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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2003
( ) TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
Commission File Number: 33-62526
COMMONWEALTH INCOME & GROWTH FUND IV
(Exact name of registrant as specified in its charter)
Pennsylvania 23-3080409
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
470 John Young Way Suite 300
Exton, PA 19341
(Address, including zip code, of principal executive offices)
(610) 594-9600
(Registrant's telephone number including area code)
Indicate by check mark whether the registrant (i) 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, and (III) has been subject to such filing
requirements for the past 90 days:
YES [X] NO [ ]
Commonwealth Income & Growth Fund IV
Balance Sheets
June 30, December 31,
2003 2002
-----------------------------
(unaudited)
Assets
Cash and cash equivalents $ 3,901,299 $ 510,780
Lease income receivable 27,897 30,957
Other Receivables - Commonwealth Capital Corp 156,029 -
Other Receivables - Other Affiliated Limited Partnerships 35,326 6,000
Receivables from sales of equipment - 103,610
Deferred Revenue 1,052 -
Refundable Deposits 1,130 -
-----------------------------
4,122,733 651,347
-----------------------------
Computer equipment, at cost 4,631,678 2,110,606
Accumulated depreciation (480,620) (92,931)
-----------------------------
4,151,058 2,017,675
-----------------------------
Equipment acquisition costs and deferred expenses, net 165,015 79,672
Prepaid acquisition fees 181,887 33,905
-----------------------------
346,902 113,577
-----------------------------
Total assets $ 8,620,693 $ 2,782,599
=============================
Liabilities and Partners' Capital
Liabilities
Accounts payable 500,190 20,486
Accounts payable - General Partner 6,047 806
Accounts payable - Commonwealth Capital Corp. - 61,807
Unearned lease income 53,735 6,514
Notes payable 658,996 -
-----------------------------
Total liabilities 1,218,968 89,613
-----------------------------
Partners' Capital
General partner 1,000 1,000
Limited partners 7,400,725 2,691,986
-----------------------------
Total partners' capital 7,401,725 2,692,986
-----------------------------
Total liabilities and partners' capital $ 8,620,693 $ 2,782,599
=============================
see accompanying notes to financial statements
Commonwealth Income & Growth Fund IV
Statements of Operations
Three Months Ended Six Months Ended
June 30, June 30,
2003 2003
------------------ ----------------
(unaudited) (unaudited)
Income
Lease $ 313,237 $ 583,492
Interest and other 4,942 6,529
----------- -----------
Total Income 318,179 590,021
----------- -----------
Expenses
Operating, excluding depreciation 426,956 665,012
Organizational costs 43,775 65,842
Equipment management fee - General Partner 15,662 29,175
Interest 11,207 21,649
Depreciation 201,141 387,689
Amortization of equipment
acquisition costs and deferred expenses 12,913 23,660
----------- -----------
Total expenses 711,654 1,193,027
----------- -----------
Net (loss) $ (393,475) $ (603,006)
=========== ===========
Net (loss) per equivalent limited
partnership unit $ (0.99) $ (1.93)
=========== ===========
Weighted average number of equivalent limited
partnership units outstanding during the period 398,671 312,047
=========== ===========
(1) Although the Partnership was formed on May 15, 2001, the Fund did not
commence operations until July 8, 2002.
see accompanying notes to financial statements
Commonwealth Income & Growth Fund IV
Statements of Partners' Capital
For the Six Months ended June 30, 2003
(unaudited)
General Limited
Partner Partner General Limited
Units Units Partner Partner Total
-------------------------------------------------------------------------------------
Partners' capital - December 31, 2002 50 181,566 $ 1,000 $ 2,691,986 $ 2,692,986
Contributions 315,131 6,285,591 6,285,591
Offering costs (687,667) (687,667)
Net income (loss) 2,862 (605,868) (603,006)
Distributions (2,862) (283,317) (286,179)
-------------------------------------------------------------------------------------
Partners' capital - June 30, 2003 50 496,697 $ 1,000 $ 7,400,725 $ 7,401,725
=====================================================================================
see accompanying notes to financial statements
Commonwealth Income & Growth Fund IV
Statement of Cash Flow
For the Six Months Ended June 30, 2003
2003
-----------
Operating activities (unaudited)
Net (loss) $ (603,006)
Adjustments to reconcile net (loss) to net cash
provided by operating activities
Depreciation and amortization 411,349
Other noncash activities included in
determination of net loss (157,008)
Changes in assets and liabilities
(Increase) decrease in assets
Lease income receivable 3,060
Deferred revenue (1,052)
Other receivables - Other Affiliated Limited Partnerships (29,326)
Receivables from sales of equipment 103,610
Refundable Deposits (1,130)
Increase (decrease) in liabilities
Accounts payable 479,704
Accounts payable, Common Capital Corp. (61,807)
Accounts payable, General Partner 5,241
Unearned lease income 47,221
-----------
Net cash provided by operating activities 196,856
-----------
Investing activities:
Capital Expenditures (1,705,068)
Prepaid acquisition fees (147,982)
Equipment acquisition fees paid to General Partner (100,843)
-----------
Net cash (used in) investing activities (1,953,893)
-----------
Financing activities:
Contributions 6,285,591
Offering Costs (687,667)
Distributions to partners (286,179)
Other receivable, Commonwealth Capital Corp (156,029)
Debt Placement fee paid to the General Partner (8,160)
-----------
Net cash provided by financing activities 5,147,556
-----------
Net increase in cash and equivalents 3,390,519
Cash and cash equivalents, beginning of period 510,780
-----------
Cash and cash equivalents, end of period $ 3,901,299
===========
(1) Although the Partnership was formed on May 15, 2001, the Fund did not
commence operations until July 8, 2002.
see accompanying notes to financial statements
NOTES TO FINANCIAL STATEMENTS
1. Business Commonwealth Income & Growth Fund IV (the
"Partnership") is a limited partnership
organized in the Commonwealth of Pennsylvania
on May 15, 2001. The Partnership is offering
for sale up to 750,000 units of the limited
partnership at the purchase price of $20 per
unit (the "Offering"). The Partnership
reached the minimum amount in escrow and
commenced operations on July 8, 2002. As of
June 30, 2003, the Partnership has received
$9,913,145 in contributions from limited
partners, amounting to 496,697 units. For the
quarter ended June 30, 2003, the Partnership
has received $4,183,942 in contributions from
limited partners, amounting to 210,049 units.
As of June 30, 2003, there was $254,000 in
contributions from limited partners,
amounting to 12,700 units, which remained in
our escrow account. This amount was withdrawn
from the escrow agent and contributed to the
Partnership on July 3, 2003.
The Partnership uses the proceeds of the
Offering to acquire, own and lease various
types of computer peripheral equipment and
other similar capital equipment, which will
be leased primarily to U.S. corporations and
institutions. Commonwealth Capital Corp
("CCC"), on behalf of the Partnership and
other affiliated partnerships, will acquire
computer equipment subject to associated debt
obligations and lease agreements and allocate
a participation in the cost, debt and lease
revenue to the various partnerships based on
certain risk factors.
The Partnership's General Partner is
Commonwealth Income & Growth Fund, Inc. (the
"General Partner"), a Pennsylvania
corporation which is an indirect wholly owned
subsidiary of CCC. CCC is a member of the
Investment Program Association (IPA),
Financial Planning Association (FPA), and the
Equipment Leasing Association (ELA).
Approximately ten years after the
commencement of operations, the Partnership
intends to sell or otherwise dispose of all
of its computer equipment, make final
distributions to partners, and to dissolve.
Unless sooner terminated, the Partnership
will continue until December 31, 2012.
2. Summary of Basis of Presentation
Significant
Accounting The financial information presented as of any
Policies date other than December 31 has been prepared
from the books and records without audit.
Financial information as of December 31 has
been derived from the audited financial
statements of the Partnership, but does not
include all disclosures required by generally
accepted accounting principles. In the
opinion of management, all adjustments,
consisting only of normal recurring
adjustments, necessary for a fair
presentation of the financial information for
the periods indicated have been included. For
further information regarding the
Partnership's accounting policies, refer to
the financial statements and related notes
included in the Partnership's annual report
on Form 10-K for the year ended December 31,
2002. Operating results for the six-month
period ended June 30, 2003 are not
necessarily indicative of financial results
that may be expected for the full year ended
December 31, 2003.
Revenue Recognition
Through June 30, 2003, the Partnership has
only entered into operating leases. Lease
revenue is recognized on a monthly basis in
accordance with the terms of the operating
lease agreements.
The Partnership reviews a customer's credit
history before extending credit and may
establish a provision for uncollectible
accounts receivable based upon the credit
risk of specific customers, historical trends
and other information.
Use of Estimates
The preparation of financial statements in
conformity with generally accepted accounting
principles requires 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
revenues and expenses during the reporting
period. Actual results could differ from
those estimates.
Long-Lived Assets
The Partnership evaluates its long-lived
assets when events or circumstances indicate
that the value of the asset may not be
recoverable. The Partnership determines
whether an impairment exists by estimating
the undiscounted cash flows to be generated
by each asset. If the estimated undiscounted
cash flows are less than the carrying value
of the asset then an impairment exists. The
amount of the impairment is determined based
on the difference between the carrying value
and the fair value. The fair value is
determined based on estimated discounted cash
flows to be generated by the asset. As of
June 30, 2003, there is no impairment.
Depreciation on computer equipment for
financial statement purposes is based on the
straight-line method over estimated useful
lives of four years.
Intangible Assets
Equipment acquisition costs and deferred
expenses are amortized on a straight-line
basis over two- to-four year lives.
Unamortized acquisition fees and deferred
expenses are charged to amortization expense
when the associated leased equipment is sold.
Cash and Cash Equivalents
The Partnership considers all highly liquid
investments with a maturity of three months
or less to be cash equivalents. Cash
equivalents have been invested in a money
market fund investing directly in Treasury
obligations.
Income Taxes
The Partnership is not subject to federal
income taxes; instead, any taxable income
(loss) is passed through to the partners and
included on their respective income tax
returns.
Taxable income differs from financial
statement net income as a result of reporting
certain income and expense items for tax
purposes in periods other than those used for
financial statement purposes, principally
relating to depreciation, amortization, and
lease income.
Offering Costs
Offering costs are payments for selling
commissions, dealer manager fees,
professional fees and other offering expenses
relating to the syndication. Selling
commissions are 8% of the partners'
contributed capital and dealer manager fees
are 1% of the partners' contributed capital.
These costs have been deducted from
partnership capital in the accompanying
financial statements.
Net Income (Loss) Per Equivalent Limited
Partnership Unit
The net income (loss) per equivalent limited
partnership unit is computed based upon net
income (loss) allocated to the limited
partners and the weighted average number of
equivalent units outstanding during the
period.
Reimbursable Expenses
Reimbursable expenses, which are charged to
the Partnership by CCC in connection with the
administration and operation of the
Partnership, are allocated to the Partnership
based upon several factors including, but not
limited to, the number of investors,
compliance issues, and the number of existing
leases.
3. Computer The Partnership is the lessor of equipment
Equipment under operating leases with periods ranging
from 16 to 36 months. In general, the lessee
pays associated costs such as repairs and
maintenance, insurance and property taxes.
The Partnership's share of the computer
equipment in which they participate at June
30, 2003 was approximately $8,000, which is
included in the Partnership's fixed assets on
their balance sheet, and the total cost of
the equipment shared by the Partnership with
other partnerships at June 30, 2003 was
approximately $48,000. The Partnership did
not participate in shared equipment as of
December 31, 2002.
The following is a schedule of future minimum
rentals on noncancellable operating leases at
June 30, 2003:
Amount
----------------------------------------------------
Six Months ended December 31, 2003 $ 744,000
Year Ended December 31, 2004 1,457,000
Year Ended December 31, 2005 1,058,000
Year Ended December 31, 2006 133,000
-----------
$ 3,392,000
----------------------------------------------------
4. Related Party Other Receivables
Transactions
During the six-months ended June 30, 2003,
the Partnership made a non-interest bearing
advance to CCC, a related party to the
Partnership, in the amount of approximately
$156,000. This advance, as well as potential
future advances, was and will be made at the
discretion of the General Partner. CCC,
through its indirect subsidiaries, including
the General Partner of the Partnership,
earns fees based on revenues and new lease
purchases from this fund. CCC, through its
indirect subsidiaries, including the General
Partner of the Partnership, earns fees based
on revenues and new lease purchases from
this fund. CCC intends to repay the
receivable via the offsetting of acquisition
and debt placement fees over the next
several fiscal years.
5. Notes Payable Notes payable consisted of the following:
June 30, December 31,
2003 2002
----------------------------------------------------------------------------------
Installment notes payable to banks; interest
ranging from 5.75% to 7.75%, due in monthly
installments ranging from $60 to $1,980,
including interest, with final payments due from
June through December 2004. $ 84,538 $ -
Installment notes payable to banks; interest
ranging from 5.50% to 6.75%, due in monthly
installments ranging from $151 to $4,212,
including interest, with final payments due from
January through December 2005. 514,020 -
Installment notes payable to banks; interest
ranging from 5.50% to 6.50%, due in monthly
installments ranging from $155 to $1,445,
including interest, with final payments due in
January 2006. 60,438 -
----------------------------
$ 658,996 $ -
----------------------------------------------------------------------------------
These notes are secured by specific computer
equipment and are nonrecourse liabilities of
the Partnership. Aggregate maturities of
notes payable for each of the periods
subsequent to June 30, 2003 are as follows:
Amount
--------
Six months ended December 31, 2003 $171,193
Year ended December 31, 2004 341,539
Year ended December 31, 2005 144,174
Year ended December 31, 2006 2,090
--------
$658,996
--------
6. Supplemental Other noncash activities included in the
Cash Flow determination of net loss are as follows:
Information
- --------------------------------------------------------------------------
Six months ended June 30, 2003
- --------------------------------------------------------------------------
Lease income, net of interest expense on
notes payable realized as a result of
direct payment of principal by lessee to bank $ 157,008
No interest or principal on notes payable was paid by the Partnership
because direct payment was made by lessee to the bank in lieu of
collection of lease income and payment of interest and principal by
the Partnership.
Noncash investing and financing activities include the following:
Six months ended June 30, 2003
- ---------------------------------------------------------------------------
Debt assumed in connection with purchase
of computer equipment $ 816,004
- ---------------------------------------------------------------------------
Item 2: Management's Discussion and Analysis of Financial Condition
and Results of Operations
CRITICAL ACCOUNTING POLICIES
Financial Reporting Release No. 60, which was released by the Securities and
Exchange Commission, requires all companies to include a discussion of critical
accounting policies or methods used in the preparation of financial statements.
Our significant accounting policies are described in Note 1 of the Notes to the
Financial Statements. The significant accounting policies that we believe are
the most critical to aid in fully understanding our reported financial results
include the following:
COMPUTER EQUIPMENT
Commonwealth Capital Corp, on behalf of the Partnership and other affiliated
partnerships, acquires computer equipment subject to associated debt obligations
and lease revenue and allocates a participation in the cost, debt and lease
revenue to the various partnerships based on certain risk factors.
The Partnership will acquire equipment with no associated debt obligations with
the original contributions. The Partnership plans on acquiring equipment leases
with associated debt obligations from the monthly rental payments associated
with the equipment acquired with its original capital contributions.
REVENUE RECOGNITION
Through June 30, 2003, the Partnership has only entered into operating leases.
Lease revenue is recognized on a monthly basis in accordance with the terms of
the operating lease agreements.
The Partnership reviews a customer's credit history extending credit and
establishes provisions for uncollectible accounts based upon the credit risk of
specific customers, historical trends and other information.
LONG-LIVED ASSETS
The Partnership evaluates its long-lived assets when events or circumstances
indicate that the value of the asset may not be recoverable. The Partnership
determines whether an impairment exists by estimating the undiscounted cash
flows to be generated by each asset. If the estimated undiscounted cash flows
are less than the carrying value of the asset then an impairment exists. The
amount of the impairment is determined based on the difference between the
carrying value and the fair value. Fair value is determined based on estimated
discounted cash flows to be generated by the asset. Depreciation on computer
equipment for financial statement purposes is based on the straight-line method
over estimated useful lives of four years.
Liquidity and Capital Resources
The Partnership's primary source of capital for the six months ended June 30,
2003 was contributions of approximately $6,285,000. The primary uses of cash for
the six months ended June 30, 2003 were for capital expenditures of new
equipment totaling $1,705,000, offering costs of approximately $688,000, payment
of an advance made by the Partnership to CCC, a related party to the
Partnership, of approximately $156,000 and payments of preferred distributions
to partners of approximately $286,000.
For the six month period ended June 30, 2003, the Partnership generated cash
flows from operating activities of $197,000, which includes a net loss of
$603,000, depreciation and amortization expenses of $411,000. Other noncash
activities included in the determination of net income include direct payments
of lease income by lessees to banks of $157,000.
Cash is invested in money market accounts that invest directly in treasury
obligations pending the Partnership's use of such funds to purchase additional
computer equipment, to pay Partnership expenses or to make distributions to the
Partners. At June 30, 2003, the Partnership had approximately $3,069,000
invested in these money market accounts.
The Partnership's investment strategy of acquiring computer equipment and
generally leasing it under "triple-net leases" to operators who generally meet
specified financial standards minimizes the Partnership's operating expenses. As
of June 30, 2003, the Partnership had future minimum rentals on non-cancelable
operating leases of $744,000 for the balance of the year ending December 31,
2003 and $2,648,000 thereafter. At June 30, 2003, the outstanding debt was
$659,000, with interest rates ranging from 5.50% to 7.75%, and will be payable
through January 2006.
During the six-months ended June 30, 2003, the Partnership made a non-interest
bearing advance to CCC, a related party to the Partnership, in the amount of
approximately $156,000. This advance, as well as potential future advances, was
and will be made at the discretion of the General Partner. CCC, through its
indirect subsidiaries, including the General Partner of the Partnership, earns
fees based on revenues and new lease purchases from this fund. CCC, through its
indirect subsidiaries, including the General Partner of the Partnership, earns
fees based on revenues and new lease purchases from this fund. CCC intends to
repay the receivable via the offsetting of acquisition and debt placement fees
over the next several fiscal years.
The Partnership's cash from operations is expected to continue to be adequate to
cover all operating expenses, liabilities, and preferred distributions to
Partners during the next 12-month period. If available Cash Flow or Net
Disposition Proceeds are insufficient to cover the Partnership expenses and
liabilities on a short and long term basis, the Partnership will attempt to
obtain additional funds by disposing of or refinancing Equipment, or by
borrowing within its permissible limits. The Partnership may, from time to time,
reduce the distributions to its Partners if it deems necessary. Since the
Partnership's leases are on a "triple-net" basis, no reserve for maintenance and
repairs are deemed necessary.
The Partnership's share of the computer equipment in which they participate at
June 30, 2003 was approximately $8,000, which is included in the Partnership's
fixed assets on their balance sheet, and the total cost of the equipment shared
by the Partnership with other partnerships at June 30, 2003 was approximately
$48,000. The Partnership did not participate in shared equipment as of December
31, 2002.
Results of Operations
Three Months Ended June 30, 2003
--------------------------------
For the period ended June 30, 2003, the Partnership recognized income of
$318,000 and expenses of $711,000, resulting in a net loss of $393,000.
Lease income was approximately $313,000 for the quarter ended June 30, 2003. The
Partnership has entered into approximately 16 new leases during the quarter
ended June 30, 2003.
Operating expenses of approximately $427,000, excluding depreciation, primarily
consist of professional fees of approximately $50,000, due diligence of
approximately $61,000, outside service fees of approximately $10,000,
conventions of $9,000 and reimbursement of expenses to CCC for administration
and operation of the Partnership of approximately $85,000.
Organizational costs were approximately $44,000 for the period ended June 30,
2003.
The equipment management fee is approximately 5% of the gross lease revenue
attributable to equipment that is subject to operating leases. The equipment
management fee is approximately $16,000 for the period ended June 30, 2003.
Depreciation and amortization expenses consist of depreciation on computer
equipment and amortization of equipment acquisition fees. The expenses totaled
approximately $214,000 for the period ended June 30, 2003.
Six Months Ended June 30, 2003
------------------------------
For the six months ended June 30, 2003, the Partnership recognized income of
$590,000 and expenses of $1,193,000 resulting in a net loss of $603,000.
Lease income was approximately $583,000 for the six months ended June 30, 2003.
The Partnership has entered into approximately 91 leases through the six months
ended June 30, 2003
Operating expenses of approximately $665,000, excluding depreciation, primarily
consist of professional fees of approximately $83,000, due diligence of
approximately $72,000, outside service fees of approximately $21,000 and
reimbursement of expenses to CCC for administration and operation of the
Partnership of approximately $137,000.
Organizational costs were approximately $66,000 for the six months ended June
30, 2003.
The equipment management fee is approximately 5% of the gross lease revenue
attributable to equipment that is subject to operating leases. The equipment
management fee is approximately $29,000 for the six months ended June 30, 2003.
Depreciation and amortization expenses consist of depreciation on computer
equipment and amortization of equipment acquisition fees. The expenses totaled
approximately $411,000 for the six months ended June 30, 2003.
RECENT ACCOUNTING PRONOUNCEMENTS
SFAS 150
In May 2003, the FASB issued FASB Statement No. 150, Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity, which
establishes standards for how an issuer classifies and measures certain
financial instruments with characteristics of liabilities and equity. It
requires that an issuer classify a financial instrument that is within its scope
as a liability (or an asset in some circumstances). Many of those instruments
were previously classified as equity. SFAS is applicable immediately for
financial instruments entered into or modified after May 31, 2003 and otherwise
shall be effective at the beginning of the first interim period beginning after
June 15, 2003. The Partnership believes that the adoption of SFAS 150 will not
have an impact on its financial position and results of operations.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Inapplicable
Item 4. Controls and Procedures
The Chief Executive Officer and a Financial Officer of the Partnership have
conducted a review of the Partnership's disclosure controls and procedures as of
June 30, 2003.
The Partnership's disclosure controls and procedures include the Partnership's
controls and other procedures designed to ensure that information required to be
disclosed in this and other reports filed under the Securities Exchange Act of
1934, as amended (the " Exchange Act") is accumulated and communicated to the
Partnership's management, including its chief executive officer and a financial
officer, to allow timely decisions regarding required disclosure and to ensure
that such information is recorded, processed, summarized and reported with the
required time quarters.
Based upon this review, the Partnership's Chief Executive Officer and a
Financial Officer have concluded that the Partnership's disclosure controls (as
defined in pursuant to Rule 13a-14 c promulgated under the Exchange Act) are
sufficiently effective to ensure that the information required to be disclosed
by the Partnership in the reports it files under the Exchange Act is recorded,
processed, summarized and reported with adequate timeliness.
Part II: OTHER INFORMATION
Commonwealth Income & Growth Fund IV
Item 1. Legal Proceedings.
Inapplicable
Item 2. Changes in Securities.
Inapplicable
Item 3. Defaults Upon Senior Securities.
Inapplicable
Item 4. Submission of Matters to a Vote of Securities Holders.
Inapplicable
Item 5. Other Information.
Inapplicable
Item 6. Exhibits and Reports on Form 8-K.
a) Exhibits:
31.1 THE RULE 15d-14(a)
31.2 THE RULE 15d-14(a)
32.1 SECTION 1350 CERTIFICATION OF CEO
32.2 SECTION 1350 CERTIFICATION OF CFO
31.1 THE RULE 15d-14(a)
I, George Springsteen certify that:
1. I have reviewed this quarterly report on Form 10-Q of Commonwealth Income &
Growth Fund IV (the Registrant);
2. Based on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the Registrant as
of, and for, the periods presented in this report;
4. The Registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financing
reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the
registrant and have:
a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision, to
ensure that material information relating to the Registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
b) Designed such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting
principals;
(c) Evaluated the effectiveness of the registrant's disclosure controls and
procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of
the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's most
recent fiscal quarter (the registrant's fourth fiscal quarter in the case
of an annual report) that has materially affected, or is reasonably likely
to materially affect, the registrant's internal control over financial
reporting; and
5. The registrant's other certifying officer(s) and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to the
registrant's auditors and the audit committee of the registrant's board of
directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process,
summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control
over financial reporting.
/s/ George S. Springsteen
- -------------------------
George S. Springsteen
Chief Executive Officer
August 14, 2003
31.2 THE RULE 15d-14(a)
I, Kimberly A. Springsteen, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Commonwealth Income &
Growth Fund IV (the Registrant);
2. Based on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the Registrant as
of, and for, the periods presented in this report;
4. The Registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financing
reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the
registrant and have:
a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision, to
ensure that material information relating to the Registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
b) Designed such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting
principals;
(c) Evaluated the effectiveness of the registrant's disclosure controls and
procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of
the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's most
recent fiscal quarter (the registrant's fourth fiscal quarter in the case
of an annual report) that has materially affected, or is reasonably likely
to materially affect, the registrant's internal control over financial
reporting; and
5. The registrant's other certifying officer(s) and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to the
registrant's auditors and the audit committee of the registrant's board of
directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process,
summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control
over financial reporting.
/s/ Kimberly A. Springsteen
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Kimberly A. Springsteen
Principal Financial Officer
August 14, 2003
32.1 SECTION 1350 CERTIFICATION OF CEO
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Commonwealth Income & Growth Fund IV,
(the "Company") on Form 10-Q for the quarter ending June 30, 2003, as filed with
the Securities and Exchange Commission on the date hereof (the "Report"), I,
George S. Springsteen, Chief Executive Officer of the Company, certify, pursuant
to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act
of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of the
Company.
/s/ George S. Springsteen
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George S. Springsteen
Chief Executive Officer
August 14, 2003
32.2 SECTION 1350 CERTIFICATION OF CFO
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Commonwealth Income & Growth Fund IV,
(the "Company") on Form 10-Q for the quarter ending June 30, 2003, as filed with
the Securities and Exchange Commission on the date hereof (the "Report"), I,
Kimberly A. Springsteen, Principal Financial Officer of the Company, certify,
pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the
Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of the
Company.
/s/ Kimberly A. Springsteen
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Kimberly A. Springsteen
Principal Financial Officer
August 14, 2003
SIGNATURE
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.
COMMONWEALTH INCOME & GROWTH FUND IV
BY: COMMONWEALTH INCOME &
GROWTH FUND, INC. General Partner
August 14, 2003 By: /s/ George S. Springsteen
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Date George S. Springsteen
President