TALPHERA, INC. — Director's Dealing 2011

Feb 18, 2011

SEC Form 4 — Statement of Changes in Beneficial Ownership

Issuer: ACELRX PHARMACEUTICALS INC (ACRX)
CIK: 0001427925
Period of Report: 2011-02-16

Reporting Person: Skyline Venture Partners Qualified Purchaser Fund IV L P (10% Owner)
Reporting Person: Skyline Venture Management IV, LLC (10% Owner)
Reporting Person: HOFFMAN STEPHEN J (Director)
Reporting Person: KANEKO YASUNORI (10% Owner)
Reporting Person: Freund John Gordon (10% Owner)

Non-Derivative Transactions

Date	Security	Code	Shares	Price	A/D	Holdings After	Ownership
2011-02-16	Common Stock	C	682904	—	Acquired	682904	Indirect
2011-02-16	Common Stock	C	468664	—	Acquired	1151568	Indirect
2011-02-16	Common Stock	C	915798	—	Acquired	2067366	Indirect
2011-02-16	Common Stock	C	554685	—	Acquired	2622051	Indirect
2011-02-16	Common Stock	C	29241	—	Acquired	2651292	Indirect
2011-02-16	Common Stock	P	1235943	$5.00	Acquired	3877235	Indirect

Derivative Transactions

Date	Security	Exercise Price	Code	Shares	A/D	Expiration	Underlying	Ownership
2011-02-16	Series A Convertible Preferred Stock	$	C	500000	Disposed		Common Stock (682904)	Indirect
2011-02-16	Series B Convertible Preferred Stock	$	C	312500	Disposed		Common Stock (468664)	Indirect
2011-02-16	Series C Convertible Preferred Stock	$	C	915798	Disposed		Common Stock (915798)	Indirect
2011-02-16	Convertible Promissory Note	$	C		Disposed		Common Stock (502890)	Indirect
2011-02-16	Warrant to purchase Series C Convertible Preferred Stock	$	X	125386	Disposed		Series C Preferred Stock (125386)	Indirect
2011-02-16	Series C Convertible Preferred Stock	$	X	125386	Acquired		Common Stock (125386)	Indirect
2011-02-16	Series C Convertible Preferred Stock	$5.00	S	98875	Disposed		Common Stock (98875)	Indirect
2011-02-16	Series C Convertible Preferred Stock	$	C	26511	Disposed		Common Stock (26511)	Indirect
2011-02-16	Warrant to purchase Series C Convertible Preferred Stock	$	J	12914	Acquired		Series C Preferred Stock (12914)	Indirect
2011-02-16	Warrant to purchase Series C Convertible Preferred Stock	$	X	12914	Disposed		Series C Preferred Stock (12914)	Indirect
2011-02-16	Series C Convertible Preferred Stock	$	X	12914	Acquired		Common Stock (12914)	Indirect
2011-02-16	Series C Convertible Preferred Stock	$5.00	S	10184	Disposed		Common Stock (10184)	Indirect
2011-02-16	Series C Convertible Preferred Stock	$	C	2730	Disposed		Common Stock (2730)	Indirect
2011-02-16	Convertible Promissory Note	$	J		Acquired		Common Stock (51795)	Indirect
2011-02-16	Convertible Promissory Note	$	C		Disposed		Common Stock (51795)	Indirect

Footnotes

F1: The shares reflect the automatic conversion of 500,000 shares of the Issuer's Series A Convertible Preferred Stock for 682,904 shares of the Issuer's Common Stock immediately prior to the closing of the Issuer's initial public offering.

F2: The shares are held by Skyline Venture Partners Qualified Purchaser Fund IV, L.P. John G. Freund and Yasunori Kaneko are the Managing Members of Skyline Venture Management IV, LLC, which is the general partner of Skyline Venture Partners Qualified Purchaser Fund IV, L.P., and as such Drs. Freund and Kaneko may be deemed to share voting and dispositive power with respect to all shares of Common Stock held by Skyline Venture Partners Qualified Purchaser Fund IV, L.P. Stephen Hoffman, one of the Issuer's directors, is a Managing Director of Skyline Ventures and as such may be deemed to share voting and dispositive power with respect to all shares of Common Stock held by Skyline Venture Partners Qualified Purchasers Fund IV, L.P. Each of Drs. Freund, Kaneko and Hoffman disclaims beneficial ownership of such shares.

F3: The shares reflect the automatic conversion of 312,500 shares of the Issuer's Series B Convertible Preferred Stock for 468,664 shares of the Issuer's Common Stock immediately prior to the closing of the Issuer's initial public offering.

F4: 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.

F5: Notes and accrued interest in the aggregate of $2,218,743.81 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.

F6: Immediately convertible into shares of the Issuer's Common Stock.

F7: These shares have no expiration date.

F8: Notes and accrued interest in the aggregate of $2,011,560.11 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.

F9: The exercise price is $3.942 per share.

F10: Immediately exercisable prior to and contingent upon the closing of the Issuer's initial public offering.

F11: 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.

F12: Pursuant to that certain Note and Warrant Transfer Agreement dated February 16, 2011, ACP IV, L.P. transferred (i) a convertible promissory note in the amount of $207,183.70 including accrued interest and (ii) an associated warrant to purchase preferred stock of the Issuer, exercisable into 12,914 shares of Series C Convertible Preferred Stock to Skyline Venture Partners Qualified Purchaser Fund IV, L.P., for a nominal consideration, contingent upon the closing of the Issuer's initial public offering.

F13: A note with the principal amount plus accrued interest of $207,183.70 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.

F14: These shares represent the net exercise of a warrant to purchase Series C Convertible Preferred Stock for an acquisition of 26,511 shares of Series C Convertible Preferred Stock of the Issuer.

F15: These shares represent the net exercise of a warrant to purchase Series C Convertible Preferred Stock for an acquisition of 2,730 shares of Series C Convertible Preferred Stock of the Issuer.