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August 16, 2005

Spherix Incorporated

12051 Indian Creek Court

Beltsville, MD 20906

Attn: Rufus Decker, Branch Chief

Securities and Exchange Commission

Washington, DC 20549-0510

RE:          Form 10-K for the
Fiscal Year Ended December 31, 2004

Form 10-Q for the period ended March 31,
2005

File No. 0-5576

Dear Mr. Decker:

In response to the SEC’s letter dated June 13, 2005, the Company
is pleased to provide the following responses to the Commission’s request for
additional information regarding our Form 10-K filing for the fiscal year
ended December 31, 2004 and Form 10-Q for the period ended March 31,
2005.  Attached hereto are the Staff’s
inquiries and the Company’s responses which have been numbered to correspond to
the paragraph numbers contained in the June 13, 2005 letter.

Sincerely,

  /s/Richard C. Levin

  Richard C. Levin

  CEO, President and CFO

1.             SEC
Comment

We have reviewed your response
to comment three.  Based on your response
that you have changed your practice of allocating corporate rent to the
divisions, we would anticipate a change in reported segment results rather than
a change in classification on your statements of operations.  Please tell us why the change in the way you
evaluate division results has no effect on your segment reporting.

Spherix

The Company reports its segments after the
allocation of all costs.

Since the relocation of the BioSpherix
Division occurred in 2004, the modification to the Company’s allocation pools
would have little to no effect to the segment results for 2003 and 2002.  In recalculating the prior year’s segment
result under the new allocation method, we find that the 2003 variance was
approximately $7,000 and the 2002 variance was less than $1,000.  Management considers both variances to be
immaterial.  Furthermore, a modification
of a company’s allocation methods, such as this one, can be important at the
project level within a company, but have little effect at the consolidated
division level.  Similarly, modifications
that reclassifies an indirect expense from an overhead cost pool to a G&A
cost pool can result in changes to individual line items on the statement of
operations and our internal reporting at the project and department levels
(whose managers are primarily accountable for direct and overhead costs of
their departments, and not the administrative costs allocated to the division),
yet not have a material effect on the overall business segment reporting in the
notes to the financial statements, which includes an allocation of all of the
Company’s expenses including sales and marketing, accounting and human
resources, general corporate costs including those related to being a public
company, etc.

The Company’s decision to modify its
methodology of classifying and allocating facility space was based on our
internal operating and reporting needs, and for the effective management of our
cost centers.  As stated in our previous
response, management does not consider this accounting change to have a
particularly significant effect to an over understanding of the Company’s
financial reports and the readers understanding of critical trends in
operations that are discussed in the MD&A discussions.

2.             SEC Comment

Please tell us
how you determine what costs are direct contract and operating costs.  Please also tell us why you believe the
inclusion of costs that do not directly benefit the operations of either
division in the direct costs line item was appropriate in the prior year.

Spherix

The Company’s
chart of accounts is designed to classify expenses into the following broad
categories; contract costs, research and development costs, fringe benefit
costs, overhead costs, and G&A costs.
These classifications are further

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subdivided
by the various departments within the company.
All together the Company has approximately 17 different cost pools that
are used to allocate indirect costs between operating, R&D and
administration expenses for financial reporting purposes.  In the Company’s Statement of Operations, our
“Direct contract and operating costs” consist of project costs, operating
overhead costs, related fringe costs, and excludes any
related depreciation, which is presented in a separate line item.  Our “Selling, general and administrative
expenses” consist of sales and marketing activities, accounting and human
relations costs, and other general corporate costs including those related to
being a public company plus related fringe and excluding related depreciation,
which is presented as a separate line item.

Ultimately, all facility costs are allocated
to the business segments, either through the overhead cost center pools or the
G&A cost center pools.  The fact that
the change in allocation methods had little to no effect in the overall segment
reporting for the prior years, serves as further proof that both the old and
the new allocation methods were consistent and reasonable methods of allocating
the indirect costs to the segments.

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