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UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
 Form 10-Q þ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 For the quarterly period
ended      March 31, 2005 OR o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 For the transition period from  to Commission file
number:     333-9371 CAPTEC FRANCHISE CAPITAL PARTNERS L.P. IV 
    
  38-3304096 
  24 Frank Lloyd Wright Drive, Lobby L, 4th Floor
P.O. Box 544, Ann Arbor, Michigan 48106-0544 
  (734) 994-5505 
  Not Applicable 
  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 such
shorter period that the registrant was required to file such reports), and (2) has been subject to
filing requirements for the past 90 days. Yes þ No APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS Check whether the registrant filed all documents and reports required to be filed by Section 12, 13
or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by court:
Not applicable APPLICABLE ONLY TO CORPORATE ISSUERS State the number of shares outstanding of each of the issuers classes of common equity, as of the
latest practicable date: Not applicable




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CAPTEC FRANCHISE CAPITAL PARTNERS L.P. IV Index to Form 10-Q Item No.
    
    PagePART I FINANCIAL INFORMATIONItem 1. Financial Statements:Balance Sheets, March 31, 2005 and December 31, 2004
    
    
    3Statement of Discontinued Operations for the three months ended March 31, 2005 and 2004
    
    
    4Statement of Changes in Partners Capital for the three months ended March 31, 2005
    
    
    5Statement of Cash Flows for the three months ended March 31, 2005 and 2004
    
    
    6Notes to Financial Statements
    
    
    79Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    912Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    12Item 4. Controls and Procedures
    
    
    13PART II OTHER INFORMATIONOther Information
    
    
    13-14SIGNATURES15CERTIFICATION Pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002
    
    
    16Certification Pursuant to Section 302Certification Pursuant to 18 U.S.C. Section 1350
 2




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Captec Franchise Capital Partners L.P. IV 
 Balance Sheets March 31,
    
    
    December 31,2005
    
    
    2004(Unaudited)AssetsCash and cash equivalents
    
    $
    46,572
    
    
    $
    143,463Restricted cash
    
    
    236,253
    
    
    
    333,006Assets Held for Sale:Operating leases, net
    
    
    25,905,039
    
    
    
    25,905,039Financing leases, net
    
    
    1,283,104
    
    
    
    1,326,425Unbilled rent, net
    
    
    1,136,432
    
    
    
    1,075,996Other Assets
    
    
    273,087
    
    
    
    258,339Accounts receivable
    
    
    161,841
    
    
    
    178,011Total assets
    
    $
    29,042,328
    
    
    $
    29,220,279Liabilities and Partners CapitalLiabilities Held for Sale:Notes payable
    
    $
    13,508,563
    
    
    $
    13,597,961Accounts payable and accrued expenses
    
    
    119,393
    
    
    
    171,715Due to related parties
    
    
    5,649
    
    
    
    10,969Total liabilities
    
    
    13,633,605
    
    
    
    13,780,645Partners capital:Limited partners capital accounts
    
    
    15,409,845
    
    
    
    15,444,197General partners capital account
    
    
    (1,122
    )
    
    
    (4,563
    )Total partners capital
    
    
    15,408,723
    
    
    
    15,439,634Total liabilities and partners capital
    
    $
    29,042,328
    
    
    $
    29,220,279
 The accompanying notes are an integral part of the financial statements. 3




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Captec Franchise Capital Partners L.P. IV 
 Statement of Discontinued Operations   2005
    
    
    2004Operating revenue:Rental income
    
    $
    703,798
    
    
    $
    783,576Finance income
    
    
    32,607
    
    
    
    39,270Total operating revenue
    
    
    736,405
    
    
    
    822,846Operating costs and expenses:Interest expense
    
    
    288,736
    
    
    
    312,534Depreciation
    
    
    
    
    
    
    126,675Debt Retirement Costs
    
    
    
    
    
    
    209,010General and administrative
    
    
    105,927
    
    
    
    123,026Total operating costs and expenses
    
    
    394,663
    
    
    
    771,245Income from discontinued operations
    
    
    341,742
    
    
    
    51,601Other income :Gain on sale of equipment
    
    
    1,997
    
    
    
    Gain on sale of real estate
    
    
    
    
    
    
    252,311Interest and other income
    
    
    350
    
    
    
    168Total other income
    
    
    2,347
    
    
    
    252,479Net Income from discontinued operations
    
    
    344,089
    
    
    
    304,080Net income from discontinued operations allocable to general partner
    
    $
    3,441
    
    
    $
    3,041Net income from discontinued operations allocable to limited partners
    
    $
    340,648
    
    
    $
    301,039Net income from discontinued operations per limited partnership unit
    
    $
    11.76
    
    
    $
    10.33Weighted average number of limited partnership
units outstanding
    
    
    28,975
    
    
    
    29,155
 The accompanying notes are an integral part of the financial statements. 4




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Captec Franchise Capital Partners L.P. IV 
 Statements of Changes in Partners Capital   Limited
    
    
    Limited
    
    
    General
    
    
    TotalPartners
    
    
    Partners
    
    
    Partners
    
    
    PartnersUnits
    
    
    Accounts
    
    
    Account
    
    
    CapitalBalance, December 31, 2004
    
    
    28,975
    
    
    $
    15,444,197
    
    
    $
    (4,563
    )
    
    $
    15,439,634Distributions - ($12.94 per limited partnership unit)
    
    
    
    
    
    
    (375,000
    )
    
    
    
    
    
    
    (375,000
    )Net income from discontinued operations
    
    
    
    
    
    
    340,648
    
    
    
    3,441
    
    
    
    344,089Balance, March 31, 2005
    
    
    28,975
    
    
    $
    15,409,845
    
    
    $
    (1,122
    )
    
    $
    15,408,723
 The accompanying notes are an integral part of the financial statements. 5




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Statements of Cash Flows   2005
    
    
    2004Cash flows from operating activities:Net income from discontinued operations
    
    $
    344,089
    
    
    $
    304,080Adjustments to net income:Depreciation
    
    
    
    
    
    
    126,675Amortization of debt issuance costs
    
    
    14,895
    
    
    
    39,613Gain on sale of equipment
    
    
    (1,997
    )
    
    
    Gain on sale of real estate
    
    
    
    
    
    
    (252,311
    )Increase in unbilled rent
    
    
    (60,436
    )
    
    
    (3,084
    )Decrease (increase) in accounts receivable
    
    
    16,170
    
    
    
    (34,794
    )Decrease in accounts payable and accrued expenses
    
    
    (52,322
    )
    
    
    (54,008
    )Decrease in due to related parties
    
    
    (5,320
    )
    
    
    (3,796
    )Increase in other assets
    
    
    (29,643
    )
    
    
    Decrease (increase) in restricted cash
    
    
    96,753
    
    
    
    (15,277
    )Net cash provided by operating activities
    
    
    322,189
    
    
    
    107,098Cash flows from investing activities:Proceeds from sale of equipment
    
    
    15,000
    
    
    
    Proceeds from sale of real estate
    
    
    
    
    
    
    2,130,375Principal collections on financing leases
    
    
    30,318
    
    
    
    65,091Net cash provided by investing activities
    
    
    45,318
    
    
    
    2,195,466Cash flows from financing activities:Repayments of notes payable
    
    
    (89,398
    )
    
    
    (553,481
    )Distributions to limited partners
    
    
    (375,000
    )
    
    
    (500,000
    )Net cash used in financing activities
    
    
    (464,398
    )
    
    
    (1,053,481
    )Net (decrease) increase in cash and cash equivalents
    
    
    (96,891
    )
    
    
    1,249,083Cash and cash equivalents, beginning of period
    
    
    143,463
    
    
    
    694,742Cash and cash equivalents, end of period
    
    $
    46,572
    
    
    $
    1,943,825
 The accompanying notes are an integral part of the financial statements. 6




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CAPTEC FRANCHISE CAPITAL PARTNERS L.P. IV 
 NOTES TO FINANCIAL STATEMENTS
  1.
    THE PARTNERSHIP AND ITS SIGNIFICANT ACCOUNTING PRINCIPLES:Captec Franchise Capital Partners L.P. IV (the Partnership), a Delaware limited
partnership, was organized on July 23, 1996 for the purpose of acquiring income-producing
commercial real properties and equipment leased on a triple net or double net basis,
primarily to operators of national and regional chain franchised fast food and family style
restaurants, as well as other national and regional retail chains.The initial general partners of the Partnership were Captec Franchise Capital Corporation
IV (the Corporation), a wholly-owned subsidiary of Captec Financial Group, Inc.
(Captec), an affiliate, and Patrick L. Beach, the Chairman of the Board of Directors,
President and Chief Executive Officer of the Corporation and Captec. In August 1998, Captec
Net Lease Realty, Inc. (Captec Net Lease), an affiliate, acquired the general partnership
interest of the Partnership. In December 2001, Captec Net Lease merged with and into
Commercial Net Lease Realty, Inc. (Commercial Net Lease). In connection with the merger,
Commercial Net Lease agreed to sell and assign its general partnership interest in the
Partnership to GP4 Asset Acquisition, LLC (GP4 Asset Acquisition), which is wholly-owned
by Mr. Beach and is an affiliate of Captec. Effective January 15, 2002, the limited
partners consented to the transfer of the general partnership interest. On September 11,
2003, the Partnerships secured lender consented to the transfer of the general partnership
interest to GP4 Asset Acquisition. Upon receipt of the secured lenders consent, the
general partnership interest was immediately transferred to GP4 Asset Acquisition.
Therefore, as of September 11, 2003, GP4 Asset Acquisition became the general partner of
the Partnership.The Partnership commenced a public offering (the Offering) of up to 30,000 limited
partnership units (the Units), priced at $1,000 per Unit, registered under the Securities
Act of 1933, as amended, by means of a Registration Statement filed on Form S-11, which was
declared effective by the Securities and Exchange Commission on December 23, 1996. The
Partnership accepted subscriptions for the minimum number of Units on March 5, 1997 and
immediately commenced operations. The Offering was fully subscribed in December 1998. Since
1999, 1,025 Units have been repurchased by the Partnership pursuant to the terms of the
Repurchase Plan set forth in the Partnerships December 23, 1996 prospectus with respect to
the Offering. At March 31, 2005, the Partnership had 28,975 Units issued and outstanding.The principal investment objectives of the Partnership are: (i) preservation and protection
of capital; (ii) distribution of cash flow generated by the Partnerships leases; (iii)
capital appreciation of Partnership properties; (iv) generation of increased income and
protection against inflation through escalation of base rents or participation in gross
revenues of tenants of Partnership properties; and (v) deferred taxation of cash
distributions to the limited partners.Allocation of profits, losses and cash distributions from operations and cash distributions
from sale or refinancing activities are made pursuant to the terms of the Partnership
Agreement. Profits and losses from operations are allocated among the limited partners
based upon the number of Units owned.Net income per limited partnership interest is calculated using the weighted average number
of limited partnership Units outstanding during the period and the limited partners
allocable share of the net income.Distributions per limited partnership Unit are calculated using the actual distributions
disbursed during the period and the weighted average number of limited partnership Units
outstanding during the period. Actual individual limited partner distributions may vary
from this calculation as a result of a variety of factors including: (i) actual
distributions are computed based on quarterly 7




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operating results and outstanding limited partnership units, which are disbursed in the
subsequent quarter; (ii) certain limited partners have elected to receive monthly
distributions versus quarterly distributions which creates timing differences between
comparative calculations, and (iii) the calculation ignores the timing of repurchases.In November 2004, the limited partners approved a plan to liquidate the Partnership and
dispose of all the assets of the Partnership. With this approval, the Partnership
commenced activities to liquidate and dispose of the assets of the Partnership, which
included entering into an exclusive listing agreement with a third party, who will oversee
the marketing and offering for sale of all the real estate assets and equipment leases and
loans on behalf of the Partnership. In accordance with Financial Accounting Standards No.
144 Accounting for the Impairment or Disposal of Long Lived-Assets (FAS 144), as a
result of the approval of this plan, all assets except cash are classified as Assets Held
for Sale and depreciation on these assets is discontinued, all liabilities are classified
as Liabilities Held for Sale and the results of the operations in their entirety are
classified as discontinued operations for all years presented, since the operations are
directly related to the assets or liabilities held for sale. The assets of the Partnership
will be sold and the cash will be used to distribute the net proceeds from such liquidation
after the repayment of all debt in accordance with the partnership agreement.On February 15, 2005, the Partnership executed an Agreement of Sale (the Agreement)
pursuant to which the Partnership has agreed to sell twelve of the Partnerships properties
and certain real property leases related to such properties for an aggregate purchase price
of $20,975,000. Under the Agreement, the purchase price may be adjusted if, among other
things, less than all the properties set forth in the Agreement are sold due to the
exercise by tenants of certain rights of first refusal contained in the property leases.The closing of the transactions contemplated by the Agreement is contingent upon the
satisfaction of certain customary conditions set forth more fully in the Agreement,
including satisfactory completion of due diligence review. In addition, the closing is
further contingent upon the contemporaneous closing of a separate agreement of sale between
the purchaser and Captec Franchise Capital Partners, L.P. III (LP III), an affiliate of
the Partnership, governing the sale of ten properties owned by LP III. The parties to the
Agreement anticipate that the closing will occur during the second quarter of 2005.The balance sheet of the Partnership as of March 31, 2005, the statements of discontinued
operations and cash flows for the periods ending March 31, 2005 and March 31, 2004 and the
statements of changes in partners capital for the period ending March 31, 2005 have not
been audited. In the opinion of management, these unaudited financial statements contain
all adjustments necessary to present fairly the financial position and results of
operations and cash flows of the Partnership for the periods then ended. Results of
operations for the interim periods are not necessarily indicative of results for the full
year. These unaudited financial statements should be read in conjunction with the
financial statements and notes thereto included in the Partnerships annual report on Form
10-K for the year ended December 31, 2004 filed with the United States Securities and
Exchange Commission on March 30, 2005.2.
    LAND AND BUILDING SUBJECT TO OPERATING LEASES:The net investment in operating leases as of March 31, 2005 is comprised of the following: Land
    
    $
    10,261,124Building and improvements
    
    
    17,979,56428,240,688Less accumulated depreciation
    
    
    (2,335,649
    )Total
    
    $
    25,905,039
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3.
    NET INVESTMENT IN FINANCING LEASES:The net investment in financing leases as of March 31, 2005 is comprised of the following: Minimum lease payments to be received
    
    $
    2,049,175Less unearned income
    
    
    (766,071
    )Net investment in financing leases
    
    $
    1,283,104
  4.
    NOTES PAYABLE:In December 1998, the Partnership entered into a $6.4 million term note. The note has a
10-year term, is collateralized by certain properties which have a carrying value of
approximately $11.6 million subject to operating leases, and bears interest at a rate of
8.13% per annum.In March 1999, the Partnership entered into an additional $3.3 million term note. The note
has a 10-year term, is collateralized by properties which have a carrying value of
approximately $3.4 million subject to operating leases, and bears interest at a rate of
8.5% per annum. In March 2004, the Partnership defeased approximately $466,000 of this note
payable with proceeds from the sale of a property.In October 2000, the Partnership assumed a $3.75 million term note, collateralized by a
certain property which has a carrying value of approximately $4.6 million. The note has a
10-year term, and bears interest at a rate of 8.35% per annum.In November 2001, the Partnership entered into a $1.5 million term note. In June 2004, the
Partnership sold a property subject to an operating lease that secured this note. Using
proceeds from the sale, the note was paid down to a balance of $874,000, and the maturity
date was extended to July 2006. The remaining note is secured by a property subject to an
operating lease which has a carrying value of $1.5 million, and bears interest at a rate of
prime plus 2% per annum.In April 2003, the Partnership entered into an $862,500 term note. The note has a 5-year
term, is collateralized by a property subject to an operating lease which has a carrying
value of $1.1 million, and bears interest at a rate of 6.25%, per annum.In April 2003, the Partnership entered into a $57,500 unsecured revolving note. The note
initially had a 2-year term and bore interest at a variable rate equivalent to the Wall
Street Journal (WSJ) prime rate plus 1/2%. The interest rate is adjusted monthly for
changes in the WSJ prime rate. In April 2005, the maturity date on the note was extended
to April 2006. All other terms and conditions on the note remain unchanged.Debt issuance costs of $646,349 were incurred in connection with the issuance of the notes,
and are being amortized over the life of the notes to interest expense using the
straight-line method, which is not materially different than the interest rate method. 
 ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS  When used in this discussion, the words, intends, anticipates, expects, and similar
expressions are intended to identify forward-looking statements. Forward-looking
statements are subject to certain risks and uncertainties, some of which are beyond the
Partnerships control, which could cause actual results to differ materially from those
projected. Such risks and uncertainties include the following: (i) a tenant may default
in making rent payments, (ii) a fire or 9




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other casualty may interrupt the cash flow stream from a property, (iii) the properties may
not be leased at the assumed rental rates, (iv) unexpected expenses may be incurred in the
ownership of the properties, and (v) properties may not be sold at the presently
anticipated prices and times. Any statements contained in this report or any documents
incorporated herein by reference that are not statements of historical fact may be deemed
to be forward-looking statements. You should not place undue reliance on these
forward-looking statements, which speak only as of the date of this report. The Partnership
disclaims, except as may be required by law, any obligations to update or release revisions
to these forward-looking statements to reflect events or circumstances after the date of
this report or to reflect the occurrence of unanticipated events.As a result of the approval of the Plan of Liquidation and Dissolution, all of the
Partnerships assets except cash are classified as Assets Held for Sale, all liabilities
are classified as Liabilities Held for Sale and the operations of the Partnership have been
classified as discontinued operations for all periods presented. Therefore, the following
discussion and analysis of the results of operations is entirely in regards to discontinued
operations, and the discussion and analysis of financial condition is principally regarding
Assets and Liabilities Held for Sale.RESULTS OF OPERATIONSThree Months Ended March 31, 2005.During the three months ended March 31, 2005,
total operating revenue decreased 10.5% to approximately $736,000 compared to approximately
$823,000 for the three months ended March 31, 2004. Rental revenue from operating leases
for the three months ended March 31, 2005 decreased 10.2% to approximately $704,000
compared to approximately $784,000 for the prior year period, primarily due to the
disposition of three operating leases in 2004. Earned income from financing leases for
the three months ended March 31, 2005 decreased 17.0% to approximately $33,000 compared to
approximately $39,000 for the three months ended March 31, 2004 due to the amortization of
principal balances and the disposition of an equipment lease in April 2004.Operating expenses from discontinued operations totaled approximately $395,000 for the
three months ended March 31, 2005, compared to approximately $771,000 for the three months
ended March 31, 2004. No depreciation expense is recognized for the three months ended
March 31, 2005. In accordance with FAS 144, all of the Partnerships assets except cash
are classified as Assets Held for Sale and depreciation on these assets is discontinued.
General and administrative expense decreased by approximately $13,000 for the three months
ended March 31, 2005 compared to the prior year period due to reduction in property taxes.
For the three months ended March 31, 2004, there were approximately $209,000 in debt
retirement costs associated with the disposition of one of the
property in 2004.Other income from discontinued operations for the three months ended March 31, 2005 was
approximately $2,000 due to the disposition of an equipment lease in February 2005 for net
cash proceeds of $15,000, resulting in a gain of approximately $2,000. Other income from
discontinued operations for the three months ended March 31, 2004 was approximately
$252,000 and related to the sale of two properties that were triggered by the tenants
exercise of purchase option clauses in the lease agreements. The properties were sold in
March 2004 for net cash proceeds of approximately $2.1million.As a result of the foregoing, the Partnerships net income from discontinued operations
increased 13.2% to approximately $344,000 for the three months ended March 31, 2005,
compared to $304,000 for the three months ended March 31, 2004.The Partnership announced first quarter distributions of approximately $250,000, of which
approximately $217,760 was distributed to certain limited partners on April 15, 2005 and
the remainder of which will be distributed to limited partners electing to receive
distributions on a monthly basis. 10




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LIQUIDITY AND CAPITAL COMMITMENTSIn December 1996, the Partnership commenced its offering of up to 30,000 Units. The offering
reached final funding in December 1998 with subscriptions for the entire 30,000 Units. Net
proceeds after offering expenses were approximately $26.1 million.In December 1998, the Partnership entered into a $6.4 million term note. The note has a
10-year term, is collateralized by certain properties which have a carrying value of
approximately $11.6 million subject to operating leases, and bears interest at a rate of
8.13% per annum.In March 1999, the Partnership entered into an additional $3.3 million term note. The note
has a 10-year term, is collateralized by properties which have a carrying value of
approximately $3.4 million subject to operating leases, and bears interest at a rate of
8.5% per annum. In March 2004, the Partnership defeased approximately $466,000 of this note
payable with proceeds from the sale of a property.The Partnership purchased a property in October 2000 and assumed a $3.75 million term note
in connection with the acquisition. The note has a 10-year term, is collateralized by a
property which has a carrying value of approximately $4.6 million and bears interest at
the rate of 8.35% per annumIn November 2001, the Partnership entered into a $1.5 million term note. In June 2004, the
Partnership sold a property subject to an operating lease that secured this note. Using
proceeds from the sale, the note was paid down to a balance of $874,000, and the maturity
date was extended to July 2006. The remaining note is secured by a property subject to an
operating lease which has a carrying value of $1.5 million, and bears interest at a rate of
prime plus 2% per annum.In April 2003, the Partnership entered into an $862,500 term note. The note has a 5-year
term, is collateralized by a property subject to an operating lease which has a carrying
value of $1.1 million, and bears interest at a rate of 6.25%, per annum.In April 2003, the Partnership entered into a $57,500 unsecured revolving note. The note
initially had a 2-year term and bore interest at a variable rate equivalent to the Wall
Street Journal (WSJ) prime rate plus 1/2%. The interest rate is adjusted monthly for
changes in the WSJ prime rate. In April 2005, the maturity date on the note was extended
to April 2006. All other terms and conditions on the note remain unchanged.Debt issuance costs of $646,349 were incurred in connection with the issuance of the notes,
and are being amortized over the life of the notes to interest expense using the
straight-line method, which is not materially different than the interest rate method.As of March 31, 2005, the Partnership had a portfolio of 19 properties located in 9 states,
with a cost basis of $29.4 million, and 2 performing equipment leases with an original
investment of $517,000. The remaining net investment in the Partnerships leased equipment
is $55,000, net of $462,000 of aggregate principal collections on financing leases during
the life of those investments. Inclusive of the above amount, the Partnership has received
approximately $7.0 million of aggregate principal collections on its financing leases
during the life of those investments. As of March 31, 2005, the Partnership has not made,
nor does it intend to make, any commitments to purchase additional properties.The Partnership semi-annually considers written requests to repurchase Units pursuant to the
terms of the repurchase plan set forth in the Partnerships prospectus with respect to the
Offering. Since 1999, 1,025 Units have been repurchased by the Partnership pursuant the
repurchase plan. At March 31, 2005, the Partnership had 28,975 Units issued and
outstanding. The Partnership is not 11




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obligated to accept Unit repurchase requests if the annualized Cash Flow for the three
months prior to the redemption period is less than 10% per annum of the adjusted investment
and/or if such repurchases would impair the capital of the Partnership. In connection with
the announcement of the Partnerships liquidation plans, the general partner has
indefinitely suspended the repurchase plan.The Partnership expects that only limited amounts of liquid assets will be required for
existing properties since its property and equipment leases require tenants and lessees to
pay all taxes and assessments, maintenance and repairs and insurance premiums, including
casualty insurance thereby minimizing the Partnerships operating expenses and capital
requirements. The General Partner expects that the cash flow to be generated by the
Partnerships properties and equipment will provide adequate liquidity and capital resources
to pay operating expenses and provide distributions to the limited partners.Effective November 8, 2004 the limited partners consented to the Plan of Liquidation and
Dissolution, which involves the dissolution of the Partnership, the liquidation of its
assets and the winding up of its affairs. As a result, the general partner is authorized to
liquidate the assets of the Partnership and distribute the net proceeds from such
liquidation after the repayment of all debt in accordance with the partnership agreement.
The Partnership is undertaking steps to liquidate and dispose of its assets in accordance
with the Plan of Liquidation and Dissolution and has entered into an exclusive listing
agreement with a third party that will oversee the marketing and sale of the Partnerships
assets. Management believes the proceeds on sale will be adequate to pay off all
liabilities and make one or more distributions to the partners. Disclosure of Contractual Obligations Payment due by periodContractual
    
    
    
    
    
    
    
    Less than
    
    
    
    1-3
    
    

    
    3-5Obligations
    
    
    Total
    
    
    
    1 year
    
    
    
    years
    
    
    
    years
    
    
    
    More than 5 yearsLong-term Debt
Obligation
    
    
    $
    13,508,563
    
    
    
    $
    275,061
    
    
    
    $
    2,724,718
    
    
    
    $
    10,508,784
    
    
    
    
    
 
  ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKCredit risk relates to investment in leases and accounts receivable balances and results
from the possibility of lessee defaulting on its contractual obligation to the Partnership.
Both the ability of the lessees to pay rent on a timely basis and the amount of the rent
(which is the Partnerships principal source of income) are affected by general economic
conditions. A default by a lessee or other premature termination of a lease agreement will
interrupt rental payments and Partnership cash flows would be temporarily impacted. In such
an instance, the general partner expects that it would find a substitute lessee, however,
there can be no assurances that the property or equipment could be leased on comparable or
acceptable terms. The Partnership monitors this risk by performing ongoing credit
evaluations of lessees and maintains allowances for potential credit losses.The Partnership is exposed to interest rate risks, primarily as a result of its long-term
fixed rate debt used to finance its investments. The Partnerships approach to interest
rate risk management is to limit the impact of interest rate changes on earnings and cash
flows by matching investments with long-term fixed rate borrowings to the extent possible.
A change in interest rates will not affect the interest expense associated with the fixed
rate debt. Changes in the interest rate environment upon maturity of this fixed rate debt
could have an effect on the Partnerships future cash flows and earnings, depending on
whether the debt is replaced with other fixed rate debt, variable rate debt, or equity or
repaid by the sale of assets. Current Notes Payables mature in 2006 and in the years 2008
through 2010. 12




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ITEM 4. CONTROLS AND PROCEDURES  Mr. Beach, acting in his capacity as the principal executive officer of GP4 Asset
Acquisition, is ultimately responsible for the disclosure controls and procedures of the
Partnership. Disclosure controls and procedures are established and maintained by the
Partnership to ensure the information required to be disclosed by the Partnership in the
reports that it files or submits pursuant to the Securities Exchange Act of 1934, as amended
(the Act), is recorded, processed, summarized and reported within the time periods
specified in the Commissions rules and forms. Mr. Beach has evaluated the effectiveness of
the Partnerships disclosure controls and procedures as of a date within 90 days prior to
the filing date of this report, and has determined that the Partnerships disclosure
controls and procedures effectively communicate the information required to be disclosed by
the Partnership in the reports it files or submits under the Act in a manner that allows
timely decisions regarding such disclosure.There have been no significant changes in the Partnerships internal controls over financial
reporting during the period covered by this report that have materially affected, or are
reasonably likely to materially affect, the Partnerships internal control over financial
reporting. 
 PART II  OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS.None ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS .None ITEM 3. DEFAULTS UPON SENIOR SECURITIES.None. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.None ITEM 5. OTHER INFORMATION.None ITEM 6. EXHIBITS. The following exhibits are included herein or incorporated by reference: Number
    
    Exhibit2
    
    Plan of Liquidation and Dissolution (Incorporated by reference to the
Registrants Definitive Proxy Statement on Schedule 14A, filed on September 21, 2004)4
    
    Amended Agreement of Limited Partnership of Registrant. (Incorporated by
reference to the Registrants Definitive Proxy Statement on Schedule 14A, filed on
September 21, 2004 and the corresponding exhibit in the Registrants Form 10-K for the
year ended December 31, 1998)10.1
    
    Promissory Note dated November 28, 1998 between Registrant and National
Realty Funding L.C. (Incorporated by reference to the corresponding exhibit in the
Registrants Form 10-K for the year ended December 31, 1998)
 13




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Number
    
    Exhibit10.2
    
    Promissory Note dated March 31, 1999 between Registrant and National Realty
Funding L.C. (Incorporated by reference to the corresponding exhibit in the
Registrants Form 10-Q for the quarter ended March 31, 1999)31
    
    Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 200232
    
    Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section of the Sarbanes-Oxley Act of 2002
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SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned thereunto duly authorized. By:
    
    Captec Franchise Capital Partners L.P. IVGP4 Asset Acquisition, LLCIts ManagerBy:
    
    /s/ Patrick L. BeachPatrick L. BeachPresidentDate:
    
    May 13, 2005
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Exhibit Index ExhibitNumber
    
    Description31
    
    Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 200232
    
    Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section of the Sarbanes-Oxley Act of 2002