As filed with the U.S. Securities and Exchange Commission on April 6, 2020

Registration No. 333-                

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-4

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

ACELRX PHARMACEUTICALS, INC.

(Exact name of registrant as specified in its charter)

351 Galveston Drive

Redwood City, CA 94063

(650) 216-3500

(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)

Raffi Asadorian

Chief Financial Officer

AcelRx Pharmaceuticals, Inc.

351 Galveston Drive

Redwood City, CA 94063

(650) 216-3500

(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service)

Copies to:

Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable on or after the effective date of this registration statement and all other conditions to the merger described in the enclosed proxy statement/prospectus have been satisfied or waived.

If the securities being registered on this Form are to be offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box.  ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.  ☐

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer)  ☐

Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer)  ☐

CALCULATION OF REGISTRATION FEE

The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to Section 8(a), may determine.

The information contained in this proxy statement/prospectus is not complete and may be changed. AcelRx Pharmaceuticals, Inc. may not distribute and issue the shares of AcelRx Pharmaceuticals, Inc. common stock being registered pursuant to the registration statement filed with the Securities and Exchange Commission, of which this document is a part, until the registration statement is declared effective. This proxy statement/prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities in any jurisdiction where an offer or solicitation is not permitted.

SUBJECT TO COMPLETION, DATED APRIL 6, 2020

PROXY STATEMENT OF TETRAPHASE PHARMACEUTICALS, INC.		PROSPECTUS OF ACELRX PHARMACEUTICALS, INC.

PROPOSED MERGER—YOUR VOTE IS VERY IMPORTANT

Dear Tetraphase Stockholder:

We cordially invite you to attend a special meeting of the stockholders of Tetraphase Pharmaceuticals, Inc., a Delaware corporation, which we refer to as “we,” “us,” “our,” “Tetraphase” or the “Company,” to be held via the Internet at a virtual web conference at www.proxydocs.com/ttph on [DATE], at [TIME], Eastern Time. We are holding this special meeting virtually in order to support the health and well-being of our stockholders, employees and directors in light of the recent novel coronavirus (“COVID-19”) outbreak.

On March 15, 2020, the Company entered into an agreement and plan of merger, which we refer to as the merger agreement, with AcelRx Pharmaceuticals, Inc., a Delaware corporation, which we refer to as AcelRx, and Consolidation Merger Sub, Inc., a Delaware corporation and an indirect wholly-owned subsidiary of AcelRx, which we refer to as Merger Sub, providing for the merger of Merger Sub with and into the Company, with the Company surviving the merger as an indirect wholly-owned subsidiary of AcelRx, which we refer to as the merger.

At the special meeting, you will be asked to consider and vote on the following matters:

Approval of the merger agreement proposal is required for completion of the merger. Neither the compensation proposal nor the adjournment proposal is a condition to the obligations of the Company or AcelRx to complete the merger.

If the merger is consummated, each share of Tetraphase common stock issued and outstanding immediately prior to the effective time of the merger will, other than excluded shares (as defined in the accompanying proxy statement/prospectus), be converted into the right to receive, in accordance with the terms of the merger agreement, (1) a number of shares of AcelRx’s common stock, par value $0.001 per share, equal to 0.6303 (the “Exchange Ratio”); provided that if the Company’s closing net cash (“Closing Net Cash”) is less than $5.0 million, the Exchange Ratio shall be adjusted to the ratio determined as follows: (a) (i) $20.0 million, minus (ii) the dollar amount by which the Closing Net Cash is less than $5.0 million, minus (iii) $10,265,292, divided by (b) (i) 10,800,166 shares of Tetraphase common stock divided by (ii) $1.43, and (2) one contingent value right per share (a “CVR”) representing the right to receive up to $12.5 million (payable in cash or shares of AcelRx’s common stock, at AcelRx’s election), subject to the achievement of net sales milestones pursuant to the CVR Agreement (as defined below), which we refer to as the merger consideration.

The board of directors of the Company, which we refer to as the Tetraphase Board, has unanimously adopted and approved the merger agreement and recommended that the Company’s stockholders vote in favor of the merger agreement proposal. The Tetraphase Board made its determination after consultation with its legal and financial

advisors and consideration of a number of factors. The Tetraphase Board unanimously recommends that you vote “FOR” the merger agreement proposal, “FOR” the compensation proposal and “FOR” the adjournment proposal, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to adopt the merger agreement.

Your vote is very important. The merger cannot be completed unless the holders of a majority of the outstanding shares of our common stock entitled to vote at the special meeting vote in favor of the merger agreement proposal.

The accompanying proxy statement/prospectus provides you with detailed information about the special meeting, the merger agreement and the merger. A copy of the merger agreement is attached as Annex A to the accompanying proxy statement/prospectus. We encourage you to carefully read the entire proxy statement/prospectus and its annexes, including the merger agreement. You also may obtain additional information about the Company from documents we have filed with the Securities and Exchange Commission by following the instructions listed in the section of the accompanying proxy statement/prospectus titled “Where You Can Find More Information.”

In general, the exchange of Tetraphase common stock for the merger consideration in the merger is expected to be a taxable transaction for U.S. federal income tax purposes. We encourage Tetraphase stockholders to carefully review the information under the section titled “Material U.S. Federal Income Tax Consequences of the Merger for Tetraphase Stockholders” beginning on page 180 of the accompanying proxy statement/prospectus for a description of material U.S. federal income tax consequences of the merger.

If you have any questions or need assistance submitting a proxy to have your shares of Tetraphase common stock voted at the special meeting, please call Alliance Advisors LLC, the Company’s proxy solicitor, at (855) 742-8268.

Thank you in advance for your cooperation and continued support.

Sincerely,

L. Patrick Gage, PhD.

Chairman of the Board

Larry Edwards

Chief Executive Officer

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the merger or the other transactions described in this proxy statement/prospectus or the securities to be issued in connection with the merger or determined if this proxy statement/prospectus is accurate or complete. Any representation to the contrary is a criminal offense.

This proxy statement/prospectus is dated                , 2020 and is expected to be first mailed to Tetraphase stockholders on or about                , 2020.

Tetraphase Pharmaceuticals, Inc.

480 Arsenal Way

Watertown, MA 02472

Notice of Special Meeting of Stockholders to be Held on                 , 2020

To the Stockholders of Tetraphase Pharmaceuticals, Inc.:

Notice is hereby given that Tetraphase Pharmaceuticals, Inc., which is referred to as Tetraphase, will hold a special meeting of its stockholders, which is referred to as the Tetraphase special meeting, via the Internet at a virtual web conference at www.proxydocs.com/ttph on [DATE], at [TIME], Eastern Time, for the purpose of considering and voting on the following proposals:

Tetraphase will transact no other business at the Tetraphase special meeting or any adjournment or postponement thereof. The accompanying proxy statement/prospectus, including the merger agreement attached thereto as Annex A, contains further information with respect to these matters.

Only holders of record of Tetraphase common stock at the close of business on                , 2020, the record date for notice of and voting at the Tetraphase special meeting, which is referred to as the record date, are entitled to notice of and to vote at the Tetraphase special meeting.

The board of directors of Tetraphase, which is referred to as the Tetraphase Board, has unanimously approved and declared advisable the merger agreement and the transactions contemplated by the merger agreement on the terms and subject to the conditions set forth in the merger agreement. The Tetraphase Board unanimously recommends that Tetraphase stockholders vote “FOR” the merger agreement proposal, “FOR” the compensation proposal and “FOR” the adjournment proposal.

Your vote is very important, regardless of the number of shares of Tetraphase common stock you own. Tetraphase cannot complete the transactions contemplated by the merger agreement, including the merger, without approval of the merger agreement proposal. Assuming a quorum is present, the approval of the merger agreement proposal requires the affirmative vote of the holders of a majority of the outstanding shares of Tetraphase common stock entitled to vote on the proposal.

To support the health and well-being of Tetraphase’s stockholders, employees and directors in light of the recent novel coronavirus (“COVID-19”) outbreak, the special meeting will be a “virtual meeting” of stockholders, which will be conducted exclusively via the Internet at a virtual web conference. There will not be a physical meeting location, and stockholders will not be able to attend the special meeting in person. This means that you can attend the special meeting online, vote your shares during the online meeting and submit questions during the online meeting by visiting the above-mentioned Internet site. In light of the public health and safety concerns related to COVID-19, we believe that hosting a “virtual meeting” will enable greater stockholder attendance and participation from any location around the world.

Whether or not you plan to attend the Tetraphase special meeting via virtual web conference, Tetraphase urges you to please promptly mark, sign and date the accompanying proxy card and return it in the enclosed postage-paid envelope, or call the telephone number or use the Internet as described in the instructions included with the proxy card, so that your shares may be represented and voted at the Tetraphase special meeting. If you hold your shares through a broker, bank or other nominee in “street name” (instead of as a registered holder) and you wish to vote during the Tetraphase special meeting, you will receive instructions from the holder of record that you must follow for your shares to be voted. Instructions on how to attend and participate online, including how to demonstrate proof of stock ownership, are posted at www.proxydocs.com/ttph. A list of registered stockholders as of the close of business on the record date will be available for examination by any stockholder for any purpose germane to the special meeting at www.proxydocs.com/ttph for a period of at least 10 days prior to the special meeting. This list will also be available for examination by the stockholders during the whole time of the special meeting at www.proxydocs.com/ttph.

If you have any questions about the merger or about how to vote or direct a vote in respect of your shares of Tetraphase common stock, you may contact Tetraphase’s proxy solicitor, Alliance Advisors LLC, at (855) 742-8268.

By Order of the Board of Directors,

Larry Edwards

Chief Executive Officer

Watertown, Massachusetts

Dated:                 , 2020

Your vote is important. Tetraphase stockholders are requested to complete, date, sign and return the enclosed proxy card in the envelope provided, which requires no postage if mailed in the United States, or to submit a proxy to vote your shares electronically through the Internet or by telephone.

ABOUT THIS PROXY STATEMENT/PROSPECTUS

AcelRx Pharmaceuticals, Inc. (“AcelRx”) has supplied all information contained in or incorporated by reference into this proxy statement/prospectus relating to AcelRx. Tetraphase Pharmaceuticals, Inc. (“Tetraphase”) has supplied all information contained in this proxy statement/prospectus relating to Tetraphase. AcelRx and Tetraphase have both contributed to information relating to the proposed merger.

No one has been authorized to provide you with information that is different from that contained in or incorporated by reference into this proxy statement/prospectus. We take no responsibility for, and can provide no assurance as to the reliability of, any information others may give you. This proxy statement/prospectus is dated                 , 2020, and is based on information as of that date or such other date as may be noted. You should not assume that the information contained in this proxy statement/prospectus is accurate as of any other date. You should not assume that the information contained in any document incorporated or deemed to be incorporated by reference herein is accurate as of any date other than the date of such document. Any statement contained in a document incorporated or deemed to be incorporated by reference into this proxy statement/prospectus will be deemed to be modified or superseded to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference into this proxy statement/prospectus modifies or supersedes that statement. Any statement so modified or superseded will not be deemed, except as so modified or superseded, to constitute a part of this proxy statement/prospectus. Neither the mailing of this proxy statement/prospectus to the stockholders of Tetraphase nor the taking of any actions contemplated hereby by AcelRx or Tetraphase at any time will create any implication to the contrary.

This proxy statement/prospectus does not constitute an offer to sell, or a solicitation of an offer to buy, any securities, or the solicitation of a proxy, in any jurisdiction in which or from any person to whom it is unlawful to make any such offer or solicitation in such jurisdiction.

Unless otherwise indicated or as the context otherwise requires, all references in this proxy statement/prospectus to:

REFERENCES TO ADDITIONAL INFORMATION

This proxy statement/prospectus incorporates by reference important business and financial information about AcelRx and Tetraphase from documents AcelRx and Tetraphase have filed or will file with the SEC that are not included in or delivered with this proxy statement/prospectus. This information is available to you without charge upon your written or oral request and must be made no later than five business days before the date of the Special Meeting. You can obtain documents incorporated by reference into this proxy statement/prospectus by requesting them in writing or by telephone using the following contact information:

If you would like to request any documents, please do so by                , 2020, or the date that is five business days before the date of the Special Meeting, in order to receive them before the Special Meeting.

For additional information on the documents incorporated by reference into this proxy statement/prospectus, see “Where You Can Find More Information” beginning on page 196 of this proxy statement/prospectus and “Incorporation of Certain Information by Reference” beginning on page 197 of this proxy statement/prospectus.

TABLE OF CONTENTS

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QUESTIONS AND ANSWERS

Q: Why did I receive these proxy materials?

A: You are receiving this proxy statement/prospectus because you were a stockholder of record of Tetraphase on the Record Date for the Special Meeting to be held via the Internet at a virtual web conference at www.proxydocs.com/ttph on [DATE], at [TIME], Eastern Time. You are invited to attend the Special Meeting online and are requested to vote on the items of business described in this proxy statement/prospectus.

Q: What is the purpose of the Special Meeting?

A: At the Special Meeting, Tetraphase stockholders will consider and vote on the following matters:

Q: What is the Merger?

A: AcelRx, Tetraphase, and Merger Sub entered into an Agreement and Plan of Merger, dated as of March 15, 2020, pursuant to which, among other things, Merger Sub will be merged with and into Tetraphase, with Tetraphase continuing as the surviving corporation and an indirect wholly-owned subsidiary of AcelRx. The Merger Agreement, as it may be amended from time to time, contains the terms and conditions of the proposed merger transaction between AcelRx, Tetraphase, and Merger Sub. This proposed merger transaction is referred to as the Merger.

At the Effective Time, each share of Tetraphase Common Stock outstanding immediately prior to the Effective Time (other than shares owned by AcelRx, Merger Sub or Tetraphase or any direct or indirect wholly-owned subsidiary of AcelRx or Tetraphase or by stockholders of Tetraphase who have exercised and perfected their statutory rights of appraisal as more fully described in the section titled “The Merger—Appraisal Rights” in this proxy statement/prospectus) will be converted into the right to receive the Merger Consideration.

Each outstanding share of Tetraphase Common Stock will be automatically converted into the right to receive (i) 0.6303 of a share of AcelRx Common Stock (subject to adjustment as described below), plus (ii) one CVR, plus (iii) any cash payable in lieu of fractional shares of AcelRx Common Stock.

The Exchange Ratio is subject to a potential downward adjustment if the Tetraphase Net Cash is less than $5.0 million at the closing of the Merger.

The Merger Agreement also provides that:

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At the Effective Time, AcelRx’s stockholders will continue to own and hold their existing shares of AcelRx Common Stock.

Q: What will I receive for my shares of Tetraphase Common Stock in the Merger?

A: In the Merger, each issued and outstanding share of Tetraphase Common Stock immediately prior to the Effective Time will be automatically cancelled and converted into the right to receive (i) 0.6303 of a share of AcelRx Common Stock (subject to adjustment as described herein), plus (ii) one CVR, plus (iii) any cash payable in lieu of fractional shares of AcelRx Common.

After the consummation of the Merger, Tetraphase stockholders will own shares of AcelRx Common Stock and will no longer own shares of Tetraphase Common Stock. See “The Merger Agreement” beginning on page 90 of this proxy statement/prospectus.

Q: Where will the shares of AcelRx Common Stock that I receive in the Merger be traded?

A: Shares of AcelRx Common Stock are listed on Nasdaq under the symbol “ACRX.” AcelRx will apply to have the new shares of AcelRx Common Stock issued in the Merger listed on Nasdaq upon consummation of the Merger.

Q: What percentage of AcelRx Common Stock will Tetraphase stockholders own following the Merger?

A: Based on the number of shares of Tetraphase Common Stock and AcelRx Common Stock estimated to be outstanding on the Record Date for the Special Meeting, Tetraphase and AcelRx estimate that, upon completion of the Merger, former Tetraphase stockholders and certain other Tetraphase equityholders will own approximately 14.6% of the combined company on a fully diluted basis.

Q: Are AcelRx stockholders voting on the Merger?

A: No. No vote of AcelRx’s stockholders is required to complete the Merger.

Q: When is the Merger expected to be completed?

A: AcelRx and Tetraphase are working toward completing the Merger as expeditiously as possible and currently expect the Merger to be completed in the second quarter of 2020. However, AcelRx and Tetraphase cannot be certain when, or if, the conditions to the Merger will be satisfied or waived, or that the Merger will be completed.

Q: Who can vote at the Special Meeting?

A: To be entitled to vote, you must have been a stockholder of record at the close of business on the Record Date. There were            shares of Tetraphase Common Stock outstanding and entitled to vote at the Special Meeting as of the Record Date.

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Q: Why is the Special Meeting of stockholders a virtual, online meeting?

A: To support the health and well-being of Tetraphase stockholders, employees and directors in light of the recent novel coronavirus (“COVID-19”) outbreak, the Tetraphase Special Meeting will be a virtual meeting of stockholders where stockholders will participate by accessing a website using the Internet. There will not be a physical meeting location. In light of the public health and safety concerns related to COVID-19, Tetraphase believes that hosting a virtual meeting will facilitate stockholder attendance and participation at the Tetraphase Special Meeting by enabling stockholders to participate remotely from any location around the world. Tetraphase has designed the virtual Special Meeting to provide the same rights and opportunities to participate as stockholders would have at an in-person meeting, including the right to vote and ask questions through the virtual meeting platform. If the Contemplated Transactions are not consummated, Tetraphase intends to return to holding in person meetings as soon as it is safe to do so.

Q: How do I virtually attend the Special Meeting?

A: Tetraphase will host the Special Meeting live online via webcast. You may attend the Special Meeting live online by visiting www.proxydocs.com/ttph. The webcast will start at [TIME], Eastern Time, on [DATE]. You will need the control number included on your proxy card or voting instruction form in order to be able to enter the Special Meeting online. Instructions on how to attend and participate online, including how to demonstrate proof of stock ownership, are posted at www.proxydocs.com/ttph. Online check-in will begin at [TIME], Eastern Time on [DATE], and you should allow ample time for the online check-in proceedings. Tetraphase will have technicians standing by and ready to assist you with any technical difficulties you may have accessing the Special Meeting starting at [TIME], Eastern Time, on [DATE]. If you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, please call: [DOMESTIC PHONE NUMBER] (domestic) or [INTERNATIONAL PHONE NUMBER] (international).

Q: May I see a list of stockholders entitled to vote as of the Record Date?

A: A list of registered stockholders as of the close of business on the Record Date will be available for examination by any stockholder for any purpose germane to the Special Meeting at www.proxydocs.com/ttph for a period of at least 10 days prior to the Special Meeting. Such list will also be available for examination by the stockholders during the whole time of the Special Meeting at www.proxydocs.com/ttph.

Q: How do I submit a question at the Special Meeting?

A: If you wish to submit a question, on the day of the Special Meeting, beginning at [TIME], Eastern Time on [DATE], you may log into the virtual meeting platform at www.proxydocs.com/ttph, type your question into the “Ask a Question” field, and click “Submit.” Tetraphase’s virtual meeting will be governed by Tetraphase’s [RULES OF CONDUCT AND PROCEDURES] which will be posted at www.proxydocs.com/ttph in advance of the meeting. The [RULES OF CONDUCT AND PROCEDURES] will address the ability of stockholders to ask questions during the meeting, including rules on permissible topics, and rules for how questions and comments will be recognized and disclosed to meeting participants. All questions received from stockholders during the virtual Special Meeting will be posted on Tetraphase’s investor relations website at https://ir.tphase.com/investor-relations as soon as practicable following the Special Meeting.

Q: How many votes do I have?

A: Each share of Tetraphase Common Stock that you own as of the Record Date will entitle you to one vote on each matter considered at the Special Meeting.

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Q: How do I vote?

A: If you are the “record holder” of your shares, meaning that your shares are registered in your name in the records of Tetraphase’s transfer agent, American Stock Transfer & Trust Company, LLC, you may vote your shares during the meeting or by proxy as follows:

If your shares are held in “street name,” meaning they are held for your account by an intermediary, such as a broker, then you are deemed to be the beneficial owner of your shares and the broker that actually holds the shares for you is the record holder and is required to vote the shares it holds on your behalf according to your instructions. The proxy materials, as well as voting and revocation instructions, should have been forwarded to you by the broker that holds your shares. In order to vote your shares, you will need to follow the instructions that your broker provides you. Many brokers solicit voting instructions over the Internet or by telephone.

A “broker non-vote” occurs when shares held by a broker are not voted with respect to a particular proposal because the broker does not have or did not exercise discretionary authority to vote on the matter and has not received voting instructions from its clients. Because none of the proposals currently scheduled to be voted on at the Special Meeting are routine matters for which brokers may have discretionary authority to vote, Tetraphase does not expect there to be any broker non-votes at the Special Meeting.

Regardless of whether your shares are held in street name, you are welcome to virtually attend the Special Meeting. You may not vote shares held in street name during the meeting, however, unless you obtain a proxy, executed in your favor, from the holder of record (i.e., your broker).

Q: Are there risks associated with the Merger that I should consider in deciding how to vote?

A: Yes. There are a number of risks related to the Merger and the other Contemplated Transactions that are discussed in this proxy statement/prospectus and in the documents incorporated by reference into this proxy statement/prospectus. Please read carefully the detailed description of the risks described in “Risk Factors” beginning on page 27 of this proxy statement/prospectus.

Q: Can I change my vote?

A: If your shares are registered directly in your name, you may revoke your proxy and change your vote at any time before the vote is taken at the Special Meeting. Execution of the proxy will not in any way affect your right to virtually attend the Special Meeting. To revoke a prior proxy, you must do one of the following:

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If your shares are held in “street name,” you may submit new voting instructions with a later date by contacting your broker.

Q: How many shares must be represented to have a quorum and hold the Special Meeting?

A: A majority of the shares of Tetraphase Common Stock outstanding at the Record Date must be virtually present or represented by proxy to hold the Special Meeting. This is called a quorum. For purposes of determining whether a quorum exists, Tetraphase counts as present any shares that are voted over the Internet, by telephone or by submitting a proxy card. Further, for purposes of establishing a quorum, Tetraphase will count as present shares that a stockholder holds even if the stockholder votes against the proposals or abstains. In addition, Tetraphase will count as present shares held in “street name” by brokers who indicate on their proxies that they do not have authority to vote those shares. If a quorum is not present, Tetraphase expects to adjourn the Special Meeting until Tetraphase obtains a quorum.

Q: What vote is required to approve the proposals and how are votes counted?

A: Proposal 1: Merger Agreement Proposal: Assuming a quorum is present at the Special Meeting, the merger agreement proposal requires the affirmative vote of the holders of a majority of the outstanding shares of Tetraphase Common Stock entitled to vote on such proposal. Accordingly, a Tetraphase stockholder’s abstention from voting, a broker non-vote or the failure of a Tetraphase stockholder to vote (including the failure of a Tetraphase stockholder who holds shares in “street name” through a bank, broker or other nominee to give voting instructions to that bank, broker or other nominee) will have the same effect as votes cast “AGAINST” the merger agreement proposal.

Proposal 2: Compensation Proposal: Assuming a quorum is present at the Special Meeting, approval of the compensation proposal requires the affirmative vote of the holders of shares of Tetraphase Common Stock representing a majority of the votes cast on the proposal. Shares which abstain from voting and “broker non-votes” with respect to this proposal will not be counted as votes in favor of such matter, and will also not be counted as shares voting on such matter. Accordingly, abstentions and “broker non-votes” will have no effect on the voting on this proposal.

Proposal 3: Adjournment Proposal: Whether or not a quorum is present at the Special Meeting, approval of the adjournment proposal requires the affirmative vote of the holders of shares of Tetraphase Common Stock representing a majority of the votes cast on the proposal. Shares which abstain from voting and “broker non-votes” with respect to this proposal will not be counted as votes in favor of such matter, and will also not be counted as shares voting on such matter. Accordingly, abstentions and “broker non-votes” will have no effect on the voting on this proposal.

Q: Who will count the vote?

A: The votes will be counted, tabulated and certified by Mediant Communications.

Q: How does the board of directors recommend that I vote on the proposals?

A: The Tetraphase Board unanimously recommends that you vote FOR each of the proposals.

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Q: Are there other matters to be voted on at the Special Meeting?

A: Tetraphase does not know of any matters that may come before the Special Meeting other than the three proposals previously mentioned. If any other matters are properly presented at the Special Meeting, the persons named in the accompanying proxy card intend to vote, or otherwise act, in accordance with their judgment on the matter.

Q: Where can I find the voting results?

A: Tetraphase plans to announce preliminary voting results at the Special Meeting and will report final voting results in a Current Report on Form 8-K filed with the SEC within four business days following the conclusion of the Tetraphase Special Meeting.

Q: What are the costs of soliciting these proxies?

A: Tetraphase will bear the cost of soliciting proxies. In addition to solicitation by mail, Tetraphase’s directors, officers and employees may solicit proxies by telephone, e-mail, facsimile and in person without additional compensation. Tetraphase has engaged Alliance Advisors, LLC, a proxy solicitation firm, to solicit proxies from shareholders for a fee of $10,000 plus certain additional costs associated with solicitation campaigns. Tetraphase may reimburse brokers or persons holding stock in their names, or in the names of their nominees, for their expenses in sending proxies and proxy material to beneficial owners. Tetraphase has also hired a proxy solicitor who may also solicit proxies from shareholders by telephone, e-mail, facsimile and in person and whose fees Tetraphase will reimburse.

Q: What are the material U.S. federal income tax consequences of the Merger to U.S. Holders of Tetraphase Stockholders?

A: In general, the exchange of Tetraphase Common Stock for the Merger Consideration in the Merger is expected to be a taxable transaction for U.S. federal income tax purposes. Please carefully review the information set forth in “Material U.S. Federal Income Tax Consequences of the Merger for Tetraphase Stockholders” beginning on page 180 of this proxy statement/prospectus for a description of material U.S. federal income tax consequences of the Merger to Tetraphase Stockholders. The tax consequences to you of the Merger will depend on your particular facts and circumstances. You are urged to consult your tax advisors as to the specific tax consequences to you of the Merger and your receipt of the Merger Consideration, including the applicability and effect of U.S. federal, state, local and non-U.S. income and other tax laws in light of your particular circumstances.

Q. What happens if the Merger is not completed?

A. If the Merger is not completed, Tetraphase stockholders will not receive any consideration for their shares of Tetraphase Common Stock. Instead, Tetraphase and AcelRx will remain independent public companies, and shares of Tetraphase Common Stock and AcelRx Common Stock will continue to be independently listed and traded on Nasdaq. In the event the Merger Agreement is terminated pursuant to its terms, Tetraphase may, in certain circumstances, be required to pay AcelRx a termination fee equal to $810,000 and/or, in certain additional circumstances, to reimburse AcelRx for certain expenses up to $200,000 incurred in connection with the Merger Agreement and the Contemplated Transactions. These termination fees and reimbursement expenses are described in more detail in “The Merger Agreement—Termination Fee and Expenses” beginning on page 102 of this proxy statement/prospectus.

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Stockholders Sharing the Same Address

Some brokers and other nominee record holders may be “householding” Tetraphase proxy materials. This means a single notice and, if applicable, the proxy materials, will be delivered to multiple stockholders sharing an address unless contrary instructions have been received. Tetraphase will promptly deliver a separate copy of the notice and, if applicable, the proxy materials, to you if you call or write to Tetraphase at its principal executive offices, 480 Arsenal Way, Watertown, Massachusetts 02472, Attn: Investor Relations, telephone: (617) 715-3600. In the future, if you want to receive separate copies of the proxy materials, or if you are receiving multiple copies and would like to receive only one copy per household, you should contact your broker, or you may contact Tetraphase at the above address and telephone number.

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SUMMARY

This summary highlights selected information described in more detail elsewhere in this proxy statement/prospectus and the documents incorporated herein by reference and may not contain all of the information that is important to you. To understand the Merger and the other matters to be voted on by Tetraphase stockholders at the Special Meeting more fully, and to obtain a more complete description of the terms of the Merger Agreement, you should carefully read this entire proxy statement/prospectus, including the Annexes, and the documents to which AcelRx and Tetraphase refer you. You should also read and consider the information in the documents incorporated by reference into this proxy statement/prospectus described under “Incorporation of Certain Information by Reference” beginning on page 197 and the additional information described under “Where You Can Find More Information” beginning on page 196 of this proxy statement/prospectus. AcelRx and Tetraphase have included page references parenthetically to direct you to a more complete description of the topics presented in this summary.

The Companies (see page 36)

Tetraphase Pharmaceuticals, Inc.

Tetraphase Pharmaceuticals, Inc. (“Tetraphase”) is a biopharmaceutical company using its proprietary chemistry technology to develop and commercialize novel tetracyclines for serious and life-threatening conditions, including bacterial infections caused by many multidrug-resistant (“MDR”), bacteria. There is a medical need for new antibiotics as resistance to existing antibiotics increases. The company’s commercial product, XERAVA^™ (eravacycline), a fully synthetic fluorocycline, is an intravenous (“IV”) antibiotic that is approved for use as a first-line empiric monotherapy for the treatment of MDR infections, including those found in complicated intra-abdominal infections. The Tetraphase pipeline also includes TP-271 IV and Oral, and TP-6076 IV only, which are Phase 2 ready, and TP-2846, which is in preclinical testing for acute myeloid leukemia.

Shares of Tetraphase Common Stock are traded on the Nasdaq Global Select Market under the symbol “TTPH.”

Tetraphase’s current contact information is as follows:

Tetraphase Pharmaceuticals, Inc.

480 Arsenal Way

Watertown, MA 02472

(617) 715-3600

Additional information about Tetraphase is included in the documents incorporated by reference into this proxy statement/prospectus. See “Information About Tetraphase” beginning on page 117 of this proxy statement/prospectus and “Where You Can Find More Information” beginning on page 196 of this proxy statement/prospectus.

AcelRx Pharmaceuticals, Inc.

AcelRx Pharmaceuticals, Inc. (“AcelRx”) is a specialty pharmaceutical company focused on the development and commercialization of innovative therapies for use in healthcare institutions. AcelRx’s proprietary, non-invasive sublingual formulation technology delivers sufentanil with consistent pharmacokinetic profiles. The company has one approved product in the U.S., DSUVIA^® (sufentanil sublingual tablet, 30 mcg), known as DZUVEO^™ in Europe, indicated for the management of acute pain severe enough to require an opioid analgesic for adult patients in certified medically supervised healthcare settings, and one product candidate, Zalviso^® (sufentanil sublingual tablet system, SST system, 15 mcg), an investigational product in the U.S., is being developed as an innovatively designed patient-controlled analgesia (PCA) system for reduction of moderate-to-severe acute pain in medically supervised settings. DZUVEO and Zalviso are both approved products in Europe.

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Shares of AcelRx Common Stock are traded on The Nasdaq Stock Market LLC under the symbol “ACRX.”

AcelRx’s current contact information is as follows:

AcelRx Pharmaceuticals, Inc.

351 Galveston Drive

Redwood City, CA 94063

(650) 216-3500

Additional information about AcelRx and its subsidiaries is included in the documents incorporated by reference into this proxy statement/prospectus. See “Where You Can Find More Information” beginning on page 196 of this proxy statement/prospectus and “Incorporation of Certain Information by Reference” beginning on page 197 of this proxy statement/prospectus.

Consolidation Merger Sub, Inc.

Consolidation Merger Sub, Inc., a Delaware corporation and an indirect wholly-owned subsidiary of AcelRx (“Merger Sub”), was organized solely for the purpose of entering into the Merger Agreement and completing the Merger and other Contemplated Transactions. Merger Sub has not conducted any business operations other than in connection with the Contemplated Transactions. Upon consummation of the Merger, Merger Sub will cease to exist, with Tetraphase surviving the Merger as an indirect wholly-owned subsidiary of AcelRx under the name “Tetraphase Pharmaceuticals, Inc.”.

Merger Sub’s current contact information is as follows:

c/o AcelRx Pharmaceuticals, Inc.

351 Galveston Drive

Redwood City, CA 94063

(650) 216-3500

The Merger (see page 47)

The AcelRx Board and the Tetraphase Board have each unanimously approved the Merger Agreement, pursuant to which Merger Sub, an indirect wholly-owned subsidiary of AcelRx, will merge with and into Tetraphase, with Tetraphase surviving the Merger. As a result of the Merger, Tetraphase will become an indirect wholly-owned subsidiary of AcelRx. Upon completion of the Merger, Tetraphase stockholders and certain other Tetraphase equityholders will own approximately 14.6% of the outstanding shares of AcelRx Common Stock on a fully diluted basis.

At the Special Meeting to be held via the Internet at a virtual web conference at www.proxydocs.com/ttph on [DATE], at [TIME], Eastern Time, you will be asked to consider and vote upon a proposal to adopt the Merger Agreement.

Tetraphase stockholders are receiving this proxy statement/prospectus in connection with Tetraphase’s solicitation of proxies for the Special Meeting.

The Merger Agreement (see page 90)

A copy of the Merger Agreement is attached as Annex A to this proxy statement/prospectus. AcelRx and Tetraphase encourage you to read the entire Merger Agreement carefully because it is the principal document governing the Merger.

Merger Consideration and the Exchange Ratio (see page 90)

At the Effective Time, each share of Tetraphase Common Stock issued and outstanding immediately prior to the Effective Time (other than shares owned by AcelRx, Merger Sub or Tetraphase or any direct or indirect wholly-

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owned subsidiary of AcelRx or Tetraphase or by stockholders of Tetraphase who have exercised and perfected their statutory rights of appraisal under the DGCL) will be converted into the right to receive (i) 0.6303 of a share of AcelRx Common Stock (subject to a potential downward adjustment if the Tetraphase Net Cash is less than $5.0 million at the closing of the Merger) prior to the completion of the Merger), plus (ii) one CVR, plus (iii) any cash payable in lieu of fractional shares of AcelRx Common Stock. No fractional shares of AcelRx Common Stock will be issued in the Merger.

The Special Meeting (see page 97)

The Special Meeting will be held via the Internet at a virtual web conference at www.proxydocs.com/ttph on [DATE], at [TIME], Eastern Time. The purposes of the Special Meeting are as follows:

Completion of the Merger is conditioned on the approval of the merger agreement proposal by Tetraphase stockholders. Approval of the compensation proposal concerning the merger-related compensation arrangements for Tetraphase’s named executive officers is not a condition to the obligation of either Tetraphase or AcelRx to complete the Merger.

Only holders of record of issued and outstanding shares of Tetraphase Common Stock as of the close of business on the Record Date are entitled to notice of, and to vote at, the Special Meeting. Tetraphase stockholders may cast one vote for each share of Tetraphase Common Stock that Tetraphase stockholders held as of the Record Date.

Assuming a quorum is present at the Special Meeting, the merger agreement proposal requires the affirmative vote of the holders of a majority of the outstanding shares of Tetraphase Common Stock entitled to vote on such proposal. Accordingly, a Tetraphase stockholder’s abstention from voting, a broker non-vote or the failure of a Tetraphase stockholder to vote (including the failure of a Tetraphase stockholder who holds shares in “street name” through a bank, broker or other nominee to give voting instructions to that bank, broker or other nominee) will have the same effect as votes cast “AGAINST” the merger agreement proposal.

Assuming a quorum is present at the Special Meeting, approval of the compensation proposal requires the affirmative vote of the holders of shares of Tetraphase Common Stock representing a majority of the votes cast on the proposal. Shares which abstain from voting and “broker non-votes” with respect to this proposal will not be counted as votes in favor of such matter, and will also not be counted as shares voting on such matter. Accordingly, abstentions and “broker non-votes” will have no effect on the voting on this proposal.

Whether or not a quorum is present at the Special Meeting, approval of the adjournment proposal requires the affirmative vote of the holders of shares of Tetraphase Common Stock representing a majority of the votes cast on the proposal. Shares which abstain from voting and “broker non-votes” with respect to this proposal will not be counted as votes in favor of such matter, and will also not be counted as shares voting on such matter. Accordingly, abstentions and “broker non-votes” will have no effect on the voting on this proposal.

The AcelRx Board’s Reasons for the Merger (see page 62)

The AcelRx Board authorized and approved the Merger Agreement and approved the Contemplated Transactions, including the issuance of AcelRx Common Stock as Merger Consideration, and such other

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agreements, instruments and documents as are contemplated by the Merger Agreement, including the Voting Agreements, Exchange Agreement and the form of CVR Agreement, as well as the Co-Promotion Agreement. The AcelRx Board also determined that the terms of the Merger are fair to and in the best interests of AcelRx, Merger Sub and their respective stockholders.

The AcelRx Board believes the combination of the two organizations creates efficiencies resulting from commercializing multiple products with a single salesforce. The combination also creates a growth platform to further consolidate hospital-focused pharmaceutical companies and products expected to generate near-and long-term growth, additional synergies and stockholder value.

Recommendation of the Tetraphase Board, the Tetraphase Board’s Reasons for the Merger (see page 62)

The Tetraphase Board unanimously recommends that Tetraphase stockholders vote “FOR” the merger agreement proposal, “FOR” the compensation proposal, and “FOR” the adjournment proposal. In reaching its determinations and recommendations, the Tetraphase Board consulted with Tetraphase’s senior management and its outside legal and financial advisors, and considered a number of factors, including the following reasons that weighed in favor of the Merger:

For a more complete description of the factors considered by the Tetraphase Board in reaching this decision, including potentially negative factors against which these advantages and opportunities were weighed, and additional information on the recommendation of the Tetraphase Board, see the section titled “The Merger—Recommendation of the Tetraphase Board; Tetraphase’s Reasons for the Merger” beginning on page 62 of this proxy statement/prospectus.

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Opinion of Janney Montgomery Scott LLC, Tetraphase’s Financial Advisor (see page 66)

Tetraphase retained Janney as its financial advisor in connection with the potential sale of Tetraphase. Janney delivered an opinion to the Tetraphase Board to the effect that, as of March 15, 2020, based upon and subject to the assumptions made, matters considered and limitations and qualifications upon the review undertaken by Janney, the Merger Consideration to be received in the Merger was fair, from a financial point of view, to the common stockholders of Tetraphase. The full text of Janney’s written opinion, dated as of March 15, 2020, which is attached as Annex E to this proxy statement/prospectus and which you should read carefully and in its entirety, is subject to the assumptions, limitations, qualifications and other conditions contained in such opinion and is necessarily based on economic, capital markets and other conditions, and the information made available to Janney, as of the date of such opinion. The description set forth below is qualified in its entirety by reference to the full text of the opinion.

Janney’s opinion was directed to the Tetraphase Board and addressed only the fairness, from a financial point of view, as of the date of the Opinion, of the consideration to be paid to the common stockholders of Tetraphase. Janney’s opinion did not address any other aspects of the proposed Merger or the Contemplated Transactions and did not address the prices at which shares of AcelRx Common Stock would trade following completion of the proposed Merger or at any time. Janney’s opinion sets forth, among other things, the assumptions made, procedures followed, matters considered and qualifications and limitations on the scope of review undertaken by Janney in rendering its opinion. Janney’s opinion did not and does not constitute a recommendation as to how any holder of Tetraphase Common Stock should vote in connection with the proposed Merger.

For a description of the opinion that the Tetraphase Board received from Janney, see “The Merger—Opinion of Janney Montgomery Scott LLC, Tetraphase’s Financial Advisor” beginning on page 66 of this proxy statement/prospectus.

Interests of Tetraphase Directors and Executive Officers in the Merger (see page 78)

In considering the information described in this proxy statement/prospectus, you should be aware that Tetraphase’s executive officers and directors may have interests in the Merger that are or were different from, or in conflict with or are in addition to, those of Tetraphase’s stockholders generally. In addition to the rights described below in this section, the executive officers of Tetraphase may be eligible to receive some of the generally applicable benefits described under “The Merger Agreement—Employee Benefit Matters” beginning on page 110 of this proxy statement/prospectus, and certain directors are affiliated with certain of Tetraphase’s equityholders that will be entitled to receive consideration as described under “The Merger—Interests of Directors and Executive Officers in the Merger—Treatment of Outstanding Tetraphase Warrants.” The Tetraphase Board was aware of and considered these interests, among other matters, in evaluating and reaching its decision to approve the Merger Agreement, the Merger and the other Contemplated Transactions and in recommending that Tetraphase stockholders vote for the merger agreement proposal.

Overview of the Merger Agreement and Agreements Related to the Merger Agreement

Treatment of Tetraphase Common Stock (see page 90)

At the Effective Time, each share of Tetraphase Common Stock outstanding immediately prior to the Effective Time (other than any Dissenting Tetraphase Shares or shares held by AcelRx, Merger Sub, Tetraphase (or in Tetraphase’s treasury) or any wholly-owned subsidiary of AcelRx or Tetraphase) will be converted into the right to receive the Merger Consideration, i.e., (i) a number of shares of AcelRx Common Stock equal to the Exchange Ratio and (ii) one CVR representing the right to receive the consideration set forth in the CVR Agreement. No fractional shares of AcelRx Common Stock will be issued in the Merger and Tetraphase’s stockholders will receive cash in lieu of any fractional share.

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Treatment of Tetraphase Options (see page 90)

All Tetraphase Options, whether vested or unvested, will terminate at the Effective Time and will be of no further force and effect.

Treatment of Tetraphase RSUs and Tetraphase PRSUs (see page 90)

Effective as of five business days prior to the closing date of the Merger, each outstanding Tetraphase RSU and Tetraphase PRSU will vest in full, and Tetraphase will issue to the holder one share of Tetraphase Common Stock in respect of each Tetraphase RSU and each Tetraphase PRSU that vests. The holders of the Tetraphase RSUs and Tetraphase PRSUs are required, pursuant to the applicable award agreements, to sell, on the vesting date, a number of shares that are issued in respect of such awards having a value equal to Tetraphase’s tax withholding obligations. All shares of Tetraphase Common Stock issued on vesting of the Tetraphase RSUs and Tetraphase PRSUs (including the shares that are sold to satisfy tax withholding obligations and any shares that continue to be held by the holder of the award) will be treated as outstanding shares of Tetraphase Common Stock at the Effective Time and will be converted into the right to receive the Merger Consideration.

Treatment of Tetraphase Warrants (see page 91)

Each outstanding and unexercised Tetraphase Warrant will be treated in accordance with its terms, except that, pursuant to the Voting Agreements and Exchange Agreement described below, (i) each outstanding common stock warrant issued by Tetraphase in November 2019 will be converted into the right to receive, at the closing of the Merger, 0.8813 of a share of AcelRx Common Stock for each share of Tetraphase Common Stock underlying such Tetraphase Warrant, (ii) each outstanding common stock warrant issued by Tetraphase in January 2020 will be converted into the right to receive, at the closing of the Merger, 0.9087 of a share of AcelRx Common Stock for each share of Tetraphase Common Stock underlying such Tetraphase Warrant, and (iii) each outstanding pre-funded warrant will be converted into the right to receive the product of (a) in the case of pre-funded warrants issued by Tetraphase in November 2019, 98.89052%, and in the case of pre-funded warrants issued by Tetraphase in January 2020, 99.88906%, and (b) each element of the Merger Consideration, for each share of Tetraphase Common Stock underlying such Tetraphase Warrant.

The Voting Agreements and Exchange Agreement (see page 113)

Concurrently with the execution of the Merger Agreement, AcelRx entered into Voting Agreements with the Tetraphase equityholders party thereto (including certain entities holding shares of Tetraphase Common Stock on their behalf), and collectively beneficially owning approximately 31% of the outstanding voting power of Tetraphase, pursuant to which such equityholders agreed, among other things, to vote their shares of Tetraphase Common Stock in favor of the adoption of the Merger Agreement, and agreed to certain restrictions on their ability to take actions with respect to the Tetraphase and their shares of Tetraphase Common Stock. In addition, such equityholders agreed to the treatment of the Tetraphase Warrants specified above. The Voting Agreements terminate by their terms in certain circumstances, including upon termination of the Merger Agreement in accordance with its terms and upon a Tetraphase Adverse Change in Recommendation. Tetraphase also entered into an exchange agreement with a holder of Tetraphase Warrants under which the holder agreed to the treatment of Tetraphase Warrants specified above.

The CVR Agreement (see page 114)

Prior to the Effective Time of the Merger, AcelRx will enter into the CVR Agreement with a rights agent selected by AcelRx and reasonably acceptable to Tetraphase governing the terms of certain consideration payable thereunder. The CVRs represent the right to receive contingent payments, payable to the rights agent for the benefit of the holders of CVRs, of up to $12.5 million in the aggregate, payable in cash or shares of AcelRx

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Common Stock at AcelRx’s election, without interest, and allocated among the outstanding CVRs, if the following milestones are achieved:

The CVR Agreement provides that all milestones or a combination of any two milestones can be earned in the same year, in which case all such applicable milestone amounts will be payable. If AcelRx elects to pay milestone amounts in shares of AcelRx Common Stock, the number of shares of AcelRx Common Stock will be determined by reference to the number of shares of AcelRx Common Stock equal to the applicable milestone amount divided by the average closing price of a share of AcelRx Common Stock on the Nasdaq Global Market for the 10 most recent trading days that AcelRx Common Stock has traded ending on the trading day one day prior to the date of the applicable payment date. Notwithstanding anything to the contrary in the CVR Agreement, AcelRx will not be required to pay any milestone amounts in shares of AcelRx Common Stock in excess of a number of shares of AcelRx Common Stock equal to 19.9% of the total number of shares of AcelRx Common Stock issued and outstanding immediately prior to the execution and delivery of the Merger Agreement, when combined with all other shares of AcelRx Common Stock issued in connection with the closing of the Merger; provided that this limitation shall not limit any CVR holder’s right to receive any milestone amount in full, and any portion of a milestone amount that would otherwise exceed such limitation will be paid in cash.

Additionally, commencing upon the closing of the Merger and continuing until the earlier of December 31, 2024 or the achievement of all milestones, AcelRx has agreed to, and has agreed to cause its affiliates and licensees to, use commercially reasonable efforts (as defined in the CVR Agreement) to achieve the milestones. Without limiting the foregoing, AcelRx has further agreed that neither it nor any of its affiliates will act in bad faith for the purpose of avoiding achievement of any milestone or the payment of any milestone amount.

The terms of the CVRs described above reflect the parties’ agreement over the sharing of potential economic upside benefits from future net sales of XERAVA and do not reflect anticipated net sales of XERAVA. There can be no assurance that such levels of net sales will occur or that any or all of the payments in respect of the CVRs will be made.

The right to payments under the CVRs as evidenced by the CVR Agreement is a contractual right only and will not be transferable, except in the limited circumstances specified in the CVR Agreement, including: (i) upon death of a holder by will or intestacy; (ii) by instrument to an inter vivos or testamentary trust in which the CVRs are to be passed to beneficiaries upon the death of the trustee; (iii) pursuant to a court order; (iv) by operation of law (including by consolidation or merger) or without consideration in connection with the dissolution, liquidation or termination of any corporation, limited liability company, partnership or other entity; (v) in the case of CVRs held in book-entry or other similar nominee form, from a nominee to a beneficial owner and, if applicable, through an intermediary, as allowable by the Depository Trust Company; or (vi) to AcelRx in connection with an abandonment of the CVR or in connection with a negotiated transaction.

The foregoing description of the CVR Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the CVR Agreement, a form of which is attached as Annex D to this proxy statement/prospectus.

The Co-Promotion Agreement (see page 115)

Concurrently with the Merger Agreement, AcelRx and Tetraphase entered into the Co-Promotion Agreement, pursuant to which AcelRx agreed to detail and promote Tetraphase products, and Tetraphase agreed to detail and

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promote AcelRx’s products, in accordance with marketing plans to be agreed to by the parties and subject to specified minimum call requirements. The co-promotion activities are overseen by a joint marketing and sales committee, which is responsible for developing marketing plans for the products, provided, that each party is responsible for developing the marketing strategy for, creating the promotional materials for, and handling sales and distribution of, its own products. There are no payments being made between the parties under the agreement, and each party will continue to receive all the revenues from the sales of its own products.

The Co-Promotion Agreement has a five-year term, unless terminated earlier pursuant to its terms. Either party may terminate the Co-Promotion Agreement upon a 15-month notice period. Additionally, either party may terminate the Co-Promotion Agreement in the event of an uncured material breach or insolvency event of the other party and in the event of other specified circumstances relating to the other party’s products, such as safety.

In the event of a change of control of either party, the other party may terminate the agreement upon one month’s notice and, upon a material breach by the change of control party, may be entitled to receive a 10% royalty on net sales of the change of control party’s products for a specified period of time (but not to exceed eighteen months).

Conditions to the Merger (see page 93)

The obligations to consummate the Merger and otherwise consummate the Contemplated Transactions are subject to receipt of the Tetraphase stockholder vote required to adopt the Merger Agreement and the satisfaction or waiver, on or prior to the Effective Time, of the other conditions set forth in the section titled “The Merger Agreement—Conditions to the Merger” beginning on page 93 of this proxy statement/prospectus.

No Solicitation of Acquisition Proposals (see page 96)

The Merger Agreement prohibits Tetraphase from soliciting an alternative transaction to the Merger. Under these “no solicitation” provisions, Tetraphase has agreed not to, directly or indirectly:

The Merger Agreement provides, however, that Tetraphase may furnish information to and/or engage in discussions or negotiations with a third party in response to a bona fide, written Acquisition Proposal if:

Tetraphase must keep AcelRx reasonably informed of any material developments regarding any such Acquisition Proposal, including by providing reasonably prompt (and in any event within one business day) notice of all

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material amendments or modifications thereto and a copy of any final definitive agreement Tetraphase would be prepared to execute, subject to the terms and conditions of the Merger Agreement.

For more information, see “The Merger Agreement—No Solicitation of Acquisition Proposals” beginning on page 96 of this proxy statement/prospectus.

Tetraphase Board Recommendation (see page 98)

The Tetraphase Board may, prior to the adoption of the merger agreement proposal by the Tetraphase stockholders, effect a Tetraphase Adverse Change in Recommendation or terminate the Merger Agreement to substantially concurrently enter into a Specified Agreement (as defined in this section) and pay the termination fee pursuant to the Merger Agreement if (and only if):

If there are any material amendments to such Acquisition Proposal, a new Determination Notice must be delivered to AcelRx except the references to four business days will be reduced to two business days.

Further, the Tetraphase Board may, prior to the adoption of the merger agreement proposal by the Tetraphase stockholders, make a Tetraphase Change of Recommendation in response to a Change in Circumstance (as defined in this section) if (and only if):

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If there is a material change to the status of such Change in Circumstance, a new Determination Notice must be delivered to AcelRx except the references to four business days will be reduced to two business days.

For more information, see “The Merger Agreement—Tetraphase Board Recommendation” beginning on page 98 of this proxy statement/prospectus.

Termination of the Merger Agreement and Termination Fee and Expenses (see pages 102 and 103)

The Merger Agreement may be terminated by the parties under certain circumstances, and upon termination of the Merger Agreement, Tetraphase may be required, in certain circumstances, to pay to AcelRx a termination fee of $810,000, and/or in other specified circumstances Tetraphase may be required to reimburse AcelRx’s expenses incurred, up to a maximum of $200,000, as set forth in the section titled “The Merger Agreement—Termination Fees and Expenses” beginning on page 102 of this proxy statement/prospectus.

Accounting Treatment of the Merger (see page 89)

AcelRx expects the Merger will be accounted for by AcelRx as a business combination under the acquisition method of accounting, in conformity with GAAP. Under the acquisition method of accounting, the assets and liabilities of Tetraphase as of the Effective Time will be recorded by AcelRx at their respective fair values and consolidated with those of AcelRx. Any excess of purchase price over the fair value of the net assets will be recorded as goodwill. Tetraphase’s assets and liabilities and results of operations will be consolidated with those of AcelRx from and after the date of the Merger.

Material U.S. Federal Income Tax Consequences (see page 180)

In general, the exchange of Tetraphase Common Stock for the Merger Consideration in the Merger is expected to be a taxable transaction for U.S. federal income tax purposes Please carefully review the information under “Material U.S. Federal Income Tax Consequences of the Merger for Tetraphase Stockholders” beginning on page 180 of this proxy statement/prospectus for a description of material U.S. federal income tax consequences of the Merger to Tetraphase stockholders. The tax consequences to you will depend on your particular facts and circumstances.

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You are urged to consult your tax advisors as to the specific tax consequences to you of the Merger and your receipt of the Merger Consideration, including the applicability and effect of U.S. federal, state, local and non-U.S. income and other tax laws in light of your particular circumstances.

Risk Factors (see page 27)

Both AcelRx and Tetraphase are subject to various risks associated with their businesses and their industries. In addition, the Merger, including the possibility that the Merger may not be completed, poses a number of risks to each company and its respective stockholders, including the following risks:

These risks and other risks are discussed in greater detail under the section titled “Risk Factors” in this proxy statement/prospectus. You are encouraged to read and consider all of these risks carefully.

Appraisal Rights in Connection with the Merger (see page 86)

Holders of AcelRx Common Stock are not entitled to appraisal rights in connection with the Merger. Holders of Tetraphase Common Stock are entitled to appraisal rights in connection with the Merger under Section 262 of the DGCL. For more information about such rights, please see the provisions of Section 262 of the DGCL attached as Annex F to this proxy statement/prospectus, and the section titled “The Merger—Appraisal Rights” beginning on page 86 of this proxy statement/prospectus.

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SELECTED HISTORICAL FINANCIAL DATA OF ACELRX

The following table sets forth selected historical consolidated financial data for AcelRx. The historical consolidated financial information for each of the years in the five-year period ended December 31, 2019 is derived from the audited consolidated financial statements of AcelRx as of and for each of the years in the five-year period ended December 31, 2019. You should not assume the results of operations for any past periods indicate results for any future period, including with respect to the future performance of AcelRx following the date of this proxy statement/prospectus or following the completion of the Merger.

The information set forth below should be read in conjunction with AcelRx’s consolidated financial statements and the related notes thereto and the information under the heading “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in AcelRx’s Annual Report on Form 10-K for the year ended December 31, 2019, which is incorporated by reference into this proxy statement/prospectus. For additional information, see “Where You Can Find More Information” beginning on page 196 of this proxy statement/prospectus and “Incorporation of Certain Information by Reference” beginning on page 197 of this proxy statement/prospectus.

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Statements of Operations Data

Balance Sheet Data

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SELECTED HISTORICAL FINANCIAL DATA OF TETRAPHASE

Tetraphase is a smaller reporting company, as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended, and is not required to provide the information required under this item.

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SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The following table presents selected unaudited pro forma combined financial information about AcelRx’s consolidated balance sheet and statements of operations, after giving effect to the Merger with Tetraphase. The information under “Selected Unaudited Pro Forma Condensed Combined Statements of Operations” in the table below assumes the Merger had been consummated on January 1, 2019, the beginning of the earliest period presented. The information under “Selected Unaudited Pro Forma Condensed Combined Balance Sheet Data” in the table below assumes the Merger had been consummated on December 31, 2019.

The unaudited pro forma condensed combined financial information includes adjustments which are preliminary and may be revised. These revisions may be material. In addition, the unaudited pro forma condensed combined financial information does not reflect any cost savings or associated costs to achieve such savings from operating efficiencies, synergies, debt refinancing or other restructuring that may result from the Merger. The unaudited pro forma condensed combined financial information is not necessarily indicative of results that actually would have occurred or that may occur in the future had the Merger been completed on the dates indicated.

The accompanying unaudited pro forma condensed combined financial information should be read in conjunction with (a) the audited consolidated financial statements of AcelRx contained in its Annual Report on Form 10-K for the year ended December 31, 2019, which is incorporated herein by reference, and (b) the audited consolidated financial statements of Tetraphase for the year ended December 31, 2019, which are incorporated herein by reference. See “Where You Can Find More Information” beginning on page 196 of this proxy statement/prospectus and “Incorporation of Certain Information by Reference” beginning on page 197 of this proxy statement/prospectus.

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UNAUDITED COMPARATIVE PER SHARE INFORMATION

The following table sets forth, for the periods indicated, selected per share information for AcelRx Common Stock on a historical and pro forma combined basis and selected per share information for Tetraphase Common Stock on a historical and pro forma equivalent basis. Except for the historical information as of and for the year ended December 31, 2019, which is derived from the audited financial statements, the information in the table is unaudited. The information in the table is based on, and should be read together with, the historical consolidated financial statements and related notes of (i) AcelRx contained in its Annual Report on Form 10-K for the year ended December 31, 2019, which is incorporated by reference into this proxy statement/prospectus, and (ii) Tetraphase as disclosed under “Consolidated Financial Statements of Tetraphase” included in Tetraphase’s Annual Report on Form 10-K for the year ended December 31, 2019, which is incorporated by reference into this proxy statement/prospectus. See “Where You Can Find More Information” beginning on page 196 of this proxy statement/prospectus and “Incorporation of Certain Information by Reference” beginning on page 197 of this proxy statement/prospectus.

The pro forma combined per share information for the year ended December 31, 2019 reflects the Merger as if it had occurred on January 1, 2019. The pro forma combined book value per share amounts in the table below reflect the Merger as if it had occurred on December 31, 2019. The pro forma information below is presented for illustrative purposes only and is not necessarily indicative of the operating results or financial position that would have occurred if the Merger and the other Contemplated Transactions had been completed as of the beginning of the periods presented, nor is it necessarily indicative of the future operating results or financial position of AcelRx or Tetraphase following the date of this proxy statement/prospectus or following the completion of the Merger.

The pro forma combined net loss per share of common stock set forth below was calculated using the methodology as described in “Unaudited Pro Forma Condensed Combined Financial Information” beginning on page 185 of this proxy statement/prospectus. The pro forma combined book value per share was calculated by dividing total combined AcelRx and Tetraphase pro forma common stockholders’ equity by pro forma equivalent shares of common stock. The Tetraphase equivalent pro forma per common share amounts were calculated by multiplying the AcelRx pro forma combined per share amounts by the Exchange Ratio of 0.6303, rounded to the nearest whole cent.

Neither AcelRx nor Tetraphase declared a cash dividend on account of their respective common stock during the periods presented in the following table. Neither AcelRx nor Tetraphase have any intention to pay cash dividends in the foreseeable future.

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COMPARATIVE MARKET PRICE INFORMATION

AcelRx Common Stock is listed on Nasdaq under the symbol “ACRX.” Tetraphase Common Stock is listed on Nasdaq under the symbol “TTPH.” The following table presents the closing prices of AcelRx Common Stock and Tetraphase Common Stock on March 13, 2020, the last trading day before the public announcement of the Merger Agreement, and                , 2020, the last practicable trading day prior to the mailing of this proxy statement/prospectus. The table also shows the equivalent per share value of the Merger Consideration for a share of Tetraphase Common Stock on the relevant date. Equivalent per share amounts for Tetraphase Common Stock are calculated by multiplying per share information for AcelRx Common Stock by the Exchange Ratio of 0.6303, rounded to the nearest whole cent.

The above table shows only historical comparisons. These comparisons may not provide meaningful information to Tetraphase stockholders in determining whether to approve the adoption of the Merger Agreement. Because the Exchange Ratio will not be adjusted for changes in the market price of AcelRx Common Stock, the market value of the shares of AcelRx Common Stock that holders of Tetraphase Common Stock will be entitled to receive at the Effective Time of the Merger may vary significantly from the market value of the shares of AcelRx Common Stock that holders of Tetraphase Common Stock would have received if the Merger were completed on the dates shown in the table above.

The above table does not take into account any adjustment of the Exchange Ratio to the extent the Tetraphase Net Cash is less than $5.0 million at the closing of the Merger. If the Tetraphase Net Cash is less than $5.0 million, the Exchange Ratio will be adjusted to the ratio determined as follows: (a) (i) $20.0 million, minus (ii) the dollar amount by which the Tetraphase Net Cash is less than $5.0 million, minus (iii) $10,265,292, divided by (b) (i) 10,800,166 shares of Tetraphase Common Stock, divided by (ii) $1.43.

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RISK FACTORS

Risks Relating to the Merger

The failure to complete the Merger in a timely manner, or at all, may adversely affect the business and financial results of AcelRx and Tetraphase and their respective stock prices.

Each of AcelRx’s and Tetraphase’s obligations to consummate the Merger are subject to the satisfaction or waiver of certain customary conditions, including, among others, (i) the Merger Agreement must be adopted by the requisite vote of Tetraphase stockholders; (ii) the absence of (A) any governmental restraining order or injunction having been issued with respect to the Contemplated Transactions and continuing in effect or (B) any legal proceeding of a governmental body challenging or seeking to prohibit the consummation of the Merger or related matters; (iii) subject to certain qualifications, the accuracy of the respective representations and warranties of Tetraphase and AcelRx and compliance by the parties with their respective obligations under the Merger Agreement; (iv) the registration statement of which this proxy statement/prospectus forms a part being declared effective by the SEC, and remaining in effect; (v) the approval of the shares of AcelRx Common Stock issuable as Merger Consideration for listing on Nasdaq; and (vi) the absence of any Tetraphase Material Adverse Effect or AcelRx Material Adverse Effect since the date of the Merger Agreement. AcelRx and Tetraphase cannot provide assurance that these or the other conditions to the completion of the Merger will be satisfied in a timely manner or at all. In addition, other factors may affect when and whether the Merger will occur. If the Merger is not completed, AcelRx’s and Tetraphase’s stock prices could fall to the extent that such current stock prices reflect an assumption that the Merger will be completed. Furthermore, if the Merger is not completed and the Merger Agreement is terminated, AcelRx and Tetraphase may suffer other consequences that could adversely affect such entity’s business, results of operations and stock price, including the following:

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The Exchange Ratio is not adjustable based on the market price of AcelRx Common Stock so the merger consideration at the closing of the Merger may have a greater or lesser value than at the time the Merger Agreement was signed.

At the Effective Time, outstanding shares of Tetraphase Common Stock will be converted into the Merger Consideration, which includes shares of AcelRx Common Stock. Applying the Merger Consideration, each share of Tetraphase Common Stock issued and outstanding immediately prior to the Effective Time (other than shares owned by AcelRx, Merger Sub or Tetraphase or any direct or indirect wholly-owned subsidiary of AcelRx or Tetraphase or by stockholders of Tetraphase who have exercised and perfected their statutory rights of appraisal under the DGCL) will be automatically converted into the right to receive (i) 0.6303 of a share of AcelRx Common Stock (subject to a potential downward adjustment if the Tetraphase Net Cash is less than $5.0 million at the closing of the Merger) prior to the completion of the Merger), plus (ii) one CVR, plus (iii) any cash payable in lieu of fractional shares of AcelRx Common Stock.

Any changes in the market price of AcelRx Common Stock before the completion of the Merger will not affect the number of shares Tetraphase stockholders will be entitled to receive pursuant to the Merger Agreement. Therefore, if before the completion of the Merger the market price of AcelRx Common Stock declines from the market price on the date of the Merger Agreement, then holders of Tetraphase Common Stock could receive merger consideration with substantially lower value. Similarly, if before the completion of the Merger the market price of AcelRx Common Stock increases from the market price on the date of the Merger Agreement, then holders of Tetraphase Common Stock could receive consideration with substantially more value for their shares of Tetraphase Common Stock than the parties had negotiated for in the establishment of the Exchange Ratio. The Merger Agreement does not include a price-based termination right.

Stock price changes may result from a variety of factors, including, among others, general market and economic conditions, changes in AcelRx’s or Tetraphase’s respective businesses, operations and prospects, reductions or changes in U.S. government spending or budgetary policies, market assessments of the likelihood that the merger will be completed, interest rates, general market, industry and economic conditions, pandemics and viruses, and other factors generally affecting the respective prices of AcelRx’s or Tetraphase’s common stock, federal, state and local legislation, governmental regulation and legal developments in the industry segments in which AcelRx or Tetraphase operate, and the timing of the merger.

Many of these factors are beyond AcelRx’s and Tetraphase’s control, and neither AcelRx nor Tetraphase is permitted to terminate the Merger Agreement solely due to a decline in the market price of the common stock of the other party. You are urged to obtain current market quotations for AcelRx Common Stock and Tetraphase Common Stock in determining whether to vote for the adoption of the merger agreement proposal.

Uncertainty about the Merger may adversely affect the respective business and stock price of AcelRx and Tetraphase, whether or not the Merger is completed.

Each of AcelRx and Tetraphase are subject to risks in connection with the announcement and pendency of the Merger, including the risks from possibly foregoing opportunities AcelRx and Tetraphase might otherwise pursue absent the proposed Merger. Furthermore, uncertainties about the Merger may cause current and prospective employees of AcelRx and Tetraphase to experience uncertainty about their future with their respective companies. These uncertainties may impair AcelRx’s and Tetraphase’s ability to retain, recruit or motivate key management and other personnel.

In addition, in response to the announcement of the proposed Merger, AcelRx’s and Tetraphase’s existing or prospective customers, suppliers or collaboration partners may:

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While AcelRx and Tetraphase are attempting to address these risks, their respective existing and prospective customers, suppliers or collaboration partners may be reluctant to purchase AcelRx’s and Tetraphase’s products, supply AcelRx and Tetraphase with goods and services or continue collaborations due to the potential uncertainty about the direction of AcelRx’s and Tetraphase’s product offerings and the support and service of AcelRx’s and Tetraphase’s products after the completion of the Merger.

While the Merger is pending, Tetraphase is subject to contractual restrictions that could harm its business, operating results and stock price.

The Merger Agreement includes restrictions on the conduct of Tetraphase’s business prior to the completion of the Merger, generally (i) requiring Tetraphase to use commercially reasonable efforts to cause each of Tetraphase and its subsidiaries to conduct its business and operations in the ordinary course and in accordance in all material respects with past practice, to pay its debt, payables and taxes when due, and to attempt to ensure that each of Tetraphase and its subsidiaries preserves intact the material components of its current business organization and maintains its relations and goodwill with all material suppliers, material customers, material licensors and governmental bodies, and (ii) restricting Tetraphase from taking certain specified actions absent AcelRx’s prior written consent. See “The Merger Agreement—Conduct of Business Pending the Merger” beginning on page 103 of this proxy statement/prospectus. Tetraphase may find that these and other obligations in the Merger Agreement may delay or prevent Tetraphase from or limit its ability to respond effectively to competitive pressures, industry developments and future business opportunities that may arise during such period, even if Tetraphase’s management and the Tetraphase Board think they may be advisable. These restrictions could adversely impact Tetraphase’s business, operating results and stock price and its perceived acquisition value, regardless of whether the Merger is completed.

The Merger Agreement limits Tetraphase’s ability to pursue alternative transactions which could deter a third party from proposing an alternative transaction.

The Merger Agreement contains provisions that, subject to certain exceptions, limit Tetraphase’s ability to solicit, initiate or knowingly facilitate or knowingly encourage any inquiries or the making of any proposal or offer that constitutes, or would reasonably be expected to lead to, or engage in, continue or otherwise participate in any discussions or negotiations regarding, or furnish any non-public information in connection with, an alternative transaction. See “The Merger Agreement—No Solicitation of Acquisition Proposals” beginning on page 96 of this proxy statement/prospectus. It is possible that these or other provisions in the Merger Agreement might discourage a potential competing acquirer that might have an interest in acquiring all or a significant part of the outstanding shares of Tetraphase Common Stock from considering or proposing an acquisition or might result in a potential competing acquirer proposing to pay a lower per share price to acquire Tetraphase Common Stock than it might otherwise have proposed to pay.

The Merger will involve substantial and potentially unexpected costs.

AcelRx and Tetraphase have incurred and expect to continue to incur substantial costs and expenses relating directly to the Merger and the issuance of AcelRx Common Stock in connection with the Merger, including, as applicable, fees and expenses payable to financial advisors, other professional fees and expenses, insurance premium costs, fees and costs relating to regulatory filings and notices, SEC filing fees, printing and mailing costs and other transaction-related costs, fees and expenses. Actual transaction costs may substantially exceed estimates and may have an adverse effect on the combined company’s financial condition and operating results.

If the Merger is not completed, AcelRx and Tetraphase will have incurred substantial expenses for which no ultimate benefit will have been received by either company.

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The fairness opinion obtained by the Tetraphase Board from its financial advisor will not be updated to reflect changes in circumstances between signing the Merger Agreement and the completion of the Merger.

The Tetraphase Board has not obtained an updated fairness opinion as of the date of this proxy statement/prospectus from Janney, its financial advisor. Changes in the operations and prospects of AcelRx or Tetraphase, general market and economic conditions, and other factors that may be beyond the control of AcelRx and Tetraphase and on which the fairness opinion was based, may alter the value of AcelRx or Tetraphase or the price of AcelRx Common Stock or Tetraphase Common Stock by the time the Merger is completed.

The fairness opinion does not speak as of the time the Merger will be completed or as of any date other than the date of such opinion. Tetraphase does not anticipate asking Janney to update its fairness opinion. The fairness opinion of Janney is included as Annex E to this proxy statement/prospectus. For a description of the fairness opinion that the Tetraphase Board received from Janney and a summary of the material financial analyses it provided to the Tetraphase Board in connection with rendering such opinion, see “The Merger—Opinion of Janney Montgomery Scott LLC, Tetraphase’s Financial Advisor” beginning on page 66 of this proxy statement/prospectus.

For a description of the factors considered by the Tetraphase Board in determining to approve the Merger, see “The Merger—Recommendation of the Tetraphase Board; the Tetraphase Board’s Reasons for the Merger” beginning on page 62 of this proxy statement/prospectus.

Certain directors and executive officers of Tetraphase may have interests in the Merger that are or were different from, or in conflict with or in addition to, those of Tetraphase’s stockholders generally.

In considering whether to approve the proposals at the Special Meeting, Tetraphase stockholders should recognize that directors and officers of Tetraphase have interests in the Merger that may differ from, or that are in addition, to their interests as stockholders of Tetraphase. The Tetraphase Board was aware of these interests at the time it approved the Merger Agreement. These interests may cause Tetraphase’s directors and officers to view the Merger differently from how you may view it as a stockholder. For a description of the factors considered by the Tetraphase Board in determining to approve the Merger, see “The Merger—Interests of Tetraphase Directors and Executive Officers in the Merger” beginning on page 78 of this proxy statement/prospectus.

The Merger is expected to be a taxable transaction for U.S. federal income tax purposes.

The exchange of Tetraphase Common Stock for the Merger Consideration in the Merger is expected to be a taxable transaction for U.S. federal income tax purposes. However, no opinion of counsel or ruling from the IRS with respect to the tax treatment of the Merger has or will be sought, and there can be no assurance that the IRS will not assert a contrary position. Assuming the Merger will be a taxable transaction for U.S. federal income tax purposes, the amount of gain or loss a holder of Tetraphase Common Stock recognizes, and the timing and potentially the character of a portion of such gain or loss, depends in part on the U.S. federal income tax treatment of the CVRs, with respect to which there is uncertainty. For further discussion, see “Material U.S. Federal Income Tax Consequences of the Merger for Tetraphase Stockholders” elsewhere in this proxy statement/prospectus. Tetraphase stockholders should be aware that the Merger Consideration they will be entitled to receive upon the completion of the Merger does not include a cash component payable at closing to pay any taxes that may be due as a result of the Merger.

Tetraphase and AcelRx may be targets of securities class action and derivative lawsuits which could result in substantial costs and may delay or prevent the Merger from being completed.

Securities class action lawsuits and derivative lawsuits are often brought against public companies that have entered into merger agreements. Even if the lawsuits are without merit, defending against these claims could result in substantial costs and divert management time and resources. An adverse judgment could result in

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monetary damages, which could have a negative impact on Tetraphase’s and AcelRx’s respective liquidity and financial condition. Additionally, if a plaintiff is successful in obtaining an injunction prohibiting completion of the Merger, then that injunction may delay or prevent the Merger from being completed, or from being completed within the expected timeframe, which may adversely affect Tetraphase’s and AcelRx’s respective business, financial position and results of operations.

The shares of AcelRx Common Stock to be received by Tetraphase stockholders as a result of the Merger will have rights different from the current shares of Tetraphase Common Stock.

Upon consummation of the Merger, the rights of Tetraphase stockholders, who will become stockholders of AcelRx, will be governed by the amended and restated certificate of incorporation and bylaws of the AcelRx. The rights associated with Tetraphase Common Stock are different from the rights which will be associated with AcelRx Common Stock. See the section entitled “Comparison of Rights of Holders of AcelRx Common Stock and Tetraphase Common Stock” beginning on page 173 of this proxy statement/prospectus for a discussion of these rights.

Risks Related to the CVRs

You may not receive any future issuance of AcelRx Common Stock or cash payment on the CVRs.

Your right to receive any future issuance of AcelRx Common Stock or cash payment on the CVRs will be contingent upon the achievement by AcelRx and its subsidiaries of certain milestones within agreed time periods, as specified in the CVR Agreement. If some or all of the milestones specified in the CVR Agreement are not achieved for any reason within the time periods specified in such agreement, only some or none of the issuances of AcelRx Common Stock or cash payments will be made under the CVRs and the CVRs will expire valueless. Accordingly, the value, if any, of the CVRs is speculative, and the CVRs may ultimately result in no additional value to holders of CVRs. See “The CVR Agreement” on page 114 of this proxy statement/prospectus.

You will not be able to determine the amount of stock or cash to be received under the CVRs until the achievement of certain agreed upon milestones, which makes it difficult to value the CVRs.

Upon the achievement of certain agreed upon milestones, the CVRs are payable in cash or shares of AcelRx Common Stock at AcelRx’s election. If any issuance of AcelRx Common Stock or cash payment is made on the CVRs, it will not be made until the achievement of such milestones. As such, you will not know the value, if any, of your CVRs until certain sales milestones occur, or until the CVRs expire.

The CVRs are nontransferable.

The CVRs are not transferable, except in the limited circumstances specified in the CVR Agreement. The CVRs will not be registered as securities and they will not be listed or traded on any stock exchange in the United States or elsewhere. Therefore, the CVRs are not liquid and you will not be permitted to sell or transfer them, except for in certain limited circumstances. See “The CVR Agreement” on page 114 of this proxy statement/prospectus.

While AcelRx and its subsidiaries and licensees are required to use commercially reasonable efforts to achieve the CVR milestones, some or all of the milestones may ultimately not be achieved.

AcelRx has agreed to, and has agreed to cause its affiliates and licensees to, use commercially reasonable efforts to achieve the CVR milestones. AcelRx has further agreed that neither it nor any of its affiliates shall act in bad faith for the purpose of avoiding achievement of any milestone or the payment of any milestone amount. The CVR Agreement does not, however, require AcelRx to take all possible actions to achieve each milestone, and the milestones may not be achieved due to factors outside of AcelRx’s control. As a result, some or all of the milestones may ultimately not be achieved.

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The U.S. federal income tax treatment of the CVRs is unclear.

There is no legal authority directly addressing the U.S. federal income tax treatment of the CVRs or the treatment of payments that may be received pursuant to the CVR Agreement. Accordingly, the amount, timing and character of any gain, income or loss with respect to the CVRs are uncertain. For further discussion, see “Material U.S. Federal Income Tax Consequences of the Merger for Tetraphase Stockholders” elsewhere in this proxy statement/prospectus.

Risks Related to AcelRx Following the Merger

AcelRx may fail to realize the benefits expected from the Merger, which could adversely affect its stock price.

The anticipated benefits AcelRx expects from the Merger are, necessarily, based on projections and assumptions about the combined businesses of AcelRx and Tetraphase, which may not materialize as expected or which may prove to be inaccurate. The value of AcelRx Common Stock following the completion of the Merger could be adversely affected if AcelRx is unable to realize the anticipated benefits from the Merger on a timely basis or at all. Achieving the benefits of the Merger will depend, in part, on AcelRx’s ability to integrate the sales team, business, operations and products of Tetraphase successfully and efficiently with its sales team and business. The challenges involved in this integration, which will be complex and time-consuming, include the following:

If AcelRx does not successfully manage these issues and the other challenges inherent in integrating an acquired business of the size and complexity of Tetraphase, then AcelRx may not fully achieve, or may take longer to achieve, the anticipated benefits of the Merger and its revenue, expenses, operating results and financial condition could be materially adversely affected.

The acquisition of Tetraphase may result in significant charges or other liabilities that could adversely affect the financial results of the combined company.

The financial results of the combined company may be adversely affected by cash expenses and non-cash accounting charges incurred in connection with AcelRx’s integration of the business and operations of Tetraphase. The amount and timing of these possible charges are not yet known. Further, AcelRx’s failure to identify or accurately assess the magnitude of certain liabilities it is assuming in the Merger could result in unexpected litigation or regulatory exposure, unfavorable accounting charges, unexpected increases in taxes due, a loss of anticipated tax benefits or other adverse effects on AcelRx’s business, operating results or financial condition. The price of AcelRx Common Stock following the Merger could decline to the extent the combined company’s financial results are materially affected by any of these events.

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AcelRx’s future results will suffer if it does not effectively manage its expanded operations following the Merger.

Following the Merger, the size and scope of operations of the business of the combined companies will increase beyond the current size and scope of operations of either AcelRx’s or Tetraphase’s current businesses. In addition, AcelRx may continue to expand its size and operations through additional acquisitions or other strategic transactions. AcelRx’s future success depends, in part, upon its ability to manage its expanded business, which may pose substantial challenges for its management, including challenges related to the management and monitoring of new operations and associated increased costs and complexity. There can be no assurances that AcelRx will be successful in managing such expanded business or that it will realize the expected economies of scale, synergies and other benefits currently anticipated from the Merger or anticipated from any additional acquisitions or strategic transactions.

Future results of AcelRx following the Merger may differ materially from the unaudited pro forma financial information included in this proxy statement/prospectus.

The future results of AcelRx following the Merger may be materially different from those shown in the unaudited pro forma financial information presented in this proxy statement/prospectus that show only a combination of AcelRx’s and Tetraphase’s historical results. AcelRx expects to incur significant costs associated with completing the Merger and integrating the operations of Tetraphase, and the exact magnitude of these costs is not yet known. Furthermore, these costs may decrease the amount of capital that could be used by AcelRx for other purposes.

The market price of AcelRx Common Stock after completion of the Merger will continue to fluctuate, and may be affected by factors different from those affecting shares of Tetraphase Common Stock currently.

Upon completion of the Merger, holders of Tetraphase Common Stock will become holders of AcelRx Common Stock. The business of AcelRx differs from that of Tetraphase in important respects, and, accordingly, the results of operations of AcelRx after the Merger, as well as the market price of AcelRx Common Stock, may be affected by factors different from those currently affecting the results of operations of Tetraphase. As a result of the Merger, Tetraphase will be part of a larger company with other lines of business, such that decisions affecting Tetraphase may be made in respect of the larger combined business as a whole rather than the Tetraphase business individually. Moreover, general fluctuations in stock markets could have a material adverse effect on the market for, or liquidity of, AcelRx Common Stock, regardless of AcelRx’s actual operating performance. For further information on the businesses of AcelRx and Tetraphase and certain factors to consider in connection with those businesses, see the documents incorporated by reference or included in this proxy statement/prospectus and referred to under “Where You Can Find More Information” beginning on page 196 of this proxy statement/prospectus, “Incorporation of Certain Information by Reference” beginning on page 197 of this proxy statement/prospectus and “Information about Tetraphase” beginning on page 117 of this proxy statement/prospectus.

Additional Risks Related to AcelRx and Tetraphase

AcelRx’s and Tetraphase’s businesses are and will be subject to the risks described above. In addition, AcelRx is also currently subject to the additional risks described in AcelRx’s Annual Report on Form 10-K for the year ended December 31, 2019, as updated by any subsequent Current Reports on Form 8-K and Quarterly Reports on Form 10-Q, all of which are filed with the SEC and are incorporated by reference into this proxy statement/prospectus. See “Where You Can Find More Information” beginning on page 196 of this proxy statement/prospectus and “Incorporation of Certain Information by Reference” beginning on page 197 of this proxy statement/prospectus. In addition, Tetraphase is currently subject to the additional risks described in Tetraphase’s Annual Report on Form 10-K for the year ended December 31, 2019, as updated by any subsequent Current Reports on Form 8-K and Quarterly Reports on Form 10-Q, all of which are filed with the SEC and are incorporated by reference into proxy statement/prospectus.

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The Tetraphase Bylaws provides that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for substantially all disputes between Tetraphase and its stockholders, which could limit its stockholders’ ability to obtain a judicial forum that they find favorable for disputes with Tetraphase or its directors, officers or other employees.

The Tetraphase Bylaws provides that the Court of Chancery of the State of Delaware is the sole and exclusive forum for any derivative action or proceeding brought on Tetraphase’s behalf, any action asserting a breach of fiduciary duty owed by any of its current or former directors, officers or other employees to Tetraphase, agents, or its stockholders, including, without limitation, a claim alleging the aiding and abetting of such a breach of fiduciary duty, any action asserting a claim against it arising pursuant to any provisions of the DGCL, the Tetraphase Charter or Tetraphase Bylaws, or any action asserting a claim against it that is governed by the internal affairs doctrine or other “internal corporate claim” as that term is defined in Section 115 of the DGCL; provided, that these provisions will not apply to actions or proceedings brought to enforce a duty or liability created by the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, or any other claim for which the federal courts have exclusive jurisdiction. The choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with Tetraphase or its directors, officers or other employees, which may discourage such lawsuits against Tetraphase or the combined company and its directors, officers and other employees. If a court were to find the choice of forum provision contained in the Tetraphase Bylaws to be inapplicable or unenforceable in an action, the combined company may incur additional costs associated with resolving such action in other jurisdictions.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This proxy statement/prospectus contains “forward-looking statements” within the meaning of federal securities laws. Forward-looking statements may contain words such as “believes”, “anticipates”, “estimates”, “expects”, “intends”, “aims”, “potential”, “will”, “would”, “could”, “considered”, “likely” and words and terms of similar substance used in connection with any discussion of future plans, actions or events identify forward-looking statements. All statements, other than historical facts, including statements regarding the expected timing of the closing of the Merger and AcelRx’s or Tetraphase’s expected financial condition, results of operations and business performance, including any forecasts, financial projections and descriptions of anticipated cost savings or other synergies or expected benefits of the Merger, are forward-looking statements. These statements are based on management’s current expectations, assumptions, estimates and beliefs. While AcelRx and Tetraphase believe these expectations, assumptions, estimates and beliefs are reasonable, such forward-looking statements are only predictions, and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements.

The following factors, among others, could cause actual results to differ materially from those described in the forward-looking statements:

These and additional factors that may affect the future results of Tetraphase and AcelRx are set forth under “Risk Factors” beginning on page 27 of this proxy statement/prospectus, as well as in AcelRx’s Annual Report on Form 10-K for the year ended December 31, 2019, as updated by any subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. See “Incorporation of Certain Information by Reference” beginning on page 197 of this proxy statement/prospectus. The risks and uncertainties described and referred to above are not exclusive and further information concerning AcelRx and Tetraphase and their respective businesses, including factors that potentially could materially affect their respective businesses, financial condition or operating results, may emerge from time to time. You are urged to consider these factors carefully in evaluating these forward-looking statements, and not to place undue reliance on any forward-looking statements. The forward-looking statements in this proxy statement/prospectus speak only as of the date of this proxy statement/prospectus. Except as required by law, AcelRx and Tetraphase assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.

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THE COMPANIES

Information about Tetraphase

Tetraphase Pharmaceuticals, Inc. (“Tetraphase”) is a biopharmaceutical company using its proprietary chemistry technology to develop and commercialize novel tetracyclines for serious and life-threatening conditions, including bacterial infections caused by many multidrug-resistant (“MDR”), bacteria. There is a medical need for new antibiotics as resistance to existing antibiotics increases. The company’s commercial product, XERAVA^™ (eravacycline), a fully synthetic fluorocycline, is an intravenous (“IV”) antibiotic that is approved for use as a first-line empiric monotherapy for the treatment of MDR infections, including those found in complicated intra-abdominal infections. The Tetraphase pipeline also includes TP-271 IV and Oral, and TP-6076 IV only, which are Phase 2 ready, and TP-2846, which is in preclinical testing for acute myeloid leukemia.

Shares of Tetraphase Common Stock are traded on The Nasdaq Global Select Market under the symbol “TTPH.”

Additional information about Tetraphase is included in the documents incorporated by reference into this proxy statement/prospectus. See “Where You Can Find More Information” beginning on page 196 of this proxy statement/prospectus and “Incorporation of Certain Information by Reference” beginning on page 197 of this proxy statement/prospectus for information on how you can view reports and other documents filed with the SEC by Tetraphase.

Information about AcelRx

AcelRx Pharmaceuticals, Inc. (“AcelRx”) is a specialty pharmaceutical company focused on the development and commercialization of innovative therapies for use in healthcare institutions. AcelRx’s proprietary, non-invasive sublingual formulation technology delivers sufentanil with consistent pharmacokinetic profiles. The company has one approved product in the U.S., DSUVIA^® (sufentanil sublingual tablet, 30 mcg), known as DZUVEO^™ in Europe, indicated for the management of acute pain severe enough to require an opioid analgesic for adult patients in certified medically supervised healthcare settings, and one product candidate, Zalviso^® (sufentanil sublingual tablet system, SST system, 15 mcg), an investigational product in the U.S., is being developed as an innovatively designed patient-controlled analgesia (PCA) system for reduction of moderate-to-severe acute pain in medically supervised settings. DZUVEO and Zalviso are both approved products in Europe.

Shares of AcelRx Common Stock are traded on The Nasdaq Stock Market LLC under the symbol “ACRX.”

Additional information about AcelRx is included in the documents incorporated by reference into this proxy statement/prospectus. See “Where You Can Find More Information” beginning on page 196 of this proxy statement/prospectus and “Incorporation of Certain Information by Reference” beginning on page 197 of this proxy statement/prospectus.

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THE SPECIAL MEETING

This proxy statement/prospectus is being provided to Tetraphase stockholders as part of a solicitation of proxies by the Tetraphase Board for use at the Special Meeting. This proxy statement/prospectus contains important information regarding the Special Meeting, the proposals on which you are being asked to vote, information you may find useful in determining how to vote and voting procedures.

This proxy statement/prospectus is being first mailed on or about                 , 2020 to all stockholders of record of Tetraphase as of the Record Date. Stockholders of record who owned Tetraphase Common Stock at the close of business on the Record Date are entitled to receive notice of, attend and vote at the Special Meeting. On the Record Date, there were                 shares of Tetraphase Common Stock outstanding.

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DO NOT SEND IN ANY TETRAPHASE STOCK CERTIFICATES WITH YOUR PROXY CARD.

As described in the Merger Agreement, Tetraphase stockholders will be sent materials for exchanging Tetraphase Common Stock shortly after consummation of the Merger.

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BENEFICIAL STOCK OWNERSHIP OF TETRAPHASE DIRECTORS, EXECUTIVE OFFICERS

AND CERTAIN HOLDERS OF TETRAPHASE COMMON STOCK

Unless otherwise provided below, the following table sets forth information regarding beneficial ownership of Tetraphase Common Stock as of March 31, 2020 by:

Beneficial ownership is determined in accordance with SEC rules. These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to those securities and include shares of Tetraphase Common Stock issuable upon the exercise of stock options, warrants or other rights that are immediately exercisable or exercisable or that will vest, as applicable, within 60 days after March 1, 2020. Except as otherwise indicated, all of the shares reflected in the table are shares of Tetraphase Common Stock and all persons listed below have sole voting and investment power with respect to the shares of Tetraphase Common Stock beneficially owned by them, subject to applicable community property laws. The information is not necessarily indicative of beneficial ownership for any other purpose.

The column titled “Percentage of Shares Beneficially Owned” is based on a total of 7,259,236 shares of Tetraphase Common Stock outstanding as of March 1, 2020. Except as otherwise indicated in the footnotes below, the address of the beneficial owner is c/o Tetraphase Pharmaceuticals, Inc., 480 Arsenal Way, Watertown, MA 02472.

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PROPOSAL 1: ADOPTION OF THE MERGER AGREEMENT

This proxy statement/prospectus is being furnished to you as a stockholder of Tetraphase as part of the solicitation of proxies by the Tetraphase Board for use at the Special Meeting to consider and vote upon a proposal to adopt the Merger Agreement, which is attached as Annex A to this proxy statement/prospectus.

The Tetraphase Board, after due and careful discussion and consideration, unanimously approved and declared advisable the Merger Agreement, the Merger and the other Contemplated Transactions and determined that the Merger Agreement, the Merger and the other Contemplated Transactions are fair to and in the best interests of Tetraphase and its stockholders.

The Tetraphase Board accordingly unanimously recommends that Tetraphase stockholders adopt the Merger Agreement, which is described in this proxy statement/prospectus and particularly in the sections titled “The Merger” beginning on page 47 of this proxy statement/prospectus and “The Merger Agreement” beginning on page 90 of this proxy statement/prospectus and which is attached as Annex A to this proxy statement/prospectus.

The Merger between AcelRx and Tetraphase cannot be completed without the affirmative vote of the holders of a majority of the outstanding shares of Tetraphase Common Stock entitled to vote thereon. A failure to vote or an abstention will have the same effect as a vote “AGAINST” the proposal to adopt the Merger Agreement.

THE TETRAPHASE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE MERGER AGREEMENT PROPOSAL (PROPOSAL 1).

PROPOSAL 2: ADVISORY (NON-BINDING) VOTE ON MERGER-RELATED

COMPENSATION FOR TETRAPHASE NAMED EXECUTIVE OFFICERS

Pursuant to Section 14A of the Exchange Act and Rule 14a-21(c) thereunder, Tetraphase is seeking a non-binding, advisory stockholder approval of the compensation of Tetraphase’s named executive officers that is based on or otherwise relates to the Merger as disclosed in the section titled “Interests of Tetraphase’s Directors and Executive Officers in the Merger—Employee Incentives and Benefits—Possible Change-in-Control Compensation” beginning on page 83 of this proxy statement/prospectus. The compensation proposal gives stockholders the opportunity to express their views on the merger-related compensation of Tetraphase’s named executive officers.

Accordingly, Tetraphase is asking its stockholders to vote “FOR” the adoption of the following resolution, on a non-binding, advisory basis:

“RESOLVED, that the compensation that will or may be paid or become payable to Tetraphase’s named executive officers, in connection with the Merger, and the agreements or understandings pursuant to which such compensation will or may be paid or become payable, in each case as disclosed pursuant to Item 402(t) of Regulation S-K in the section titled “Interests of Tetraphase’s Directors and Executive Officers in the Merger—Employee Incentives and Benefits—Possible Change-in-Control Compensation” of the proxy statement/prospectus for this meeting is hereby APPROVED.”

The vote on the compensation proposal is a vote separate and apart from the vote to adopt the Merger Agreement. Accordingly, if you are a stockholder, you may vote to adopt the Merger Agreement proposal, and vote not to approve the compensation proposal, and vice versa. Because the vote on the merger-related compensation proposal is advisory only, it will not be binding on Tetraphase. If the Merger is completed, the merger-related compensation may be paid to Tetraphase’s named executive officers to the extent payable in accordance with the terms of the compensation agreements and arrangements even if stockholders fail to approve the advisory vote regarding merger-related compensation.

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Assuming a quorum is present at the Special Meeting, approval of the compensation proposal requires the affirmative vote of the holders of shares of Tetraphase Common Stock representing a majority of the votes cast on the proposal. Shares which abstain from voting and “broker non-votes” with respect to this proposal will not be counted as votes in favor of such matter, and will also not be counted as shares voting on such matter. Accordingly, abstentions and “broker non-votes” will have no effect on the voting on this proposal.

THE TETRAPHASE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE COMPENSATION PROPOSAL (PROPOSAL 2).

PROPOSAL 3: ADJOURNMENT OF THE TETRAPHASE SPECIAL MEETING

The Special Meeting may be adjourned to another time and place if necessary to permit solicitation of additional proxies if there are not sufficient votes to approve the Merger Agreement proposal or to ensure that any supplement or amendment to this proxy statement/prospectus is timely provided to stockholders.

Tetraphase is asking its stockholders to authorize the holder of any proxy solicited by the Tetraphase Board to vote in favor of any adjournment of the Special Meeting to solicit additional proxies if there are not sufficient votes to approve the merger agreement proposal or to ensure that any supplement or amendment to this proxy statement/prospectus is timely provided to stockholders.

Whether or not a quorum is present at the Special Meeting, approval of the adjournment proposal requires the affirmative vote of the holders of shares of Tetraphase Common Stock representing a majority of the votes cast on the proposal. Shares which abstain from voting and “broker non-votes” with respect to this proposal will not be counted as votes in favor of such matter, and will also not be counted as shares voting on such matter. Accordingly, abstentions and “broker non-votes” will have no effect on the voting on this proposal.

Under the Tetraphase Bylaws, the chairman of the Special Meeting may adjourn the Special Meeting regardless of the outcome of the adjournment proposal if a quorum is not present.

THE TETRAPHASE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE ADJOURNMENT PROPOSAL (PROPOSAL 3).

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THE MERGER

This section of the proxy statement/prospectus describes certain material aspects of the proposed Merger. This section may not contain all of the information that is important to you. You should carefully read this entire proxy statement/prospectus and the documents incorporated herein by reference, including the full text of the Merger Agreement, which is attached as Annex A, for a more complete understanding of the Merger. In addition, (i) important business and financial information about AcelRx is incorporated into this proxy statement/prospectus by reference and (ii) important business and financial information about Tetraphase is incorporated into this proxy statement/prospectus by reference. See also “Where You Can Find More Information” beginning on page 196 of this proxy statement/prospectus and “Incorporation of Certain Information by Reference” beginning on page 197 of this proxy statement/prospectus.

Background of the Merger

The Tetraphase Board, together with members of the Tetraphase management team, regularly reviews and assesses the performance, future growth prospects, business plans and overall strategic direction of Tetraphase and considers a variety of strategic alternatives that may be available to Tetraphase including continuing to pursue the company’s strategy as a standalone company or pursuing potential strategic or financing transactions with third parties, in each case, with the goal of maximizing shareholder value.

In connection with such a review, representatives of Tetraphase met with representatives of several companies and potential investors at the 2019 J.P. Morgan Conference in San Francisco, California during the period between January 7, 2019 and January 9, 2019. These potential strategic partners included representatives of ten companies, including: AcelRx and companies that we refer to as Company B, Company C, Company D, Company E, Company F and Company G.

On March 1, 2019, Company F sent an unsolicited offer to acquire all the common stock of Tetraphase in a stock-for-stock transaction to Mr. Guy Macdonald, Tetraphase’s then President and Chief Executive Officer, and to other members of Tetraphase’s management team. The offer contemplated a fixed exchange ratio that would result in stockholders of Tetraphase holding approximately 37% of the equity of the combined company.

On March 3, 2019, the Tetraphase Board was notified of the Company F proposal.

On March 4, 2019, the Tetraphase Board held a telephonic meeting to discuss the Company F proposal. At this meeting, representatives of management, Tetraphase’s then financial advisor, which we refer to as Financial Advisor A, and Tetraphase’s special legal counsel for a possible transaction with Company F, which we refer to as Law Firm A, also participated. During this meeting the Tetraphase Board directed representatives of management and Financial Advisor A to conduct a “market check” to determine if there were other parties interested in a potential strategic transaction with the company.

On March 5, 2019, Financial Advisor A contacted representatives of companies that we refer to as Company H and Company I regarding a potential strategic transaction with Tetraphase, which were selected based on a judgment about their potential interest in Tetraphase’s business and assets as a result of their existing commercial products and pipeline. Both companies subsequently declined, indicating that they were not interested in acquiring assets in the antibiotic space. Officers of Tetraphase also contacted representatives of Company E and of a company that we refer to as Company J for the same purpose of determining whether they would be interested in a possible strategic transaction with the company. Company J subsequently declined. Later in the day, representatives of Financial Advisor A contacted representatives of Company F to discuss the timeline for a possible acquisition of Tetraphase.

On March 6, 2019, Maria Stahl, Tetraphase’s Chief Business Officer and General Counsel, e-mailed an officer of Company E with an update on the potential timing of a transaction.

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On or about March 8, 2019, such officer of Company E informed Ms. Stahl telephonically that Company E was not interested in pursuing a strategic transaction with Tetraphase at that time, citing structural and valuation concerns with a potential transaction, including a lack of willingness on the part of Company E to seek and obtain approval from its own stockholders for a transaction.

On March 12, 2019, representatives of Tetraphase and Company F met in Boston, Massachusetts to discuss Tetraphase’s business and operations. Representatives of each company’s financial advisors were also present at the meeting.

On March 14, 2019, Company F provided representatives of Tetraphase with access to a data room, and Tetraphase began conducting due diligence on Company F’s business and operations.

On or about March 15, 2019, Tetraphase provided Company F with access to a data room and Company F began conducting due diligence on Tetraphase’s business and operations.

On March 21, 2019, the Tetraphase Board held a telephonic meeting to review the terms and conditions of a draft merger agreement, initially prepared by Tetraphase, and other matters related to a potential strategic transaction with Company F. Representatives of Tetraphase management, Financial Advisor A and Law Firm A also participated in the meeting.

On March 28, 2019, the Tetraphase Board held a telephonic meeting to review matters related to the potential strategic transaction with Company F. Representatives of Tetraphase management, Financial Advisor A and Law Firm A also participated in the meeting.

On or about April 5, 2019, representatives of Company F informed representatives of Tetraphase that Company F was no longer interested in pursuing a strategic transaction with Tetraphase, citing financial and liquidity concerns with Tetraphase’s business.

In late June 2019, Company F’s Chief Executive Officer contacted Mr. Macdonald to discuss the possibility of resuming discussions regarding a possible strategic transaction between Tetraphase and Company F.

On July 2, 2019, representatives of Company F’s management team and Tetraphase’s management team met in Philadelphia, Pennsylvania to discuss the business and operations of both companies and the potential synergies arising out of a combination of the two companies.

From July 3, 2019 to July 31, 2019, discussions between Company F and Tetraphase continued. Also during this period, members of Tetraphase’s management team held discussions with other potential strategic partners and investors, including, but not limited to, Company C, which had earlier not been interested in a potential strategic transaction but, due to developments with its own business, expressed a desire to discuss a potential transaction with Tetraphase.

On July 25, 2019, representatives of Tetraphase management received an offer to acquire the company in a stock-for-stock transaction from Company C. The offer contemplated a fixed exchange ratio that would result in stockholders of Tetraphase holding approximately 20% of the equity of the combined company. On or about the same day, Tetraphase management informed representatives of Financial Advisor A, Law Firm A and all the members of the Tetraphase Board of Company C’s offer.

On July 26, 2019, at a previously scheduled telephonic meeting of a committee of the Tetraphase Board composed of L. Patrick Gage, Garen Bohlin and John Freund which had been formed to evaluate potential equity financing transactions, which we refer to as the Pricing Committee, and at which other members of the Tetraphase Board were present, the Tetraphase directors discussed Company C’s offer and Tetraphase management and Financial Advisor A were instructed to contact other parties to determine whether there was any interest in pursuing a possible strategic transaction with Tetraphase. Financial Advisor A contacted approximately seven parties between July 26, 2019 and August 1, 2019.

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On July 29, 2019, Tetraphase and AcelRx entered into a confidentiality agreement in anticipation of the sharing of confidential information by the parties, which did not include a standstill.

On or about August 2, 2019, based on responses to these contacts and following the execution of a confidentiality agreement with the applicable party, Tetraphase provided access to a data room to representatives of Company B, Company C, Company F, Company G and Company I as well as companies that we refer to as Company K and Company L.

On August 4, 2019, the Tetraphase Board held a telephonic meeting to discuss Company C’s proposal as well as ongoing discussions with the other potential interested parties. Representatives of Tetraphase management, Financial Advisor A and Law Firm A also participated in this meeting.

On or about August 12, 2019, Company G provided Tetraphase with a non-binding proposal to acquire the company in an all cash transaction for aggregate consideration of $20 million.

Between late July and late August, representatives of Tetraphase management, Financial Advisor A and Law Firm A continued to work on diligence matters with the interested parties referred to above.

On August 18, 2019, the Tetraphase Board held a telephonic meeting to discuss the terms and conditions of a proposed merger agreement to be delivered to Company G. Representatives of Tetraphase management, Financial Advisor A and Law Firm A also participated in the meeting.

On or prior to August 25, 2019, Company C advised Tetraphase that it was no longer interested in pursuing a potential strategic transaction with the company, citing market conditions.

On or about September 4, 2019, Company G notified Financial Advisor A that following its due diligence review and due to other business development activities it would not be pursuing a potential strategic transaction with Tetraphase. Prior to that date each of Companies B, F, I, K and L had also indicated to Tetraphase or Financial Advisor A that it was not interested in pursuing a strategic transaction with the company, citing, to the extent the parties provided a specific reason, market conditions and judgments regarding valuation and liquidity.

On September 25, 2019 the Tetraphase Board held a regularly scheduled meeting in Boston, Massachusetts, at the offices of Wilmer Cutler Pickering Hale and Dorr LLP, Tetraphase’s outside corporate counsel, which we refer to as WilmerHale. At this meeting, the Tetraphase Board instructed management to engage an investment bank to underwrite a public offering of Tetraphase’s common stock.

On or about September 27, 2019, Ms. Stahl began discussions with representatives of H.C. Wainwright & Co., or HCW, concerning a potential equity financing for Tetraphase.

On September 29, 2019, after approval from the Pricing Committee, Tetraphase management engaged HCW as its exclusive agent, advisor or underwriter for an equity offering for capital raising purposes.

On September 30, 2019 representatives of HCW and its legal counsel, members of Tetraphase management, WilmerHale and representatives of Ernst & Young LLP, Tetraphase’s independent public company registered accountants (“EY”), participated in an organizational call to discuss the structure and timing of a potential public offering.

From September 30, 2019 through the morning of October 7, 2019, representatives of HCW and its legal counsel, members of Tetraphase management, WilmerHale, and EY worked to prepare Tetraphase for a public offering of Tetraphase Common Stock. This work included, but was not limited to, conducting due diligence and drafting and negotiating documentation.

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On October 2, 2019, Tetraphase commenced discussions under terms of confidentiality with potential investors for a public offering of Tetraphase Common Stock.

From October 2, 2019 through October 4, 2019, members of Tetraphase management participated in telephone calls with potential investors in the public equity offering.

On October 2, 2019, Ms. Stahl and an officer of Company E met in person. During this meeting, the Company E officer noted that Company E’s board of directors was interested in pursuing a possible strategic transaction with Tetraphase. Following the meeting, Ms. Stahl reported this discussion to Larry Edwards, who had succeeded Mr. Macdonald as Tetraphase’s President and Chief Executive Officer effective as of August 1, 2019.

On the morning of October 4, 2019, Ms. Stahl and the Company E officer spoke by telephone and the officer reiterated Company E’s interest in commencing discussions with Tetraphase regarding a possible strategic transaction.

On the afternoon of October 4, 2019, the Pricing Committee met telephonically with members of Tetraphase management and WilmerHale. During this meeting, management updated the Tetraphase Board on the potential public equity offering, noting the expected terms of the offering, including the fact that investors would likely require warrants to be issued in the offering, including warrants containing “Black-Scholes” provisions potentially requiring any acquirer of Tetraphase to redeem the warrants at their Black-Scholes value, which we refer to as the Black-Scholes Put Provisions. Members of Tetraphase management also discussed with the Pricing Committee the in-bound inquiry by Company E, noting that if Tetraphase were to pursue the in-bound inquiry, then Tetraphase’s efforts regarding a public equity offering would have to cease. The Pricing Committee directed management to call a meeting of the full Board for a discussion of Tetraphase’s alternatives.

Late in the day on October 4, 2019, the President and Chief Executive Officer of Company E called Mr. Edwards to reiterate Company E’s interest in a potential strategic transaction.

In October 2019, Tetraphase engaged an agent to assist the company in exploring the availability of debt financing for Tetraphase. As a result of these efforts, the company entered into confidentiality agreements and engaged in discussions with several third party lenders, following which the company determined that debt financing would not be available due, in part, to the company’s limited cash resources.

On October 7, 2019, Company E delivered a non-binding indication of interest to Tetraphase providing for an acquisition of the company for approximately $14.56 million payable in shares of Company E common stock, representing an approximate 14% ownership in the combined company, with such valuation based on market prices for Tetraphase’s and Company E’s common stock existing at such time, with an exchange ratio to be determined prior to execution of definitive documents based on each company’s current market valuation. Later on October 7, 2019, the Tetraphase Board held a telephonic meeting and determined that management should cease pursuing the public equity offering and instead should focus its efforts on moving forward with a potential strategic transaction with Company E.

From October 7, 2019 to October 10, 2019, representatives of Tetraphase management held discussions with four potential financial advisors.

On or about October 8, 2019, Company E began to conduct due diligence on Tetraphase and Tetraphase informed HCW that it would cease all activities regarding a financing transaction.

On October 9, 2019, representatives of Company E met in person with representatives of Tetraphase, including Mr. Edwards and Ms. Stahl, at the company’s corporate offices to discuss Tetraphase’s business and operations and begin conducting in-person due diligence.

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On October 10, 2019, Ms. Stahl and a Company E officer spoke telephonically to discuss process and timing for a potential transaction as well as the likelihood of obtaining necessary consent from the Tetraphase stockholders.

On October 11, 2019, Messrs. Edwards and Christopher Watt, Tetraphase’s Senior Vice President, Finance, held an in-person meeting with representatives of an investor which we refer to as Company M to ascertain whether or not Company M would be interested in making a strategic investment in Tetraphase.

From October 9, 2019 through October 18, 2019, Company E continued to conduct legal and operational due diligence on Tetraphase, including telephonic calls with Tetraphase’s legal advisors and in person meetings with representatives of Tetraphase’s operations team.

On or about October 18, 2019, Company E delivered a draft merger agreement to representatives of Tetraphase.

On October 20, 2019, the Tetraphase Board held a telephonic meeting with WilmerHale to discuss certain provisions of the draft merger agreement provided by Company E, including certain termination provisions in the draft merger agreement.

On October 21, 2019, Mr. Edwards and Ms. Stahl and representatives of Company E spoke telephonically regarding the termination provisions of the draft merger agreement and their implications to Tetraphase in light of its projected cash runway and liquidity position, and the Tetraphase Board’s concerns with these provisions, including the fact that if the merger agreement was executed but ultimately terminated prior to consummation Tetraphase would have insufficient capital to effect an orderly bankruptcy or liquidation process.

On the afternoon of October 23, 2019, Ms. Stahl and a Company E officer discussed certain terms and conditions related to the draft merger agreement, including the proposed termination provisions.

One the evening of October 23, 2019, the Tetraphase Board held a telephonic meeting to discuss certain termination provisions in the draft merger agreement. At the direction of the Tetraphase Board, following this meeting, Tetraphase engaged Janney Montgomery Scott LLC (“Janney”) as the company’s financial advisor, including to provide a fairness opinion with respect to a potential transaction and to conduct a “market check” with certain parties previously contacted and other parties that could be interested in a potential transaction.

On October 23, 2019, Ms. Stahl reviewed with the Tetraphase Board considerations related to certainty of consummating the proposed strategic transaction with Company E, including issues raised by the termination provisions in Company E’s draft merger agreement. Later in the day Ms. Stahl and the Company E officer discussed with WilmerHale and Company E’s outside counsel the potential timing of a transaction. In the early evening on this date, the Company E officer telephoned Ms. Stahl to discuss, once again, certain termination provisions in the draft merger agreement.

On October 24, 2019, representatives of Janney and WilmerHale, Ms. Stahl and Mr. Watt discussed the potential transaction with Company E and Janney’s work process. Also on October 24, 2019, Ms. Stahl and an officer of Company E spoke again regarding the termination provisions of the draft merger agreement.

On October 25, 2019, Mr. Edwards, Ms. Stahl and representatives of Janney discussed the status of prior discussions between Tetraphase and potential strategic partners as well as new potential strategic partners to contact as part of Janney’s “market check.” They also discussed certain considerations related to a potential transaction with Company E, including the termination provisions and the potential timing of a transaction.

On October 26, 2019, the Tetraphase Board held a telephonic meeting to discuss the potential strategic transaction with Company E. Representatives of management, Janney and WilmerHale also participated in this meeting at the Tetraphase Board’s request. During this meeting, the Tetraphase Board determined to cease pursuing a potential strategic transaction with Company E due to Company E’s stated requirements regarding the

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termination provisions, particularly in light of the company’s cash runway and financial position. Company E required Tetraphase to meet a specified cash threshold as of the closing of the proposed transaction that Tetraphase determined it could not meet, and Company E had indicated that it would not negotiate on this threshold. Later on October 26, 2019, Ms. Stahl notified Company E of the Tetraphase Board decision. Also on October 26, 2019, at the request of the Tetraphase Board, Ms. Stahl contacted HCW to resume discussions regarding a potential financing transaction and requested that Janney cease outreach to potential counterparties regarding a potential strategic transaction.

From October 26, 2019 to October 29, 2019, representatives of Tetraphase, WilmerHale, and representatives of HCW and its legal counsel worked to prepare and consummate an offering of Tetraphase equity securities. During this period the Pricing Committee met telephonically on multiple occasions to discuss the terms of an offering, including the requirement for the issuance of warrants that included Black-Scholes Put Provisions.

On the morning of October 30, 2019, Tetraphase announced that it had entered into a registered direct offering at the market for $8.0 million of its equity securities, consisting of shares of common stock, common stock warrants (which included the Black-Scholes Put Provisions) and pre-funded warrants, with a single investor, Armistice Capital. The financing was consummated on November 1, 2019. Steve Boyd and Keith Maher, who became members of the Tetraphase Board on January 21, 2020 in connection with the January Offerings described below, are principals of Armistice Capital, a global, long/short, value-oriented and event-driven hedge fund. Upon the consummation of the financing, Armistice Capital became Tetraphase’s largest stockholder, both on an actual basis and a fully-diluted basis.

Also on the morning of October 30, 2019, after Tetraphase issued the financing press release, an officer of Company G contacted Mr. Edwards to congratulate him on the financing and to inquire about the company’s future prospects.

Following the closing of the offering on November 1, 2019 until December 3, 2019, representatives of Tetraphase’s management contacted several parties, including Company E, Company G and Company M, to see if there was any interest in a potential strategic transaction.

From November 1, 2019 to early December 2019, Tetraphase reengaged with an agent to assist the company in exploring the availability of debt financing for Tetraphase. As a result of these efforts, the company entered into confidentiality agreements and engaged in discussions with several third-party lenders, following which the company determined that debt financing continued to be unavailable.

On December 4, 2019, the Tetraphase Board held a regularly scheduled meeting. At this meeting, the Tetraphase Board determined that the company should engage financial and legal advisors to begin preparations for a potential sale of the company through a bankruptcy process.

Between December 5, 2019 to December 12, 2019, Tetraphase entered into engagement letters with a financial advisor that we refer to as Financial Advisor B, another financial advisor that we refer to as Financial Advisor C, and Delaware special bankruptcy counsel.

On December 16, 2019, representatives of Tetraphase and representatives of Financial Advisor B and Financial Advisor C met to discuss the company’s business and operations as well as potential parties for a strategic transaction with the company.

On or about December 19, 2019, a representative of Financial Advisor B contacted representatives of a company referred to as Company N to see if Company N had any interest in making a strategic investment in the company, based on certain public reports indicating Company N’s potential increased involvement in the antibiotic section.

From December 20, 2019 to December 23, 2019, Mr. Boyd of Armistice Capital had several discussions with members of Tetraphase management regarding the company’s business and financial needs and possible bankruptcy plans.

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On December 20, 2019, Mr. Edwards met with representatives of the sole stockholder of Company K, which we refer to as Company O, regarding Tetraphase’s financial and near-term strategic needs.

On December 24, 2019, a company that we refer to as Company P delivered an unsolicited proposal to acquire Tetraphase for an aggregate cash amount of $9.0 million. Company P is affiliated with Armistice Capital, and Mr. Boyd is a member of Company P’s board of directors.

On December 26, 2019, the Tetraphase Board held a telephonic meeting to discuss the Company P proposal. During this meeting the Tetraphase Board instructed representatives of Financial Advisor B to conduct a “market check.” Later on December 26, 2019, a representative of Financial Advisor B contacted several potential parties to gauge their interest in a strategic transaction with Tetraphase, including AcelRx, Company E, Company G, Company L, Company M, Company N and Company O.

Between December 26, 2019 and December 30, 2019, representatives of Financial Advisor B and Tetraphase management held calls with potential parties to a strategic transaction.

On December 28, 2019, Company E delivered a proposal to acquire Tetraphase in an all stock transaction valued at approximately $14.2 million.

On December 30, 2019, Company P executed a confidentiality agreement with Tetraphase and representatives of Company P and Armistice Capital, as an investor in and potential financing source for Company P, began conducting due diligence on Tetraphase.

On December 31, 2019, legal and financial advisors of Company E and Tetraphase held a telephonic meeting to discuss Company E’s proposal, the potential structure of a transaction and other matters related to the timing of a potential transaction.

Also on December 31, 2019, representatives of Financial Advisor B discussed with representatives of Company L a potential strategic transaction with Tetraphase. Based on this discussion, Tetraphase allowed Company L to begin conducting due diligence on the company’s business and operations.

On January 1, 2020, Ms. Stahl provided representatives of Company P and its outside legal counsel a draft merger agreement for review.

On January 2, 2020, an officer of Company P discussed with Ms. Stahl the expected legal requirements for a potential transaction. Also on January 2, 2020, representatives of Armistice Capital held a diligence discussion with representatives of Tetraphase and its financial advisors to discuss Tetraphase’s pipeline, compliance program and other areas of the company’s business and operations.

On January 3, 2020, Mr. Edwards communicated additional financial information to Mr. Boyd as previously requested by Mr. Boyd.

On the morning of January 3, 2020, the Tetraphase Board held a telephonic meeting to discuss the Company P and Company E proposals. Representatives of management, WilmerHale, Financial Advisor B and Financial Advisor C participated in the meeting. At this meeting representatives of Financial Advisor B reviewed with the Tetraphase Board the potential proceeds to Tetraphase stockholders in a transaction with Company P and a transaction with Company E, including the implications of the Black-Scholes Put Provisions. The representative of WilmerHale also reviewed with the Tetraphase Board various timing scenarios with respect to the two proposals and their potential interplay with a bankruptcy filing.

In the evening of January 3, 2020, Tetraphase received a draft non-binding proposal from Company E detailing the terms and conditions by which Company E would be willing to serve as a stalking horse bidder to acquire certain of Tetraphase’s assets in a chapter 11 bankruptcy process.

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On January 4, 2020, Mr. Edwards and Ms. Stahl had a brief discussion with representatives of Financial Advisor B and WilmerHale to review the Company E proposal. Following this discussion, Financial Advisor B sent an e-mail to Company E seeking clarification on Company E’s proposal.

On January 6, 2020, WilmerHale held a discussion with counsel for Company P regarding certain terms and conditions of the draft merger agreement previously sent to Company P. Following this call, Mr. Edwards had a discussion with Mr. Boyd regarding the same terms and conditions.

On January 7, 2020, Mr. Edwards and Ms. Stahl engaged in a telephonic discussion with Financial Advisor B and WilmerHale regarding the Company E proposal. Following this discussion, Financial Advisor B provided representatives of Company E with feedback on the draft proposal previously sent to Tetraphase.

On January 8, 2020, Mr. Edwards met in New York City with representatives of Armistice Capital to discuss Tetraphase’s business and operations.

Also on January 8, 2020, representatives of Company E and its counsel engaged in a telephonic discussion with representatives of Tetraphase, WilmerHale and Financial Advisor B to discuss Tetraphase’s comments on Company E’s proposal.

Also on January 8, 2020, counsel for Company P provided WilmerHale with a markup of the draft merger agreement previously provided by WilmerHale. Financial Advisor B also had a conversation with Armistice Capital regarding the structure of a potential transaction involving the company and Company P.

On January 8, 2020, Financial Advisor B discussed with representatives of Company N a potential transaction involving Tetraphase.

On January 8, 2020, Tetraphase provided access to its data room to representatives of Company E and to representatives of Company P’s outside legal counsel.

On January 9, 2020, representatives of Financial Advisor B, Financial Advisor C and WilmerHale met with representatives of Tetraphase to discuss in detail the company’s expected cash position over the next few months and the implications and risks associated with entering into a strategic transaction.

On January 9, 2020, WilmerHale discussed Company P’s markup of the merger agreement with counsel for Company P.

On January 9, 2020, Mr. Watt had a discussion with an officer of Company E regarding Tetraphase’s business and cash needs in the event of a potential chapter 11 proceeding.

On January 9, 2020, Ms. Stahl shared a draft bridge financing term sheet, created by Tetraphase for potential distribution to Company P and Mr. Boyd, with the Tetraphase Board. The proposed bridge financing was intended to provide the company with sufficient funds to operate through the closing of a transaction with Company P or, if that transaction failed to close, through a bankruptcy proceeding.

On January 9, 2020, Company E provided Tetraphase a revised non-binding proposal for the purchase of Tetraphase’s assets through a chapter 11 proceeding.

On January 10, 2020, the Tetraphase Board held a telephonic meeting to discuss the terms of a bridge financing proposal to send to Company P and Armistice Capital and the revised Company E asset purchase proposal. Members of management and representatives of WilmerHale, Financial Advisor B and Financial Advisor C also participated in the meeting.

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Following this meeting, representatives of Tetraphase delivered on the same day the proposed bridge financing terms to Armistice Capital, Company P and their respective representatives. Representatives of Armistice Capital and Company P also sent representatives of Tetraphase their own set of proposed bridge financing terms.

Later in the day on January 10, 2020, representatives of Financial Advisor B and WilmerHale discussed both sets of the bridge financing proposals with representatives of Armistice Capital and Company P, including Mr. Boyd.

Also on January 10, 2020, representatives of Company E’s financial advisor called Financial Advisor B to discuss the timeline associated with Company E’s revised proposal.

Later in the day on January 10, 2020, Financial Advisor C sent counsel for Company P certain Tetraphase financial information.

On January 12, 2020, representatives of Tetraphase, WilmerHale and Financial Advisor B held a telephonic discussion with representatives of Company E and its counsel and financial advisor regarding Company E’s revised asset purchase proposal. The parties also discussed a request from Company E for up to $250,000 in prepayments of its expenses in connection with potentially serving as a stalking horse bidder in the event of a chapter 11 bankruptcy filing by the company.

Also on January 12, 2020, Mr. Boyd discussed a potential equity investment in the Company, as an alternative to either Company E’s proposal or Company P’s proposal, with HCW and with Mr. Edwards. Later that day representatives of HCW sent a revised engagement letter to Mr. Edwards and Ms. Stahl. HCW also sent Tetraphase a term sheet for a proposed $15 million financing, consisting of the purchase of common stock and warrants by Armistice Capital on substantially the same terms as the October 2019 financing.

On January 13, 2020, Mr. Edwards conveyed HCW’s financing proposal to the Tetraphase Board.

Also on January 13, 2020, in furtherance of the Company E proposal, WilmerHale discussed with counsel for Company E the potential timeline and documentation in the event that Tetraphase were to file for chapter 11 protection.

On or about January 14, 2020, Mr. Boyd informed Mr. Edwards that Armistice Capital would no longer fund the Company P proposal to acquire Tetraphase.

On January 14, 2020, the Tetraphase Board held a telephonic meeting. At the meeting, the Tetraphase Board instructed management to continue working with HCW and Armistice Capital toward a potential capital investment in the company. In response to a request from Company E, the Tetraphase Board also instructed management to pay Company E $75,000 as a prepayment of its expenses in connection with potentially serving as a stalking horse bidder in the event of a chapter 11 bankruptcy filing by the company.

Later on January 14, 2020, Tetraphase entered into an amended engagement letter for a financing transaction with HCW.

On January 15, 2020 Mr. Edwards attended the 2020 JP Morgan Healthcare Conference and met with representatives of several biotechnology companies, including Vince Angotti, President and Chief Executive Officer of AcelRx.

On January 20, 2020, Dr. Freund and Mr. Angotti, who knew each other from prior business dealings, met in Palo Alto. At this meeting, Mr. Angotti indicated that AcelRx was interested in a potential merger with Tetraphase.

On or about January 21, 2020, AcelRx requested certain financial information from Tetraphase, which the company provided.

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Also on January 21, 2020, Company E informed Ms. Stahl that Company E was no longer interested in pursuing a transaction to acquire Tetraphase’s assets due in part to the company’s unwillingness to provide Company E with additional reimbursement of its expenses in connection with a potential stalking horse bid in a Tetraphase bankruptcy.

Also, on January 21, 2020, HCW advised Tetraphase that Armistice Capital had indicated that it would not fund the full $15 million in the proposed financing and proposed that HCW contact other potential investors to explore their interest in participating in a concurrent registered direct offering along-side the Armistice Capital investment.

Also on January 21, 2020, the Tetraphase Board held a telephonic meeting to approve moving forward with the proposed financing involving Armistice Capital and certain additional investors. During the meeting the Tetraphase Board reviewed the potential investors in the financing and the terms of the proposed offering, including the issuance of common stock warrants that included the Black-Scholes Put Provisions.

On January 22, 2020, the Pricing Committee met telephonically on two occasions to discuss and approve, and Tetraphase announced, offerings of common stock, common stock warrants and pre-funded warrants with aggregate gross proceeds of approximately $17.5 million, consisting of a $10 million private placement with Armistice Capital and a $7.5 million concurrent registered direct offering with certain additional investors, which we refer to collectively as the January Offerings. Steve Boyd and Keith Maher, who are each affiliated with Armistice Capital, became members of the Tetraphase Board on January 21, 2020 in connection with the January Offerings.

On January 23, 2020, Tetraphase and AcelRx entered into an amendment to the July 29, 2019 confidentiality agreement between the parties to extend the agreed upon confidentiality obligations to cover additional discussions and information sharing between the parties.

On January 24, 2020, Tetraphase completed the January Offerings.

On January 30, 2020 and January 31, 2020, Mr. Edwards, Ms. Stahl, Mr. Watt and Kevin Lloyd, Tetraphase’s Vice President of Program Management, held in person meetings at Tetraphase’s headquarters with Vincent Angotti, AcelRx’s President and Chief Executive Officer, and Raffi Asadorian, AcelRx’s Chief Financial Officer.

On February 2, 2020, the Tetraphase Board held a telephonic meeting and considered, among other things, the status of discussions with and outreach to various parties regarding a potential strategic transaction for the company.

On February 5, 2020, representatives of Tetraphase, including Mr. Edwards, and representatives of AcelRx, including Mr. Angotti, discussed potential synergies in territories and the field teams of the two companies and the possibility of entering into a co-promotion agreement between the parties.

On February 7, 2020, Tetraphase management contacted Janney to re-engage regarding a potential fairness opinion and to conduct a “market check” with various potential counterparties. Also on February 7, 2020, representatives of Tetraphase and representatives of AcelRx held a telephonic discussion regarding potential timing of a possible transaction, and Mr. Boyd spoke with Mr. Angotti, who knew each other as a result of prior business dealings.

On February 9, 2020, representatives of Tetraphase and AcelRx and their legal representatives and AcelRx’s financial advisor met telephonically to discuss a proposed timeline for a potential transaction.

On February 10, 2020, AcelRx delivered to Mr. Edwards a non-binding proposal for an acquisition of Tetraphase in an all-stock transaction for a fully diluted equity value, using a fixed exchange ratio based on market prices as

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of the date of the proposal, ranging between $20 million to $25 million, inclusive of amounts payable under the Black-Scholes Put Provisions, subject to a closing adjustment provision based on an assumed $15 million of net cash at Tetraphase at closing. The proposal also contemplated that the parties would enter into the co-promotion agreement. That same day Mr. Edwards shared the term sheet with the Tetraphase Board.

On February 11, 2020, the Tetraphase Board held a telephonic meeting, with representatives of Janney and WilmerHale participating at the invitation of the Board. The Tetraphase Board considered the AcelRx proposal as well as the status of other discussions and outreach regarding a potential strategic transaction for the company. The Board also discussed AcelRx’s request for exclusivity and certain cash balance adjustments at the closing of a transaction.

On February 12 and 13, 2020, representatives of AcelRx met with representatives of Tetraphase at Tetraphase’s offices for purposes of conducting additional reciprocal due diligence.

On February 12, 2020, AcelRx provided Tetraphase with a draft of the co-promotion agreement.

On February 13, 2020, AcelRx sent a revised offer to acquire all the equity of Tetraphase in an all-stock transaction for a fully diluted equity value, using a fixed exchange ratio based on market prices as of the date of the proposal, ranging between $13 million to $18 million, including amounts payable under the Black-Scholes Put Provisions, subject to a closing adjustment provision based on an assumed $8 million of net cash at Tetraphase at closing, and requested exclusivity beginning on February 18, 2020.

Also on February 13, 2020, management instructed Janney on behalf of the Tetraphase Board to contact third parties, including Companies E, H, I and K, to see if there was any interest in a strategic transaction with Tetraphase.

On February 14, 2020, Janney contacted 12 third parties to inquire about their potential interest in a strategic transaction with Tetraphase, including parties that had previously expressed an interest in acquiring Tetraphase. Of the 12 parties contacted by Janney over the course of February 14, 2020 through February 21, 2020, only Company K expressed interest in submitting an offer to acquire Tetraphase. Also on February 14, 2020, representatives of Company K and Janney discussed a potential strategic transaction, in which representatives of Company K expressed interest in moving forward with the process. Also on February 14, 2020, Dr. Freund and Mr. Angotti had a telephone call to discuss a potential merger with Tetraphase.

On February 15, 2020, the Tetraphase Board held a telephonic meeting to discuss AcelRx’s revised proposal and request for exclusivity. Representatives of Tetraphase management, Janney and WilmerHale participated in the meeting.

On February 16, 2020, Mr. Richard Page and Mr. James McNaughton of Janney spoke with a representative of AcelRx’s financial advisor regarding AcelRx’s proposal and the Tetraphase Board’s response to that proposal. Mr. Page and Mr. McNaughton noted that the Tetraphase Board would not agree to exclusivity, and that AcelRx should revisit the valuation included in AcelRx’s proposal.

On February 18, 2020, representatives of Janney followed up with representatives of Company K. Representatives of Company K requested access to the Tetraphase data room and indicated that Company K would be in a position to provide an update the following week.

On February 19, 2020, AcelRx delivered a draft merger agreement to Tetraphase, and then Cooley LLP (“Cooley”), counsel for AcelRx, circulated a revised version on February 20, 2020. On the same day, Tetraphase delivered a revised draft of the co-promotion agreement to AcelRx.

On February 20, 2020, representatives of Tetraphase and WilmerHale spoke to representatives of AcelRx and Cooley regarding the draft co-promotion agreement. Also on February 20, 2020, Dr. Freund and Mr. Angotti met and discussed the timing of the deal and consideration.

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On or about February 21, 2020, Tetraphase granted access to its data room to representatives of Company K and representatives of Company O, Company’s K’s sole stockholder.

On February 23, 2020, Cooley delivered a draft voting agreement for the transaction to WilmerHale.

On February 25, 2020, WilmerHale provided Cooley with comments on the draft merger agreement and the draft voting agreement, including, among others, comments related to the termination fee, the obligation to pay AcelRx’s expenses in certain circumstances, certain proposed downward adjustments to the exchange ratio, the covenants applicable to both parties between signing and closing of the merger, and the conditions to the closing of the merger.

On February 26, 2020, representatives of Janney held a call with representatives of Company K to discuss a potential strategic transaction with Tetraphase.

On February 27, 2020, Mr. Edwards and representatives of Company O had an in-person meeting. During this meeting, they discussed a potential strategic transaction involving Tetraphase. Also on February 27, 2020, representatives of Janney held a call with representatives of Company O and Company K to discuss a potential transaction with Tetraphase, including the potential impact of the Black-Scholes Put Provisions.

On February 28, 2020, Company O sent representatives of Janney a non-binding proposal for the acquisition of Tetraphase in a transaction valuing the Company at $10 million in cash, plus contingent value rights, or CVRs, representing the right to receive up to an additional $5 million in cash based on attainment of certain sales milestones. Mr. Edwards shared this non-binding proposal with the Tetraphase Board later that day.

Also on February 28, 2020, representatives of AcelRx provided a capabilities presentation to representatives of Tetraphase and Janney. Representatives of Tetraphase and Janney asked questions of the representatives of AcelRx for the purpose of conducting diligence on the business prospects of AcelRx.

Also on February 28, 2020, AcelRx sent Tetraphase a further revised non-binding proposal to acquire Tetraphase in an all-stock transaction, reflecting a fixed exchange ratio in which each share of Tetraphase Common Stock would be exchanged for the right to receive 0.748 of a share of AcelRx common stock, which, based on then prevailing market prices, reflected a fully-diluted equity value of approximately $17 million, inclusive of amounts payable to the Company’s warrant holders under the Black-Scholes Put Provisions. Also on February 28, 2020, Cooley sent WilmerHale a revised draft of the merger agreement for the proposed transaction.

On February 29, 2010, Cooley sent WilmerHale a revised draft of the voting agreement.

On March 1, 2020, representatives of Tetraphase, Janney and WilmerHale held a discussion regarding the Company O proposal and the revised AcelRx proposal as well as the comments received on the merger agreement, the co-promotion agreement and a proposed voting agreement pursuant to which certain stockholders of Tetraphase would agree, subject to certain terms and conditions, to vote in favor of the merger.

Also on March 1, 2020, Mr. Edwards and Ms. Stahl held a discussion with Messrs. Angotti and Asadorian and AcelRx’s general counsel, regarding certain open business issues.

Also on March 1, 2020, the Tetraphase Board held a telephonic meeting to discuss the Company O proposal and the revised AcelRx proposal, including AcelRx’s continued request for exclusivity. At this meeting the Tetraphase Board formed a mergers and acquisitions committee, which we refer to as the M&A Committee, consisting of Messrs. Gage, Bohlin, Boyd, Freund and Maher, to provide guidance regarding a proposed strategic transaction to Tetraphase’s management and advisors between meetings of the full board.

On March 2, 2020, representatives of Janney contacted representatives of Company O to discuss their initial proposal. Representatives of Janney also contacted representatives of AcelRx’s financial advisor to inform them

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that another offer had been presented to Tetraphase, and encouraged AcelRx to revisit the value in their offer letter. Representatives of Janney also indicated that Tetraphase would consider granting a limited period of exclusivity if AcelRx sufficiently increased its offer.

On March 3, 2020, WilmerHale provided Cooley with a revised draft of the merger agreement and the co-promotion agreement, as well as a markup of the draft voting agreement assuming that certain shareholders would be willing to enter into such an agreement.

On March 4, 2020, Cooley and WilmerHale discussed the revised merger agreement and Mr. Edwards and Mr. Angotti also discussed certain open issues in the merger agreement.

Also on March 4, 2020, representatives of Company K and Company O contacted Janney and verbally informed them of a revised offer consisting of $15 million in cash to be paid at closing, without any CVR component. On the same day Mr. Edwards discussed the verbal revised offer with a principal of Company O. Representatives of Janney and Mr. Edwards each expressed to representatives of Company K and Company O that their revised offer was still not as attractive as an alternative offer being considered by Tetraphase and suggested that Company K and Company O should further consider their offer before submitting a revised written proposal.

On March 5, 2020, representatives of Janney held discussions with a representative of Company O regarding the potential for Company K and Company O to revise the verbal offer of March 4, 2020. Later in the day, a representative of Company O spoke to Janney and provided an update indicating that a revised written proposal would be forthcoming and that the revised proposal would be an improvement over the latest verbal offer. Also on the same day, Mr. Edwards shared this new offer with members of the M&A Committee.

Also on March 5, 2020, representatives of Janney engaged in discussions with representatives of AcelRx’s financial advisor regarding various items relating to the business terms of the transaction documents, including AcelRx’s desire for a closing condition and an adjustment to the purchase price tied to Tetraphase’s net cash at the closing, AcelRx’s desire for exclusivity and the need for AcelRx to increase its previous offer before exclusivity would be considered by the Tetraphase Board.

On March 6, 2020, representatives of Janney spoke to representatives of AcelRx’s financial advisor to inform them that Tetraphase was expecting to receive a revised written proposal from a competing bidder. The Janney representatives indicated that the alternative proposal was for upfront cash consideration, rather than shares of stock as in AcelRx’s proposal, and that Tetraphase was asking both parties to submit their best and final proposals by 5:00 p.m. on March 6, 2020, in advance of a Tetraphase M&A Committee meeting on March 7, 2020. In particular, representatives of Janney indicated to representatives of AcelRx’s financial advisor the attractiveness to Tetraphase of the shorter timeline to closing and potential for greater closing certainty provided by the competing bid, as well as the certainty of value presented by the upfront cash consideration in the other proposal.

On March 6, 2020, representatives of Company O sent representatives of Janney an updated non-binding proposal to acquire Tetraphase for $15 million of cash at closing, plus a CVR for an additional $2.5 million based upon the attainment of $20 million of net sales in any four consecutive quarters by 2021. Also on March 6, 2020, representatives of Janney and of Company O exchanged emails and discussed by phone that Tetraphase intended to make a decision to proceed with one party or the other after the Tetraphase M&A Committee meeting on March 7, 2020. During this discussion, representatives of Company O indicated that its offer of $15 million in cash plus a CVR of up to $2.5 million in potential future value represented its “best and final” offer. Company O informed Tetraphase that it had several more weeks of diligence to complete before it would potentially be willing to convert its non-binding proposal to a binding agreement, and the Tetraphase Board determined that not only was the final AcelRx offer more attractive financially, but that AcelRx had also completed its diligence and was willing to sign a binding agreement.

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On March 7, 2020, representatives of Janney and representatives of AcelRx’s financial advisor conducted a phone discussion during which representatives of AcelRx’s financial advisor orally provided an updated proposal from AcelRx to acquire Tetraphase in a transaction in which each share of Tetraphase Common Stock would be exchanged for the right to receive (x) 0.791 of a share of AcelRx common stock, representing on the date of the offer a fully diluted upfront equity value of approximately $20 million (inclusive of any consideration payable to warrant holders under the Black-Scholes Put Provisions), subject to a closing adjustment provision based on an assumed $5 million of net cash at Tetraphase at closing, and (y) a CVR for the pro rata portion of up to $12.5 million (payable at AcelRx’s election in cash or shares of its common stock) upon the achievement of certain net sales milestones. AcelRx’s financial advisor sent Janney a written copy of the non-binding proposal from AcelRx following the discussion. Over the course of March 8, 2020 through March 13, 2020, AcelRx with the assistance of its legal and financial advisors revised the exchange ratio within the offer to 0.6303 to reflect the latest fully diluted share count and the inclusion of the CVR value attributable to warrant holders under the Black-Scholes Put Provisions, both of which were not considered in the non-binding proposal from March 7, 2020. Additionally, as a result of the financial and stock markets experiencing unusual volatility from March 9, 2020 through March 13, 2020, the offer, on the date of signing, March 16, 2020, was negatively impacted by the drop in AcelRx’s stock price to $1.03 per share (from $1.43 at the time of the proposal) and as a result represented as of the execution of the merger agreement a lower fully diluted upfront equity value of approximately $14.4 million (inclusive of any consideration payable to warrant holders under the Black-Scholes Put Provisions).

Also on March 7, 2020, Cooley sent to WilmerHale a revised draft of the merger agreement, voting agreement and co-promotion agreement for the proposed transaction.

Later on March 7, 2020, the M&A Committee held a telephonic meeting with representatives of Janney and WilmerHale to discuss the two revised proposals. Members of the Committee and their advisors compared and contrasted the proposals from AcelRx and Company O. Mr. Edwards and representatives of Janney both shared with the M&A Committee Company O’s unwillingness to further increase its offer, and members of the M&A Committee expressed concern that, without granting exclusivity, there was a risk that AcelRx might withdraw its offer. The M&A Committee instructed management to move forward with the AcelRx proposal and authorized management to enter into an agreement with AcelRx granting exclusivity until the end of the day on Wednesday, March 11, 2020. Later that day, Janney communicated the M&A Committee’s decisions to AcelRx’s financial advisor. Also on this day AcelRx and Tetraphase entered into an exclusivity agreement, which provided for exclusivity through March 11, 2020.

On March 8, 2020, Janney communicated Tetraphase’s decisions to Company K and Company O.

Also on March 8, 2020, representatives of Tetraphase and its outside intellectual property counsel held a diligence call with representatives of AcelRx and Cooley. A lengthy discussion also occurred between representatives of Tetraphase and WilmerHale and representatives of AcelRx and Cooley regarding the terms and conditions of the merger agreement.

On March 9, 2020, Ms. Stahl spoke to Dr. Maher of Armistice Capital regarding the Black-Scholes Put Provisions and their implications for a transaction with AcelRx.

Also on March 9, 2020, representatives of Tetraphase and representatives of AcelRx continued to negotiate the terms and conditions of the merger agreement. Revised drafts of the co-promotion agreement and merger agreement were distributed by WilmerHale to Cooley. Later that day, Cooley provided WilmerHale with a first draft of the contingent value rights agreement.

On March 10, 2020, the parties continued to negotiate the terms and conditions of the merger agreement and the other transaction documents, and WilmerHale and Cooley exchanged drafts of the merger agreement.

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On March 11, 2020, Ms. Stahl and Mr. Boyd discussed the potential valuation of the warrants held by Armistice Capital and the other warrant holders for purposes of the Black-Scholes Put Provisions. Mr. Boyd informed Ms. Stahl that Armistice Capital would be willing to agree to a fixed exchange ratio for its warrants in connection with the signing of the merger agreement. Also on this day, WilmerHale and Cooley exchanged drafts of the contingent value rights agreement.

On March 12, 2020, the M&A Committee met telephonically on two occasions with representatives of Janney and WilmerHale. During these meetings the M&A Committee discussed the status of ongoing discussions and negotiations with AcelRx, including AcelRx’s request for an extension of the exclusivity period, as well as the status of discussions with the holders of warrants with the Black-Scholes Put Provisions. Ms. Stahl noted that, given the current market turmoil, none of the warrant holders was willing to enter into confidentiality agreements to facilitate a discussion of these issues prior to close of market on Friday, March 13, 2020 and that the warrant holders would not be willing to be out of the market on Monday, March 16, 2020. The M&A Committee directed management to proceed with discussions with the warrant holders after market close on Friday, March 13, 2020, and to agree to an extension of exclusivity with AcelRx through 8:00 am Eastern Time on Monday, March 16, 2020. Also on this day, Cooley sent a revised draft of the merger agreement to WilmerHale and WilmerHale and Cooley exchanged drafts of the contingent value rights agreement.

On March 13, 2020, Ms. Stahl requested that warrant holders other than Armistice Capital enter into confidentiality agreements with Tetraphase, which they did following the close of market. Ms. Stahl then contacted representatives of each warrant holder requesting that they enter into voting agreements and agree to a fixed exchange ratio for the shares of common stock issuable under their warrants pursuant to the Black-Scholes Put Provisions. Also on this day, Cooley and WilmerHale exchanged drafts of the merger agreement, contingent value rights agreement and voting agreement.

On March 14, 2020, Ms. Stahl had discussions with several warrant holders regarding the specifics of the proposed transaction and the value attributable to their warrants. Following these discussions, four of the five warrant holders agreed to enter into voting agreements with AcelRx in connection with the contemplated transactions and to fix the exchange ratio for the shares of common stock issuable under their warrants pursuant to the Black-Scholes Put Provisions and the fifth warrant holder, which did not own shares of Tetraphase Common Stock, agreed to enter into an exchange agreement for the same purpose.

Also on March 14, 2020, materials were provided to the Tetraphase Board for review and consideration in anticipation of the following day’s scheduled board meeting to consider approval of the proposed transactions and Cooley and WilmerHale finalized the transaction documents.

On March 15, 2020, the AcelRx Board met to discuss the contemplated transactions. The AcelRx Board unanimously approved the transactions. Also on March 15, 2020, the Tetraphase Board met to discuss the contemplated transactions. Members of the Tetraphase management team, representatives of WilmerHale and Janney also participated in this meeting. Janney delivered to the Tetraphase Board an oral opinion, which was later confirmed in writing, stating that the Merger Consideration to be received in the merger was fair, from a financial point of view, to the common stockholders of Tetraphase. The Tetraphase Board unanimously approved the merger agreement. Following these two board meetings, the parties entered into the merger agreement and the ancillary agreements. Tetraphase’s warrant holders also entered into either a voting agreement or an exchange agreement with AcelRx relating to the voting of their common stock and exchange ratios of their respective warrants.

On March 16, 2020, each company separately issued a press release before the market open detailing the proposed merger of the two companies. AcelRx also held an investor call prior to market open to discuss its earnings for the year ended December 31, 2019 and to discuss the proposed merger between the two companies.

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Effects of the Merger

Upon completion of the Merger, Merger Sub, an indirect wholly-owned subsidiary of AcelRx, will merge with and into Tetraphase. Tetraphase will be the Surviving Corporation and will become an indirect wholly-owned subsidiary of AcelRx.

Merger Consideration

For a discussion of Merger Consideration (including treatment of the Tetraphase Common Stock, Tetraphase equity awards and Tetraphase Warrants) and the Exchange Ratio, please see the section titled “The Merger Agreement—Merger Consideration and Exchange Ratio” beginning on page 90 of this proxy statement/prospectus.

Other Effects

The rights pertaining to AcelRx Common Stock will be different from the rights pertaining to Tetraphase Common Stock, because the AcelRx Charter and the AcelRx Bylaws in effect immediately after the completion of the Merger will be different from the Tetraphase Charter and the Tetraphase Bylaws, respectively. A further description of the rights pertaining to AcelRx Common Stock and the AcelRx Charter and AcelRx Bylaws is set forth under “Comparison of Rights of Holders of AcelRx Common Stock and Tetraphase Common Stock” beginning on page 173 of this proxy statement/prospectus.

AcelRx Board’s Reasons for the Merger

The AcelRx Board authorized and approved the Merger Agreement and approved the Contemplated Transactions, including the issuance of AcelRx Common Stock as Merger Consideration, and such other agreements, instruments and documents as are contemplated by the Merger Agreement, including the Voting Agreements, Exchange Agreement and the form of CVR Agreement, as well as the Co-Promotion Agreement. The AcelRx Board also determined that the terms of the Merger Agreement, the Merger and the other Contemplated Transactions are fair to and in the best interests of AcelRx, Merger Sub and their respective stockholders.

The AcelRx Board believes the combination of the two organizations creates efficiencies resulting from commercializing multiple products with a single salesforce. The combination also creates a growth platform to further consolidate hospital-focused pharmaceutical companies and products expected to generate near-and long-term growth, additional synergies and stockholder value.

Recommendation of the Tetraphase Board; the Tetraphase Board’s Reasons for the Merger

At a meeting held on March 15, 2020, the Tetraphase Board unanimously:

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Accordingly, the Tetraphase Board has approved the Merger Agreement and unanimously recommends that Tetraphase stockholders vote “FOR” the merger agreement proposal, “FOR” the compensation proposal, and “FOR” the adjournment proposal.

In reaching its decision to approve and declare advisable the Merger Agreement, the Merger and the other Contemplated Transactions, the Tetraphase Board, as described in the section titled “—Background of the Merger” beginning on page 47 of this proxy statement/prospectus, held a number of meetings, consulted with Tetraphase’s senior management and its outside legal and financial advisors, WilmerHale and Janney, respectively, and considered the business, assets and liabilities, results of operations, financial performance, strategic direction and prospects of Tetraphase and AcelRx. At its meeting held on March 15, 2020, after due consideration and consultation with Tetraphase’s senior management and outside legal and financial advisors and after receipt of its financial advisor’s opinion (as described in the section titled “—Opinion of Janney Montgomery Scott LLC, Tetraphase’s Financial Advisor” beginning on page 66 of this proxy statement/prospectus), the Tetraphase Board unanimously approved and declared advisable the Merger Agreement, the Merger and the other Contemplated Transactions and recommended that Tetraphase stockholders vote in favor of the adoption of the Merger Agreement.

In making its determination, the Tetraphase Board focused on a number of reasons, including the following potential advantages and opportunities:

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The Tetraphase Board weighed these advantages and opportunities against a number of potentially negative reasons in its deliberations concerning the Merger Agreement and the Merger including:

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The Tetraphase Board considered all of these reasons as a whole and, on balance, concluded that it supported a favorable determination to approve the Merger Agreement and to make its recommendations to Tetraphase stockholders.

In addition, the Tetraphase Board was aware of and considered the interests of its directors and executive officers that are different from, or in addition to, the interests of Tetraphase stockholders generally, including the treatment of equity awards and warrants held by such directors and executive officers in the Merger described in the section titled “Interests of Tetraphase’s Directors and Executive Officers in the Merger” beginning on page 78 of this proxy statement/prospectus and the obligation of the combined company to indemnify Tetraphase directors and officers against certain claims and liabilities.

The foregoing discussion of the information and reasons that the Tetraphase Board considered is not intended to be exhaustive, but rather is meant to include the material reasons that the Tetraphase Board considered. The Tetraphase Board collectively reached the conclusion to approve the Merger Agreement, the Merger and the other Contemplated Transactions in light of the various reasons described above and other reasons that the members of the Tetraphase Board believed were appropriate. In view of the complexity and wide variety of reasons, both positive and negative, that the Tetraphase Board considered in connection with its evaluation of the Merger, the Tetraphase Board did not find it practical, and did not attempt, to quantify, rank or otherwise assign relative or specific weights or values to any of the reasons it considered in reaching its decision and did not undertake to make any specific determination as to whether any particular reason, or any aspect of any particular reason, was favorable or unfavorable to the ultimate determination of the Tetraphase Board. In considering the reasons discussed above, individual directors may have given different weights to different reasons.

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The foregoing description of Tetraphase’s consideration of the reasons supporting the Merger is forward-looking in nature. This information should be read in light of the reasons discussed in the section titled “Special Note Regarding Forward-Looking Statements” beginning on page 35.

Opinion of Janney Montgomery Scott LLC, Tetraphase’s Financial Advisor

The Tetraphase Board retained Janney Montgomery Scott LLC (“Janney”) on October 23, 2019 to act as its financial advisor in connection with the Merger and requested Janney to render an opinion, as investment bankers, as of the date of the opinion, whether the Merger Consideration to be received in the Merger is fair, from a financial point of view, to the common stockholders of Tetraphase. In selecting Janney, the Tetraphase Board considered, among other things, the fact that Janney is a reputable investment banking firm with substantial experience advising companies in the healthcare sector and in providing strategic advisory services in general. Janney, as part of its investment banking business, is continuously engaged in the valuation of businesses and their securities in connection with mergers and acquisitions, negotiated underwritings, secondary distributions of listed and unlisted securities, private placements and valuations for corporate and other purposes.

On March 15, 2020, at the request of the Tetraphase Board, Janney rendered an oral opinion to the Tetraphase Board, which was subsequently confirmed in a written opinion as of the same date (the “Opinion”), that as of such date, and based upon and subject to the assumptions made, matters considered and limitations and qualifications upon the review undertaken by Janney, the Merger Consideration to be received in the Merger was fair, from a financial point of view, to the common stockholders of Tetraphase.

The full text of Janney’s written Opinion to the Tetraphase Board dated March 15, 2020, is attached to this document as Annex E and is incorporated by reference in this document in its entirety. Holders of shares of Tetraphase’s common stock should read the Opinion carefully and in its entirety. The Opinion sets forth, among other things, the assumptions made, procedures followed, matters considered and qualifications and limitations on the scope of review undertaken by Janney in rendering its Opinion. Janney’s Opinion was directed to the Tetraphase Board and addressed only the fairness, from a financial point of view, as of the date of the Opinion, of the consideration to be paid to the common stockholders of Tetraphase. Janney’s Opinion did not address any other aspects of the proposed Merger or the Contemplated Transactions and did not address the prices at which shares of AcelRx’s common stock would trade following completion of the proposed Merger or at any time. Janney’s Opinion did not and does not constitute a recommendation as to how any holder of Tetraphase’s common stock should vote in connection with the proposed Merger. The summary of Janney’s Opinion set forth in this document is qualified in its entirety by reference to the full text of such Opinion. The Opinion was approved by Janney’s fairness opinion committee in accordance with the requirements of the Financial Industry Regulatory Authority Rule 5150.

In rendering the Opinion, Janney made such reviews, analyses and inquiries as deemed necessary and appropriate under the circumstances. Among other things, Janney:

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In performing its review, Janney relied upon the accuracy and completeness of all of the financial and other information that was available from public sources, that was provided by Tetraphase and its representatives and by AcelRx and its representatives or that was otherwise reviewed, and assumed such accuracy and completeness for purposes of rendering its Opinion. Janney further relied on the assurances of management of Tetraphase and management of AcelRx that they were not aware of any facts or circumstances that would make any of such information inaccurate or misleading. Janney has not been asked to and has not undertaken any independent verification of any of such information and does not assume any responsibility or liability for the accuracy or completeness thereof. Janney has not been requested to and did not make an independent evaluation or appraisal of any of the assets or liabilities (contingent or otherwise) of Tetraphase or any of its affiliates and has not been furnished with any such evaluation or appraisal. Janney has not made any physical inspection of the properties or assets of Tetraphase.

With respect to the financial forecasts prepared by Tetraphase’s management or those prepared by AcelRx’s management, both management teams have confirmed that they were prepared in good faith and reflected then-currently available estimates and judgments of such management of the future financial performance of each respective company. Janney expresses no opinion or view as to such financial projections or the assumptions on which they are based or whether if the Merger were not consummated that Tetraphase’s performance would be consistent with such forecasts. Janney relied only on Tetraphase’s and AcelRx’s historical financial information, except for the financial forecasts prepared by Tetraphase’s management and the management team of AcelRx (which was assumed will be achieved) in connection with the analysis. Janney relied on the assessment by

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management of Tetraphase of the strategic, financial and other benefits (including their ability to integrate the businesses) expected to result from the Merger, that such benefits will be realized in the amounts and the time periods indicated thereby, and Janney expressed no opinion with respect to such benefits or the assumptions on which they were based. Janney relied upon and assumed, without independent verification, that the actual amounts that may become payable under the CVR Agreement and the actual Merger Consideration calculated as of the closing of the Merger will not differ from the amounts thereof that Janney was directed to assume in any respect that would be material to its analyses or its Opinion. The financial and stock markets have been experiencing unusual volatility as a result of the coronavirus pandemic and Janney expressed no opinion or view as to any potential effects of such volatility on the Merger, the Company or AcelRx and the Opinion does not purport to address potential developments in any such markets.

Janney’s conclusion was rendered on the basis of market, economic and other conditions prevailing as of March 15, 2020 and on the conditions and prospects, financial and otherwise, of Tetraphase, as they existed and were known on March 15, 2020. Janney’s Opinion is directed only to the fairness, from a financial point of view, as of March 15, 2020, of the Merger Consideration to be received by holders of shares of Tetraphase’s common stock and not any other constituency of Tetraphase and does not address the fairness of the Merger to, or any consideration received in connection therewith by, or the amount or nature of any compensation to be paid or payable to any of the officers, directors or employees of Tetraphase, whether relative to the Merger Consideration or otherwise.

Janney is not expressing any opinion as to the solvency or viability of Tetraphase, any of the other parties to the Merger Agreement, the CVR Agreement, the Voting Agreements, the Exchange Agreement or AcelRx or their respective ability to pay their debts when they become due, including any impact of the Merger thereon.

Janney’s Opinion does not address the fairness of the Merger to, or any consideration received in connection therewith by, any warrant holders of Tetraphase. Furthermore, no opinion, counsel or interpretation is intended in matters that require legal, regulatory, accounting, insurance, tax or other similar professional advice. It is assumed that such opinions, counsel or interpretations have been or will be obtained from the appropriate professional sources. Furthermore, Janney relied, with the Tetraphase Board’s consent, on the assessments by Tetraphase and its advisers, as to all legal, regulatory, accounting, insurance and tax matters with respect to Tetraphase and the Merger. Events occurring after March 15, 2020 may affect Janney’s Opinion and the assumptions used in preparing it, and Janney did not assume any obligation to revise or reaffirm its Opinion.

Summary of Financial Analyses

The summary set forth below does not purport to be a complete description of the analyses performed by Janney, but describes, in summary form, the material elements of the presentation that Janney made to the Tetraphase Board on March 15, 2020, in connection with Janney’s Opinion. In accordance with customary investment banking practice, Janney employed generally accepted valuation methods and financial analyses in reaching its Opinion as well as other financial analysis Janney deemed relevant. The following is a summary of the material financial analyses performed by Janney in arriving at its Opinion.

None of the analyses performed were assigned a greater significance by Janney than any other, nor does the order of analyses described represent relative importance or weight given to those analyses by Janney. The summary text describing each financial analysis does not constitute a complete description of Janney’s financial analyses, including the methodologies and assumptions underlying the analyses, and if viewed in isolation could create a misleading or incomplete view of the financial analyses performed. The summary text set forth below does not represent and should not be viewed by anyone as constituting conclusions reached by Janney with respect to any of the analyses performed in connection with its Opinion. Rather, Janney made its determination as to the fairness of the Merger Consideration to the common stockholders of Tetraphase pursuant to the Merger Agreement, from a financial point of view, on the basis of its experience and professional judgment after considering the results of all of the analyses performed.

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In performing its analyses, Janney made numerous assumptions with respect to industry performance, general business, regulatory, economic, market and financial conditions and other matters. These include, among other things, the impact of competition on the businesses of Tetraphase and the industry generally, industry growth and the absence of any adverse material change in the financial condition and prospects of Tetraphase, AcelRx, the industry or in the financial markets in general. Many of these assumptions are beyond the control of Tetraphase or AcelRx. Any estimates contained in Janney’s analyses are not necessarily indicative of future results or actual values, which may be significantly more or less favorable than those suggested by such estimates. Except as otherwise noted, the information utilized by Janney in its analyses, to the extent that it is based on market data, is based on market data as it existed on or before March 13, 2020, the last market trading day prior to signing of the Merger Agreement, and is not necessarily indicative of current market conditions.

In performing its financial analyses summarized below and in arriving at its Opinion, Janney used and relied upon the financial projections of Tetraphase, those of AcelRx and the combined pro forma projections more fully described in the section titled “Unaudited Pro Forma Condensed Combined Financial Information Financial Data.” Some of the financial analyses summarized below include information presented in tabular format. In order to fully understand the financial analyses used by Janney, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses and must be considered as a whole

Implied Equity Value of the Merger Consideration

The Merger Consideration consists of (1) 0.6303 shares of AcelRx common stock, or the Exchange Ratio, for each share of Tetraphase Common Stock outstanding immediately prior to the effective time of the Merger (provided that if the Tetraphase Net Cash is less than $5.0 million, the Exchange Ratio shall be adjusted to the ratio determined as follows: (a) (i) $20.0 million, minus (ii) the dollar amount by which the Tetraphase Net Cash is less than $5.0 million, minus (iii) $10,265,292, divided by (b) (i) 10,800,166, divided by (ii) $1.43, and) plus (2) one contingent value right per share for each share of Tetraphase Common Stock prior to the effective time of the Merger. Janney calculated the upfront value of the AcelRx stock consideration to Tetraphase by multiplying (1) the Exchange Ratio of 0.6303 by both (a) the total number of Tetraphase fully diluted shares estimated to be outstanding immediately prior to closing of 10,800,166 and by (b) AcelRx’s share price of $1.03 as of March 13, 2020 to arrive at an upfront value of AcelRx stock to Tetraphase common stockholders of $7.0 million. Janney then calculated an implied present value of the aggregate amount of $12.5 million of potential CVR payments to common stockholders assuming that Tetraphase would attain the required sales milestones in the latest possible year under the CVR Agreement to adjust for the possibility that Tetraphase may not achieve the exact projected sales figures provided in the Certain Projected Information in the year forecasted. Janney then applied discount rates, based on an estimate of Tetraphase’s weighted average cost of capital (as further described under the Standalone Discounted Cash Flow Analysis below), ranging from 17.6% to 21.6%, to the following list of potential CVR payments reflecting Tetraphase’s achievement of sales milestones in the latest possible period under the CVR Agreement, as described above: (1) an aggregate amount of $2.5 million on December 31, 2021, (2) an aggregate amount of $4.5 million on December 31, 2024 and (3) an aggregate amount of $5.5 million on December 31, 2024. The analysis yielded a present value range of the total CVR payments of $6.0 million to $6.8 million. Janney then added this CVR value range to the upfront value of the AcelRx stock consideration, to derive a range of total implied equity value of the Merger Consideration to Tetraphase stockholders of $13.0 million to $13.8 million as shown in the following table. Janney then assumed the midpoint of the range, or $13.4 million as the implied total equity value of the Merger Consideration to Tetraphase stockholders for comparison purposes to the rest of its analyses.

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Standalone Discounted Cash Flow Analysis

Janney performed a discounted cash flow analysis on Tetraphase, which is designed to provide an implied value of a company on a standalone basis by calculating the present value of the estimated future cash flows of such company.

Tetraphase Discounted Cash Flow Analysis. Janney calculated a range of implied equity values to existing Tetraphase stockholders based on estimates of future cash flows from June 30, 2020 through December 31, 2024. Janney performed its analysis on the estimated future cash flows contained in the Tetraphase projections (see the section titled “Certain Projected Information.” Janney first calculated the estimated unlevered free cash flows of Tetraphase (calculated as tax-effected earnings before interest and taxes less capital expenditures, plus depreciation and amortization, less the increase in net working capital or plus the decrease in net working capital, as appropriate, and plus any non-cash related adjustments). Janney utilized an illustrative terminal value in the year 2024 based on an Enterprise Value/Revenue exit multiple range of 2.25x to 2.75x that was determined based on Janney’s experience and professional judgment, which included, but was not limited to, reviews of relevant multiples from the Selected Precedent Transaction Analysis below. Janney then discounted the unlevered free cash flows and terminal value to a present value as of the anticipated transaction close date of June 30, 2020, using the mid-year discount convention and a range of discount rates of 17.6% to 21.6%. The range of discount rates was derived based on Tetraphase’s assumed weighted average cost of capital under the capital asset pricing model based on Janney’s experience and professional judgment and included assumptions regarding post-tax cost of debt, market risk premium, equity size premium, risk free rate, beta (which was based on a re-levered adjusted beta of selected public companies in the healthcare space with similar characteristics to Tetraphase, including but not limited to anti-bacterial drug focus and similar operating metrics) and debt to total capitalization.

Janney then deducted the net debt or added the net cash, as applicable, of Tetraphase from the resulting value to derive gross equity value. Net debt (cash) was based on Tetraphase’s debt and cash and cash equivalents from management projections as of June 30, 2020. Janney then deducted the present value of projected proceeds from a future $41.4 million equity financing transaction needed to fund projected cash shortfalls below the estimated cash balance on June 30, 2020 until Tetraphase achieved projected positive free cash flow, with such future equity financing proceeds discounted using 19.6%, the mid-point of the assumed discount rate range of 17.6% to 21.6% (which Janney derived based on Tetraphase’s assumed cost of capital calculated under the capital asset pricing model using its experience and professional judgment) to derive adjusted gross equity value.

Based on the above-described analysis, Janney derived the following ranges of the equity value to existing holders of Tetraphase’s common stock as of an assumed transaction close date of June 30, 2020:

Analysis of Implied Pro Forma Equity Value Impact to Tetraphase

Janney performed an illustrative analysis of the pro forma impact of the Merger on Tetraphase’s equity value, which compared (1) Tetraphase’s potential standalone equity value to existing common stockholders based on the Tetraphase Management Projections to (2) the combined company’s potential equity value on a pro forma basis and the resultant value to existing Tetraphase common stockholders based on a discounted cash flow analysis (derived from each of the Tetraphase management projections and AcelRx management projections, including illustrative synergies, as applicable, as further described in the section titled “Certain Projected Information” assuming a pro forma equity split of 14.6% Tetraphase and 85.4% AcelRx and reflecting the impact of a future dilutive equity financing to address projected cash shortfalls of the combined pro forma company.

Description of Certain Pro Forma Discounted Cash Flow Assumptions. Janney calculated a range of implied pro forma equity values of the combined entity to existing Tetraphase common stockholders based on estimates of

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future pro forma cash flows of both Tetraphase and AcelRx from June 30, 2020 through December 31, 2024. Janney performed its analysis on the estimated future cash flows contained in the management projections (see the section titled “Certain Projected Information”). The pro forma discounted cash flow analysis also included the impact of certain operational synergies expected to be achieved as a result of the Merger provided by AcelRx management, informed by discussions with Tetraphase management. Janney first calculated the estimated unlevered free cash flows of the pro forma combined entity (calculated as tax-effected earnings before interest and taxes less capital expenditures, plus depreciation and amortization, less the increase in net working capital or plus the decrease in net working capital, as appropriate, and plus any non-cash related adjustments). Janney utilized an illustrative terminal value in the year 2024 based on an Enterprise Value/Revenue exit multiple range of 2.25x to 2.75x that was determined based on Janney’s experience and professional judgment, which included, but was not limited to, reviews of relevant multiples from the Selected Precedent Transaction Analysis below. Janney then discounted the unlevered free cash flows and terminal value to present value as of the anticipated transaction close date of June 30, 2020, using the mid-year discount convention and a range of discount rates of 14.7% to 18.7%. The range of discount rates was derived based on AcelRx’s assumed weighted average cost of capital under the capital asset pricing model based on Janney’s experience and professional judgment and included assumptions regarding post- tax cost of debt, market risk premium, equity size premium, risk free rate, beta (which was based on re-levered adjusted beta of selected public companies in the healthcare space with similar characteristics to AcelRx) and debt to total capitalization.

Janney then deducted the net debt or added the net cash, as applicable, of the combined Pro Forma entity from the resulting value to derive gross equity value. Net debt (cash) was based on Tetraphase and AcelRx’s forecasted debt and cash and cash equivalents as of June 30, 2020 from management projections, and was further adjusted to deduct Tetraphase management’s assumption of $10 million in transaction and severance costs for Tetraphase associated with the Merger. Janney then deducted the present value of projected proceeds from a $4.2 million future equity financing transaction needed to fund projected cash shortfalls of the combined pro forma company below the estimated cash balance on June 30, 2020 until the combined pro forma company achieved projected positive free cash flow, with such future equity financing proceeds discounted using 16.7%, which was the mid-point of the assumed of discount rate range of 14.7% to 18.7%which Janney derived based on AcelRx’s assumed cost of capital calculated under the capital asset pricing model using its experience and professional judgment) to derive adjusted gross equity value.

Based on the above-described analysis, Janney derived the following ranges of equity value to the combined Pro Forma entity as of June 30, 2020: $528.7 million to $708.3 million. Tetraphase common stockholders and warrant holders, collectively, as part of the Merger Consideration, will receive 14.6% of the total Pro Forma entity, with 48.7% of the AcelRx shares issued to Tetraphase going to Tetraphase common stockholders. The analysis indicated the following implied equity value to existing Tetraphase common stockholders, who own 7.1% of the Pro Forma combined entity (48.7% of the Tetraphase portion of 14.6%).

Selected Precedent Transactions Analysis

Janney reviewed and analyzed the following 15 precedent merger and acquisition transactions, which were selected based on Janney’s professional judgment and expertise and include comparable transactions with companies in the healthcare space with similar characteristics to Tetraphase, including but not limited to anti-bacterial drug focus and similar operating metrics. Using publicly available information, Janney calculated, when available, for each selected transaction, the multiple of the target company’s enterprise value (calculated as equity value, plus the book value of debt, preferred stock and minority interests, minus cash and equivalents and the book value of investments in unconsolidated affiliates) implied in the relevant transaction to the target

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company’s estimated revenue for the trailing twelve months at the announcement date of each applicable transaction (“LTM Revenue”). Financial data for the selected companies was based on the selected companies’ filings with the SEC, equity research reports, earnings transcripts, company investor presentations and press releases, FactSet Research Systems, BioCentury, Capital IQ and SNL Financial. Enterprise value and revenue calculations for certain of the selected transactions were adjusted, using publicly available information, for certain mergers and acquisitions activity.

The following table sets forth a summary of the enterprise values as a multiple of LTM Revenue for the selected acquisitions identified above:

In calculating the implied equity values for Tetraphase, Janney utilized LTM Revenue of $3.6 million, which corresponds to the Xerava product revenue for the year end 2019, and added the cash balances to the resulting enterprise values to arrive at the implied equity value under two scenarios: (1) the cash balance as of December 31, 2019 of $21 million and (2) the expected balance sheet cash at the assumed Merger completion date of June 30, 2020 of $5 million. The following table sets forth, for the period indicated, the reference range of revenue multiples utilized by Janney in performing its analysis and the range of the equity values for Tetraphase implied by the analysis, which were selected based upon its professional judgment and experience and after taking into consideration, among other things, the observed data for the selected transactions:

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Premiums Paid Analysis

Janney reviewed the consideration paid in 30 selected healthcare transactions involving an enterprise value less than $500 million announced subsequent to January 1, 2017, selected based on Janney’s professional judgment and experience in the industry. Janney calculated the premiums paid in these transactions over the applicable, unaffected stock price of the target company on the trading day one trading day prior to the announcement of the acquisition, the trading day five trading days prior to the announcement of the acquisition and the trading day 30 trading days prior to the announcement of the acquisition.

The following table sets forth the ranges of premiums paid utilized by Janney in performing its analysis, which were derived from the selected healthcare transactions identified above using the first and third quartiles to provide a representative sample range, and the ranges of the equity values of Tetraphase Common Stock implied by the analysis.

Other Information

Selected Public Companies Analysis. Janney reviewed, analyzed and compared certain financial information relating to Tetraphase to corresponding publicly available financial information and market multiples for the following thirteen publicly traded antibiotic-focused companies, of which some had commercially available products and others did not:

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Janney selected the companies used in the analysis on the basis of its experience and knowledge of companies in the industry and various factors, including the size of the company and the similarity of the lines of business to Tetraphase’s lines of business, as well as the business models, service offerings and end-market exposure of such companies. As noted above, no company used as a comparison is identical to Tetraphase.

Janney reviewed, among other things, the range of enterprise values of the selected publicly traded companies (calculated as equity value, using the closing stock prices on March 13, 2020, plus the book value of debt, preferred stock and minority interests, minus cash and equivalents and the book value of investments in unconsolidated affiliates), as a multiple of estimates of revenue of the applicable selected company for calendar year 2019, 2020 and 2021. Financial data for the selected companies was based on the selected companies’ filings with the SEC and publicly available equity research analyst consensus estimates from FactSet Research Systems.

The selected public companies analysis was presented for reference purposes only, and was not relied upon for valuation purposes. In its professional judgement, Janney did not compare Tetraphase, whose auditor expressed significant doubt in the company continuing as a going concern in its most recently filed 10-K, to other publicly traded companies with commercially available products that did not have a going concern opinion from their auditors. Furthermore, given the uncertainty and challenges surrounding the pre-commercial publicly traded companies in gaining regulatory approval and market acceptance of their products, Janney also did not did not compare Tetraphase to the group of pre-commercial companies, since Tetraphase already has an approved product on the market.

Miscellaneous

This summary is not a complete description of Janney’s Opinion or the underlying analyses and factors considered in connection with Janney’s Opinion. The preparation of a fairness opinion is a complex process involving the application of subjective business and financial judgment in determining the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances and, therefore, is not readily susceptible to partial analysis or summary description. Janney believes that its analyses described above must be considered as a whole and that considering any portion of such analyses and of the factors considered without considering all analyses and factors could create a misleading view of the process underlying its Opinion. No company or transaction in the analyses described above is identical to Tetraphase or the Merger.

In conducting its analyses and arriving at its Opinion, Janney utilized a variety of valuation methods. The analyses were prepared solely for the purpose of enabling Janney to provide its Opinion to the Tetraphase Board as to the fairness, from a financial point of view, to the holders of Tetraphase Common Stock of the consideration to be received by the holders of Tetraphase Common Stock in the Merger, as of the date of the Opinion, and do not purport to be an appraisal or necessarily reflect the prices at which businesses or securities actually may be sold, which are inherently subject to uncertainty.

The terms of the Merger were determined through negotiations between Tetraphase and AcelRx, and were approved by the Tetraphase Board. Although Janney provided advice to Tetraphase’s management team and the Tetraphase Board during the course of these negotiations, the decision to enter into the Merger Agreement was solely that of the Tetraphase Board. Janney did not recommend any specific consideration to Tetraphase or the Tetraphase Board, or that any specific amount or type of consideration constituted the only appropriate consideration for the Merger. As described above, the Opinion of Janney and its presentation to the Tetraphase Board were among a number of factors taken into consideration by the Tetraphase Board in making its determination to approve the Merger Agreement and the Merger.

Pursuant to the terms of the engagement letters between Janney and the Tetraphase Board and between Janney and the management of Tetraphase, Tetraphase agreed to pay to Janney a retainer fee upon signing of the fairness

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opinion engagement letter, a fee upon Janney’s delivery of its Opinion, and a fee upon the consummation of the Merger in consideration of financial advisory services rendered in connection with the Merger, for an aggregate amount of fees of approximately $600,000. Approximately half of the amount of the total fees are contingent upon the successful completion of the Merger. The fee for rendering the Opinion is not contingent on the successful completion of the Merger or the conclusions expressed therein. In addition, Tetraphase agreed to reimburse Janney for its reasonable out-of-pocket expenses, including attorneys’ fees and disbursements, and to indemnify Janney and related persons against various liabilities, including certain liabilities under the federal securities laws.

Janney, as part of its investment banking business, is continually engaged in the valuation of businesses and their securities in connection with mergers and acquisitions, negotiated underwritings, competitive biddings, secondary distributions of listed and unlisted securities, private placements and valuations for estate, corporate and other purposes. As of the date of the Opinion, Janney, on behalf of its own account and for the accounts of its customers, held 23,100 shares of common stock of Tetraphase and held 23,635 shares of common stock of AcelRx, which represents an immaterial percentage of the overall total amount of shares of all companies held by Janney for its own account and for the account of others. In the two years prior to the date hereof, Janney has not been engaged by Tetraphase or AcelRx on financial advisory or financing assignments in which it received customary investment banking fees. Janney or its affiliates may provide investment and corporate banking services to AcelRx and its respective affiliates in the future, for which Janney or its affiliates would seek customary compensation. Janney provides a full range of financial advisory and securities services and, in the course of its normal trading activities, may from time to time affect transactions and hold securities, including, without limitation, derivative securities, of Tetraphase or its affiliates for its own account and for the accounts of customers.

Certain Information Provided by the Parties

Certain Projected Information

As a matter of course, Tetraphase does not publicly disclose long-term projections of future financial results due to the inherent unpredictability and subjectivity of underlying assumptions and estimates. In connection with its evaluation of the Merger, the Tetraphase Board considered unaudited, non-public financial projections prepared by (i) Tetraphase management with respect to Tetraphase as a standalone company and (ii) AcelRx management with respect to (a) AcelRx as a standalone company and (b) the combined company, which was also used for the purposes of Janney’s financial analyses and opinion (which opinion is attached to this proxy statement/prospectus as Annex E). We refer to these financial projections as the management projections. A summary of the management projections is set forth below. The Tetraphase management projections were provided to AcelRx.

The inclusion of the management projections below should not be deemed an admission or representation by Tetraphase, Janney, AcelRx or any of their respective officers, directors, employees, affiliates, advisors, or other representatives with respect to such projections. The management projections are not included to influence your views on the Merger described in this proxy statement/prospectus but solely to provide stockholders access to certain non-public information that was provided to the Tetraphase Board in connection with its evaluation of the Merger and to Janney to assist with its financial analyses as described in the section titled “Opinion of Janney Montgomery Scott LLC, Tetraphase’s Financial Advisor” beginning on page 66 of this proxy statement/prospectus. The information from the management projections included below should be evaluated, if at all, in conjunction with the historical financial statements and other information regarding Tetraphase and AcelRx in their respective public filings with the SEC. Because the management projections (other than the combined company projections summarized below) were prepared on a standalone basis, they do not give effect to the proposed Merger expected to result from the acquisition.

The management projections included in this section regarding AcelRx and its business and projected synergies from the combination of both companies were prepared and provided by AcelRx management. The inclusion of

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such management projections should not be deemed an admission or representation by, or in any way adopted by, AcelRx or any of its officers, directors, employees, affiliates, advisors, or other representatives with respect to such projections.

The management projections were not prepared with a view toward public disclosure, nor were they prepared with a view toward compliance with published guidelines of the SEC, the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information, or GAAP. Such financial measures used in the management projections were relied upon by Janney for purposes of its opinion and by the Tetraphase Board in connection with its consideration of the Merger. Such financial measures were provided to a financial advisor for the purpose of rendering an opinion that is materially related to the business combination transaction, and therefore are excluded from the definition of non-GAAP financial measures, and as a result, a reconciliation of a non-GAAP financial measure to a GAAP financial measure is not required. Accordingly, Tetraphase has not provided a reconciliation of the financial measures included in the management projections to the relevant GAAP financial measures. Neither the independent registered public accounting firm of Tetraphase, AcelRx, nor any other independent accountant has audited, reviewed, compiled, examined or performed any procedures with respect to the accompanying unaudited prospective financial information for the purpose of its inclusion herein, and accordingly, neither the independent registered public accounting firm of Tetraphase, AcelRx, nor any other independent accountant expresses an opinion or provides any form of assurance with respect thereto for the purpose of this proxy statement/prospectus. This report does not extend to the management projections and should not be read to do so.

The management projections were prepared for internal use and are subjective in many respects. As a result, these management projections are susceptible to multiple interpretations and periodic revisions based on actual experience and business developments. Although Tetraphase and AcelRx believe their respective assumptions to be reasonable, all financial projections are inherently uncertain, and Tetraphase and AcelRx expect that differences will exist between actual and projected results. Although presented with numerical specificity, the management projections reflect numerous variables, estimates, and assumptions made by Tetraphase’s and AcelRx management at the time they were prepared, and also reflect general business, economic, regulatory, market, and financial conditions and other matters, all of which are difficult to predict and many of which are beyond Tetraphase’s and AcelRx’s control. In addition, the management projections cover multiple years, and this information by its nature becomes subject to greater uncertainty with each successive year. Furthermore, the projections prepared by AcelRx management reflect numerous variables, estimates, and assumptions made by AcelRx’s management, rather than Tetraphase’s management. Accordingly, there can be no assurance that the estimates and assumptions made in preparing the management projections will prove accurate or that any of the management projections will be realized.

The Tetraphase management projections include certain assumptions relating to, among other things, Tetraphase’s expectations relating to revenue growth rates, including underlying assumptions relating to product pricing, market penetration, the availability and amount of reimbursement, peak U.S. sales, patent life of products, gross margins and operating costs. The projections prepared by AcelRx management include certain assumptions relating to, among other things, the pricing and volume of products sold, the share of the moderate-to-severe acute pain market and the timing to penetrate the market, production costs, the amount of selling, general and administrative expenses and the amount of capital expenditures and debt service.

The management projections are subject to many risks and uncertainties and you are urged to review (i) “Risk Factors” beginning on page 27 of this proxy statement/prospectus for a description of risk factors relating to the Merger. You should also read “Special Note Regarding Forward-Looking Statements” beginning on page 35 of this proxy statement/prospectus for additional information regarding the risks inherent in forward-looking information such as the management projections.

The inclusion of the management projections herein should not be regarded as an indication that Tetraphase, Janney, AcelRx or any of their respective affiliates or representatives considered or consider the management projections to be necessarily indicative of actual future events, and the management projections should not be

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relied upon as such. The management projections do not take into account any circumstances or events occurring after the date they were prepared. Tetraphase and AcelRx do not intend to, and disclaim any obligation to, update, correct, or otherwise revise the management projections to reflect circumstances existing or arising after the date the management projections were generated or to reflect the occurrence of future events, even in the event that any or all of the assumptions or other information underlying the management projections are shown to be in error. Furthermore, the management projections do not take into account the effect of any failure of the Merger to be consummated and should not be viewed as accurate or continuing in that context.

The management projections set forth below include earnings before interest and tax (“EBIT”) and unlevered free cash flow, which are (subject to the disclosure above) non-GAAP financial measures.

In light of the foregoing factors and the uncertainties inherent in financial projections, Tetraphase stockholders are cautioned not to place undue reliance, if any, on the management projections.

Tetraphase Projections

Tetraphase Base Case (in millions)

The following table presents a selected summary of the base Tetraphase management projections with respect to net sales of Xerava (the “Tetraphase Base Projections”). The Tetraphase Base Projections were prepared by Tetraphase management, made available to the Tetraphase Board and used by Janney in its financial analyses.

Tetraphase Upside Case (in millions)

The following table presents a selected summary of the upside case Tetraphase management projections with respect to net sales of Xerava (the “Tetraphase Upside Projections”). The Tetraphase Upside Projections were prepared by Tetraphase management and made available to the Tetraphase Board.

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AcelRx Projections

AcelRx base case (in millions)

The following table presents a selected summary of the base AcelRx management projections with respect to sales of DSUVIA and of Zalviso in the European Union (the “AcelRx Base Projections”). The AcelRx Base Projections were prepared by AcelRx management, provided to Tetraphase, provided by Tetraphase management to the Tetraphase Board and used by Janney in its financial analyses.

Combined pro forma company projections