Ceragenix Completes $3.2 Million Convertible Note Transaction.

DENVER -- Ceragenix Pharmaceuticals, Inc., ("Ceragenix" or the "Company"), a development stage biopharmaceutical company, (OTCBB:CGXP) today announced that it had completed a financing in which the Company sold $3.2 million in convertible notes (the "Notes") in a private transaction to four institutional investors. The Notes accrue interest at the rate of 10% per annum, payable quarterly, with principal and any accrued interest payable in full on November 28, 2007. The Notes are convertible into shares of the Company's common stock at a conversion price equal to $2.05 per share, subject to adjustment under certain circumstances. In addition, for every two shares of common stock issuable upon conversion of the Notes, an investor received one warrant exercisable for five years to purchase one additional share of common stock at a purchase price of $2.225 per share. The warrants also include a cashless exercise provision. Furthermore, the Company paid placement agents $320,000 in commissions and issued warrants exercisable for five years to acquire 156,098 shares of common stock at an exercise price of $2.05 per share.

"We believe this investment represents a validation of our technology and business model and should allow us to execute our plan through mid 2006," said Steven Porter, Ceragenix's Chairman and Chief Executive Officer.

ABOUT CERAGENIX

Ceragenix is a development stage biopharmaceutical company focused on dermatology and infectious disease. Ceragenix's patented Barrier Repair Technology, invented by Dr. Peter Elias and licensed from the University of California, is the platform for the development of two prescription topical creams-Epiceram(TM) and Neoceram(TM) that form human-identical skin barriers. Defects in the skin's barrier function play critical roles in the pathogenesis of skin diseases such as eczema, irritant contact dermatitis and other common skin disorders. The Company's patented Cationic Steroid Antibiotic ("CSA") technology provides the basis for its novel antimicrobial medical device coating that may be attached to various medical devices to provide potentially long duration antimicrobial activity. Ceragenix also plans to develop CSAs for use as topical and systemic antibiotic therapies in the treatment of skin infections (MRSA), burn wound infections, eye infections and other indications.

FORWARD LOOKING STATEMENTS

This press release may contain forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those expressed or implied by such forward-looking statements, including, but not limited to, the following: the ability of the Company to raise capital in a timely manner, the ability of the Company to raise sufficient capital to finance its planned pharmaceutical activities, the FDA concurring with the Company that the 510(k) application is the appropriate approval process for Epiceram(TM), receiving the necessary marketing clearance approvals from the FDA, successful clinical trials of the Company's planned products, the ability of the Company to commercialize its planned products, market acceptance of the Company's planned products, and the Company's ability to successfully compete in the marketplace. Although management believes that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance that the forward-looking statements will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements, the inclusion of such information should not be regarded as a representation by the Company or any other person that the objectives and plans of the Company will be achieved. For further information, please see the company's filings with the SEC, including its Forms SB-2, 10-KSB, 10-QSB and 8-K. The Company assumes no obligation to update its forward-looking statements to reflect actual results or changes in factors affecting such forward-looking statements.