Import
fid = fopen('test.txt');
txt = textscan(fid,'%s');
fclose(fid);
Transform into a M by 28 char array, transpose and reshape to have a 4 char block on each column. Then add to the bottom a row of blanks and reshape back. Store each line in a cell.
txt = reshape(char(txt{:})',4,[]);
txt = cellstr(reshape([txt; repmat(' ',1,size(txt,2))],35,[])')
Write each cell/line to new file
fid = fopen('test2.txt','w');
fprintf(fid,'%s\r\n',txt{:});
fclose(fid);