<PAGE>   1
                                   FORM 10-QSB

             [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934
               For the Quarterly period ended September 30, 1997

             [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
                                  EXCHANGE ACT
              For the transition period from _________ to _________

                         Commission file number 0-28710

                     (Exact name of small business issuer as
                            specified in its charter)
  PERFORMANCE ASSET MANAGEMENT FUND IV, LTD., A CALIFORNIA LIMITED PARTNERSHIP

     (State or other jurisdiction                    (IRS Employer
     of incorporation or organization)             Identification No.)
               CALIFORNIA                              33-0548134

                    (Address of principal executive offices)
            4100 NEWPORT PLACE, SUITE 400, NEWPORT BEACH, CALIFORNIA

                           (Issuer's telephone number)
                                 (714) 261-2400

              (Former name, former address and former fiscal year,
                         if changed since last report)

        Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such report(s), and (2)
has been subject to such filing requirements for the past 90 days. Yes X 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. Yes [X] No [ ].

                      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: N/A
        Transitional Small Business Disclosure Format (check one):
                                 Yes [ ] No [X]


                                       1


<PAGE>   2
                   PERFORMANCE ASSET MANAGEMENT FUND IV, LTD.,
                        A CALIFORNIA LIMITED PARTNERSHIP

                              INDEX TO FORM 10-QSB

                                     PART I

<TABLE>
<S>                                                                            <C>
Item 1. Financial Statements                                                    3

Item 2. Management's Discussion and Analysis or Plan of Operation              10 



                                     PART II


Item 1. Legal Proceedings                                                      14 

Item 2. Exhibits and Reports                                                   15 

        Signatures                                                             16 

</TABLE>


                                       2


<PAGE>   3
                   PERFORMANCE ASSET MANAGEMENT FUND IV, LTD.,
                        A CALIFORNIA LIMITED PARTNERSHIP


                                     PART I


ITEM 1. FINANCIAL STATEMENTS


<TABLE>
<S>                                                                                  <C>
Index to the Financial Statements for the Partnership:

        Balance Sheets, September 30, 1997 and December 31, 1996..................... 4

        Statements of Operations, For the Three and Nine Months Ended September 30,
               1997 and September 30, 1996........................................... 5

        Statements of Partnership Capital, For the Nine Months Ended
               September 30, 1997 and Year Ended December 31, 1996................... 6

        Statements of Cash Flows, For the Nine Months Ended September 30,
               1997 and September 30, 1996........................................... 7

        Footnotes to Financial Statements ........................................... 8
</TABLE>

The financial statements have been prepared by Performance Asset Management Fund
IV, Ltd., A California Limited Partnership ("Partnership"), without audit,
pursuant to the rules and regulations of the Securities and Exchange Commission.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to such rules and regulations. The
Partnership believes that the disclosures are adequate to make the information
presented not misleading when read in conjunction with the Partnership's
financial statements for the year ended December 31, 1996. The financial
information presented reflects all adjustments, consisting only of normal
recurring adjustments, which are, in the opinion of management, necessary for a
fair statement of the results for the interim periods presented.


                                       3


<PAGE>   4
                   PERFORMANCE ASSET MANAGEMENT FUND IV, LTD.,
                        A CALIFORNIA LIMITED PARTNERSHIP

                                 BALANCE SHEETS
                    SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
                                   (UNAUDITED)

                                     ASSETS


<TABLE>
<CAPTION>
                                                     1997          1996
                                                  -----------  -----------
<S>                                               <C>          <C>        
Cash and equivalents                              $ 4,031,952  $ 2,121,545
Cash held in trust                                  2,815,791    5,834,268
Investments in distressed loan portfolios, net      7,857,350    9,091,186
Due from affiliate                                         --      136,022
Other assets                                          104,977      104,977
Organization costs, net                                   612        3,454
                                                  ===========  ===========
         Total assets                             $14,810,682  $17,291,452
                                                  ===========  ===========

                       LIABILITIES AND PARTNERS' CAPITAL

Accounts  payable                                 $     5,350  $     6,351
Due to affiliates, net                                509,522      350,576
                                                  -----------  -----------
         Total liabilities                            514,872      356,927
                                                  -----------  -----------

Commitments and contingencies

Partners' capital                                  14,295,810   16,934,525
                                                  ===========  ===========
         Total liabilities and partners' capital  $14,810,682  $17,291,452
                                                  ===========  ===========
</TABLE>


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


                                       4


<PAGE>   5
                   PERFORMANCE ASSET MANAGEMENT FUND IV, LTD.,
                        A CALIFORNIA LIMITED PARTNERSHIP

                            STATEMENTS OF OPERATIONS
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                               FOR THE THREE MONTHS         FOR THE NINE MONTHS
                                                ENDED SEPTEMBER 30           ENDED SEPTEMBER 30
                                             -------------------------   -------------------------
                                                 1997          1996         1997           1996
                                             -----------   -----------   -----------   -----------
<S>                                          <C>           <C>           <C>           <C>        
Portfolio collections                        $   630,035   $   749,724   $ 2,047,261   $ 4,443,911
Less: portfolio basis recovery                   606,690       748,714     1,998,422     4,296,050
                                             -----------   -----------   -----------   -----------
                Net investment income             23,345         1,010        48,839       147,861
                                             -----------   -----------   -----------   -----------
Cost of operations:
         Collection expense                       47,988         6,409       215,877       120,346
         Management fee expense                   52,010        46,498       160,734       163,691
         Professional fees                         2,359       213,625       168,152       630,511
         Amortization                                917           828         2,842         2,842
         General and administrative expense        1,176         9,171        64,976        19,260
                                             -----------   -----------   -----------   -----------
                Total operating expenses         104,450       276,531       612,581       936,650
                                             -----------   -----------   -----------   -----------
Income (loss) from operations                    (81,105)     (275,521)     (563,742)     (788,789)
Other income:
         Interest                                (21,303)       86,724       167,337       288,165
         Other income                                  0         2,400         9,993        13,951
                                             ===========   ===========   ===========   ===========
Net income (loss)                            ($  102,408)  ($  186,397)  ($  386,412)  ($  486,673)
                                             ===========   ===========   ===========   ===========
</TABLE>


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


                                       5



<PAGE>   6
                   PERFORMANCE ASSET MANAGEMENT FUND IV, LTD.,
                        A CALIFORNIA LIMITED PARTNERSHIP

                STATEMENTS OF PARTNERS' CAPITAL (DEFICIT) FOR THE
      NINE MONTHS ENDED SEPTEMBER 30, 1997 AND YEAR ENDED DECEMBER 31, 1996
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                          GENERAL         LIMITED
                                          PARTNER        PARTNERS        TOTAL
                                        ------------   ------------   ------------
<S>                                     <C>            <C>            <C>         
Balance, December 31, 1995              ($   516,291)  $ 19,815,741   $ 19,299,450
       Redemption of partnership units            --        (40,000)       (40,000)
       Distributions                        (159,334)    (1,433,425)    (1,592,759)
       Net loss                              (73,217)      (658,949)      (732,166)
                                        ------------   ------------   ------------
Balance, December 31, 1996                  (748,842)    17,683,367     16,934,525
       Redemption of partnership units            --        (25,000)       (25,000)
       Distributions                        (222,903)    (2,004,400)    (2,227,303)
       Net income                            (38,641)      (347,771)      (386,412)
                                        ============   ============   ============
Balance, September 30, 1997             ($ 1,010,386)  $ 15,306,196   $ 14,295,810
                                        ============   ============   ============
</TABLE>



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


                                       6

<PAGE>   7
                   PERFORMANCE ASSET MANAGEMENT FUND IV, LTD.,
                        A CALIFORNIA LIMITED PARTNERSHIP

                            STATEMENTS OF CASH FLOWS
              FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                                    1997          1996
                                                                 -----------   -----------
<S>                                                              <C>           <C>       
Cash flows from operating activities:
         Net income (loss)                                         ($386,412)    ($486,673)
         Adjustments to reconcile net income (loss) to net cash
             provided by operating activities:
                Amortization                                           2,842         2,842
                Decrease (increase) in assets:
                       Other assets                                       --       219,153
                       Due from affiliates                           136,022       489,650
                Increase (decrease) in liabilities:
                       Accounts payable                               (1,001)      (37,088)
                       Due to affiliates                             158,946        (8,250)
                                                                 -----------   -----------
                Net cash provided by (used in)
                    operating activities                             (89,603)      179,634
                                                                 -----------   -----------
Cash flows provided by (used in) investing activities:
         Recovery of portfolio basis                               1,998,422     4,296,050
         Receivable from West Capital                                     --     1,937,718
         Cash held in trust                                        3,018,477      (498,793)
         Purchase of investments in distressed loan portfolios      (764,586)   (2,904,293)
                                                                 -----------   -----------
                Net cash provided by investing activities          4,252,313     2,830,682
                                                                 -----------   -----------
Cash flows provided by (used in) financing activities:
         Redemption of limited partnership units                     (25,000)      (35,000)
         Distributions to partners                                (2,227,303)     (637,122)
                                                                 -----------   -----------
                Net cash used in financing activities             (2,252,303)     (672,122)
                                                                 -----------   -----------
Net (decrease) increase in cash                                    1,910,407     2,338,194
Cash at beginning of period                                        2,121,545       559,223
                                                                 ===========   ===========
Cash at end of period                                            $ 4,031,952   $ 2,897,417
                                                                 ===========   ===========
</TABLE>


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


                                        7


<PAGE>   8
                   PERFORMANCE ASSET MANAGEMENT FUND IV, LTD.,
                        A CALIFORNIA LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

1.      Organization and Description of Business

        Performance Asset Management Fund IV, Ltd., A California Limited
        Partnership ("Partnership"), was formed in October 1992, for the purpose
        of acquiring investments in or direct ownership of distressed loan
        portfolios from financial institutions and other sources. Interests in
        the Partnership were sold in an intrastate offering to residents of
        California pursuant to the provisions of Section 3(A) (11) of the
        Securities Act of 1933; however, the Partnership did not begin its
        primary operations until March 1993. The General Partner is Performance
        Development, Inc., a California corporation ("General Partner").

        Profits, losses, and cash distributions are allocated 90% to the limited
        partners and 10% to the General Partner until such time as the limited
        partners have received cash equal to 100% of their contributions to the
        capital of the Partnership plus an amount equal to 6% annually of
        remaining unpaid capital contributions which will accumulate until
        recovery by those limited partners of these capital contributions.
        Thereafter, Partnership profits, losses, and cash distributions will be
        allocated 70% to the limited partners and 30% to the General Partner.

        Cash and Equivalents

        The Partnership defines cash equivalents as all highly liquid
        investments with a maturity of three months or less when purchased. The
        Partnership maintains its cash balances at one bank in accounts which,
        at times, may exceed federally insured limits. The Partnership uses a
        cash management system whereby idle cash balances are swept daily into a
        master account and invested in high quality, short-term securities. The
        General Partner believes that these cash balances are not subject to any
        significant credit risk due to the nature of the investments and the
        fact that the Partnership has not experienced any losses with cash and
        equivalent investments.


                                       8


<PAGE>   9
        Cash Held in Trust

        The General Partner anticipates that the Partnership and similar
        California limited partnerships for which the General partner serves as
        their general partner ("PAM Funds") may, in the future, be reorganized
        and merged with and into one corporation. In an effort to accomplish
        that reorganization and merger on terms and conditions consistent with
        the intent of the General Partner, on December 12, 1995, the General
        Partner, on behalf of the Partnership and the PAM Funds, and the State
        of California Department of Corporations entered into an agreement
        pursuant to the provisions of which the Performance Asset Management
        Fund Trust ("Trust") was created. These funds are subject to the terms
        of the Trust's agreement. The Trust was the recipient of a portion of
        the funds resulting from a settlement of certain litigation between the
        Partnership and its affiliates and West Capital Financial Services Corp.
        ("WCFSC") and its affiliates.

        The General Partner and the Department of Corporations currently
        disagree regarding certain allocations among the Trust beneficiaries
        made by the General Partner. The outcome of this disagreement is
        anticipated to be resolved in the near future.

        Investments in Distressed Loan Portfolios and Revenue Recognition

        Investments in distressed loan portfolios are carried at the lower of
        cost, market, or estimated net realizable value. Amounts collected are
        treated as a reduction to the carrying basis of the related investments
        on an individual portfolio basis. Accordingly, income is not recognized
        until 100% recovery of the original cost of the investment in each
        portfolio occurs. Estimated net realizable value represents the General
        Partner's estimates, based on its present plans and intentions, of the
        present value of future collections. Due to the distressed nature of
        these investments, no interest is earned on outstanding balances, and
        there is no assurance that the unpaid principal balances will ultimately
        be collected. Any adjustments to the carrying value of the individual
        portfolios are recorded in the results of operations.

        Organization Costs, Net

        Organization costs include legal and other professional fees incurred
        related to the organization of the Partnership. These costs are
        capitalized and amortized using the straight-line method over five
        years. Accumulated amortization at September 30, 1997 and December 31,
        1996 totaled $17,735 and $14,893, respectively.

        Income Taxes

        No provision for income taxes has been made in the financial statements,
        except for the Partnership's minimum state franchise tax liability of
        $800. All partners are taxed individually on their share of the
        Partnership's earnings and losses.


                                       9


<PAGE>   10
        Estimates

        The preparation of financial statements in conformity with generally
        accepted accounting principles requires the management to make estimates
        and assumptions that affect the reported amounts of assets and
        liabilities and disclosure of contingent assets and liabilities at the
        date of the financial statements and the reported amounts of revenue and
        expenses during the reported period. Actual results could differ from
        the estimate.


        ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
        RESULTS OF OPERATIONS.

        DISCLOSURE REGARDING FORWARD LOOKING STATEMENTS.

        The information contained in this report on Form 10-QSB, other than
        historical facts, contains "forward-looking statements" (as such term is
        defined with the meaning of the Private Securities Litigation Reform Act
        of 1995) including, without limitation, statements as to the
        Partnership's objective to grow through future portfolio acquisitions,
        portfolio account sales, the Partnership's ability to realize operating
        efficiencies in the integration of its acquisitions, trends in the
        Partnership's future operating performance, and statements as to the
        Partnership's or the General Partner's beliefs, expectations and
        opinions. Forward looking statements may be identified by the use of
        forward looking terminology, such as "may", "will", "expect",
        "estimate", "anticipate", "could", "probable", "possible", "should",
        "continue", or similar terms, variations of those terms or the negative
        of those terms. Forward-looking statements are subject to risks and
        uncertainties and may be affected by various factors which may cause
        actual results to differ materially from those in the forward-looking
        statements. In addition to the factors discussed in this report, certain
        risks, uncertainties and other factors, including, without limitation,
        the risk that the Partnership will not be able to realize operating
        efficiencies in the integration of its acquisitions, risks associated
        with growth and future acquisitions, fluctuations in quarterly operating
        results, and the other risks detailed from time to time in the
        Partnership's filings with the Securities and Exchange Commission,
        including the Partnership's Annual Report on Form 10-KSB, dated March
        31, 1997, can cause actual results and developments to be materially
        different from those expressed or implied by such forward-looking
        statements.

        RESULTS OF OPERATIONS.

        The Partnership recorded net investment income of $48,839 for the nine
        months ended September 30, 1997, a 67% decrease from $147,861 for the
        comparable period ended September 30, 1996. The decrease was primarily
        attributed to the receipt of proceeds resulting from a settlement
        agreement with WCFSC in 1996. The settlement agreement terminated all
        servicing relations with WCFSC and assigned and transferred certain
        distressed loan portfolios to WCFSC in exchange for the payment of
        certain funds owed to the Partnership and its affiliates. Approximately
        3% of portfolio collections received for the nine months ended September
        30, 1997 was reflected as net investment income which is comparable to
        the similar period in 1996.


                                       10


<PAGE>   11
        Net investment revenue of $48,839 for the nine months ending September
        30, 1997 is the direct result of portfolio collection proceeds from
        three portfolios. The remaining portfolio collections of $1,998,422
        contributed to a 14% reduction to the book value of total investments in
        distressed loan portfolios. The Partnership acquired one portfolio
        during the third quarter of 1997, which offset the reduction of net
        assets as a result of portfolio collections recognized as portfolio
        basis reductions. The Partnership maintains and holds one portfolio
        which contributes 49% of net investment revenue and two other portfolios
        which contributed the remaining net investment revenue during the nine
        months ended September 30, 1997. Collections for the months ended July
        31, 1997, August 30, 1997, and September 30, 1997, totaled $249,655,
        $189,586, and $190,794, respectively.

        The Partnership received proceeds from portfolio sales of $40,691, of
        which 99% were recorded as recoveries of investment bases and reflected
        as portfolio collections for the three months ended September 30, 1997.
        No such proceeds were received for the comparable period ended September
        30, 1996. The General Partner continues to believe that proceeds from
        both collection proceeds and portfolio account sales will increase in
        subsequent periods and estimates that proceeds from portfolio account
        sales should exceed those amounts recorded in the fiscal year ended
        1996.

        Total operating expenses of the Partnership decreased 35% to $612,581
        for the nine months ended September 30, 1997, from $936,650 for the
        comparable period in 1996. The decrease is due primarily to a reduction
        of professional fees of 73% to $168,152 for the nine months ended
        September 30, 1997, from $630,511 for the similar period in 1996,
        attributed to unusually high legal fees in 1996 associated with the
        settlement agreement with WCFSC. Collection expenses increased 79%, to
        $215,877 for the nine months ended September 30, 1997 from $120,346 for
        the same period in 1996, due to additional skip trace processing on
        Partnership debtor accounts conducted to identify and contact additional
        collection accounts. These procedures are necessary to increase the
        available active collector accounts in acquired portfolios which
        eventually contribute to increased collection proceeds. The Partnership
        also realized a reduction in management fees by 2% to $160,734 for the
        nine months ended September 30, 1997, from $163,691 for the same period
        in 1996, which was attributed to the reduction of investments in
        distressed loan portfolios and net assets under management. Operating
        expenses as a percentage of portfolio collections totaled 30% for the
        nine months ended September 30, 1997 as compared to 21% for the
        comparable period in 1996.

        Total operating expenses of the Partnership decreased 62% to $104,450
        for the third quarter of 1997 from $276,531 for the same period in 1996.
        The decrease is primarily attributed to a 99% reduction in professional
        fees. This decrease is directly related to the reduction of legal fees
        associated with the WCFSC settlement in 1996. General and administrative
        fees decreased 87% for the quarter ended September 30, 1997 to $1,176
        from $9,171 for the same period in 1996, primarily due to printing
        expenses associated with the annual report. The increase in collection
        expenses of 649% to $47,988, for the three months ended September 30,
        1997, from $6,409 for the comparable period ended September 30, 1996, is
        caused by certain mailing expenses and skip trace processing associated
        with the purchase and servicing of new portfolios.


                                       11


<PAGE>   12
        FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES.

        The Partnership's total assets decreased approximately 14% to
        $14,810,682 as of September 30, 1997, from $17,291,452 at December 31,
        1996. The decrease was primarily attributed to portfolio collection
        proceeds of $2,047,261 of which 98% or $1,998,422 were recorded as a
        reduction of investment portfolio assets. The decrease in cash held in
        trust (by the Trust) of $3,018,477 was primarily attributed to the
        reallocation of the funds held in trust to the PAM Funds involved in the
        Trust. The decrease of $136,022 in due from affiliates is the result of
        payment of prior period collections.

        The increase of $158,946 in due to affiliates was due primarily to
        unpaid collection expenses, accrued and unpaid management fees, and
        declared but unpaid distributions to the General Partner.

        The Partnership acquired one new distressed portfolio asset in the third
        quarter of 1997, and anticipates that the Partnership will acquire
        additional portfolios in the near future. Future acquisitions will
        depend on the asset market, which continues to grow in size and
        diversity. The Partnership continues to believe that the Partnership
        will continue to acquire low-priced distressed portfolios; however, the
        General Partner will continue to evaluate assets with different pricing
        and debtor account structure to determine whether such portfolios can
        generate significant immediate cash flows and provide additional
        liquidity to the Partnership.

        The Partnership has made no future commitments with credit card
        originators and other financial institutions to acquire portfolio
        assets. The General Partner plans to use its present contacts and
        relationships to identify and acquire additional assets at optimal
        prices, and believes that it will have no difficulties in identifying
        and acquiring such assets. The General Partner has suspended
        distributions to its partners in the third quarter of 1997 in
        anticipation of the contemplated reorganization of the Partnership with
        other affiliated partnerships and Performance Capital Management, Inc.,
        a California corporation and an affiliate of the General Partner
        ("PCM"). The General Partner also believes current cash reserves and
        future portfolio collection proceeds will be sufficient to acquire
        additional portfolio assets in the next twelve months. However, the
        General Partner will continuously monitor the Partnership's liquidity
        and evaluate whether additional capital will be necessary for future
        growth.

        IMPACT OF ADDITIONAL PARTNERSHIP ACQUISITIONS AND RESOURCES ON
        OPERATIONS.

        The General Partner anticipates that additional portfolio acquisitions
        and continued expansion will improve the Partnership's liquidity,
        profitability and financial condition, which will result in increased
        portfolio collections and sales. The General Partner believes that PCM,
        which serves as the servicer of the Partnership's portfolios of
        indebtedness, must continue to increase that amount of its collection
        representatives and human resources in order to supplement such growth
        to the Partnership. The General Partner, in conjunction with PCM and
        other affiliated companies and partnerships is seeking to lease office
        space in which PCM and the Partnership plan to 


                                       12


<PAGE>   13
        move their facilities. The General Partner believes that this move
        provides the Partnership with adequate operating facilities for the
        future growth of the Partnership.

        The General Partner, on behalf of the Partnership, has filed the
        necessary documents, dated November 4, 1997, with the Securities and
        Exchange Commission to merge the Partnership, other affiliated
        partnerships ("Affiliated Partnerships") and PCM with Performance Asset
        Management Company, a Delaware corporation ("Company"), whereby the
        company shall acquire, by merger, all of the assets of the Partnership,
        PCM and the Affiliated Partnerships. The proposed merger transaction
        contemplates that the Partnership and the Affiliated Partnerships shall
        receive shares of common stock of the Company in exchange for their
        assets. On the winding up and dissolution of the Partnership and the
        Affiliated Partnerships, those shares of that common stock shall be
        distributed to the non dissenting limited partners in exchange for their
        units. The Partnership and the Affiliated Partnerships shall cease to
        exist by operation of law upon completion of their winding up and
        dissolution. Additionally, the shares of common stock of the Company
        that are received shall be registered for trading or other resale
        transactions.

                           PART II - OTHER INFORMATION

        ITEM 1. LEGAL PROCEEDINGS.

        Reference is made to the Partnership's Form 10-KSB dated March 31, 1997,
        in which such legal proceedings were reported in Part I, Item 3, "Legal
        Proceedings". The Partnership, by this reference, makes that disclosure
        a part of this Form 10-QSB.

        On or about October 31, 1997, SunAmerica, Inc., a Maryland corporation;
        SunAmerica Life Insurance Company, an Arizona corporation; WCFSC; and
        WCFSC Special Purpose Corporation, a California corporation, as
        Plaintiffs, filed a Complaint in United States District Court for the
        Central District of California alleging (i) violations of Section 10(b)
        of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated
        pursuant thereto; (ii) fraud and deceit, and (iii) gross negligence.
        Specified in that Complaint as Defendants are Vincent E. Galewick,
        President of the General Partner; the Partnership; the Affiliated
        Partnerships; and the General Partner ("Performance Defendants"). That
        Complaint, in essence, alleges that Michael A. Joplin, the then
        President of WCFSC, engaged in wrongful, deceptive and fraudulent
        conduct in connection with the purchase and sale of certain securities.
        Additionally, that Complaint alleges that the Performance Defendants
        participated in that conduct.

        None of the Performance Defendants participated, either directly or
        indirectly, in any wrongful, deceptive and fraudulent conduct in
        connection with the purchase and sale of those securities.

        As part of their settlement of the various disputes with WCFSC, the
        Performance Defendants entered into a thorough and comprehensive Mutual
        General Release ("Release"). Pursuant to the provisions of the Release,
        WCFSC, for itself and its shareholders, officers, directors, affiliates,
        agents, successors, and assigns, forever and unequivocally released,
        acquitted and discharged the Performance Defendants and their officers,
        directors, employees, shareholders, partnerships, affiliates, agents,  


                                       13


<PAGE>   14
        successors, and assigns. Therefore, it is the opinion of counsel for the
        Performance Defendants that the Performance Defendants have been
        completely and unconditionally released from any liability resulting
        from their relationships and transactions with WCFSC.

        The Performance Defendants deny each and every allegation in that
        litigation matter and shall defend that litigation matter vigorously. It
        is the opinion of counsel for the Performance Defendants that any
        resolution of that litigation matter should be resolved favorably for
        the Performance Defendants and, therefore, the resolution of that
        litigation matter should not (i) affect the ability of the General
        Partner to function as the General Partner and manage operations of the
        Partnership or (ii) materially and adversely affect the General Partner,
        the Partnership or the Affiliated Partnerships.



        ITEM 2.EXHIBITS AND REPORTS.


        (a)    Exhibits


<TABLE>
<CAPTION>
        Exhibit Number                      Exhibit
        --------------                      -------

<S>                    <C>
                1       Certificate of Limited Partnership Form LP-1 (Charter
                        Document) *

                2       Agreement of Limited Partnership (Instrument defining
                        the rights of Security Holders) **

                27      Financial Data Schedule
</TABLE>


        * Reference is made to the Partnership's Form 10-KSB, dated March 31,
        1997, in which that Certificate of Limited Partnership was included as
        an exhibit. The Partnership, by this reference, makes that Certificate
        of Limited Partnership a part of this Form 10-QSB.

        ** Reference is made to the Partnership's Form 10-KSB, dated March 31,
        1997, in which that Agreement of Limited Partnership was included as an
        exhibit. The Partnership, by this reference, makes that Agreement of
        Limited Partnership a part of this Form 10-QSB.


                                       14


<PAGE>   15
                                   SIGNATURES



In accordance with Section 13 or 15(d) of the Exchange Act, the Partnership
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

Dated: November 10, 1997    Performance Asset Management Fund IV, Ltd.,
                            A California Limited Partnership
                                     (Registrant)

By:     /s/ Vincent E. Galewick
        ------------------------------
        Vincent E. Galewick
        President of the General Partner,
        Performance Development, Inc.


                                       15


<PAGE>   16
                                EXHIBIT INDEX
                                -------------

         
<TABLE>
<CAPTION>
Exhibit                           Description
-------                           -----------
<S>                  <C> 
   27                Financial Data Schedule
</TABLE>