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Spherix (SPEX) Merger Terms.

|Includes:Spherix Incorporated (SPEX)

Spherix (NASDAQ:SPEX) schedule 14A

The issuance of the Merger Consideration is full consideration for the acquisition of the North South Patent Portfolio and will not have any effect (other than a dilutive effect, as further discussed below) upon the rights of existing security holders. The issuance of the Merger Consideration will have a significant dilutive effect on our existing security holders. Subsequent to the consummation of the Merger, we will have outstanding: 1,268,308 shares of Common Stock; 1 share of Series B Preferred Stock convertible into 1 share of Common Stock; 70,389 shares of Series C Preferred Stock convertible into an aggregate of 70,389 shares of Common Stock; 1,488,152 shares of Series D Preferred Stock convertible into an aggregate of 14,881,520 shares of Common Stock; 100,000 shares of Series E Preferred Stock convertible into an aggregate of 100,000 shares of Common Stock; warrants to purchase an aggregate of 116,708 shares of Common Stock and options to purchase aggregate of 2,019,062 shares of Common Stock. Upon the closing of the Merger, the existing shareholders of the Company will hold approximately 90.6% of the issued and outstanding Common Stock of the Company and approximately 6.2% of the outstanding Common Stock of the Company on a fully diluted basis ( without regard to any beneficial or conversion limitations of the outstanding convertible securities) and the shareholders of North South will hold approximately 9.3% of the outstanding Common Stock of the Company and will hold 15,000,003 shares of the Company's Common Stock or approximately 81% of the outstanding Common Stock on a fully diluted basis, assuming the conversion of the Series D Preferred Stock issued under the Merger Agreement (without regard to an beneficial ownership or conversion limitations contained therein), The Company's 100,000 shares of Series E Preferred Stock were issued to North South on June 25, 2013 for a purchase price of $500,000 in a private placement transaction.

Anthony Hayes is the Chief Executive Officer of North South and North South's executive offices are located at 110 Greene Street, Suite 403, New York, NY 10012. On May 4, 2013, we entered into a consulting agreement with Mr. Hayes in order to facilitate the transitioning of the oversight of North South's patents, licenses and applications (the "North South Intellectual Property") to us in consideration for (i) a cash payment of $30,000 and (ii) a ten year option to purchase 750,000 shares of our Common Stock at a per share purchase price of $7.08, subject to certain vesting requirements and satisfaction of certain conditions.

Stocks: SPEX