SEC FORM 4

SEC Form 4

FORM 4

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934
or Section 30(h) of the Investment Company Act of 1940

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Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

1. Name and Address of Reporting Person^*

THREE ARCH MANAGEMENT III LLC

(Last)

(First)

(Middle)

3200 ALPINE ROAD

(Street)

PORTOLA VALLEY

94028

(City)

(State)

(Zip)

2. Issuer Name and Ticker or Trading Symbol
ACELRX PHARMACEUTICALS INC [ ACRX ]

5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)

Director	X	10% Owner
Officer (give title below)		Other (specify below)

3. Date of Earliest Transaction (Month/Day/Year)
02/16/2011

4. If Amendment, Date of Original Filed (Month/Day/Year)

6. Individual or Joint/Group Filing (Check Applicable Line)

	Form filed by One Reporting Person
X	Form filed by More than One Reporting Person

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1. Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	3. Transaction Code (Instr. 8)		4. Securities Acquired (A) or Disposed Of (D) (Instr. 3, 4 and 5)			5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4)	6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
1. Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	Code	V	Amount	(A) or (D)	Price		6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
Common Stock	02/16/2011		C		31,357	A	⁽¹⁾	31,357	I	See Footnote⁽²⁾
Common Stock	02/16/2011		C		583,255	A	⁽³⁾	583,255	I	See Footnote⁽⁴⁾
Common Stock	02/16/2011		C		25,106	A	⁽⁵⁾	56,463	I	See Footnote⁽²⁾
Common Stock	02/16/2011		C		466,990	A	⁽⁶⁾	1,050,245	I	See Footnote⁽⁴⁾
Common Stock	02/16/2011		C		44,702	A	⁽⁷⁾	101,165	I	See Footnote⁽²⁾
Common Stock	02/16/2011		C		831,466	A	⁽⁷⁾	1,881,711	I	See Footnote⁽⁴⁾
Common Stock	02/16/2011		C		27,142	A	⁽⁸⁾	128,307	I	See Footnote⁽²⁾
Common Stock	02/16/2011		C		504,860	A	⁽⁹⁾	2,386,571	I	See Footnote⁽⁴⁾
Common Stock	02/16/2011		C		1,430	A	⁽⁷⁾	129,737	I	See Footnote⁽²⁾
Common Stock	02/16/2011		C		26,615	A	⁽⁷⁾	2,413,186	I	See Footnote⁽⁴⁾
Common Stock	02/16/2011		P		65,806	A	$5	195,543	I	See Footnote⁽²⁾
Common Stock	02/16/2011		P		1,223,983	A	$5	3,637,169	I	See Footnote⁽⁴⁾

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Transaction Date (Month/Day/Year)	3A. Deemed Execution Date, if any (Month/Day/Year)	4. Transaction Code (Instr. 8)		5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5)		6. Date Exercisable and Expiration Date (Month/Day/Year)		7. Title and Amount of Securities Underlying Derivative Security (Instr. 3 and 4)		8. Price of Derivative Security (Instr. 5)	9. Number of derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4)	10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)
1. Title of Derivative Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Transaction Date (Month/Day/Year)	3A. Deemed Execution Date, if any (Month/Day/Year)	Code	V	(A)	(D)	Date Exercisable	Expiration Date	Title	Amount or Number of Shares	8. Price of Derivative Security (Instr. 5)		10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)
Series A Convertible Preferred Stock	⁽¹⁾	02/16/2011		C			22,959	⁽¹⁰⁾	⁽¹¹⁾	Common Stock	31,357	$0	0	I	See Footnote⁽²⁾
Series A Convertible Preferred Stock	⁽³⁾	02/16/2011		C			427,040	⁽¹⁰⁾	⁽¹¹⁾	Common Stock	583,255	$0	0	I	See Footnote⁽⁴⁾
Series B Convertible Preferred Stock	⁽⁵⁾	02/16/2011		C			16,741	⁽¹⁰⁾	⁽¹¹⁾	Common Stock	25,106	$0	0	I	See Footnote⁽²⁾
Series B Convertible Preferred Stock	⁽⁶⁾	02/16/2011		C			311,384	⁽¹⁰⁾	⁽¹¹⁾	Common Stock	466,990	$0	0	I	See Footnote⁽⁴⁾
Series C Convertible Preferred Stock	⁽⁷⁾	02/16/2011		C			44,702	⁽¹⁰⁾	⁽¹¹⁾	Common Stock	44,702	$0	0	I	See Footnote⁽²⁾
Series C Convertible Preferred Stock	⁽⁷⁾	02/16/2011		C			831,466	⁽¹⁰⁾	⁽¹¹⁾	Common Stock	831,466	$0	0	I	See Footnote⁽⁴⁾
Convertible Promissory Note	⁽¹²⁾	02/16/2011		C			$96,767.12	⁽¹²⁾	⁽¹²⁾	Common Stock	24,608	$0	0	I	See Footnote⁽²⁾
Convertible Promissory Note	⁽¹³⁾	02/16/2011		C			$1,799,869.22	⁽¹³⁾	⁽¹³⁾	Common Stock	457,716	$0	0	I	See Footnote⁽⁴⁾
Warrant to purchase Series C Convertible Preferred Stock	⁽¹⁴⁾	02/16/2011		X			6,135	⁽¹⁵⁾	⁽¹⁶⁾	Series C Preferred Stock	6,135	$0	0	I	See Footnote⁽²⁾
Series C Convertible Preferred Stock	⁽¹⁴⁾	02/16/2011		X		6,135		⁽¹⁰⁾	⁽¹¹⁾	Common Stock	6,135	$0	6,135	I	See Footnote⁽²⁾
Series C Convertible Preferred Stock	$5	02/16/2011		S			4,838⁽²¹⁾	⁽¹⁰⁾	⁽¹¹⁾	Common Stock	4,838	$0	1,297	I	See Footnote⁽²⁾
Series C Convertible Preferred Stock	⁽⁷⁾	02/16/2011		C			1,297	⁽¹⁰⁾	⁽¹¹⁾	Common Stock	1,297	$0	0	I	See Footnote⁽²⁾
Warrant to purchase Series C Convertible Preferred Stock	⁽¹⁴⁾	02/16/2011		X			114,123	⁽¹⁵⁾	⁽¹⁶⁾	Series C Preferred Stock	114,123	$0	0	I	See Footnote⁽⁴⁾
Series C Convertible Preferred Stock	⁽¹⁴⁾	02/16/2011		X		114,123		⁽¹⁰⁾	⁽¹¹⁾	Common Stock	114,123	$0	114,123	I	See Footnote⁽⁴⁾
Series C Convertible Preferred Stock	$5	02/16/2011		S			89,993⁽²²⁾	⁽¹⁰⁾	⁽¹¹⁾	Common Stock	89,993	$0	24,130	I	See Footnote⁽⁴⁾

1. Name and Address of Reporting Person^*

THREE ARCH MANAGEMENT III LLC

(Last)

(First)

(Middle)

3200 ALPINE ROAD

(Street)

PORTOLA VALLEY

94028

(City)

(State)

(Zip)

Relationship of Reporting Person(s) to Issuer

Director	X	10% Owner
Officer (give title below)		Other (specify below)

1. Name and Address of Reporting Person^*

WAN MARK A

(Last)

(First)

(Middle)

C/O THREE ARCH PARTNERS

3200 ALPINE RD

(Street)

PORTOLA VALLEY

94028

(City)

(State)

(Zip)

Relationship of Reporting Person(s) to Issuer

X	Director	10% Owner
	Officer (give title below)	Other (specify below)

1. Name and Address of Reporting Person^*

JAEGER WILFRED E

(Last)

(First)

(Middle)

C/O THREE ARCH PARTNERS

3200 ALPINE RD

(Street)

PORTOLA VALLEY

94028

(City)

(State)

(Zip)

Relationship of Reporting Person(s) to Issuer

Director	X	10% Owner
Officer (give title below)		Other (specify below)

1. Name and Address of Reporting Person^*

THREE ARCH PARTNERS III LP

(Last)

(First)

(Middle)

(Street)

(City)

(State)

(Zip)

Relationship of Reporting Person(s) to Issuer

Director	X	10% Owner
Officer (give title below)		Other (specify below)

1. Name and Address of Reporting Person^*

THREE ARCH ASSOCIATES III LP

(Last)

(First)

(Middle)

C/O THREE ARCH PARTNERS

3200 ALPINE ROAD

(Street)

PORTOLA VALLEY

94028

(City)

(State)

(Zip)

Relationship of Reporting Person(s) to Issuer

Director	X	10% Owner
Officer (give title below)		Other (specify below)

Explanation of Responses:

1. The shares reflect the automatic conversion of 22,959 shares of the Issuer's Series A Convertible Preferred Stock for 31,357 shares of the Issuer's Common Stock immediately prior to the closing of the Issuer's initial public offering.

2. The shares are held by Three Arch Associates III, L.P. The voting and dispositive decisions with respect to the shares held by Three Arch Associates III, L.P., are made by the following Managing Members of its general partner Three Arch Management III, L.L.C.: Mark Wan and Wilfred Jaeger, each of whom disclaims beneficial ownership of such shares.

3. The shares reflect the automatic conversion of 427,040 shares of the Issuer's Series A Convertible Preferred Stock for 583,255 shares of the Issuer's Common Stock immediately prior to the closing of the Issuer's initial public offering.

4. The shares are held by Three Arch Partners III, L.P. The voting and dispositive decisions with respect to the shares held by Three Arch Partners III, L.P., are made by the following Managing Members of its general partner Three Arch Management III, L.L.C.: Mark Wan and Wilfred Jaeger, each of whom disclaims beneficial ownership of such shares.

5. The shares reflect the automatic conversion of 16,741 shares of the Issuer's Series B Convertible Preferred Stock for 25,106 shares of the Issuer's Common Stock immediately prior to the closing of the Issuer's initial public offering.

6. The shares reflect the automatic conversion of 311,384 shares of the Issuer's Series B Convertible Preferred Stock for 466,990 shares of the Issuer's Common Stock immediately prior to the closing of the Issuer's initial public offering.

7. The shares reflect the automatic conversion of shares of the Issuer's Series C Convertible Preferred Stock into Common Stock on a one-for-one basis upon the closing of the Issuer's initial public offering.

8. Notes and accrued interest in the aggregate of $108,572.10 converted automatically upon the closing of the Issuer's initial public offering into shares of Common Stock at a conversion price of $4.00, which is 80.0% of the per share price of the Common Stock sold in the Issuer's initial public offering.

9. Notes and accrued interest in the aggregate of $2,019,445.02 converted automatically upon the closing of the Issuer's initial public offering into shares of Common Stock at a conversion price of $4.00, which is 80.0% of the per share price of the Common Stock sold in the Issuer's initial public offering.

10. Immediately convertible into shares of the Issuer's Common Stock.

11. These shares have no expiration date.

12. A note with the principal amount plus accrued interest of $98,433.72 converted automatically upon the closing of the Issuer's initial public offering into shares of Common Stock at a conversion price of $4.00 which is of 80.0% of the per share price of the Common Stock sold in the Issuer's initial public offering.

13. A note with the principal amount plus accrued interest of $1,830,866.97 converted automatically upon the closing of the Issuer's initial public offering into shares of Common Stock at a conversion price of $4.00 which is 80.0% of the per share price of the Common Stock sold in the Issuer's initial public offering.

14. The exercise price is $3.942 per share.

15. Immediately exercisable prior to and contingent upon the closing of the Issuer's initial public offering.

16. Pursuant to its terms, the warrant was to be terminated at the closing of the Issuer's initial public offering. Holder elected to net exercise the warrants immediately prior to the closing of the Issuer's initial public offering. In the event the Issuer's public offering did not occur, the warrant would have terminated on September 14, 2017, unless earlier terminated in accordance with its terms, in a liquidation or change of control transaction.

21. These shares represent the net exercise of a warrant to purchase Series C Convertible Preferred Stock for an acquisition of 1,297 shares of Series C Convertible Preferred Stock of the Issuer.

22. These shares represent the net exercise of a warrant to purchase Series C Convertible Preferred Stock for an acquisition of 24,130 shares of Series C Convertible Preferred Stock of the Issuer.

Remarks:

Form 1 of 2.

	/s/ Stephen J. Bonelli, Attorney-in-fact	02/18/2011
	** Signature of Reporting Person	Date
Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
* If the form is filed by more than one reporting person, see Instruction 4 (b)(v).
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