Captec Franchise Capital Partners L P Iv 10-Q 2004 Q1 Quarterly report

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, 2004

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

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of incorporation or organization)

38-3304096
(IRS Employer Identification Number)

24 Frank Lloyd Wright Drive, Lobby L, 4th Floor
P.O. Box 544, Ann Arbor, Michigan 48106-0544
(Address of principal executive offices, including zip code)

(734) 994-5505
(Issuer’s telephone number)

Not Applicable
(Former name, former address and former fiscal year, if changed since last year)

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 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: 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

CAPTEC FRANCHISE CAPITAL PARTNERS L.P. IV

Index to Form 10-Q

Item No.		Page
PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements:
	Balance Sheets, March 31, 2004 and December 31, 2003		3
	Statement of Operations for the three months ended March 31, 2004 and 2003		4
	Statement of Changes in Partners’ Capital for the three months ended March 31, 2004		5
	Statement of Cash Flows for the three months ended March 31, 2004 and 2003		6
	Notes to Financial Statements		7-9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		9-12
Item 3.	Quantitative and Qualitative Disclosures about Market Risk		12
Item 4.	Controls and Procedures		12
PART II	OTHER INFORMATION
	Other Information		12-13
SIGNATURES			14
CERTIFICATION Pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002			16
Certification Pursuant to Section 302
Certification Pursuant to Section 1350

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CAPTEC FRANCHISE CAPITAL PARTNERS L.P. IV

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Captec Franchise Capital Partners L.P. IV
Balance Sheets

Assets	March 31,			December 31,
	2004			2003
	(Unaudited)
Cash and cash equivalents	$	1,943,825		$	694,742
Restricted cash		248,667			233,390
Investment in leases:
Operating leases, net		27,880,246			29,667,981
Financing leases, net		1,514,445			1,579,536
Impaired financing leases, net		15,000			15,000
Accounts receivable		334,983			300,189
Unbilled rent, net		1,232,126			1,446,046
Deferred financing costs, net		269,646			309,259
Total assets	$	33,438,938		$	34,246,143
Liabilities and Partners’ Capital
Liabilities:
Notes payable	$	14,394,909		$	14,948,390
Accounts payable and accrued expenses		106,505			160,513
Due to related parties		7,313			11,109
Total liabilities		14,508,727			15,120,012
Partners’ capital:
Limited partners’ capital accounts		18,939,715			19,138,676
General partner’s capital account		(9,504	)		(12,545	)
Total partners’ capital		18,930,211			19,126,131
Total liabilities and partners’ capital	$	33,438,938		$	34,246,143

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
for the three months ended March 31, 2004 and 2003
(Unaudited)

	2004			2003
Operating revenue:
Rental income	$	737,846		$	785,954
Finance income		39,270			58,283
Total operating revenue		777,116			844,237
Operating costs and expenses:
Interest expense		302,653			301,881
Depreciation		121,239			115,464
General and administrative		122,569			33,260
Total operating costs and expenses		546,461			450,605
Income from operations		230,655			393,632
Other income:
Interest income		168			27
Gain on sale of equipment		—			33
Total other income		168			60
Income from continuing operations		230,823			393,692
Discontinued Operations:
Net gain on sale of properties		252,311			—
Income from discontinued operations, net		29,956			37,789
Debt Retirement Costs		(209,010	)		—
Income from discontinued operations		73,257			37,789
Net Income		304,080			431,481
Net income allocable to general partner		3,041			4,315
Net income allocable to limited partners	$	301,039		$	427,166
Net income per limited partnership unit from continuing operations		7.84			13.28
Net income per limited partnership unit from discontinued operations		2.49			1.28
Net income per limited partnership unit	$	10.33			14.56
Weighted average number of limited partnership units outstanding		29,155			29,341

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

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Captec Franchise Capital Partners L.P. IV
Statements of Changes in Partners’ Capital
for the three months ended March 31, 2004
(Unaudited)

	Limited		Limited			General			Total
	Partners'		Partners'			Partner's			Partners'
	Units		Accounts			Account			Capital
Balance, December 31, 2003		29,155	$	19,138,676		$	(12,545	)	$	19,126,131
Distributions — ($17.15 per limited partnership unit)		—		(500,000	)		—			(500,000	)
Net income		—		301,039			3,041			304,080
Balance, March 31, 2004		29,155	$	18,939,715		$	(9,504	)	$	18,930,211

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
for the three months ended March 31, 2004 and 2003
(Unaudited)

	2004			2003
Cash flows from operating activities:
Net Income	$	304,080		$	431,481
Adjustments to net income:
Depreciation		126,675			122,243
Amortization of debt issuance costs		39,613			19,951
Gain on sale of equipment		—			(33	)
Gain on sale of real estate		(252,311	)		—
Increase in unbilled rent		(3,084	)		(35,873	)
Increase in accounts receivable		(34,794	)		(62,384	)
Decrease in accounts payable and accrued expenses		(54,008	)		(41,726	)
Increase in due from related parties		—			(14,031	)
Decrease in due to related parties		(3,796	)		(16,364	)
Increase in restricted cash		(15,277	)		(17,002	)
Net cash provided by operating activities		107,098			386,262
Cash flows from investing activities:
Proceeds from sale of real estate		2,130,375			—
Principal collections on financing leases		65,091			276,513
Net cash provided by investing activities		2,195,466			276,513
Cash flows from financing activities:
Repayments of notes payable		(553,481	)		(79,714	)
Distributions to limited partners		(500,000	)		(750,000	)
Distributions to general partner		—			—
Net cash used in financing activities		(1,053,481	)		(829,714	)
Net increase (decrease) in cash and cash equivalents		1,249,083			(166,939	)
Cash and cash equivalents, beginning of period		694,742			1,132,891
Cash and cash equivalents, end of period	$	1,943,825		$	965,952

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, 845 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, 2004, the Partnership had 29,155 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 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 is 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 realized may vary from this calculation as a result of a variety of factors including: (i) actual distributions are computed based

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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 distributions which creates timing differences between comparative calculations, and (iii) the calculation ignores the timing of repurchases.

The balance sheet of the Partnership as of March 31, 2004, the statements of operations and cash flows for the periods ending March 31, 2004 and March 31, 2003 and the statements of changes in partners’ capital for the period ending March 31, 2004 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, 2003 filed with the United States Securities and Exchange Commission on March 30, 2004.

2. LAND AND BUILDING SUBJECT TO OPERATING LEASES:

The net investment in operating leases as of March 31, 2004 is comprised of the following:

Land	$	10,681,650
Building and improvements		19,360,661
		30,042,311
Less accumulated depreciation		(2,162,065	)
Total	$	27,880,246

3. NET INVESTMENT IN FINANCING LEASES:

The net investment in financing leases as of March 31, 2004 is comprised of the following:

Minimum lease payments to be received	$	2,389,038
Estimated residual value		32,160
Gross investment in financing leases		2,421,198
Less unearned income		(906,753	)
Net investment in financing leases	$	1,514,445

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 $11.7 million subject to operating leases, and bears an interest 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 certain properties subject to operating leases which have a carrying value of approximately $3.5 million, 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 the Capital Foods property at a cost of approximately $209,000.

In October 2000, the Partnership assumed a $3.75 million term note, collaterized by a certain property which has a carrying value of approximately $4.7 million. The note has a 10-year term, and bears interest at a rate of 8.35% per annum.

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In April 2003, the Partnership entered into an $862,500 term note. The note has a 5-year term, is collaterized by a certain 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 has a 2-year term and bears 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 November 2003, the Partnership extended the term of a $1.5 million term note. The extended note has an additional 2-year term, is collaterized by certain properties subject to operating leases which has a carrying value of $3.2 million, and bears interest at a rate of prime plus 2% per annum.

Debt issuance costs of $646,349 were incurred in connection with the issuance of the notes, and are being amortized to interest expense using the straight-line method over the term of the notes.

5. EARNINGS FROM DISCONTINUED OPERATIONS:

In accordance with SFAS No. 144, “Accounting for Impairment or Disposal of Long-Lived Assets,” the Company has classified the operations of the properties sold during the three months ended March 31, 2004 as discontinued operations. Accordingly, the results of operations related to the two properties have been reclassified to earnings from discontinued operations. Discontinued Operations reflect the sale of two properties that were triggered by the tenants’ exercise of purchase option clauses in the lease agreements. The properties were sold for net cash proceeds of approximately $2.1 million in March 2004, resulting in a gain of approximately $252,000. There were approximately $209,000 in debt retirement costs associated with the disposition of the Capital Food property. Expenses include an allocation of interest expense based on the prorated share of the outstanding debt. The following is a summary of earnings from discontinued operations:

	2004		2003
Revenues:
Operating lease rents	$	45,730	$	55,000
Expenses:
Interest expense		9,881		9,881
Provision for depreciation		5,436		6,779
Management Fees		457		551
Income from discontinued operation, net	$	29,956	$	37,789

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

When used in this discussion, words such as “intends,” “anticipates,” “expects,” “will,” “could,” “estimate,” and similar expressions are intended to identify forward-looking statements. Forward-looking statements are subject to certain risks and uncertainties, which could cause actual results to differ materially from those described herein. Such risks and uncertainties, some of which are beyond the Partnership’s control, include, but are not limited to, the following: (i) the possibility that tenants and lessees may default in making rent payments, (ii) the risk of fire or other casualty interrupting cash flow from a property, (iii) the inability to enter into leases at the assumed rental rates, (iv) unexpected expenses, and (v) the inability to sell properties at anticipated prices and/or times. Any statements contained in this report or any document 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.

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RESULTS OF OPERATIONS

Three Months Ended March 31, 2004.During the three months ended March 31, 2004 total operating revenue decreased 8.0% to approximately $777,000 compared to approximately $844,000 for the three months ended March 31, 2003. Rental revenue from operating leases for the three months ended March 31, 2004 decreased 6.1% to approximately $738,000 compared to approximately $786,000 for the prior year period primarily due to the vacant properties. Earned income from financing leases for the three months ended March 31, 2004 decreased 32.6% to approximately $39,000 as compared to approximately $58,000 for the three months ended March 31, 2003 due to the amortization of principal balances and the termination and disposition of equipment leases in the third and fourth quarters of 2003.

Operating expenses totaled approximately $546,000 for the three months ended March 31, 2004, as compared to approximately $451,000 for the three months ended March 31, 2003. The increase is primarily due to increased general and administrative expenses as a result of increased property taxes and professional fees. Depreciation expense increased for the three months ended March 31, 2004 compared to the prior year period due to the acquisition of a Taco Bell property in April 2003.

As a result of the foregoing, the Partnership’s net income from continuing operations decreased 41.4% to approximately $231,000 for the three months ended March 31, 2004, as compared to $394,000 for the three months ended March 31, 2003

Discontinued Operations reflect the sale of two properties that were triggered by the tenants’ exercise of purchase option clauses in the lease agreements. The properties were sold for net cash proceeds of approximately $2.1 million in March 2004, resulting in a gain of approximately $252,000. There were approximately $209,000 in debt retirement costs associated with the disposition of the Capital Food property.

As a result of the foregoing, the Partnership’s net income decreased 29.5% to approximately $304,000 for the quarter ended March 31, 2004, compared to approximately $431,000 for the quarter ended March 31, 2003.

The Partnership announced first quarter distributions of approximately $1.9 million, of which approximately $1.6 million was distributed to its limited partners on April 15, 2004 and the remainder of which will be distributed to limited partners who elected to receive distributions on a monthly basis.

LIQUIDITY AND CAPITAL COMMITMENTS

In 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 Partnership entered into an additional $3.3 million term note in March 1999. Proceeds from the notes were used to acquire additional properties. The notes have a ten-year term, are collateralized by certain properties subject to operating leases, and bear interest at a rate of 8.13% and 8.5% per annum, respectively. In March 2004 the partnership defeased approximately $466,000 of this note payable with proceeds from the sale of the Capital Foods property.

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. The note has a ten-year term and bears interest at a rate of 8.35% per annum.

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In November 2001, the Partnership entered into an additional $1.5 million term note. The note has a two-year term, is collateralized by certain properties subject to operating leases and bears interest at a rate of prime plus 2% per annum. Proceeds from this note were used to repay approximately $700,000 of short-term borrowings and to provide working capital intended to be used to fund Unit repurchases and potential property acquisitions. In November 2003, the Partnership extended this note for an additional two years.

In April 2003, the Partnership entered into an $862,500 term note. The note has a 5-year term, is collaterized by a certain property subject to an operating lease which has a carrying value of $1.1 million, and bears an interest rate of 6.25%, per annum. In April 2003, the Partnership entered into a $57,500 unsecured revolving note. The note has a 2-year term and bears interest at a variable rate equivalent to the Wall Street Journal (WSJ) prime rate plus 1/2%. The interest rate is adjusted monthly for charges in the WSJ prime rate.

Debt issuance costs of approximately $646,349 incurred in connection with the issuance of the notes are being amortized into interest expense over the life of the notes using the straight-line method.

As of March 31, 2004, the Partnership had a portfolio of 20 properties located in 9 states, with a cost basis of $31.2 million, 7 performing equipment leases with an original investment of $1.9 million and one repossessed equipment package related to a defaulted equipment contract. The remaining net investment in the Partnership’s leased equipment is $280,000, net of $1.6 million of aggregate principal collections on financing leases during the life of those investments. Inclusive of the above amount, the Partnership has received approximately $6.8 million of aggregate principal collections on its financing leases during the life of those investments. As of March 31, 2004, the Partnership has two properties for which rental payments have been delinquent for approximately 17 months. The tenant experienced financial difficulties that resulted in the stores’ recent closure. The Partnership is actively seeking to re-tenant the properties as well as pursuing rights and remedies under the leases to collect all the amounts owed. In addition, the lease for a third property was terminated during the fourth quarter of 2003 and a lease termination agreement was executed. The Partnership is actively seeking to re-tenant the property. The General Partner does not have sufficient evidence at this time to believe impairment exists on any of the vacant 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, 845 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, 2004, the Partnership had 29,155 Units issued and outstanding. The Partnership expects to fund any future Unit repurchases out of working capital reserves and Net Sale or Refinancing Proceeds, but may also fund such repurchases out of Cash Flow. The Partnership is not obligated to accept Unit repurchase requests if the Partnership does not have the liquidity to fund such requests and/or if the Partnership does not have sufficient Cash Flow to distribute the 10% Current Preferred Return.

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 Limited Partners.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

For quantitative and qualitative disclosures about market risk, see Item 7A “Quantitative and Qualitative Disclosures About Market Risk,” of our annual report on Form 10-K for the year ended December 31, 2003. Our exposures to market risk have not changed materially since December 31, 2003.”

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 the end of the period covered by the 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 or in other factors that could significantly affect these controls subsequent to the evaluation date, including, but not limited to, any corrective actions with regard to significant deficiencies and material weaknesses.

PART II — OTHER INFORMATION

ITEM 1.     LEGAL PROCEEDINGS.None

ITEM 2.     CHANGES IN SECURITIES. USE OF PROCEEDS AND ISSUER PURCHASES OF EQUITY SECURITIES.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 AND REPORTS ON FORM 8-K.

(a) The following exhibits are included herein or incorporated by reference:

Number	Exhibit
4	Amended Agreement of Limited Partnership of Registrant. (Incorporated by reference to 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)

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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 2002
32	Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section of the Sarbanes-Oxley Act of 2002

(b) Reports on Form 8-K:

There were no reports filed on Form 8-K for the quarter ended March 31, 2004.

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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. IV
	GP4 Asset Acquisition, LLC
	Its Manager

By:	/s/ Patrick L. Beach
	Patrick L. Beach
	President
Date: May 14, 2004

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Exhibit Index

Number	Description
31	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32	Cerication Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section of the Sarbanes-Oxley Act of 2002

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