On August 8, 2005, Rexahn Pharmaceuticals, Inc. (the “Company”) completed a private placement of $1.3 million aggregate principal amount of its convertible notes (the “Convertible Notes”) in offers and sales that occurred outside the United States to persons other than U.S. persons in offshore transactions meeting the requirements of Rule 904 of Regulation S under the Securities Act of 1933, as amended (the “Securities Act”).

                The holders of the Convertible Notes are entitled any time after September 19, 2005 until August 8, 2008 (the “Maturity Date”), or upon the occurrence and continuance of any of the events of default, to convert the principal amount of any Convertible Notes or portions thereof into Company common stock at a conversion price of $2.00 per share. The initial conversion price of $2.00 per share of Company common stock is subject to adjustment upon the occurrence of certain events, including the issuance of any additional capital stock after August 8, 2005 (other than the issuance of shares of common stock described in Item 3.02 to this Current Report on Form 8-K), without consideration or for a consideration per share less than the current market price per share of additional capital stock as of the time of such issuance. On the Maturity Date, any unconverted Convertible Notes will automatically convert into shares of Company common stock at a conversion price of $2.00 per share.

                The Convertible Notes do not bear interest, except that any overdue principal of the Convertible Notes will bear interest for each day from the Maturity Date to the date of actual payment, at a rate equal to 5% per annum, or, if an event of default occurs and is continuing, the Convertible Notes will bear interest, from the date of the occurrence of such event of default until such event of default is cured or waived, at a rate equal to 5% per annum.

                The Convertible Notes and the underlying Company common stock issuable upon conversion of the Convertible Notes have not been registered under the Securities Act and may not be offered or sold in the Unites States absent registration under the Securities Act or an applicable exemption from registration requirements under the Securities Act.

                The net proceeds of the Convertibles Note sale will be used to fund clinical trials of the Company’s drug candidates and for general corporate purposes.

                The foregoing summary is qualified in its entirety by the Form of Convertible Note incorporated herein as Exhibit 4.1.

Item 3.02.  Unregistered Sales of Equity Securities

                On August 8, 2005, the Company also completed a private placement of 4,175,000 shares of Company common stock, $.0001 par value per share at $2.00 per share for aggregate gross proceeds of $8.35 million pursuant to the Subscription Agreements dated August 8, 2005. The offers and sales occurred outside the United States to persons other than U.S. persons in offshore transactions meeting the requirements of Rule 904 of Regulation S under the Securities Act.

                After payment of certain expenses by the Company, the Company received approximately $8.31 million in net proceeds upon closing of the private placement of the

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