##### Table of Contents



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 September 30, 2006
 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
  Delaware
 38-3304096
 th  P.O. Box 544, Ann
Arbor, Michigan 48106-0544
 (734) 994-5505
 Not
Applicable
 þ o
  o o þ
 o o
 APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
 Not applicable
 APPLICABLE ONLY TO CORPORATE ISSUERS
 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, September 30, 2006 and December 31, 2005
    
    
    3Statements of Operations for the three and nine months
ended September 30, 2006 and 2005
    
    
    4Statement of Changes in Partners Capital for the nine
months ended September 30, 2006
    
    
    5Statements of Cash Flows for the nine months
ended September 30, 2006 and 2005
    
    
    6Notes to Financial Statements
    
    
    711Item 2.
    
    Managements Discussion and Analysis of Financial
Condition and Results of Operations
    
    

    11-15Item 3.
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    
    15-16Item 4.
    
    Controls and Procedures
    
    
    16PART II
    
    OTHER INFORMATIONOther Information
    
    
    16-17SIGNATURES
    
    
    18CERTIFICATION Pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002
    
    
    19-21Certification
Pursuant to Section 302Certification
Pursuant to Section 906
  2




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Captec Franchise Capital Partners L.P. IV
 
 Balance Sheets
 September 30,
    
    
    December 31,2006
    
    
    2005(Unaudited)AssetsCash and cash equivalents
    
    $
    3,586,752
    
    
    $
    896,164Assets held for sale:Operating leases, net
    
    
    875,000
    
    
    
    743,750Unbilled rent, net
    
    
    
    
    
    
    45,920Investment in leases:Operating leases, net
    
    
    900,000
    
    
    
    3,551,707Financing leases, net
    
    
    889,636
    
    
    
    1,217,585Unbilled rent, net
    
    
    4,674
    
    
    
    7,517Accounts receivable
    
    
    3,500
    
    
    
    3,500Total assets
    
    $
    6,259,562
    
    
    $
    6,466,143Liabilities and Partners CapitalLiabilitiesAccounts payable and accrued expenses
    
    $
    21,781
    
    
    $
    63,800Due to related parties
    
    
    2,889
    
    
    
    20,872Total liabilities
    
    
    24,670
    
    
    
    84,672Partners capital:Limited partners capital accounts
    
    
    6,236,492
    
    
    
    6,377,000General partners capital account
    
    
    (1,600
    )
    
    
    4,471Total partners capital
    
    
    6,234,892
    
    
    
    6,381,471Total liabilities and partners capital
    
    $
    6,259,562
    
    
    $
    6,466,143
 The accompanying notes are an integral part of the financial statements.
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Captec Franchise Capital Partners L.P. IV
 
 Statements of Operations
 Three months ended
    
    
    Nine months endedSeptember 30,
    
    
    September 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Operating revenue:Rental income
    
    $
    31,280
    
    
    $
    31,280
    
    
    $
    93,840
    
    
    $
    93,840Finance income
    
    
    28,135
    
    
    
    30,815
    
    
    
    86,416
    
    
    
    94,947Total operating revenue
    
    
    59,415
    
    
    
    62,095
    
    
    
    180,256
    
    
    
    188,787Operating costs and expenses:Depreciation
    
    
    4,884
    
    
    
    
    
    
    
    14,653
    
    
    
    Provision for impaired financing and operating leases
    
    
    92,534
    
    
    
    
    
    
    
    391,400
    
    
    
    General and administrative
    
    
    95,311
    
    
    
    92,777
    
    
    
    276,335
    
    
    
    282,286Total operating costs and expenses
    
    
    192,729
    
    
    
    92,777
    
    
    
    682,388
    
    
    
    282,286(Loss) income from continuing operations before other income
    
    
    (133,314
    )
    
    
    (30,682
    )
    
    
    (502,132
    )
    
    
    (93,499
    )Other income :Interest and other income
    
    
    36,101
    
    
    
    77,749
    
    
    
    65,849
    
    
    
    93,423Total other income
    
    
    36,101
    
    
    
    77,749
    
    
    
    65,849
    
    
    
    93,423(Loss) income from continuing operations
    
    
    (97,213
    )
    
    
    47,067
    
    
    
    (436,283
    )
    
    
    (76
    )Discontinued operations:Net income from discontinued operations, net
    
    
    (336,521
    )
    
    
    159,094
    
    
    
    (170,815
    )
    
    
    861,216Gain on sale of real estate
    
    
    247,641
    
    
    
    1,522,516
    
    
    
    460,520
    
    
    
    4,754,452Gain on sale of equipment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,997Debt retirement costs
    
    
    
    
    
    
    (329,765
    )
    
    
    
    
    
    
    (1,690,354
    )Income from discontinued operations
    
    
    (88,880
    )
    
    
    1,351,845
    
    
    
    289,705
    
    
    
    3,927,311Net income
    
    $
    (186,093
    )
    
    $
    1,398,912
    
    
    $
    (146,579
    )
    
    $
    3,927,235Net (loss) income allocable to general partner
    
    $
    (4,338
    )
    
    $
    2,062
    
    
    $
    (6,071
    )
    
    $
    8,631Net income allocable to limited partners
    
    $
    (181,756
    )
    
    $
    1,396,850
    
    
    $
    (140,508
    )
    
    $
    3,918,604Net (loss) income from continuing operations per limited partnership unit
    
    $
    (3.32
    )
    
    $
    1.61
    
    
    $
    (14.91
    )
    
    $
    (0.00
    )Net income from discontinued operations per limited partnership unit
    
    $
    (2.95
    )
    
    $
    46.60
    
    
    $
    10.06
    
    
    $
    135.24Net income per limited partnership unit
    
    $
    (6.27
    )
    
    $
    48.21
    
    
    $
    (4.85
    )
    
    $
    135.24Weighted average number of limited partnership
units outstanding
    
    
    28,975
    
    
    
    28,975
    
    
    
    28,975
    
    
    
    28,975
 The accompanying notes are an integral part of the financial statements.
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Captec Franchise Capital Partners L.P. IV
 
 Statement of Changes in Partners Capital
 Limited
    
    
    Limited
    
    
    General
    
    
    TotalPartners
    
    
    Partners
    
    
    Partners
    
    
    PartnersUnits
    
    
    Accounts
    
    
    Account
    
    
    CapitalBalance, December 31, 2005
    
    
    28,975
    
    
    $
    6,377,000
    
    
    $
    4,471
    
    
    $
    6,381,471Net income (loss)
    
    
    
    
    
    $
    (140,508
    )
    
    $
    (6,071
    )
    
    
    (146,579
    )Balance, September 30, 2006
    
    
    28,975
    
    
    $
    6,236,492
    
    
    $
    (1,600
    )
    
    $
    6,234,892
 The accompanying notes are an integral part of the financial statements.
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Captec Franchise Capital Partners L.P. IV
 
 Statements of Cash Flows
 2006
    
    
    2005Cash flows from operating activities:Net income
    
    $
    (146,579
    )
    
    $
    3,927,235Adjustments to net income:Depreciation
    
    
    49,333
    
    
    
    Amortization of debt issuance costs
    
    
    
    
    
    
    25,749Gain on sale of equipment
    
    
    
    
    
    
    (1,997
    )Gain on sale of real estate
    
    
    (460,520
    )
    
    
    (4,754,452
    )Provision for impaired financing and operating leases
    
    
    781,876
    
    
    
    9,961Decrease (increase) in unbilled rent
    
    
    2,110
    
    
    
    (81,384
    )Decrease in accounts receivable
    
    
    
    
    
    
    (85,678
    )Decrease in accounts payable and accrued expenses
    
    
    (42,019
    )
    
    
    (115,236
    )Decrease in due to related parties
    
    
    (17,983
    )
    
    
    (10,969
    )Decrease in restricted cash
    
    
    
    
    
    
    333,006Net cash provided by (used by) operating activities
    
    
    166,218
    
    
    
    (753,765
    )Cash flows from investing activities:Net proceeds from sale of real estate
    
    
    2,495,287
    
    
    
    27,895,673Proceeds from sale of equipment
    
    
    
    
    
    
    15,000Payment of lease commissions
    
    
    
    
    
    
    (59,805
    )Principal collections on financing leases
    
    
    29,083
    
    
    
    90,355Net cash provided by investing activities
    
    
    2,524,370
    
    
    
    27,941,223Cash flows from financing activities:Repayments of notes payable
    
    
    
    
    
    
    (13,597,961
    )Distributions to limited partners
    
    
    
    
    
    
    (9,550,000
    )Net cash used in financing activities
    
    
    
    
    
    
    (23,147,961
    )Net increase in cash and cash equivalents
    
    
    2,690,588
    
    
    
    4,039,496Cash and cash equivalents, beginning of period
    
    
    896,164
    
    
    
    143,463Cash and cash equivalents, end of period
    
    $
    3,586,752
    
    
    $
    4,182,959
 The accompanying notes are an integral part of the financial statements.
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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 September 30, 2006, 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 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
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distributions which
creates timing differences between comparative calculations, (iii) the calculation ignores
the timing of repurchases, and (iv) liquidating distributions are determined based on the
tax account balances of the partners per the Partnership agreement.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 to oversee the
marketing and offering for sale of all the real estate assets and equipment leases and
loans on behalf of the Partnership. This agreement has been terminated and the Partnership
is negotiating with local real estate brokers to oversee the sale of the remaining assets.
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, as of
December 31, 2004 all assets, excluding cash, were previously classified as Assets Held for
Sale, and the results of the operations for these Assets Held for Sale were previously
classified as discontinued operations for all years presented, since the operations were
directly related to the assets held for sale. Depreciation of real estate assets ceased at
December 31, 2004. The properties owned by the Partnership as of December 31, 2005 which
were not disposed of within one year from the initial held for sale designation were
reclassified to investment in operating leases and financing leases at December 31, 2005.
In accordance with FAS 144, the partnership recognized depreciation expense of $80,407 for
the operating lease assets for the year ended December 31, 2005 in the fourth quarter of
2005 to cumulatively catch-up depreciation since the cessation in December 2004 upon
reclassification of these assets. At March 31, 2006 and December 31, 2005 one of the
investments in operating leases was recorded as held for sale as this property was sold on
April 12, 2006. At September 30, 2006, an additional property was recorded as held for
sale as this property was sold on October 17, 2006. The respective results of operations
of these assets, except for the real properties sold in 2006, have been presented within
continuing operations for all periods presented in accordance with FAS 144. The remaining
assets of the Partnership will be sold and the cash will be used to distribute the net
proceeds from such liquidations after the repayment of all liabilities in accordance with
the partnership agreement.On April 12, 2006, the Partnership sold the property located in Southgate, Michigan and the
related lease for a purchase price of $1 million. There were no debt retirement costs
associated with the disposition of this property.On August 15, 2006, the Partnership sold the property located in Cincinnati, Ohio and the
related lease for a purchase price of $1.5 million. There were no debt retirement costs
associated with the disposition of this property.On October 17, 2006, the Partnership sold the property located in Hamilton, Ohio and the
related lease for a purchase price of $875,000. There were no debt retirement costs
associated with the disposition of this property.As of September 30, 2006, the Partnership had a portfolio of two properties located in two
states, and one financing lease for a total cost basis of $5.2 million. As of September
30, 2006, the Partnership has not made, nor does it intend to make, any commitments to
purchase additional properties.The balance sheet of the Partnership as of September 30, 2006, the statements of operations
and cash flows for the periods ending September 30, 2006 and 2005 and the statement of
changes in partners capital for the period ending September 30, 2006 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, 2005 filed with
the United States Securities and Exchange Commission on March 29, 2006.
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2.
    
    LAND AND BUILDING SUBJECT TO OPERATING LEASES:The net investment in operating leases, including those classified as held for sale, as of
September 30, 2006 and December 31, 2005 is comprised of the following:
 September 30, 2006
    
    
    December 31, 2005Land
    
    $
    992,250
    
    
    $
    1,705,200Building and improvements
    
    
    1,150,040
    
    
    
    3,214,9802,142,290
    
    
    
    4,920,180Less accumulated depreciation
    
    
    (367,290
    )
    
    
    (624,723
    )Total
    
    $
    1,775,000
    
    
    $
    4,295,457
 The Partnerships property in Riverdale, Georgia is
accounted for as an asset to be held as of September 30, 2006.
Under the guidance of FAS 144, the Partnership recorded a
provision for impaired operating lease for $92,534 for this property
as of September 30, 2006. The fair value was determined based
on an offer received from an unrelated third party.On October 17, 2006, the Partnership sold the property located in Hamilton, Ohio and the
related lease for a purchase price of $875,000. Based on this completed transaction, the
Partnership recorded a provision for impaired operating lease for $390,476 for this
property as of September 30, 2006.3.
    
    NET INVESTMENT IN FINANCING LEASES:The net investment in financing leases as of September 30, 2006 and December 31, 2005 is
comprised of the following:
 September 30, 2006
    
    
    December 31, 2005Minimum lease payments to be received
    
    $
    1,765,353
    
    
    $
    1,880,854Less unearned income
    
    
    (576,851
    )
    
    
    (663,268
    )Less provision for impaired
financing lease
    
    
    (298,866
    )
    
    
    0Net investment in financing leases
    
    $
    889,636
    
    
    $
    1,217,585
 As of September 30, 2006, the Partnerships remaining financing lease is to Sterling
Jewelers for the location in Plano, Texas. In order to facilitate the sale of this asset
and conclude the liquidation and dissolution of the Partnership, the general partner
obtained a third party appraisal of this asset. The appraisal value as of July 13, 2006
was estimated to be $900,000. Based on this appraisal, the Partnership has recorded a
provision for impaired financing lease by $298,866 as of June 30, 2006.4.
    
    NOTES PAYABLE:In December 1998, the Partnership entered into a $6.4 million term note. The note had a
10-year term, was collateralized by certain properties that had a carrying value of
approximately $11.6 million subject to operating leases, and bore interest at a rate of
8.13% per annum. The Partnership defeased all the remaining amounts payable under this
note using the proceeds from
the sale of twelve properties in June 2005. The Partnership incurred approximately
$841,000 of yield maintenance costs and $46,000 of professional fees related to the
defeasance.In March 1999, the Partnership entered into an additional $3.3 million term note. The note
had a 10-year term, was collateralized by certain properties that had a carrying value of
approximately $3.4 million, subject to operating leases, and bore interest at a rate of
8.5% per annum. In March
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2004, the partnership defeased approximately $466,000 of this note
payable with proceeds from the sale of a property. The Partnership defeased all the
remaining amounts payable under this note using the proceeds from the sale of twelve
properties in June 2005. The Partnership incurred approximately $427,000 of yield
maintenance costs and $46,000 of professional fees related to the June 2005 defeasance.The Partnership purchased one net leased real estate property in October 2000 and assumed a
$3.75 million term note in connection with the acquisition of a property. The note had a
10-year term and was collateralized by a property that had a carrying value of
approximately $4.6 million and bore interest at the rate of 8.35% per annum. The
Partnership prepaid all remaining amounts payable under this note using the proceeds from
the sale of the collateralized property in August 2005. The Partnership incurred
approximately $295,000 of yield maintenance costs and $35,000 of professional fees related
to the prepayment.In November 2001, the Partnership entered into an additional $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 was secured by a certain
property subject to an operating lease that had a carrying value of $1.5 million, and bore
interest at a rate of prime plus 2% per annum. The Partnership prepaid all remaining
amounts payable under this note using the proceeds from the sale of the secured property in
June 2005.In April 2003, the Partnership entered into an $862,500 term note. The note has a 5-year
term, was collateralized by a certain property subject to an operating lease that had a
carrying value of $1.1 million, and bore interest at a rate of 6.25%, per annum. The
Partnership prepaid all remaining amounts payable under this note using the proceeds from
the sale of the collateralized property in June 2005.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 was adjusted monthly for
changes in the WSJ prime rate. In April 2005, the maturity date on the note was extended to
April 2006. The Partnership prepaid the remaining amounts payable under this note using
the proceeds from the sale of the twelve properties in June 2005.The Partnership has no further obligations related to any of its notes payable.Debt issuance costs of $646,349 were incurred in connection with the issuance of the notes,
and are were amortized over the life of the notes to interest expense using the
straight-line method, which was not materially different than the interest rate method.
Upon the defeasance and prepayment of the notes payable in June 2005, the remaining
unamortized debt issuance costs associated with the debt that was prepaid were expensed.5.
    
    DISCONTINUED OPERATIONS:Income from discontinued operations, net for the three and nine months ended September 30,
2006 and 2005 consisted of the following:
 Three months ended9/30/06
    
    9/30/05Revenues
    
    $
    61,482
    
    
    $
    202,713Depreciation
    
    
    7,527
    
    
    
    0Provision for impaired operating lease
    
    
    390,476
    
    
    
    0Interest expense
    
    
    0
    
    
    
    43,619Income from discontinued operations, net
    
    $
    (336,521
    )
    
    $
    159,094Nine months ended9/30/06
    
    9/30/05Revenues
    
    $
    254,341
    
    
    $
    1,417,081Depreciation
    
    
    34,680
    
    
    
    0Provision for impaired operating lease
    
    
    390,476
    
    
    
    0Interest expense
    
    
    0
    
    
    
    555,865Income from discontinued operations, net
    
    $
    (170,815
    )
    
    $
    861,216
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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  RESULTS OF OPERATIONS
 Three Months Ended September 30, 2006
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2006
    
    
    2005Revenues
    
    $
    61,482
    
    
    $
    202,713Depreciation
    
    
    7,527
    
    
    
    0Provision
for impaired operating lease
    
    
    390,476
    
    
    
    0Interest expense
    
    
    0
    
    
    
    43,619Income from discontinued operations, net
    
    $
    (336,521
    )
    
    $
    159,094
      Nine months ended September 30, 2006
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2006
    
    
    2005Revenues
    
    $
    254,341
    
    
    $
    1,417,081Depreciation
    
    
    34,680
    
    
    
    0Provision
for impaired operating lease
    
    
    390,476
    
    
    
    0Interest expense
    
    
    0
    
    
    
    555,865Income from discontinued operations, net
    
    $
    (170,815
    )
    
    $
    861,216
      13




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##### Table of Contents



LIQUIDITY AND CAPITAL COMMITMENTS
         14




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##### Table of Contents



ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
   15




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##### Table of Contents



ITEM 4. CONTROLS AND PROCEDURES
   
 PART II  OTHER INFORMATION
 ITEM 1.
    
    LEGAL PROCEEDINGS.NoneITEM 2.
    
    CHANGES IN SECURITIES AND USE OF PROCEEDS.NoneITEM 3.
    
    DEFAULTS UPON SENIOR SECURITIES.None.ITEM 4.
    
    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.NoneITEM 5.
    
    OTHER INFORMATION.NoneITEM 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)
 16




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##### Table of Contents



Number
    
    Exhibit10.1
    
    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)10.2
    
    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 906 of the Sarbanes-Oxley Act of 2002
 17




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##### Table of Contents



SIGNATURES
  By:
    
    Captec Franchise Capital Partners L.P. IVGP4 Asset Acquisition, LLCIts ManagerBy:
    
    /s/ Patrick L. BeachPatrick L. BeachPresidentDate:
    
    November 13, 2006
 18




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##### Table of Contents



EXHIBIT INDEX
 Number
    
    Exhibit31
    
    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 906 of the Sarbanes-Oxley Act of 2002
 19