Edgar Filing: THREE ARCH ASSOCIATES IV LP

Ownership Submission

FORM 4

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

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP OF SECURITIES

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940

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1. Name and Address of Reporting Person ^*

Three Arch Management IV, L.L.C.

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)

(Last)

(First)

(Middle)

3200 ALPINE ROAD,

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

(Street)

PORTOLA VALLEY, CA 94028

4. If Amendment, Date 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

(City)

(State)

(Zip)

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		13,277	A	⁽¹⁾	13,277	I	See Footnote ⁽²⁾
Common Stock	02/16/2011		C		601,335	A	⁽³⁾	601,335	I	See Footnote ⁽⁴⁾
Common Stock	02/16/2011		C		10,630	A	⁽⁵⁾	23,907	I	See Footnote ⁽²⁾
Common Stock	02/16/2011		C		481,465	A	⁽⁶⁾	1,082,800	I	See Footnote ⁽⁴⁾
Common Stock	02/16/2011		C		18,928	A	⁽⁷⁾	42,835	I	See Footnote ⁽²⁾
Common Stock	02/16/2011		C		857,241	A	⁽⁷⁾	1,940,041	I	See Footnote ⁽⁴⁾
Common Stock	02/16/2011		C		11,492	A	⁽⁸⁾	54,327	I	See Footnote ⁽²⁾
Common Stock	02/16/2011		C		520,510	A	⁽⁹⁾	2,460,551	I	See Footnote ⁽⁴⁾
Common Stock	02/16/2011		C		605	A	⁽⁷⁾	54,932	I	See Footnote ⁽²⁾
Common Stock	02/16/2011		C		27,440	A	⁽⁷⁾	2,487,991	I	See Footnote ⁽⁴⁾
Common Stock	02/16/2011		P		27,863	A	$ 5	82,795	I	See Footnote ⁽²⁾
Common Stock	02/16/2011		P		1,261,927	A	$ 5	3,749,918	I	See Footnote ⁽⁴⁾

Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
	Persons who respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.		SEC 1474 (9-02)

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 Underlying Securities
(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 of Derivative Security: Direct (D) or Indirect (I)
(Instr. 4)

11. Nature of Indirect Beneficial Ownership
(Instr. 4)

Code

(A)

(D)

Date Exercisable

Expiration Date

Title

Amount or Number of Shares

Series A Convertible Preferred Stock

⁽¹⁾

02/16/2011

9,721

⁽¹⁰⁾

⁽¹¹⁾

Common Stock

13,277

$ 0

See Footnote ⁽²⁾

Series A Convertible Preferred Stock

⁽³⁾

02/16/2011

440,278

⁽¹⁰⁾

⁽¹¹⁾

Common Stock

601,335

$ 0

See Footnote ⁽⁴⁾

Series B Convertible Preferred Stock

⁽⁵⁾

02/16/2011

7,088

⁽¹⁰⁾

⁽¹¹⁾

Common Stock

10,630

$ 0

See Footnote ⁽²⁾

Series B Convertible Preferred Stock

⁽⁶⁾

02/16/2011

321,036

⁽¹⁰⁾

⁽¹¹⁾

Common Stock

481,465

$ 0

See Footnote ⁽⁴⁾

Series C Convertible Preferred Stock

⁽⁷⁾

02/16/2011

18,928

⁽¹⁰⁾

⁽¹¹⁾

Common Stock

18,928

$ 0

See Footnote ⁽²⁾

Series C Convertible Preferred Stock

⁽⁷⁾

02/16/2011

857,241

⁽¹⁰⁾

⁽¹¹⁾

Common Stock

857,241

$ 0

See Footnote ⁽⁴⁾

Convertible Promissory Note

⁽¹²⁾

02/16/2011

$ 40,973.37

⁽¹²⁾

Common Stock

10,419

$ 0

See Footnote ⁽²⁾

Convertible Promissory Note

⁽¹³⁾

02/16/2011

$ 1,855,666.23

⁽¹³⁾

Common Stock

471,905

$ 0

See Footnote ⁽⁴⁾

Warrant to purchase Series C Convertible Preferred Stock

⁽¹⁴⁾

02/16/2011

2,597

⁽¹⁵⁾

⁽¹⁶⁾

Series C Preferred Stock

2,597

$ 0

See Footnote ⁽²⁾

Series C Convertible Preferred Stock

⁽¹⁴⁾

02/16/2011

2,597

⁽¹⁰⁾

⁽¹¹⁾

Common Stock

2,597

$ 0

2,597

See Footnote ⁽²⁾

Series C Convertible Preferred Stock

$ 5

02/16/2011

2,048 ⁽²¹⁾

⁽¹⁰⁾

⁽¹¹⁾

Common Stock

2,048

$ 0

549

See Footnote ⁽²⁾

Series C Convertible Preferred Stock

⁽⁷⁾

02/16/2011

549

⁽¹⁰⁾

⁽¹¹⁾

Common Stock

549

$ 0

See Footnote ⁽²⁾

Warrant to purchase Series C Convertible Preferred Stock

⁽¹⁴⁾

02/16/2011

117,661

⁽¹⁵⁾

⁽¹⁶⁾

Series C Preferred Stock

117,661

$ 0

See Footnote ⁽⁴⁾

Series C Convertible Preferred Stock

⁽¹⁴⁾

02/16/2011

117,661

⁽¹⁰⁾

⁽¹¹⁾

Common Stock

117,661

$ 0

117,661

See Footnote ⁽⁴⁾

Series C Convertible Preferred Stock

$ 5

02/16/2011

92,783 ⁽²²⁾

⁽¹⁰⁾

⁽¹¹⁾

Common Stock

92,783

$ 0

24,878

See Footnote ⁽⁴⁾

Reporting Owners

Reporting Owner Name / Address	Relationships
Reporting Owner Name / Address	Director	10% Owner	Officer	Other
Three Arch Management IV, L.L.C. 3200 ALPINE ROAD PORTOLA VALLEY, CA 94028		X
THREE ARCH ASSOCIATES IV LP 3200 ALPINE ROAD PORTOLA VALLEY, CA 94028		X
WAN MARK A C/O THREE ARCH PARTNERS 3200 ALPINE RD PORTOLA VALLEY, CA 94028	X
JAEGER WILFRED E C/O THREE ARCH PARTNERS 3200 ALPINE RD PORTOLA VALLEY, CA 94028		X
THREE ARCH PARTNERS IV LP		X

Signatures

/s/ Stephen J. Bonelli, Attorney-in-fact		02/18/2011
^**Signature of Reporting Person		Date

Explanation of Responses:

*	If the form is filed by more than one reporting person, see Instruction 4(b)(v).
**	Intentional misstatements or omissions of facts constitute Federal Criminal Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
(1)	The shares reflect the automatic conversion of 9,721 shares of the Issuer's Series A Convertible Preferred Stock for 13,277 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 IV, L.P. The voting and dispositive decisions with respect to the shares held by Three Arch Associates IV, L.P., are made by the following Managing Members of its general partner Three Arch Management IV, 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 440,278 shares of the Issuer's Series A Convertible Preferred Stock for 601,335 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 IV, L.P. The voting and dispositive decisions with respect to the shares held by Three Arch Partners IV, L.P., are made by the following Managing Members of its general partner Three Arch Management IV, 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 7,088 shares of the Issuer's Series B Convertible Preferred Stock for 10,630 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 321,036 shares of the Issuer's Series B Convertible Preferred Stock for 481,465 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 $45,971.78 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 $2,082,045.53 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 $41,679.02 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 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 $1,887,621.87 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 549 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 24,878 shares of Series C Convertible Preferred Stock of the Issuer.
Remarks: Form 1 of 2

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