     On March 11, 1994, the Federal Bankruptcy Court for the Middle District of
Louisiana appointed a Trustee for the Bankruptcy Estate of the Registrant Telco
Communications, Inc., formerly Cody Capital Corporation, 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. Mays 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.

Liquidity and Capital Resources

     The Issuer has no assets or liabilities, liquidity or capital resources.


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                           PART II: OTHER INFORMATION
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                            Item 1. Legal Proceedings

                                      None

                          Item 2. Change in Securities

                                      None

                     Item 3. Defaults Upon Senior Securities

                                      None

            Item 4. Submission of Matters to Vote of Security Holders

                                      None

                            Item 5. Other Information

     During the Quarter covered by this Report, the Company had and 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 quarter
Management has been engaged in the search for new business opportunities without
material results. The Issuer continues to seek new business opportunities,
including business

           Telco Communications, Inc. June 30, 1997 Form 10-KSB   Page 2

<PAGE>



combinations, associations, joint venture, merger and/or acquisition programs to
achieve profitability for shareholders.

                    Item 6. Exhibits and Reports on Form 8-K

     During the Quarter covered by this Report, the Company filed a Report on
Form 8-K, erroneously dated March 11, 1994, but actually filed and reporting as
of June 12, 1996, and reporting emergence from Bankruptcy, as repeated in Item 2
of Part I.



                                   SIGNATURES


     Pursuant to the requirements of the Securities Exchange Act of 1934, this
Form 10-QSB Report for the Quarter ended June 30, 1997, has been signed below by
the following person on behalf of the Registrant and in the capacity and on the
date indicated.


Dated: July 30, 1997


                           Telco Communications, Inc.

                        formerly Cody Capital Corporation


                                       by






-------------------------------                 --------------------------------
Miller L. Mays III             James G. Mitchell               Karl E. Rodriguez
PRESIDENT/DIRECTOR                  DIRECTOR                 SECRETARY/TREASURER
                                                
           Telco Communications, Inc. June 30, 1997 Form 10-KSB   Page 3

<PAGE>











                                   Attachment

                              FINANCIAL STATEMENTS











           Telco Communications, Inc. June 30, 1997 Form 10-KSB   Page 4





<PAGE>


G
 &
  M







                      INNOVEST CAPITAL SOURCES CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)


                               FINANCIAL STATEMENT
                                       AND
                          INDEPENDENT AUDITORS' REPORT



                         SIX MONTHS ENDED JUNE 30, 1997











<PAGE>




                        [LETTERHEAD OF GREEN & MCELREATH]




                          INDEPENDENT AUDITORS' REPORT




To the Board of Directors and Stockholders
Innovest Capital Sources Corporation
Kenner, Louisiana

We have  audited the  accompanying  balance  sheet of Innovest  Capital  Sources
Corporation (a  development  stage company) as of June 30, 1997, and the related
statements  of  operations,  shareholders'  equity,  and cash  flows for the six
months ended June 30, 1997. These financial statements are the responsibility of
the Company's  management.  Our responsibility is to express an opinion on these
financial statements 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   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 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  statements  referred to above present fairly, in
all  material  respects,  the  financial  position of Innovest  Capital  Sources
Corporation  as of June 30, 1997, and the results of its operations and its cash
flows for the six months  ended June 30,  1997,  in  conformity  with  generally
accepted accounting principles.


October 21, 1997




                                             /s/ Green & McElreath



<PAGE>



                      INNOVEST CAPITAL SOURCES CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)
                                  BALANCE SHEET
                                  JUNE 30, 1997





                              ASSETS

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

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




                LIABILITIES AND SHAREHOLDERS' EQUITY

Accrued consulting fees                                                 $ 2,400
                                                                        -------

   Total liabilities                                                      2,400
                                                                        -------



Common stock                                                              1,000
Deficit accumulated during
   the development stage                                                 (2,400)
                                                                        -------

   Total shareholders' equity                                            (1,400)
                                                                        -------

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


                       See notes to financial statements.


<PAGE>



                      INNOVEST CAPITAL SOURCES CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)
                            STATEMENTS OF OPERATIONS
                       SIX MONTHS ENDED JUNE 30, 1997 AND
                    CUMULATIVE TOTALS SINCE DATE OF INCEPTION


                                                                      Cumulative
                                                                        Totals
                                                                         Since
                                                       June 30,         Date of
                                                         1997          Inception
                                                       -------        ----------

Revenues                                               $  --            $  --

Expenses - consulting fees                               2,400            2,400
                                                       -------        ----------

Loss before income taxes                                (2,400)          (2,400)

Income taxes                                              --               --   
                                                       -------        ----------

Net loss                                               $(2,400)         $(2,400)
                                                       =======        ==========


                       See notes to financial statements.


<PAGE>



                      INNOVEST CAPITAL SOURCES CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)
                             STATEMENTS OF CASHFLOWS
                       SIX MONTHS ENDED JUNE 30, 1997 AND
                    CUMULATIVE TOTALS SINCE DATE OF INCEPTION


                                                                      Cumulative
                                                                        Totals
                                                                         Since
                                                       June 30,         Date of
                                                         1997          Inception
                                                       -------        ----------

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                                  $  --            $  --
                                                       =======          ======= 
                                                                        
                                                                        
                                                                        
                                                                        
RECONCILIATION OF NET LOSS TO NET CASH                                  
  PROVIDED BY OPERATING ACTIVITIES:                                     
    Net loss                                           $(2,400)         $(2,400)
                                                                        
    Adjustments  to  reconcile  net  loss  to net                       
      cash  provided  by  operating  activities:                        
                                                                        
      Increase in accruals                               2,400            2,400
                                                       -------          ------- 
                                                                        
NET CASH PROVIDED BY OPERATING ACTIVITES               $  --            $  --   
                                                       =======          ======= 
                                                                  



                       See notes to financial statements.


<PAGE>



                      INNOVEST CAPITAL SOURCES CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)
                        STATEMENT OF SHAREHOLDERS' EQUITY
                         FROM INCEPTION (APRIL 12, 1996)
                              THROUGH JUNE 30, 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          --

Net loss                                       --            --          (2,400)
                                         ----------    ----------    ---------- 

Balances at June 30, 1997                50,000,000    $    1,000    $   (2,400)
                                         ==========    ==========    ========== 


                        See notes to financial statements


<PAGE>



                      INNOVEST CAPITAL SOURCES CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                         SIX MONTHS ENDED JUNE 30, 1997




1.   BASIS OF PRESENTATION

     Innovest  Capital Sources  Corporation  (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  statements  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  statements  and the  reported  amounts of revenues  and expenses
     during  the  reporting  period.  Actual  results  could  differ  from those
     estimates.


2.   INCOME TAXES

     Deferred income taxes are reported for temporary  differences between items
     of  income  or  expense  reported  in the  financial  statements  and those
     reported for income tax purposes. The Company incurred a net operating loss
     for the six months ended June 30, 1996, of $2,400. This net operating loss,
     which will begin to expire in the year 2012, does not create a deferred tax
     asset pending demonstration of the Company's future profitability.


                                                                     (Continued)


<PAGE>



                      INNOVEST CAPITAL SOURCES CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                         SIX MONTHS ENDED JUNE 30, 1996




3.   INCOME TAXES (CONTINUED)

     The amount of the deferred tax asset is $816. The valuation  allowance that
     offsets the deferred tax asset is $816.


4.   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.


5.   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  statements and notes to the per
     share amounts have been restated to reflect the change in par value.


6.   SUBSEQUENT EVENTS

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