8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)   August 15, 2007

Spherix Incorporated

(Exact name of registrant as specified in its charter)

Delaware	0-5576	52-0849320
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

12051 Indian Creek Court, Beltsville, Maryland	20705
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code  301-419-3900

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Section 2 — Financial Information.

Item 2.01                Completion of Acquisition or Disposition of Assets.

On August 15, 2007, Spherix Incorporated (the “Company”) completed the sale of its InfoSpherix Incorporated subsidiary (“InfoSpherix”) to The Active Network, Inc. (“Active”).  The sale was completed in accordance with the terms and conditions of that certain Stock Purchase Agreement among the Company, InfoSpherix and Active dated as of June 25, 2007.

In the sale, the Company received $15 million in cash at closing, subject to a purchase price adjustment to be determined following closing.  In addition, $2 million was placed in escrow to satisfy any indemnification claims.  The sale was approved by the Company’s stockholders at the annual meeting held on August 15, 2007.

A copy of the press release that the Company issued to announce the closing of the transaction is furnished as Exhibit 99.1.

Section 5 — Corporate Governance and Management.

Item 5.02                Departure of Directors or Certain Officers; Election of Directors, Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

(b)           Richard C. Levin, CEO, President and Chief Financial Officer of the Company, resigned from all positions with the Company on August 15, 2007.  As outlined in the Company’s recent proxy statement, Mr. Levin will continue to manage InfoSpherix which has been sold to Active.

Effective August 15, 2007, each of M. Karen Levin and Richard C. Levin resigned as members of the board of directors of the Company to insure that the Company continues to comply with the NASDAQ requirement that a majority of the board be “independent” members of the board.

(c)           As previously reported in the Company’s Form 8-K filed on August 14, 2007, Claire L. Kruger, Ph.D., has been elected as the Chief Executive Officer/Chief Operating Officer of the Company effective as of August 15, 2007.  Additional information concerning Dr. Kruger is set forth in such Form 8-K.

On August 15, 2007, the Company elected Dr. Robert A. Lodder, Ph.D., to serve as its President.  During the past five (5) years,  Dr. Lodder has been Professor of Pharmaceutical Sciences, College of Pharmacy, University of Kentucky Medical Center, with joint professorships in the Departments of Chemistry and Electrical and Computer Engineering.  He has also served as a member of the board of directors of the Company since 2005.

Dr. Lodder will be compensated at the rate of $160,000 per year with the potential to earn an annual bonus of up to thirty-five percent (35%) of his salary if he achieves performance objectives.  He will further be provided 15,000 shares of restricted common stock of the Company which will vest ratably over a one (1) year period as long as he remains employed by the Company over this period.

On August 15, 2007, Mr. Robert Clayton was elected as Interim Treasurer and Chief Financial Officer of the Company.  Mr. Clayton has stated that he will leave the Company upon final resolution of the purchase price adjustment required in connection with the sale of InfoSpherix, at which time Mr. Clayton will serve as a consultant to Spherix.  The Company is actively seeking a new Treasurer/Chief Financial Officer.  During the past five (5) years, Mr. Clayton has served as Director of Finance and Principal Accounting Officer of the Company.

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(d)           On August 15, 2007, the board of directors of the Company elected Dr. Kruger as a member of the board of directors of the Company.  Additional information concerning Dr. Kruger is set forth in the Company’s Form 8-K filed on August 14, 2007.

(e)           The Company’s compensatory agreement with  Dr. Kruger is described in the Company’s Form 8-K filed on August 14, 2007.  The Company’s compensatory agreement with Dr. Lodder is described in paragraph (c) above.

Section 9 — Financial Statements and Exhibits

Item 9.01                Financial Statements and Exhibits

(b)           Pro forma financial information.

In accordance with Item 9.01(b)(1) of Form 8-K, the pro forma financial information required by Item 9.01(b) of Form 8-K is attached hereto as Exhibit 9.1.

(c)           Exhibits

2.1           Stock Purchase Agreement by and among the Company, InfoSpherix and Active dated as of June 25, 2007 (incorporated by reference from the Company’s Schedule 14A as filed with the Securities and Exchange Commission on July 16, 2007).

9.1           Consolidated Pro Forma Balance Sheet of the Company for the period ended June 30, 2007 and Consolidated Pro Forma Statements of Operation of the Company for the six months ended June 30, 2007 and 2006 and the year ended December 31, 2006.

99.1         Press Release of the Company dated August 16, 2007.

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 hereunto duly authorized.

Spherix Incorporated
(Registrant)
By:	Claire L. Kruger
	Claire L. Kruger,
	Chief Executive Officer and Chief Operating Officer
Date	August 20, 2007

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EX-9.1

Exhibit 9.1

UNAUDITED PRO FORMA FINANCIAL INFORMATION

The following unaudited pro forma financial statements give effect to the August 15, 2007 sale of InfoSpherix.  The unaudited pro forma condensed consolidated balance sheet and statements of operations filed with this report are presented for illustrative purposes only.  The pro forma balance sheet as of June 30, 2007 has been prepared to reflect the sale of InfoSpherix as if such sale had taken place on such date, and is not necessarily indicative of the financial position of Spherix had the sale occurred on that date.  The pro forma results of operations for the six months ended June 30, 2007 and 2006, and the year ended December 31, 2006, have been prepared assuming that the transaction occurred as of the beginning of each of these periods and are not necessarily indicative of the results of operations for future periods or the results that actually would have been realized had we sold InfoSpherix as of those dates.  The unaudited pro forma financial statements, including notes thereto, should be read in conjunction with the historical financial statements of Spherix included in our Form 10-K for the year ended December 31, 2006, the unaudited financial statements filed in our Form 10-Q for the quarters ended March 31, 2007 and June 30, 2007, and the Proxy Statement for the August 15, 2007 Annual Meeting.

The unaudited pro forma statements of operations set forth below reflect the elimination of all of the revenues and certain of the expenses attributable to InfoSpherix.  We have eliminated all direct costs and expenses attributable to InfoSpherix operations as well as some of the selling, general and administrative expenses that are specific to InfoSpherix, including accounting, marketing, legal and human resource expenses.  Other general and administrative expenses typically allocated to InfoSpherix have not been eliminated in the pro forma statements because Active Network/InfoSpherix will not assume these costs as part of the proposed sale and we will continue to incur these costs.  However, following the sale of InfoSpherix, management expects to reduce the amount of corporate expenses to a level estimated to support Spherix’ biotechnology strategy.  As such, the unaudited pro forma financial statements do not reflect other costs savings that may occur as a result of Spherix’ focusing its effort on the biotechnology strategy.

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Spherix Incorporated
Unaudited Pro Forma Condensed Consolidated Balance Sheet
As of June 30, 2007

	As Reported (a)		Adjustments		Pro Forma
ASSETS
Current assets
Cash and cash equivalents	$     7,103,936		$   15,000,000	(c)	$   22,103,936
Other receivables	32		—		32
Prepaid expenses and other assets	317,125		—		317,125
Assets of segment held for sale, current	4,399,410		(4,399,410	)(d)	—
Total current assets	11,820,503		10,600,590		22,421,093
Property and equipment, net	183,726		—		183,726
Patents, net of accumulated amortization of $147,738 and $134,963	93,858		—		93,858
Assets of segment held for sale, non-current	4,094,897		(4,094,897	)(d)	—
Total assets	$   16,192,984		$     6,505,693		$   22,698,677
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued expenses	$        573,012		$     1,210,000	(e)	$     1,783,012
Accrued salaries and benefits	214,533		—		214,533
Capital lease obligations	2,081		—		2,081
Liabilities of segment held for sale, current	3,299,366		(3,299,366	)(d)	—
Total current liabilities	4,088,992		(2,089,366	)	1,999,626
Deferred compensation	497,852		—		497,852
Deferred rent	128,457		—		128,457
Liabilities of segment held for sale, non-current	191,900		(191,900	)(d)	—
Total liabilities	4,907,201		(2,281,266	)	2,625,935
Commitments and contingencies	—		—		—
Stockholders’ equity
Preferred stock, $0.01 par value, 2,000,000 shares authorized; none issued and outstanding	—		—		—
Common stock, $0.005 par value, 50,000,000 shares authorized; 14,335,000 and 13,892,642 issued, and 14,254,562 and 13,812,204 shares outstanding at June 30, 2007 and December 31, 2006	71,496		—		71,496
Paid-in capital in excess of par value	27,441,717		—		27,441,717
Treasury stock, 80,438 shares at cost	(464,786	)	—		(464,786	)
Accumulated deficit	(15,762,644	)	8,786,959	(f)	(6,975,685	)
Total stockholders’ equity	11,285,783		8,786,959		20,072,742
Total liabilities and stockholders’ equity	$   16,192,984		$     6,505,693		$   22,698,677

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Spherix Incorporated
Unaudited Pro Forma Condensed Consolidated Statement of Operations
For the six months ended June 30, 2007

	As Reported (a)		Adjustment		Pro Forma
Revenue	$            4,019		$                 —		$            4,019
Operating expense
Selling, general and administrative expense	1,637,072		—		1,637,072
Research and development expense	2,385,540		—		2,385,540
Total operating expense	4,022,612		—		4,022,612
Loss from operations	(4,018,593	)	—		(4,018,593	)
Interest income	57,724		—		57,724
Interest expense	29		—		29
Loss from continuing operations before taxes	(3,960,898	)	—		(3,960,898	)
Income tax benefit	(20,000	)	—		(20,000	)
Loss from continuing operations	(3,940,898	)	—		(3,940,898	)
Discontinued operations
Income from discontinued operations before taxes	2,218		(2,218	)(g)	—
Income tax expense	97,500		(97,500	)(g)	—
Loss from discontinued operations	(95,282	)	95,282		—
Net loss	$    (4,036,180	)	$          95,282		$    (3,940,898	)
Net (loss) income per share, basic
Continuing operations	$             (0.28	)			$             (0.28	)
Discontinued operations	$             (0.01	)			$                 —
Net (loss) income per share, basic	$             (0.29	)			$             (0.28	)
Net (loss) income per share, diluted
Continuing operations	$             (0.28	)			$             (0.28	)
Discontinued operations	$             (0.01	)			$                 —
Net loss per share, diluted	$             (0.29	)			$             (0.28	)
Weighted average shares outstanding, basic	14,125,660				14,125,660
Weighted average shares outstanding, diluted	14,125,660				14,125,660

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Spherix Incorporated
Unaudited Pro Forma Condensed Consolidated Statement of Operations
For the six months ended June 30, 2006

	As Reported (a)		Adjustment		Pro Forma
Revenue	$            2,735		$                 —		$            2,735
Operating expense
Selling, general and administrative expense	1,142,656		—		1,142,656
Research and development expense	281,739		—		281,739
Total operating expense	1,424,395		—		1,424,395
Loss from operations	(1,421,660	)	—		(1,421,660	)
Interest income	87,539		—		87,539
Interest expense	35,030		—		35,030
Loss from continuing operations before taxes	(1,369,151	)	—		(1,369,151	)
Income tax expense	—		—		—
Loss from continuing operations	(1,369,151	)	—		(1,369,151	)
Discontinued operations
Income from discontinued operations before taxes	1,094,723		(1,094,723	)(g)	—
Income tax expense	20,000		(20,000	)(g)	—
Income from discontinued operations	1,074,723		(1,074,723	)	—
Net loss	$       (294,428	)	$    (1,074,723	)	$    (1,369,151	)
Net (loss) income per share, basic
Continuing operations	$             (0.10	)			$             (0.10	)
Discontinued operations	$              0.08				$                 —
Net (loss) income per share, basic	$             (0.02	)			$             (0.10	)
Net (loss) income per share, diluted
Continuing operations	$             (0.10	)			$             (0.10	)
Discontinued operations	$              0.08				$                 —
Net (loss) income per share, diluted	$             (0.02	)			$             (0.10	)
Weighted average shares outstanding, basic	13,353,574				13,353,574
Weighted average shares outstanding, diluted	13,353,574				13,353,574

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Spherix Incorporated
Unaudited Pro Forma Condensed Consolidated Statement of Operations
For the year ended December 31, 2006

	As Reported (b)		Adjustment		Pro Forma
Revenue	$   24,838,174		$  (24,831,239	)(g)	$            6,935
Operating expense
Direct contract and operating costs	20,794,538		(20,794,538	)(g)	—
Selling, general and administrative expense	5,639,847		(2,138,613	)(g)	3,501,234
Research and development expense	883,608		—		883,608
Total operating expense	27,317,993		(22,933,151	)	4,384,842
Loss from operations	(2,479,819	)	(1,898,088	)	(4,377,907	)
Interest income (expense), net	97,750		—	(g)	97,750
Other income	6,000,000		(6,000,000	)(g)	—
Loss from continuing operations before taxes	3,617,931		(7,898,088	)	(4,280,157	)
Income tax expense	105,050		(105,050	)(g)	—
Net income	$     3,512,881		$    (7,793,038	)	$    (4,280,157	)
Net income per share, basic	$              0.26				$             (0.32	)
Net income per share, diluted	$              0.26				$             (0.32	)
Weighted average shares outstanding, basic	13,578,363				13,578,363
Weighted average shares outstanding, diluted	13,578,363				13,578,363

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Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements

(a)Reflects the historical Consolidated Balance Sheet and Consolidated Statements of Operations of Spherix Incorporated as reported for the respective periods in its June 30, 2007 10-Q.

(b)Reflects the historical Consolidated Statement of Operations of Spherix Incorporated as reported for the respective period in its December 31, 2006 10-K.

(c)Cash proceeds received at closing of $15 million (the $2 million held in escrow will be recognized when all conditions have been satisfied).

(d)Adjustment reflects the elimination of the assets and liabilities of the discontinued InfoSpherix Incorporated subsidiary as reported at June 30, 2007.

(e)Estimated liabilities related to the transactions, such as estimated income taxes, commissions, and stay bonuses realized at closing.

(f)Estimated gain on sale net of estimated income tax liability.

(g)Adjustment reflects the elimination of the revenues and costs associated with the discontinued InfoSpherix operations.

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EX-99.1

Exhibit 99.1

	For additional information, contact
	Investor Relations, (301) 419-7877
August 16, 2007	Email: info@spherix.com

SPHERIX SHAREHOLDERS SUPPORT COMPANY’S FOCUS ON NATURLOSE, BIOTECHNOLOGY
Changes Approved for Board of Directors and Corporate Officers

BELTSVILLE, MD.  Shareholders of Spherix Incorporated (NASDAQ/SPEX) voted to approve the sale of the Company’s InfoSpherix subsidiary to The Active Network for $17 million in cash ($15 million at closing and $2 million following a 15-month escrow period).  The vote was formally recorded at the Company’s annual meeting at its headquarters in Beltsville, Maryland.

At the annual meeting, shareholders elected the following members to the Board of Directors:

·Douglas T. Brown, Senior Vice President and Manager of the Corporate Banking Government Contracting Group for PNC Bank

·A. Paul Cox, Jr., Principal, Asset Protection Company

·George C. Creel, former Executive VP and Chief Operating Officer, Baltimore Gas and Electric Co.

·Gilbert V. Levin, Ph.D., Spherix

·M. Karen Levin, former VP for Spherix

·Richard C. Levin, Spherix

·Robert A. Lodder, Jr., Director of the Analytical Spectroscopy Research Group of the Advanced Science and Technology Center at the University of Kentucky

·Robert J. Vander Zanden, Ph.D., former Vice President, R&D, Kraft Foods International

In addition, Grant Thornton LLP was selected as the Company’s independent accountants for the year 2007.

Richard Levin told shareholders that the phase 3 clinical trial for Naturlose as a diabetes treatment was going well and the entire study will now be conducted in the United States.  The trial is scheduled to finish in early- to mid-2009, he said, noting, “Patient recruitment is going smoothly, patients have been on the drug for months now, and none have withdrawn.  This is a very encouraging sign.”

Levin said that the Company’s primary goal is to interest a pharmaceutical partner in Naturlose.  To that end he said, while the phase 3 trial is running, Spherix will put together a data package geared for the pharmaceutical industry.  Levin said, “Perhaps most importantly, we will begin to develop the market.  This includes educating potential users on the product and its benefits, and determining the best path to market.”

Levin said that the Company is finalizing the protocol for a dose range study.  An additional arm to the study will determine if Naturlose will work with one dose per day.  Levin concluded his comments by saying, “I believe the biotech side of the company is positioned well for success.  It will have a substantial cash reserve, an exciting product in a phase 3 clinical trial, and a solid leader in Dr. Claire Kruger.  We could not have found a better person to lead us through this phase in the Company’s history.”

At a Board of Directors meeting later the same day, the Board elected Claire Kruger, Ph.D., as CEO of Spherix to replace Richard Levin, who will continue to manage InfoSpherix, becoming an employee of The Active Network.  Dr. Kruger will also be responsible for building Spherix’s new business line in health sciences consulting.  Board member Robert Lodder, Ph.D., was elected President of Spherix.

In addition, the Board of Directors nominated Paul Cox as Chairman, and the following slate of Corporate Officers was elected:

·Paul Cox, Chairman of the Board

·Claire Kruger, CEO/COO

·Robert Lodder, President

·Katherine Brailer, Corporate Secretary and Director of Administrative Services

·Robert Clayton, Interim CFO and Treasurer

At this meeting, Gilbert Levin, Ph.D., was made Chairman Emeritus.  In order to satisfy Sarbanes-Oxley regulations that the majority of the Board must be independent, Richard Levin and Karen Levin resigned from the Spherix Board of Directors, and Claire Kruger was elected as a Member.

Certain statements contained herein are “forward looking” statements as defined in the Private Securities Litigation Reform Act of 1995.  Because such statements include risks and uncertainties, actual results may differ materially from those expressed or implied.  Factors that could cause actual results to differ materially from those expressed or implied include, but are not limited to, those discussed in filings by the Company with the Securities and Exchange Commission, including the filing on Form 8-K made on March 3, 1999.

Under its motto, “A World of Solutions,” Spherix’s mission is to create value and increase shareholder wealth through innovations that benefit our clients and the human condition.  Spherix offers innovations in information technology, knowledge management, and biotechnology.

Our Internet address is http://www.spherix.com.

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