TARGET INCOME FUND
Semi-Annual Report
April 30, 1996
<PAGE>
June 1, 1996
TARGET INCOME FUND
Dear Shareholder:
The Target Income Fund has now completed three and one-half years of operations.
It continues to provide consistent dividend performance.
As has been the case since inception, the net asset value of your shares has
remained constant at $10.00 per share. And as always, it is the on going intent
of the Fund to attempt to maintain this fixed share price at all times, although
there can be no assurance that we will always be able to do so.
One of the potential benefits of the Target Income Fund is that it can
participate in changing interest rates. Since our last annual report in the fall
of 1995, interest rates have remained fairly constant. Short-term money-market
rates stood at 4.78% as reported in the April 30, 1996 edition of the Wall
Street Journal.
Through April 30, 1996, the Target Income Fund recorded a 12-month average
annualized return of 7.56%. The Fund's average annual total return from
inception on November 24, 1992 has been 7.58%. The Fund's portfolio now holds
approximately 50 short-term loans and credit-lines. In addition, the Fund
recently purchased a portion of a large, Securitized Trust containing numerous
loans. The Advisor believes these investments should create a relatively
diversified and balanced pool of assets. Total Net Assets of the Fund stand at
approximately $11 million.
We hope you have been satisfied with the performance of the Fund and will let us
know if there is anything we can do to be of further assistance. Thank you for
your continued confidence and support of the Target Income Fund.
TARGET CAPITAL ADVISORS, INC.
<PAGE>
TARGET INCOME FUND
Schedule of Investments (Unaudited)
April 30, 1996
<TABLE>
<CAPTION>
SENIOR COLLATERALIZED FLOATING RATE LOAN PARTICIPATIONS* - 86.68%
Principal Percent of
Amount Value* Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
MANUFACTURING
Commercial Printing - 0.32%
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C>
35,802 Cal-Central Press, Inc., due 8/17/96........................... $ 35,802 0.32%
Computer Accessories - 3.93%
- ------------------------------------------------------------------------------------------------------------------------------------
437,043 Xtend Micro Products, Inc., due 6/16/96........................ 437,043 3.93%
Electrical Signal Testing Instruments - 0.13%
- ------------------------------------------------------------------------------------------------------------------------------------
15,000 Structured Systems & Software, Inc., due 1/5/97................ 15,000 0.13%
Electronic Components - 0.09%
- ------------------------------------------------------------------------------------------------------------------------------------
9,777 Spinneret, Inc., due 8/25/96................................... 9,777 0.09%
Electronic Controls - 6.42%
- ------------------------------------------------------------------------------------------------------------------------------------
713,341 Gentron Corporation, due 2/24/97............................... 713,341 6.42%
Food Preparation - 11.75%
- ------------------------------------------------------------------------------------------------------------------------------------
406,119 Food Specialties Service Corp., due 6/30/96.................... 406,119 3.65%
900,000 Western Commerce Corporation, due 10/20/96..................... 900,000 8.10%
- ------- -- -- --- ------- ----
Total food preparation......................................... 1,306,119
Industrial Tools and Supplies - 0.46%
- ------------------------------------------------------------------------------------------------------------------------------------
51,457 Exchange Tool and Supply of Dallas, Inc., due 4/3/98........... 51,457 0.46%
Modular Office Furniture - 2.40%
- ------------------------------------------------------------------------------------------------------------------------------------
266,198 Pleion Corporation, due 5/1/96................................. 266,198 2.40%
Nitrogenous Fertilizers - 0.84%
- ------------------------------------------------------------------------------------------------------------------------------------
93,142 Actagro, Inc., due 6/24/96..................................... 93,142 0.84%
Plastic Products - 2.47%
- ------------------------------------------------------------------------------------------------------------------------------------
274,372 Precise Plastic Products, Inc., due 8/26/96.................... 274,372 2.47%
Room Cleaning Products - 3.31%
- ------------------------------------------------------------------------------------------------------------------------------------
367,318 Clean Room Products, Inc., due 12/22/97........................ 367,318 3.31%
Stairs - 1.63%
- ------------------------------------------------------------------------------------------------------------------------------------
181,409 Carolina Hardwoods, L.L.C., due 3/28/97........................ 181,409 1.63%
Stereo Speakers - 0.07%
- ------------------------------------------------------------------------------------------------------------------------------------
7,544 Triad Speakers, Inc., due 12/25/96............................. 7,544 0.07%
<PAGE>
Schedule of Investments (Unaudited), Continued
Principal Percent of
Amount Value* Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
Surgical and Medical Instruments - 1.91%
- ------------------------------------------------------------------------------------------------------------------------------------
211,891 Advanced Materials, Inc., due 11/1/96.......................... $ 211,891 1.91%
Wine - 1.21%
- ------------------------------------------------------------------------------------------------------------------------------------
134,277 Chateau Potelle, Inc., due 6/7/96.............................. 134,277 1.21%
Wood Products - 0.02%
- ------------------------------------------------------------------------------------------------------------------------------------
2,263 The Studio Resource, Inc., due 7/27/96......................... 2,263 0.02%
SERVICES
Computer Hardware and Software Sales - 0.20%
- ------------------------------------------------------------------------------------------------------------------------------------
21,746 Gateway Data Sciences Corporation, due 8/22/96................. 21,746 0.20%
Computer Repairs - 0.74%
- ------------------------------------------------------------------------------------------------------------------------------------
82,126 The Main Source Electronics, Inc., due 4/1/97.................. 82,126 0.74%
Employment Agencies - 13.06%
- ------------------------------------------------------------------------------------------------------------------------------------
1,438,739 Corporate Personnel Network, Inc., due 12/1/96 ................ 1,438,739 12.95%
12,623 FS Temporary Personnel, Inc., due 12/1/96...................... 12,623 0.11%
- ------ -- - --- ------ ----
Total employment agencies...................................... 1,451,362
Freight Transportation Arrangement - 6.90%
- ------------------------------------------------------------------------------------------------------------------------------------
766,748 Logistics Management, Inc., due 11/3/96 ...................... 766,748 6.90%
Help Supply - 0.22%
- ------------------------------------------------------------------------------------------------------------------------------------
24,338 Agostini and Associates, Inc., due 9/24/96..................... 24,338 0.22%
Management Services - 0.04%
- ------------------------------------------------------------------------------------------------------------------------------------
5,026 Shared Telecommunication Systems, Inc., due 9/30/96............ 5,026 0.04%
Motion Picture Production - 4.61%
- ------------------------------------------------------------------------------------------------------------------------------------
486,932 Beverly Hills Publishing Co., due 11/8/96...................... 486,932 4.38%
25,008 Red Car, Inc., due 6/30/96..................................... 25,008 0.23%
- ------ - -- --- ------ ----
Total motion picture production................................ 511,940
Reseller of Computer Graphic Designs - 5.14%
- ------------------------------------------------------------------------------------------------------------------------------------
571,228 Vast Tech, Inc., due 2/1/97.................................... 571,228 5.14%
Surveying Services - 0.01%
- ------------------------------------------------------------------------------------------------------------------------------------
1,657 Mountain Pacific Surveys, Inc., due 6/3/96..................... 1,657 0.01%
<PAGE>
Schedule of Investments (Unaudited), Continued
Principal Percent of
Amount Value* Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
WHOLESALE TRADE
Computer and Peripheral Equipment - 0.50%
- ------------------------------------------------------------------------------------------------------------------------------------
55,729 National Health Enhancement Systems, Inc., due 11/13/96........ $ 55,729 0.50%
Fish and Seafoods - 0.02%
- ------------------------------------------------------------------------------------------------------------------------------------
1,886 Pacific Rim Cuisine, due 4/10/97............................... 1,886 0.02%
Industrial Bearings - 2.30%
- ------------------------------------------------------------------------------------------------------------------------------------
255,125 Alliance Bearing Industries, Inc., due 2/23/97................. 255,125 2.30%
Jewelry and Metals - 1.91%
- ------------------------------------------------------------------------------------------------------------------------------------
211,968 Jupiter Imports, Inc., due 7/17/96............................. 211,968 1.91%
Leather Cases - 0.02%
- ------------------------------------------------------------------------------------------------------------------------------------
2,258 Leatex, Inc., due 7/25/96...................................... 2,258 0.02%
Meats and Meat Products - 14.05%
- ------------------------------------------------------------------------------------------------------------------------------------
1,560,771 Nikabar, Inc., due 7/17/96..................................... 1,560,771 14.05%
- --------- - -- --- --------- -----
Total investment in senior collateralized floating rate loan
participations (cost $9,630,861+) (Notes 1A and 3)........... 9,630,861 86.68%
---------- - - --------- -----
VARIABLE RATE LOANS - 6.30%
- ------------------------------------------------------------------------------------------------------------------------------------
700,000 CFC Small Business Financing Master Trust Series B
Certificate, due 5/15/96 (cost $700,000)..................... 700,000 6.30%
- -- -- -------- ------- ----
Total investments (cost $10,330,861+)...................... 10,330,861 92.98%
Other assets less liabilities, net............................. 780,480 7.02%
------- ----
Total net assets........................................... $11,111,341 100.00%
=========== ======
<FN>
* Senior collateralized floating rate loan participations bear interest at rates
that float periodically at a margin above the LIBOR Rate as specified in the
participation agreement.
+ Cost for federal income tax purposes is $10,330,861.
</FN>
</TABLE>
See accompanying notes to financial statements.
<PAGE>
TARGET INCOME FUND
Statement of Assets and Liabilities (Unaudited)
April 30, 1996
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Investments in Floating Rate Loans, at value (cost $9,630,861) (Note 1A and 3) ............ $ 9,630,861
Investments in Variable Rate Loans, at value (cost $700,000)............................... 700,000
Cash ...................................................................................... 833,337
Accrued interest receivable................................................................ 15,065
Prepaid expenses........................................................................... 3,039
Deferred organizational costs (Note 1C).................................................... 19,977
- ------
Total assets ........................................................................ 11,202,279
----------
LIABILITIES
Redemptions payable........................................................................ 15,931
Accrued expenses .......................................................................... 25,043
Dividends payable to shareholders.......................................................... 49,964
------
Total liabilities.................................................................... 90,938
------
NET ASSETS, consisting of:
Common stock, $.01 par value, 100,000,000 shares authorized................................ 11,111
Capital paid in excess of par value........................................................ 11,100,230
----------
Total net assets..................................................................... $11,111,341
===========
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE
$11,111,341/1,111,134 shares of $.01 par value outstanding................................. $10.00
=========== ========= ==== ======
COMPUTATION OF OFFERING PRICE PER SHARE
(Net asset value $10.00/.970).............................................................. $10.31
====== ==== ======
</TABLE>
See accompanying notes to financial statements.
<PAGE>
TARGET INCOME FUND
Statement of Operations (Unaudited)
For the Six Months Ended April 30, 1996
<TABLE>
<CAPTION>
INCOME
<S> <C>
Interest income ........................................................................... $ 509,426
---------
EXPENSES
Investment advisory fees (Note 2) ......................................................... 40,408
Administration fee (Note 2)................................................................ 14,918
Fund accounting fees (Note 2).............................................................. 11,934
Custodian fees ............................................................................ 1,492
Transfer agent fees........................................................................ 11,934
Legal fees................................................................................. 13,236
Auditing fees.............................................................................. 7,957
Printing costs............................................................................. 2,983
Filing and
registration costs......................................................................... 722
Directors' fees ........................................................................... 6,377
Amortization of deferred organization costs (Note 1C)...................................... 6,281
Other ..................................................................................... 5,196
-----
Total expenses....................................................................... 123,438
Add: Reimbursement to Servicer (Note 2).................................................... 27,418
Less: Fees waived by Advisor............................................................... (16,163)
-------
Net expenses......................................................................... 134,693
-------
NET INVESTMENT INCOME ................................................................... $ 374,733
=========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
TARGET INCOME FUND
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Ended Year Ended
April 30, 1996* October 31, 1995
OPERATIONS:
<S> <C> <C>
Net investment income............................................... $ 374,733 $ 818,770
Distributions to shareholders:
Distributions from net investment income
($.34 and $.76 per share, respectively)............................. (374,733) (818,770)
Capital share transactions:
Increase in net assets derived from capital share transactions (a) 318,155 327,943
Net assets:
Beginning of period ................................................ 10,793,186 10,465,243
---------- ----------
End of period....................................................... $11,111,341 $10,793,186
=========== ===========
<FN>
(a) A summary of capital shares transactions is as follows:
Six Months Ended Year Ended
April 30, 1996* October 31, 1995
Shares Value Shares Value
Shares sold.............................. 47,770 $ 477,700 53,570 $ 535,699
Shares issued in connection with the
reinvestment of distributions......... 28,520 285,201 70,678 706,778
------ ------- ------ -------
76,290 762,901 124,248 1,242,477
Shares redeemed ......................... (44,475) (444,746) (91,453) (914,534)
------- -------- ------- --------
Net increase ............................ 31,815 $ 318,155 32,795 $ 327,943
====== ========= ====== =========
*Unaudited.
</FN>
</TABLE>
See accompanying notes to financial statements.
<PAGE>
TARGET INCOME FUND
Statement of Cash Flows (Unaudited)
For the Six Months Ended April 30, 1996
<TABLE>
<CAPTION>
INCREASE (DECREASE) IN CASH
Cash flows from operating activities:
<S> <C>
Interest received.................................................................... $ 494,824
Operating
expenses paid.............................................................................. (128,209)
Purchases of portfolio securities.................................................... (36,406,345)
Proceeds from disposition of portfolio securities.................................... 36,135,232
----------
Net cash provided by operating activities...................................... 95,502
------
Cash flows from financing activities:
Proceeds from shares sold............................................................ 477,700
Payments on shares redeemed.......................................................... (710,955)
Distributions paid................................................................... (94,753)
-------
Net cash used by financing activities.......................................... (328,008)
--------
Net decrease in cash....................................................................... (232,506)
Cash at beginning of period.......................................................... 1,065,843
---------
Cash at end of period................................................................ $ 833,337
=========
Reconciliation of net increase in net assets from operations to cash provided by
operating activities:
Net increase in net assets resulting from operations................................. $ 374,733
---------
Adjustments to reconcile the net increase in net assets from operations to net cash..
provided by operating activities:
Increase in investment in securities........................................... (271,113)
Increase in interest receivable................................................ (14,602)
Decrease in receivable from advisor............................................ 6,833
Decrease in prepaid expenses................................................... 1,678
Decrease in deferred organization expenses..................................... 6,281
Decrease in accrued expenses................................................... (8,308)
------
Total adjustments.............................................................. (279,231)
--------
Net cash provided by operating activities.............................. $ 95,502
========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
TARGET INCOME FUND
Financial Highlights
<TABLE>
<CAPTION>
Six Months Year Ended Year Ended For the Period from
Ended October 31, October 31, November 24, 1992*
April 30, 1996++ 1995 1994 to October 31, 1993
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period ....... $ 10.00 $ 10.00 $ 10.00 $10.00
Income from investment operations:
Net investment income................. 0.34 0.76 0.75 0.68
---- ---- ---- ----
Total from investment
operations.................... 0.34 0.76 0.75 0.68
---- ---- ---- ----
Less distributions:
Distributions from net investment
income.............................. (0.34) (0.76) (0.75) (0.68)
----- ----- ----- -----
Total distributions............. (0.34) (0.76) (0.75) (0.68)
----- ----- ----- -----
Net asset value, end of period ............. $ 10.00 $ 10.00 $ 10.00 $10.00
======= ======= ======= ======
Total return (a) ........................... 7.1%+ 7.9% 7.7% 7.0%+
Ratios/supplemental data:
Net assets, end of period (000's)........... $11,111 $10,793 $10,465 $6,288
Ratio of expenses to average net assets..... 2.5%(1)+ 2.5%(1) 2.5%(1) 2.5%(1)+
Ratio of net investment income to
average net assets........................ 7.0%(1)+ 7.6%(1) 7.5%(1) 7.7%(1)+
<FN>
(a) Exclusive of deduction of a sales charge on investments.
(1) Prior to reimbursement and waiver of expenses, the annualized ratio of
expenses to average net assets was 2.5%, 2.8%, 2.9% and 4.4%, respectively, and
the annualized ratio of net investment income to average net assets was 7.0%,
7.3%, 6.9% and 3.1%, respectively.
*Commencement of operations.
+Annualized.
++Unaudited.
</FN>
</TABLE>
See accompanying notes to financial statements.
<PAGE>
TARGET INCOME FUND
Notes to Financial Statements (Unaudited)
April 30, 1996al April 30, 1996
1. Significant Accounting Policies
Target Income Fund, Inc. (the "Fund") was incorporated in Maryland on
December 27, 1991, and commenced operations on November 24, 1992. It is
registered under the Investment Company Act of 1940 (the "1940 Act") as a
non-diversified, closed-end management investment company. The following is a
summary of significant accounting policies consistently followed by the Fund in
preparation of its financial statements. The policies are in conformity with
generally accepted accounting principles:
A. Investment Valuation - The Fund's investments in senior
collateralized floating rate loan participations are valued at fair
value by the Fund's Advisor, Target Capital Advisors, Inc. (the
"Advisor"), under procedures established by the Directors. In valuing
senior collateralized floating rate loan participations, the Advisor
will consider relevant factors, data, and information, including: (i)
the characteristics of and fundamental analytical data relating to the
senior collateralized floating rate loan maturity and base lending rate
of the senior collateralized floating rate loan participations, the
terms and the position of the senior collateralized floating rate loan
participations in the borrower's debt structure; (ii) the nature,
adequacy and value of the collateral, including the Fund's rights,
remedies and interests with respect to the collateral; (iii) the
creditworthiness of the borrower, based on an evaluation of its
financial condition, financial statements and information about the
borrower's business, cash flows, capital structure and future
prospects; (iv) information relating to the market for the senior
collateralized floating rate loan participations (including price
quotation, if any, that are considered reliable), and trading in the
senior collateralized floating rate loan participations and interests
in similar loans and the market environment and investor attitudes
towards the senior collateralized floating rate loan participations and
similar loans; (v) the reputation and financial condition of any
lending agent or other intermediate participant; and (vi) general
economic and market conditions affecting the fair value of the senior
collateralized floating rate loan participations. Other portfolio
securities may be valued on the basis of (i) prices furnished by a
pricing service, (ii) at the last sales price on the exchange that is
the primary market for such securities, or (iii) at the last quoted bid
price for those securities, for which the over-the-counter market is
the primary market or, in the case of listed securities, for which
there were no sales during the day. Short-term obligations (which may
include senior collateralized floating rate loan participations)
maturing in sixty days or less are valued at fair value as determined
in good faith by the Board of Directors.
B. Federal Taxes - The Fund's policy is to comply with the
provisions of the Internal Revenue Code available to regulated
investment companies and to distribute to shareholders all of its
taxable income. Accordingly, no provision for federal income tax is
required.
C. Deferred Organization Costs - Cost incurred in connection
with the organization of the Fund are being amortized on a
straight-line basis through November, 1997.
D. Other - Investment transactions are accounted for on the
trade date. Interest income is recorded on the accrual
basis. Dividends to shareholders from net investment income are
declared daily and paid monthly.
<PAGE>
TARGET INCOME FUND
Notes to Financial Statements (Unaudited), Continued
April 30, 19960, 1996
2. Investment Advisory and Administration Fees
The Fund has entered into an investment advisory agreement with Target
Capital Advisors, Inc., (the "Advisor") effective November 1, 1995. The Advisor
receives a monthly fee at an annual rate of up to 0.75% of the Fund's average
net assets. The previous Investment Advisor had the same fee arrangement.
Investment Company Administration Corporation (the "Administrator") receives a
monthly fee at an annual rate of 0.25% of the Fund's average net assets, subject
to an annual minimum fee of $30,000, for providing certain administrative
services to the Fund. The Fund also pays the Administrator $24,000 per year for
maintaining the Fund's accounting records. Certain employees of the Advisor and
Administrator serve as officers of the Fund.
The Advisor has agreed to limit the Fund's expenses to 2.50% of the
Fund's average net assets and has waived advisory fees in the amount of $16,163
for the period ended April 30, 1996. The Fund has decided that the overall
operating expenses will not fall below the 2.50% limitation until Concord Growth
Corporation ("Concord"), the Fund's Master Servicer, has been fully reimbursed
for expenses paid by Concord in previous years under this agreement. The Fund
will also reimburse the Advisor in subsequent years for advisory fees waived
when operating expenses (before reimbursement) are less than the applicable
2.50% limitation.
The cumulative unreimbursed operating expenses are as follows:
<TABLE>
<S> <C> <C> <C>
Period ended October 31, 1993 $ 58,682
Year ended October 31, 1994 23,199
Year ended October 31, 1995 (2,797)
--- ---- ------
$ 79,084
========
</TABLE>
3. Investments
For the period ended April 30, 1996, the cost of purchases and the
proceeds for repayments of senior collateralized floating rate loan
participations aggregated $35,706,345 and $36,135,232, respectively.
At April 30, 1996, the Fund held senior collateralized floating rate
loan participation interests valued at $9,630,861, representing 86.68% of its
net assets. These participation interests, while exempt from registration under
the Federal Securities Act of 1933 (the "1933 Act"), contain certain
restrictions on resale and cannot be sold publicly. The fair value of these
participations is determined daily as described in Note 1A. The cost of each
senior collateralized loan participation was equal to the principal amount of
the loan on the dates of acquisition.
A substantial majority of the Fund's senior collateralized floating
rate loan participations are with issuers located in the State of California.
Such concentration may subject the Fund to economic changes occurring within
California.
<PAGE>
TARGET INCOME FUND
Notes to Financial Statements (Unaudited), Continued
April 30, 19960, 1996
The Fund may be the sole investor in a given senior collateralized floating rate
loan participation, or it may act as co-lender with other firms, such as
commercial banks, thrift institutions, insurance companies, finance companies or
other financial institutions. Issuers of senior collateralized floating rate
loan participations may use the services of financial institutions as Lending
Agents. Such Lending Agents perform administrative functions such as computing
outstanding loan balances, amounts of unfunded credit commitments, issuer's
compliance with the terms of such credit facilities including collection of
accounts receivable, and monitoring credit quality. For these services, the
issuers typically pay Lending Agents an administrative and servicing fee. Before
investing in a senior collateralized floating rate loan participation where an
issuer makes use of a Lending Agent, the Advisor will evaluate the Lending Agent
based on factors such as minimum asset size and capacity, experience in
administering revolving credit facilities, and default rates on past loan
experience. Also, the financial condition of co-lenders or lending agents or
other intermediaries may affect the ability of the Fund to receive payments,
inasmuch as they may be responsible for the administration and enforcement of
the senior collateralized floating rate loan participation and its terms.
Default of a co-lender or other intermediary could adversely affect the Fund's
ability to receive payments.
4. Commitments
As of April 30, 1996, the Fund had unfunded loan commitments pursuant
to the terms of the following loan participation agreements:
<TABLE>
<S> <C>
Actagro, Inc............................................................................... $ 59,358
Advanced Materials, Inc.................................................................... 438,109
Agostini & Associates, Inc................................................................. 18,412
Alliance Bearing Industries, Inc........................................................... 111,995
Arizona Ice Man, Inc....................................................................... 100,000
Beverly Hills Publishing Co................................................................ 13,068
Cal-Central Press, Inc..................................................................... 797,523
Carolina Hardwoods, L.L.C.................................................................. 168,588
Chateau Potelle, Inc....................................................................... 15,723
Clean Room Products, Inc................................................................... 66,014
Corporate Personnel Network, Inc........................................................... 61,261
EWI Acquisition, Inc....................................................................... 666,660
Exchange Tool & Supply of Dallas, Inc...................................................... 198,541
Food Specialties Service Corp.............................................................. 93,881
Thomas J. Forbrizzio....................................................................... 80,000
FS Temporary Personnel, Inc................................................................ 17,377
Gateway Data Sciences Corp................................................................. 578,254
Gentron Corporation........................................................................ 406,659
Jupiter Imports, Inc....................................................................... 1,124,032
Labor Ready Of Southern California, Inc.................................................... 4,050,000
Leatex, Inc................................................................................ 10,242
<PAGE>
TARGET INCOME FUND
Notes to Financial Statements (Unaudited), Continued
April 30, 19960, 1996
Logistics Management, Inc.................................................................. $ 125,752
The Main Source Electronics, Inc........................................................... 84,540
Mountain Pacific Surveys, Inc.............................................................. 843
National Health Enhancement Systems, Inc................................................... 194,271
Nikabar, Inc............................................................................... 664,229
Pacific Rim Cuisine........................................................................ 614
Pleion Corporation......................................................................... 1,493,802
Precise Plastic Products, Inc.............................................................. 175,584
Red Car, Inc............................................................................... 4,992
Schaeffer's Nursery, Inc................................................................... 250,000
Shared Telecommunication Systems, Inc...................................................... 24,974
Spinneret, Inc............................................................................. 1,473
The Studio Resource, Inc................................................................... 22,737
Super Technologies, Inc.................................................................... 1,500,000
Triad Speakers, Inc........................................................................ 4,956
Vast Tech, Inc............................................................................. 28,772
Vision Computer Technologies, Inc.......................................................... 375,000
Xtend Micro Products, Inc.................................................................. 62,957
Zeke's Metro Auto Body, Inc................................................................ 200,000
-------
$14,291,193
</TABLE>
<PAGE>
This report is intended for the shareholders of
the Target Income Fund and should not be
used as sales literature unless accompanied
or preceded by the Fund's current prospectus.
