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: March 31, 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 March 31, 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 March 31, 1997, the number of shares outstanding of the Registrant's
Common Stock was 49,836,000.

          Telco Communications, Inc. March 31, 1997 Form 10-KSB   Page 1

<PAGE>



                          PART I: FINANCIAL INFORMATION
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                          Item 1. Financial Statements

     As of March 31, 1997,  Management  reports the  financial  information  per
attachemt hereto.


                 Item 2. Management's Discussion and Analysis of
                 Financial Condition and Results of Operations9

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

     On January 15, 1997, a Majority of Shareholders met and resolved to
re-elect existing directors and to elect James G. Mitchell additional Director,
and to authorize a change of the name of the Corporation to Innovest Capital
Sources, Corporation. On the advise of Special Counsel, these actions are deemed
to be informal and advisory only, and not the official acts of the Issuer,
pending approval by Shareholders at a Meeting of Shareholders duly called upon
notice, and further pending appropriate compliance with ss.14 of the Securities
Exchange Act of 1934. Counsel advised that the Board could appoint a third
Director, to serve until the next shareholders meeting.



          Telco Communications, Inc. March 31, 1997 Form 10-KSB   Page 2

<PAGE>



                            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 1994. During the period from April 1994 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 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 no Report(s)
on Form 8-K



                                   SIGNATURES


     Pursuant to the requirements of the Securities Exchange Act of 1934, this
Form 10-QSB Report for the Quarter ended March 31, 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                                             Karl E. Rodriguez
PRESIDENT/DIRECTOR                                           SECRETARY/TREASURER

          Telco Communications, Inc. March 31, 1997 Form 10-KSB   Page 3

<PAGE>











                                   Attachment

                              FINANCIAL STATEMENTS























          Telco Communications, Inc. March 31, 1997 Form 10-KSB   Page 4



<PAGE>


                      INNOVEST CAPITAL SOURCES CORPORATION
                           BALANCE SHEETS (UNAUDITED)
              for the fiscal years ended December 31, 1996 and 1995
                  and for the Three Months ended March 31, 1997



<TABLE>
<CAPTION>
                                                             March 31,        December 31,
                                                            ----------   ----------------------
                                                              1997         1996        1995
                                                            ----------   ----------  ----------

                                     ASSETS



<S>                                                         <C>          <C>         <C>
       Total Current Assets                                 $    -0-     $    -0-    $    -0-


                                                            $    -0-     $    -0-    $    -0-
                                                            ==========   ==========  ==========


                       LIABILITIES & STOCKHOLDERS' EQUITY



Common Stock, $.001 par value; authorized 50,000,000
   shares; issued and outstanding, 2,061,000 shares
   and 49,836,000 shares                                       49,836       49,836        2061

Additional Paid-In Capital                                     51,895       51,895      99,670

Accumulated Surplus (Deficit)                                (101,731)    (101,731)   (101,731)
                                                            ----------   ----------  ----------

Total Stockholders' Equity                                      -0-          -0-         -0-
                                                            ----------   ----------  ----------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                  $    -0-     $    -0-    $    -0-
                                                            ==========   ==========  ==========
</TABLE>




                   The accompanying notes are an integral part
                         of these financial statements.



<PAGE>


                      INNOVEST CAPITAL SOURCES CORPORATION
             STATEMENTS OF LOSS AND ACCUMULATED DEFICIT (UNAUDITED)
              for the fiscal years ended December 31, 1995 and 1994
                  and for the Three Months ended March 31, 1997




                                             March 31,        December 31,
                                            ----------   ----------------------
                                              1997         1996        1995
                                            ----------   ----------  ----------

    Revenues                                $    -0-     $    -0-    $    -0-
                                            ----------   ----------  ----------

    Total Expenses                          $    -0-     $    -0-    $    -0-
                                            ----------   ----------  ----------

    Net Income (Loss)                       $    -0-     $    -0-    $    -0-
                                            ==========   ==========  ==========

    Loss per Share                          $    -0-     $    -0-    $    -0-
                                            ==========   ==========  ==========



                   The accompanying notes are an integral part
                         of these financial statements.



<PAGE>



                      INNOVEST CAPITAL SOURCES CORPORATION
                       STATEMENTS OF CASH FLOW (UNAUDITED)
              for the fiscal years ended December 31, 1996 and 1995
                  and for the Three Months ended March 31, 1997




                                             March 31,        December 31,
                                            ----------   ----------------------
                                              1997         1996        1995
                                            ----------   ----------  ----------
Operating Activities

    Net Income (Loss)                       $    -0-     $    -0-    $    -0-

Total working capital (used)                     -0-          -0-         -0-

Increase (Decrease) in
    working capital                         $    -0-     $    -0-    $    -0-
                                            ==========   ==========  ===========





                   The accompanying notes are an integral part
                         of these financial statements.



<PAGE>


                      INNOVEST CAPITAL SOURCES CORPORATION
                   STATEMENT OF STOCKHOLDERS' (DEFICIT) EQUITY
   for the period from inception (December 9, 1987) through December 31, 1987,
         for the years ended December 31, 1988 through December 31, 1996
               and for the three month period ended March 31, 1997


<TABLE>
<CAPTION>
                                                           Common Stock                                                 Total Stock-
                                                 -----------------------------      Additional          Accumulated       holders'
                                                  Number of           Par              Paid-In             Surplus         Equity
                                                    Shares            Value            Capital            (Deficit)       (Deficit)
                                                 -----------       -----------       -----------       -----------       -----------

<S>                                               <C>              <C>               <C>               <C>               <C>
Inception (December 9, 1987)                               0       $         0       $         0       $         0       $         0

Inception through December
31, 1987: Stock issued for
cash and services                                  2,500,000             2,500             2,500                               5,000

Cancellation of shares to meet
dilution requirements of offering                 (1,700,000)           (1,700)            1,700

Shares transferred to legal
counsel                                                                                       62

Shares issued in public offering                   1,261,000             1,261           124,839

Costs of public offering                                                                 (29,531)

Net loss                                                                                                      (212)
                                                 -----------       -----------       -----------       -----------       -----------
Balances, December 31, 1988                        2,061,000             2,061            99,570              (212)          101,419

Warrants issued                                                                              100

Net loss                                                                                                   (21,509)
                                                 -----------       -----------       -----------       -----------       -----------
Balances, December 31, 1989                        2,061,000             2,061            99,670           (21,721)           80,010

Year ended December 31, 1990                       2,061,000             2,061            99,670           (21,721)           80,010

Year ended December 31, 1991                       2,061,000             2,061            99,670           (21,721)           80,010

Year ended December 31, 1992                       2,061,000             2,061            99,670           (21,721)           80,010

Year ended December 31, 1993                       2,061,000             2,061            99,670           (21,721)           80,010

Write-Off of bad debt                                                                                      (80,010)
                                                 -----------       -----------       -----------       -----------       -----------
Year ended December 31, 1994                       2,061,000             2,061            99,670          (101,731)                0

Year ended December 31, 1995                       2,061,000             2,061            99,670          (101,731)                0

Shares issued upon emergence
from Chapter 7 Bankruptcy                         47,775,000            47,775           (47,775)
                                                 -----------       -----------       -----------       -----------       -----------
Year ended December 31, 1996                      49,836,000            49,836            51,895          (101,731)                0

Balances, March 31, 1997                          49,836,000       $    49,836       $    51,895       $  (101,731)      $         0
                                                 ===========       ===========       ===========       ===========       ===========
</TABLE>



                   The accompanying notes are an integral part
                         of these financial statements.



<PAGE>




                           TELCO COMMUNICATIONS, INC.
                          NOTES TO FINANCIAL STATEMENTS
   for the period from inception (December 9 1987) through December 31, 1987,
               for the years ended December 31, 1988 through 1996
                  and for the three months ended March 31, 1997



1-FORMATION AND OPERATIONS OF THE COMPANY

     Telco Communications,  Inc. (the "Company"),  was incorporated Cody Capital
     Corporation.  under the laws of the State of  Colorado  on December 9 1987.
     The Company was organized to seek out and complete a merger or  acquisition
     of other companies or businesses.  The Company  completed a public offering
     in 1988 in which it raised a net, after offering expenses,  of $96,631.  An
     investment  was made in Telco of Baton  Rouge  however  the  Company  never
     realized any return from that  investment and in 1994 it was forced to file
     for bankruptcy.  In 1996 the Company emerged from bankruptcy with no assets
     or  liabilities  and  subject to no  litigation,  claims,  enforcements  or
     proceedings  and no  business  or  operations.  As of  the  date  of  these
     statements, the Company continues to be in its development stage.

2-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     (a)  BASIS OF ACCOUNTING

          Accounting  records  of  the  Company  and  financial  statements  are
          maintained and prepared on an accrual basis.

     (b)  FISCAL YEAR

          The Company's  fiscal year for accounting and tax purposes is December
          31.

     (c)  CASH EQUIVALENTS

          For Financial  Accounting  Standards  purposes,  the Statement of Cash
          Flows,  Cash  Equivalents  include  time  deposits,   certificates  of
          deposit,   and  all  highly  liquid  debt  instruments  with  original
          maturities  of three  months or less.  Whenever  cash amount are to be
          included on the Company's Statements of Cash Flow, however,  they will
          be comprised exclusively of cash.

3-PROPERTY AND EXECUTIVE COMPENSATION

     (a)  PROPERTY:

          The  Company's  offices and all of its records  are  located,  without
          cost, 4 Normandy Drive, Kenner, Louisiana.


                                    page F-7


<PAGE>


                          Telco Communications, Inc..
                         Notes to Financial Statements
                   December 9,1987 through December 31, 1987,
             and for the years ended December 31, 1988 through 1996
                  and for the three months ended March 31, 1997
                                    continued


     (b)  EXECUTIVE COMPENSATION:

          Since  inception,  the  Company has paid no cash  compensation  to its
          officers or directors.  Officers of the Company will be reimbursed for
          out-of-pocket expenses and may be compensated for the time they devote
          to the Company.  In addition,  Officers may receive  compensation  for
          services  performed  on behalf of the  Company.  The terms of any such
          compensation  will be determined on the basis of the nature and extent
          of the services which may be required and will be no less favorable to
          the Company than the charges for similar  services made by independent
          third parties who are similarly  qualified.  No officer or director is
          required to make any  specific  amount or  percentage  of his business
          time available to the Company.

4-STOCKHOLDERS' EQUITY.

     The Company,  as originally  incorporated  in Colorado,  was  authorized to
     issue  50,000,000  shares of common stock having a par value of $0.001.  In
     December 1987,  2,500,000  shares of Common Stock,  were issued in exchange
     for organizational costs.  1,700,000 of these shares were rescinded in 1988
     and a public  offering of 1,261,000  shares was completed in the same year.
     In 1996, as a condition of emergence from bankruptcy,  47,775,000 shares of
     common stock were issued.



                                    page F-8