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: ACP IV, L.P. (10% Owner)
Reporting Person: NOHRA GUY P (Director, 10% Owner)
Reporting Person: JANNEY DANIEL (10% Owner)
Reporting Person: DELEAGE JEAN (10% Owner)
Reporting Person: Mack David Henry (10% Owner)
Reporting Person: ACMP IV LLC (10% Owner)

Non-Derivative Transactions

Date	Security	Code	Shares	Price	A/D	Holdings After	Ownership
2011-02-16	Common Stock	C	682904	—	Acquired	682904	Direct
2011-02-16	Common Stock	C	328064	—	Acquired	1010968	Direct
2011-02-16	Common Stock	C	810129	—	Acquired	1821097	Direct
2011-02-16	Common Stock	C	279097	—	Acquired	2100194	Direct
2011-02-16	Common Stock	C	14713	—	Acquired	2114897	Direct
2011-02-16	Common Stock	P	680000	$5.00	Acquired	2794907	Direct

Derivative Transactions

Date	Security	Exercise Price	Code	Shares	A/D	Expiration	Underlying	Ownership
2011-02-16	Series A Convertible Prefered Stock	$	C	500000	Disposed		Common Stock (682904)	Direct
2011-02-16	Series B Convertible Preferred Stock	$	C	218750	Disposed		Common Stock (328064)	Direct
2011-02-16	Series C Convertible Preferred Stock	$	C	810129	Disposed		Common Stock (810129)	Direct
2011-02-16	Convertible Promissory Notes	$	J		Disposed		Common Stock (163914)	Direct
2011-02-16	Warrant to Purchase Series C Convertible Preferred Stock	$	J	40865	Disposed		Series C Preferred (40865)	Direct
2011-02-16	Convertible Promissory Notes	$	C		Disposed		Common Stock (279097)	Direct
2011-02-16	Warrant to Purchase Series C Convertible Preferred Stock	$	X	69588	Disposed		Series C Preferred (69588)	Direct
2011-02-16	Series C Convertible Preferred Stock	$	X	69588	Acquired		Common Stock (69588)	Direct
2011-02-16	Series C Convertible Preferred Stock	$	S	54875	Disposed		Common Stock (54875)	Direct
2011-02-16	Series C Convertible Preferred Stock	$	C	14713	Disposed		Common Stock (14713)	Direct

Footnotes

F1: The shares reflect the automatic conversion of 500,000 shares of the Issuer's Series A 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: ACMP IV, LLC ("ACMPIV") is the general partner of ACP IV, L.P. ("ACPIV") Jean Deleage, Daniel Janney, David Mack, and Guy Nohra are directors of ACMPIV and may be deemed to share voting and dispositive power with respect to all securities of the Issuer held by ACPIV. Guy Nohra is also a director of the Issuer. Mr. Deleage, Mr. Janney, Mr. Mack, and Mr. Nohra disclaim beneficial ownership of such securities except to the extent of his proportionate pecuniary interest therein.

F3: The shares reflect the automatic conversion of 218,750 shares of Series B Preferred Stock for 328,064 shares of 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 Preferred Stock into Common Stock on a one-to-one basis upon the closing of the Issuer's initial public offering.

F5: Notes and accrued interest in the aggregate of $1,116,388.59 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% 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: Pursuant to Note and Warrant Transfer Agreement dated February 16, 2011, ACP IV, L.P. transferred (i)a convertible promissory note in the amount of $655,656.79 including accrued interest and (ii)an associated warrant to purchase preferred stock on the Issuer, exercisable into 40,865 shares of Series C Preferred Stock.

F9: Principal amount plus interest converts 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% of the per share price of the Common Stock sold in the Issuer's initial public offering.

F10: The exercise price is $3.9428 per share and immediately exercisable prior to and contingent upon the closing of the Issuer's initial public offering.

F11: Pursuant to its terms, warrant would terminate at the closing of the Issuer's intial 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 its terms, warrant shall terminate at the closing of the Issuer's intial public offering. Holder has elected to net exercise the warrants contingent upon and effective immediately prior to the closing of the Issuer's initial public offering of common stock.

F13: These shares reflect the net exercise of the Series C warrant pursuant to the terms fo the warrant into 14,713 shares of the Issuer's Series C Preferred Stock.