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: September 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 September 30, 1997, the aggregate number of shares held by non-affiliates
was approximately 2,655,726 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 September 30, 1997, the number of shares outstanding of the Registrant's
Common Stock was 50,000,000.
Telco Communications, Inc. September 30, 1997 Form 10-QSB Page 1
<PAGE>
PART I: FINANCIAL INFORMATION
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Item 1. Financial Statements
As of September 30, 1997, Management reports the financial information per
attachment 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. September 30, 1997 Form 10-QSB Page 2
<PAGE>
combinations, associations, joint venture, merger and/or acquisition programs to
achieve profitability for shareholders. The Issuer is in the process of changing
its name to Innovest Capital Sources Corporation and amending its articles to
change the par value to "no par".
Item 6. Exhibits and Reports on Form 8-K
No reports on Form 8-K were made during the period covered by this
Quarterly Report.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Form 10-QSB Report for the Quarter ended September 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: September 30, 1997
Telco Communications, Inc.
formerly Cody Capital Corporation
by
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Miller L. Mays III Karl E. Rodriguez
PRESIDENT/DIRECTOR SECRETARY/TREASURER
Telco Communications, Inc. September 30, 1997 Form 10-QSB Page 3
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Attachment
FINANCIAL STATEMENTS
Telco Communications, Inc. September 30, 1997 Form 10-QSB Page 4
<PAGE>
INNOVEST CAPITAL SOURCES CORPORATION
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENT
AND
INDEPENDENT AUDITORS' REPORT
NINE MONTHS ENDED SEPTEMBER 30, 1997
<PAGE>
INNOVEST CAPITAL SOURCES CORPORATION
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
SEPTEMBER 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 statement.
<PAGE>
INNOVEST CAPITAL SOURCES CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1997 AND
CUMULATIVE TOTALS SINCE DATE OF INCEPTION
Cumulative
Totals
Since
Sep. 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 statement.
<PAGE>
INNOVEST CAPITAL SOURCES CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASHFLOWS
NINE MONTHS ENDED SEPTEMBER 30, 1997 AND
CUMULATIVE TOTALS SINCE DATE OF INCEPTION
Cumulative
Totals
Since
Sep. 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 statement.
<PAGE>
INNOVEST CAPITAL SOURCES CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF SHAREHOLDERS' EQUITY
FROM INCEPTION (APRIL 12, 1996)
THROUGH SEPTEMBER 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 September 30, 1997 50,000,000 $ 1,000 $ (2,400)
========== ========== ==========
See notes to financial statement.
<PAGE>
INNOVEST CAPITAL SOURCES CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENT
NINE MONTHS ENDED SEPTEMBER 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 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.
1. INCOME TAXES
Deferred income taxes are reported for temporary differences between items
of income or expense reported in the financial statement 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 STATEMENT
NINE MONTHS ENDED SEPTEMBER 30, 1996
1. INCOME TAXES (CONTINUED)
The amount of the deferred tax asset is $816. The valuation allowance that
offsets the deferred tax asset is $816.
1. 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.
1. 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.
1. SUBSEQUENT EVENTS
On or about June 23, 1997, a written offer to purchase the Company was
entered into.
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<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JUL-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
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0
0
<COMMON> 50,000,000
<OTHER-SE> (1,400)
<TOTAL-LIABILITY-AND-EQUITY> 1,000
<SALES> 0
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<CGS> 0
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<OTHER-EXPENSES> 2,400
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<NET-INCOME> (2,400)
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