8-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K/A

AMENDMENT NO. 1

CURRENT REPORT PURSUANT

TO SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported):  December 31, 2010

Aceto Corporation

 (Exact Name of Registrant as Specified in its Charter)

New York	000-04217	11-1720520
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

One Hollow Lane, Lake Success, New York 11042

(Address of Principal Executive Offices) (Zip Code)

Registrant's telephone number, including area code:  (516) 627-6000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

□  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

□  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14-12)

□  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17CFR 240.14d-2(b))

□  Pre-commencement communications pursuant to Rule 13-e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.01.  Completion of Acquisition or Disposition of Assets.

On December 31, 2010, Aceto Corporation (“Aceto” or the “Company”) acquired certain assets of Rising Pharmaceuticals, Inc. (“Rising”),  a New Jersey based company that markets and distributes generic prescription and over the counter pharmaceutical products to leading wholesalers, chain drug stores, distributors, mass market merchandisers and others under its own label, throughout the United States. The purchase price was approximately $73,317,000 which was comprised of the issuance of 1,000,000 shares of Aceto common stock, valued at $9,000,000, cash payment of approximately $58,817,000 and approximately $5,500,000 liability due to Rising to satisfy bulk sales tax obligation. The purchase agreement also calls for $8,000,000 of deferred consideration to be paid by Aceto over a four year period. In addition, the agreement provides for the payment of additional contingent consideration equal to one-half of the three year cumulative Rising earnings before interest, taxes, deprecation and amortization in excess of $32,100,000, up to a maximum of $6,000,000.

On January 5, 2011, Aceto filed a Current Report on Form 8-K stating that it had completed the acquisition of certain assets of Rising and that the financial statements and pro forma financial information required under Item 9.01 of Form 8-K would be filed within the time period specified in the instructions to Item 9.01 of Form 8-K.  This amended Current Report on Form 8-K contains the required financial statements and pro forma financial information.

Item 9.01.  Financial Statements and Exhibits.

(a) Financial Statements of Business Acquired.

The audited financial statements of Rising Pharmaceuticals, Inc. for the nine months ended September 30, 2010 and for the fiscal year ended December 31, 2009 are attached hereto as Exhibit 99.1.

(b) Pro Forma Financial Information.

The unaudited pro forma financial information for Aceto, after giving effect to the acquisition of certain assets of Rising and adjustments described in such pro forma financial information, are attached hereto as Exhibit 99.2.

Exhibit No.  Description

23.1	Consent of BDO USA, LLP.
23.2	Consent of WISS & COMPANY, LLP.
99.1	Audited financial statements of Rising Pharmaceuticals, Inc. for the nine months ended September 30, 2010 and for the fiscal year ended December 31, 2009.
99.2	Unaudited pro forma financial information for Aceto, after giving effect to the acquisition of certain assets of Rising and adjustments described in such pro forma financial information.

2

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		ACETO CORPORATION
Date: March 14, 2011	By:	/s/ Albert L. Eilender
		Albert L. Eilender
		Chairman of the Board and
		Chief Executive Officer

3

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

Aceto Corporation

Lake Success, New York

We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (No. 333-149586, No. 33-38679, No. 333-90929, and No. 333-110653) of Aceto Corporation of our report dated December 13, 2010, relating to the financial statements of Rising Pharmaceuticals, Inc. which appears in this Form 8­-K/A.

/s/ BDO USA, LLP

Melville, New York

March 11, 2011

EX-23.2

Exhibit 23.2

Consent of Independent Public Accounting Firm

Aceto Corporation

Lake Success, New York

We hereby consent to the incorporation by reference in the Current Report on Form 8-K/A of Aceto Corporation of our report dated November 5, 2010, relating to the financial statements of Rising Pharmaceuticals, Inc. as of and for the year ending December 31, 2009.

/s/ Wiss & Company, LLP

Livingston, New Jersey

March 14, 2011

EX-99.1

Exhibit 99.1

	Rising Pharmaceuticals, Inc.
	Financial Statements  Nine months September 30, 2010  And the year-ended December 31, 2009
The report accompanying these financial statements was issued by BDO USA, LLP, a New York limited liability partnership and the U.S. member of BDO International Limited, a UK company limited by guarantee.

Rising Pharmaceuticals, Inc.

Financial Statements

Nine months September 30, 2010

And the year-ended December 31, 2009

Rising Pharmaceuticals, Inc.

Contents

Independent auditors’ report – BDO USA, LLP	3
Independent auditors’ report – WISS & Company, LLP	4
Financial statements:
Balance sheets	5
Statements of income	6
Statements of stockholders’ equity	7
Statements of cash flows	8
Notes to financial statements	9-14

2

Independent Auditors’ Report

Rising Pharmaceuticals, Inc.

Allendale, NJ

We have audited the balance sheet of Rising Pharmaceuticals, Inc. as of September 30, 2010, and the related statements of income, stockholders’ equity, and cash flows for the nine months then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit. The financial statements of Rising Pharmaceuticals, Inc. as of and for the year ended December 31, 2009, were audited by other auditors whose report dated November 5, 2010 expressed an unqualified opinion on those statements.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the 2010 financial statements referred to above present fairly, in all material respects, the financial position of Rising Pharmaceuticals, Inc. at September 30, 2010, and the results of its operations and its cash flows for the nine months then ended in conformity with accounting principles generally accepted in the United States of America.

/s/ BDO USA, LLP

Melville, New York

December 13, 2010 

3

INDEPENDENT AUDITORS’ REPORT

Rising Pharmaceuticals, Inc.

3 Pearl Court

Allendale, NJ 07401

We have audited the accompanying balance sheet of Rising Pharmaceuticals, Inc. (the “Company”) as of December 31, 2009 and the related statements of income, changes in stockholders’ equity and cash flows for the year then ended. These financial statements are the responsibility of the Company’s management.  Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America.  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.  Accordingly, we express no such opinion.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audit of the financial statements provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company at December 31, 2009 and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

 

WISS & COMPANY, LLP

Livingston, New Jersey

November 5, 2010

4

Rising Pharmaceuticals, Inc.

Balance Sheets

	September 30, 2010			December 31, 2009
Assets
Cash and cash equivalents	$	8,926,391		$	7,137,915
Accounts receivable, less allowance for doubtful accounts of $16,071 and $13,637 in 2010 and 2009		10,668,873			11,272,951
Inventories		2,775,381			2,823,728
Other current assets		1,052,261			565,753
Total current assets		23,422,906			21,800,347
Property and Equipment, Net		322,431			264,125
Other Assets:
Goodwill		820,930			820,930
Security deposits		29,509			29,509
Internal use software, net		277,942			274,942
	$	24,873,718		$	23,189,853
Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable and accrued expenses	$	1,983,185		$	1,340,023
Reserve for price concessions		4,893,293			5,607,859
Total current liabilities		6,876,478			6,947,882
Commitments and contingencies (Note 3)
Stockholders’ equity
Common stock, no par value – authorized 160 shares; issued and outstanding 150 shares		174,400			174,400
Retained earnings		18,569,840			16,814,571
Treasury stock, 10 shares		(747,000	)		(747,000	)
Total stockholders’ equity		17,997,240			16,241,971
Total liabilities and stockholders’ equity	$	24,873,718		$	23,189,853

See notes to financial statements.

5

Rising Pharmaceuticals, Inc.

Statements of Income

	Nine months ended September 30, 2010		Year ended December 31, 2009
Net sales	$	30,173,338	$	46,762,404
Royalty income		3,504,016		605,887
Other income		4,240,000		-
Total revenue		37,917,354		47,368,291
Cost of sales		17,364,738		31,005,815
Gross profit		20,552,616		16,362,476
Selling general and administrative expenses		6,793,749		8,593,597
Income from operations		13,758,867		7,768,879
Other income:
Interest income, net		20,600		25,219
Net income before taxes		13,779,467		7,794,098
Income taxes		36,698		18,880
Net income	$	13,742,769	$	7,775,218

See notes to financial statements.

6

Rising Pharmaceuticals, Inc.

Statements of Stockholders’ Equity

	Outstanding Common Shares		Common Stock		Retained Earnings			Treasury Stock			Total
Balance, January 1, 2009		150	$	174,400	$	14,839,353		$	(747,000	)	$	14,266,753
Year ended December 31, 2009
Net income		-		-		7,775,218			-			7,775,218
Distribution to stockholders		-		-		(5,800,000	)		-			(5,800,000	)
Balance December 31, 2009		150		174,400		16,814,571			(747,000	)		16,241,971
Nine months ended September 30, 2010
Net income		-		-		13,742,769			-			13,742,769
Distribution to stockholders		-		-		(11,987,500	)		-			(11,987,500	)
Ending balance, September 30, 2010		150	$	174,400	$	18,569,840		$	(747,000	)	$	17,997,240

See notes to financial statements.

7

Rising Pharmaceuticals, Inc.

Statements of Cash Flows

	Nine months ended September 30, 2010			Year ended December 31, 2009
Cash flows from operating activities:
Net income	$	13,742,769		$	7,775,218
Adjustments to reconcile net loss to net cash from operatingactivities:
Depreciation and amortization		185,362			256,609
Provisions for losses on accounts receivable		2,434			1,071
Change in operating assets and liabilities:
Accounts receivable		601,644			197,107
Inventories		48,347			(365,865	)
Other current assets		(486,508	)		(1,873,286	)
Accounts payable and accrued expenses		643,162			(368,363	)
Reserve for price concessions		(714,566	)		1,689,159
Net cash flows from operating activities		14,022,644			7,311,650
Cash flows from investing activities:
Acquisitions of software for internal use		(44,000	)		(216,685	)
Purchase of property and equipment		(202,668	)		(61,655	)
Net cash flows from investing activities		(246,668	)		(278,340	)
Cash flows from financing activities:
Distribution to stockholders		(11,987,500	)		(5,800,000	)
Payments on notes payable		-			(9,690	)
Net cash flows from financing activities		(11,987,500	)		(5,809,690	)
Net change in cash and equivalents		1,788,476			1,223,620
Cash and equivalents, beginning of year		7,137,915			5,914,295
Cash and equivalent, end of year		8,926,391		$	7,137,915
Supplemental cash flow information:
Interest paid	$	5,676		$	-
Income taxes paid	$	33,097		$	11,680

See notes to financial statements.

8

Rising Pharmaceuticals, Inc.

Notes to Financial Statements

1. Nature of the Business and Summary of Significant Accounting Policies

Nature of the Business

Rising Pharmaceuticals, Inc. (the “Company”) sells pharmaceuticals, vitamins and other similar products to wholesalers and retailers for over-the-counter and pharmacy dispensing.

Estimates and Uncertainties

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results, as determined at a later date, could differ from those estimates.

Cash Equivalents

Cash equivalents include money market funds and all other highly liquid short-term investments purchased with maturities of three months or less.

Revenue Recognition

Revenue is recognized at the time merchandise is shipped to a customer. Upon each sale, estimates of rebates, chargebacks, returns, federal and state drug reimbursements, and other adjustments are made. The estimates are recorded as reductions to gross revenues, with corresponding adjustments to either accounts receivable reserves and allowances or reserve for price concessions. The Company has the experience and access to relevant information that it believes are necessary to reasonably estimate the amounts of such deductions from gross revenues. The Company regularly reviews the information related to these estimates and adjusts its reserves accordingly, if and when actual experience differs from previous estimates.

Royalty Income

The Company has royalty agreements on certain of its products where third party pharmaceutical companies license the right to sell the Company’s products. The Company earns and collects royalty income based on percentages of sales as defined in those agreements.

Partnered products

The Company has various products which it has entered into collaborative arrangements with other pharmaceutical companies. As a result of these arrangements, the Company pays royalties on sales of these products, which are included in cost of goods sold. These royalties are settled on a quarterly basis and the resulting balance sheet effect is not material to either period presented.

Concentration of Credit Risk

● Cash and cash equivalents: The Company maintains its cash balances in financial institutions which are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to certain levels. At times, such balances may be in excess of FDIC insurance limits.

9

Rising Pharmaceuticals, Inc.

Notes to Financial Statements

● Accounts Receivable: Receivables from three customers comprised 60% and 70% of the total receivables as of September 30, 2010 and December 31, 2009, respectively. These three receivables are from wholesalers who resell the Company’s products to many industries such as: hospitals, major retailers, managed care centers, veterinary & independent pharmacies and governmental agencies.

● Sales: Sales to the Company’s three largest customers were approximately 55% and 62% of gross sales for the nine months ended September 30, 2010 and the year ended December 31, 2009, respectively.

● Vendors: The Company purchases a portion of its goods from vendors that at the time of purchase may be the sole source for such goods. If a change of one of these vendors were required or the vendor ceased to sell such goods, the Company could be impacted, for what might be an extended period, until another vendor could be found.

Inventories

Inventories, consisting of finished goods, are stated at the lower of cost (first-in, first-out method) or market.

Property and Equipment

Property and equipment are stated at cost. Machinery and equipment, computer equipment, and furniture and fixtures are depreciated primarily using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized over the remaining life of the lease using the straight-line method. In general, the estimated useful lives used in computing depreciation and amortization are 5 to 7 years for machinery and equipment, computer equipment and furniture and fixtures.

Repairs and maintenance costs are expensed as incurred; major renewals and betterments are capitalized. When assets are disposed of, the assets and related allowances for depreciation are eliminated from the accounts and any resulting gain or loss is reflected in operations.

Capitalized and Purchase Software Development Costs

The Company capitalizes software development costs for internal use in accordance with ASC 350. Capitalization of software development costs begins in the application development stage and ends when the asset is placed into service. Costs related to software development that have not reached application development and costs incurred in the post-implementation for training and maintenance are expensed as incurred. The Company also capitalizes software purchases that provide upgrades and enhancements that result in additional functionality to existing software. Capitalized software development costs are amortized on the straight-line method over the shorter of the expected life of the product or 3 years. Capitalized software costs are included in internal use software on the balance sheet.

10

Rising Pharmaceuticals, Inc.

Notes to Financial Statements

Impairment of Long-Lived Assets

The Company reviews long-lived assets, including property and equipment and intangible assets, for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable.An impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposal is less than its carrying amount. Impairment, if any, is assessed using discounted cash flows. The Company recorded no impairment losses for the nine months ended September 30, 2010 and the year ended December 31, 2009.

Goodwill

Goodwill is not subject to amortization and is tested for impairment annually or more frequently if events or changes in circumstances indicate that the assets may be impaired. The impairment test consists of a comparison of the fair value of the reporting unit with its carrying amount. The Company operates under one reporting unit. If the carrying amount of the reporting unit exceeds its fair value, then an analysis will be performed to compare the implied value of goodwill with the carrying value of goodwill. An impairment loss will be recognized in an amount equal to the difference. Fair value is typically based upon future cash flows discontinued at a rate commensurate with the risk involved or other market comparables. No impairment charges were recorded for the nine months ended September 30, 2010 and the year ended December 31, 2009.

Advertising and Promotional Costs

Advertising and promotional costs are expensed as incurred and approximated $27,000 for the nine months ended September 30, 2010 and $22,000 for the year ended December 31, 2009.

Research and Development Costs

Research and development costs are included in selling, general and administrative expenses and are expensed as incurred and approximated $1,462,000 for the nine months ended September 30, 2010 and $1,601,000 for the year ended December 31 2009.

Shipping and Handling Costs

The Company includes shipping and handling costs billed to customers as sales. Costs incurred for shipping and handling are included in selling expenses and approximated $385,000 for the nine months ended September 30, 2010 and $531,000 for the year ended December 31, 2009.

Income Taxes

The Company had not recorded a provision for federal income taxes since the Company has elected to be treated as an S corporation under the related sections of applicable state tax codes. The Company’s stockholders include the results of operations of the Company in their individual income tax returns. A provision has been made for income taxes in cities and states that do not recognize S corporation status, or for those which levy an entity tax in S corporations. Deferred taxes are not significant to the financial statements.

11

Rising Pharmaceuticals, Inc.

Notes to Financial Statements

Effective January 1, 2009, the Company adopted ASC 740-10, Accounting for Uncertainty in Income Taxes. ASC 740-10 prescribes a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The adoption of this accounting pronouncement has not had a significant impact on the Company’s financial statements.

Defined Contributions 401(k) Plan

The Company has a defined contribution 401(k) Plan (“the Plan”), covering substantially all employees. Employees are eligible to participate in the Plan upon attainment of age 2I and after the completion of one year of service, based on the period in which the participant is credited with at least 1,000 hours of service. The Company’s contribution for the nine months ended September 30, 2010 and the year ended December 31, 2009, made on a discretionary basis, totaled approximately $145,000 and $159,000, respectively.

Subsequent Events

Management has reviewed and evaluated all events and transactions from September 30, 2010 through December 13, 2010, the date that the financial statements were available to be issued. The effects of those events and transactions that provide additional pertinent information about conditions that existed at the balance sheet date have been recognized or disclosed in the accompanying financial statements.

Reclassification

Certain amounts previously reported have been reclassified to conform to the current year presentation.

2. Property, Equipment, and Internal Software

Property and equipment are summarized as follows:

	September 30, 2010		December 31, 2009
Leasehold improvement	$	447,236	$	244,568
Machinery and equipment		65,644		65,644
Computer equipment		148,956		148,956
Furniture and fixtures		132,130		132,130
		793,966		591,298
Less: Accumulated depreciation and amortization		471,535		327,173
	$	322,431	$	264,125
Internal use software is summarized as follows:
Internal use software	$	813,546	$	769,546
Less: Accumulated amortization		535,604		494,604
	$	277,942	$	274,942

12

Rising Pharmaceuticals, Inc.

Notes to Financial Statements

Depreciation and amortization expense related to property and equipment and internal use software totaled approximately $185,000 and $257,000 for the nine months ended September 30, 2010 and the year ended December 31, 2009, respectively.

3. Commitments and Contingencies

Line-of-Credit

The Company has available an $8,000,000 line-of-credit with a financial institution expiring on June 30, 2011. Borrowings on the line bear interest at either the Bank Floating Rate minus 0.5% or LIBOR plus 2.25%, determined at the time of the advance. At September 30, 2010, the Bank Floating Rate and LIBOR rates were 3.25% and 0.26%, respectively. Borrowings are collateralized by substantially all assets of the Company. At September 2010 and December 31, 2009 the Company had no borrowings outstanding under this facility.

Legal Proceedings

The Company is involved in various legal actions and claims arising in the ordinary course of business.

License agreements

The Company has entered into several license agreements for products currently under development. The Company may be obligated in future periods to pay additional amounts subject to the achievement of certain product milestones, as defined.

Leases

The Company leases its office and all of its warehouse space. Rent and common area maintenance paid for the nine months September 30, 2010 and the year ended December 31, 2009 totaled approximately $184,000 and $243,000, respectively.

The following is a schedule of future minimum rental payment required under all non-cancelable leases:

Three months ending December 31, 2010	$	68,000
Year ending December 31,
2011		263,000
2012		267,000
2013		271,000
2014		275,000
2015		280,000
Thereafter		284,000
Total minimum lease payments	$	1,640,000

13

Rising Pharmaceuticals, Inc.

Notes to Financial Statements

4. Income Taxes

The most significant jurisdictions in which the Company is required to file included the US federal jurisdiction and the states of California, Michigan, New Jersey and Tennessee. The Company is no longer subject to federal examination for year-ends prior to December 31, 2006. With limited exceptions the Company is no longer subject to state examinations for year ends prior to December 31, 2006.

5. Other Income

Included in other income for the nine months ended September 30, 2010 is $500,000 relating to a legal settlement and $3,740,000 relating to a sale of product licensing rights. The sale of this product also includes contingent receivables of $2,640,000, based on certain events which are outside the control of the Company, accordingly these receivables will be recorded in other income upon receipt.

6. Subsequent Event

Company Guarantee

In connection with an asset purchase agreement made by the stockholders of the Company, the Company guaranteed payments for Mirror Pharmaceuticals, LLC, a related party, in the amount of approximately $1,600,000. This asset purchase agreement was entered into in October 2010 at which time the Company made this guarantee.

Acquisition Related Transaction

In October 2010 the Company executed a non-binding letter of intent to be acquired by Aceto Corporation.

14

EX-99.2

Aceto Corporation  Exhibit 99.2

UNAUDITED PRO FORMA FINANCIAL INFORMATION (in thousands)

 On December 31, 2010, Aceto Corporation (“Aceto” or the “Company”) acquired certain assets of Rising Pharmaceuticals, Inc. (“Rising”), a New Jersey based company that markets and distributes generic prescription and over the counter pharmaceutical products to leading wholesalers, chain drug stores, distributors, mass market merchandisers and others under its own label, throughout the United States. The purchase price was approximately $73,317 which was comprised of the issuance of 1,000 shares of Aceto common stock, valued at $9,000, cash payment of approximately $58,817 and approximately $5,500 liability due to Rising to satisfy bulk sales tax obligation. The purchase agreement also calls for $8,000 of deferred consideration to be paid by Aceto over a four year period. In addition, the agreement provides for the payment of additional contingent consideration equal to one-half of the three year cumulative Rising earnings before interest, taxes, deprecation and amortization in excess of $32,100, up to a maximum of $6,000. As of December 31, 2010, the Company had accrued $850 related to this contingent consideration.

The following unaudited pro forma combined financial statements reflect the acquisition of certain assets of Rising using the purchase method of accounting. The acquisition has been accounted for in conformity with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification 805, Business Combinations (“ASC 805”). The pro forma adjustments are based upon available information and assumptions that we believe are reasonable. The pro forma adjustments are preliminary and have been prepared to illustrate the estimated effect of the acquisition. Differences between these preliminary estimates and the final acquisition accounting will occur and these differences could have a material impact on the accompanying unaudited pro forma combined financial statements and the combined companies’ future results of operations and financial position. The unaudited pro forma combined financial statements do not purport to be indicative of the operating results or financial position that would have been achieved had the acquisition taken place on the date indicated or the results that may be obtained in the future.

The unaudited pro forma combined balance sheet as of September 30, 2010 is presented as if our acquisition of certain assets of Rising had occurred on September 30, 2010.

The unaudited pro forma combined consolidated statements of income for the year ended June 30, 2010 and the three months ended September 30, 2010 illustrate the effect of the Rising acquisition as if it had occurred on July 1, 2009. The unaudited pro forma combined consolidated statement of income for the year ended June 30, 2010 combines the historical audited statement of income of Aceto for the year ended June 30, 2010 and Rising’s historical unaudited statement of income for the twelve months ended June 30, 2010. Rising’s fiscal year ended on December 31 and thus, the twelve month period was compiled by combining each quarterly statement of income for each period from July 1, 2009 to June 30, 2010. The unaudited pro forma combined consolidated statement of income for the three months ended September 30, 2010 combines the historical unaudited statement of income of both Aceto and Rising for the three months ended September 30, 2010. The historical consolidated financial information has been adjusted to give effect to pro forma events that are (i) directly attributable to the acquisition, (ii) factually supportable, and (iii) with respect to the statements of income, expected to have a continuing impact on the combined results of the companies. These unaudited pro forma condensed combined financial statements are prepared by management for informational purposes only in accordance with Article 11 of Securities and Exchange Commission Regulation S-X and are not necessarily indicative of future results or of actual results that would have been achieved had the acquisition been consummated as of the dates presented, and should not be taken as representative of future consolidated operating results of Aceto. The unaudited pro forma combined financial statements do not reflect any operating efficiencies and/or cost savings that we may achieve, or any additional expenses or costs of integration that we may incur, with respect to the combined companies as such adjustments are not factually supportable at this point in time. The assumptions used to prepare the pro forma financial information are contained in the notes to the unaudited pro forma combined financial statements, and such assumptions should be reviewed in their entirety.

The unaudited pro forma combined financial statements have been developed from and should be read in conjunction with (i) the historical audited consolidated financial statements for the year ended June 30, 2010 and notes thereto of Aceto contained in its Annual Report on Form 10-K , (ii) the historical unaudited consolidated financial statements and notes thereto of Aceto contained in its Quarterly Report on Form 10-Q for the quarter ended September 30, 2010 and (iii) historical audited financial statements and notes thereto of Rising, included in exhibit 99.1 of this Current Report on Form 8-K.

ACETO CORPORATION

Unaudited Pro Forma Combined Balance Sheet

September 30, 2010

	Aceto September 30, 2010 Historical			Rising September 30, 2010 Historical			Pro Forma Adjustments				Pro Forma Combined
ASSETS
Current assets:
Cash and cash equivalents	$	40,113		$	8,926		$	(8,817	)	(A)	$	40,222
Investments		402			-			-				402
Trade receivables, less allowance for doubtful accounts		58,354			10,669			-				69,023
Other receivables		13,087			-			-				13,087
Inventory		77,050			2,775			258		(B)		80,083
Prepaid expenses and other current assets		2,155			1,052			66		(C)		3,273
Deferred income tax asset, net		1,750			-			-				1,750
Total current assets		192,911			23,422			(8,493	)			207,840
Property and equipment, net		7,183			600			-				7,783
Property held for sale		3,752			-			-				3,752
Goodwill		1,830			821			30,942		(D)		33,593
Intangible assets, net		11,834			-			43,200		(E)		55,034
Deferred income tax asset, net		2,337			-			-				2,337
Other assets		9,814			30			-				9,844
TOTAL ASSETS	$	229,661		$	24,873		$	65,649			$	320,183
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	30,135		$	976			-			$	31,111
Short-term bank loans		5,000			-			6,000		(A)		11,000
Accrued expenses		28,306			5,900			647		(F)		54,499
								2,600		(G)
								11,546		(H)
								5,500		(I)
Deferred income tax liability		897			-			-				897
Total current liabilities		64,338			6,876			26,293				97,507
Long-term bank loans		550			-			44,000		(A)		44,550
Long-term liabilities		9,310			-			7,600		(J)		16,910
Environmental remediation liability		7,539			-							7,539
Deferred income tax liability		44			-			-				44
Total liabilities		81,781			6,876			77,893				166,550
Shareholders’ equity:
Common stock		256			174			10		(K)		266
								(174	)	(L)
Capital in excess of par value		53,776			-			8,990		(K)		62,766
Retained earnings		89,755			18,570			(647	)	(F)		86,508
								(2,600	)	(G)
								(18,570	)	(L)
Treasury		(1,926	)		(747	)		747		(L)		(1,926	)
Accumulated other comprehensive income		6,019			-			-				6,019
Total shareholders’ equity		147,880			17,997			(12,244	)			153,633
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	229,661		$	24,873		$	65,649			$	320,183

See the accompanying notes to the Pro Forma Combined Financial Statements

2

ACETO CORPORATION
Unaudited Pro Forma Combined Statement of Income
For The Year Ended June 30, 2010
(In thousands, except per share amounts)
	Aceto for the year ended			Rising
				for the
				twelve months ended
	June 30, 2010			June 30, 2010			Pro Forma				Pro Forma
	Historical			Historical			Adjustments				Combined
Net sales	$	346,631		$	48,462						$	395,093
Cost of sales		292,476			27,077							319,553
Gross profit		54,155			21,385			-				75,540
Selling, general and administrative expenses		44,717			8,457			4,321		(M)		57,495
Operating income		9,438			12,928			(4,321	)			18,045
Other income (expense):
Interest expense		(230	)		(6	)						(236	)
Interest and other income (expense), net		995			31			(1,750	)	(N)
								(522	)	(O)		(1,246	)
		765			25			(2,272	)			(1,482	)
Income before income taxes		10,203			12,953			(6,593	)			16,563
Income tax provision		3,622			9			2,480		(P)		6,111
Net income	$	6,581		$	12,944		$	(9,073	)		$	10,452
Net income per common share	$	0.26									$	0.40
Diluted net income per common share	$	0.26									$	0.40
Weighted average shares outstanding:
Basic		24,979						1,000		( K)		25,979
Diluted		25,224						1,000		( K)		26,224

See the accompanying notes to the Pro Forma Combined Financial Statements

3

ACETO CORPORATION
Unaudited Pro Forma Combined Statement of Income
For The Three Months Ended September 30, 2010
(In thousands, except per share amounts)
	Aceto			Rising
	for the			for the
	three months ended			three months ended
	September  30, 2010			September  30, 2010		Pro Forma			Pro Forma
	Historical			Historical		Adjustments			Combined
Net sales	$	87,660		$	12,382				$	100,042
Cost of sales		74,373			5,540					79,913
Gross profit		13,287			6,842		-			20,129
Selling, general and administrative expenses		9,597			2,779		1,080	(M)		13,456
Operating income		3,690			4,063		(1,080	)		6,673
Other income (expense):
Interest expense		(111	)		6					(105	)
Interest and other income (expense), net		671			3		(438)	(N)
							(65)	(O)		171
		560			9		(503	)		66
Income before income taxes		4,250			4,072		(1,583	)		6,739
Income tax provision		1,453			17		971	(P)		2,441
Net income	$	2,797		$	4,055	$	(2,554	)	$	4,298
Net income per common share	$	0.11							$	0.16
Diluted net income per common share	$	0.11							$	0.16
Weighted average shares outstanding:
Basic		25,329					1,000	( K)		26,329
Diluted		25,506					1,000	( K)		26,506

See the accompanying notes to the Pro Forma Combined Financial Statements

4

ACETO CORPORATION

Notes to Unaudited Pro Forma Combined Financial Statements

(In thousands, except per share amounts)

1.           Background and Basis of Pro Forma Presentation

On December 31, 2010, Aceto Corporation (“Aceto” or the “Company”) acquired certain assets of Rising Pharmaceuticals, Inc. (“Rising”),  a New Jersey based company that markets and distributes generic prescription and over the counter pharmaceutical products to leading wholesalers, chain drug stores, distributors, mass market merchandisers and others under its own label, throughout the United States.

The unaudited pro forma combined financial information was prepared based on the historical financial statements of Aceto and Rising.

Our acquisition has been accounted for in conformity with ASC 805 and uses the fair value concepts defined in Accounting Standards Codification 820, Fair Value Measurements and Disclosures (“ASC 820-10”). ASC 805 requires, among other things, that most assets acquired and liabilities assumed in an acquisition be recognized at their fair values as of the acquisition date and requires that fair value be measured based on the principles in ASC 820-10. ASC 820-10 clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. ASC 820-10 also requires that a fair value measurement reflect the assumptions market participants would use in pricing an asset or liability based on the best information available.

2.           Purchase Price Allocation

The acquisition is accounted for using the acquisition method of accounting. The total estimated purchase price is comprised of the following:

Cash paid at initial closing	$	58,817
Common stock issued		9,000
Bulk sales tax obligation		5,500
Estimated present value of deferred consideration		6,750
Estimated present value of additional contingent consideration		850
	$	80,917

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The following table summarizes the preliminary allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed on the closing date of December 31, 2010 as if the acquisition had occurred on September 30, 2010.

Cash and cash equivalents	$	8,926
Trade receivables		10,669
Inventory		3,033
Prepaid expenses and other current assets		1,118
Property and equipment, net		600
Goodwill		31,763
Intangible assets		43,200
Other assets		30
Total assets acquired		99,339
Accounts payable		976
Accrued expenses		17,446
Net assets acquired	$	80,917

3.           Pro Forma Financial Statement Adjustments

The following pro forma adjustments are included in the Company’s unaudited pro forma combined financial statements:

A. To reflect $58,817 of cash paid in connection with the acquisition of Rising, offset by the incurrence of $50,000 of bank borrowings used to finance the acquisition.

B. Adjustment to record a $258 step-up in the fair value of inventory.

C. To reflect purchase of continuum insurance policy.

D. To eliminate Rising’s historical goodwill of $821 and record the preliminary estimate of goodwill for our acquisition of Rising of $31,763.

E. To record the preliminary estimate of the fair value of intangible assets for our acquisition of Rising. The amortizable intangible assets acquired are comprised of the following:  approximately $32,500 of product rights, amortizable over a period of seven to fourteen years; approximately $5,100 of license agreements, amortizable over six years; approximately $3,900 of customer relationships, amortizable over eleven years; and approximately $1,700 of trademarks, amortizable over a period of four years.

F. To reflect after tax impact of non-recurring acquisition-related transaction costs.

G. To reflect tax charge related to the repatriation of earnings from certain foreign subsidiaries to assist with the funding of the acquisition.

H. To reflect working capital adjustment calculated in accordance with the asset purchase agreement.

I. To reflect approximate $5,500 liability due to Rising to satisfy bulk sales tax obligation.

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J. To reflect the fair value of deferred consideration of $6,750 to be paid by Aceto over a four year period and the fair value of additional contingent consideration of $850 equal to one-half of the three year cumulative Rising earnings before interest, taxes, deprecation and amortization in excess of $32,100, up to a maximum of $6,000.

K. To reflect 1,000 shares of Aceto common stock issued in connection with the acquisition of certain assets of Rising, valued at $9.00, the closing price of Aceto stock on the closing date.

L. To eliminate Rising's historical shareholders' equity.

M. Adjustment to record the amortization expense related to the amortizable intangible assets acquired.

N. To reflect increase in interest expense associated with bank borrowings to fund the acquisition.  On December 31, 2010, we borrowed $10,000 of Revolving Loans and a Term Loan of $40,000. Both loans were utilized by us to partially finance payment of the purchase price for the Rising acquisition. The interest rate on both loans is at an Alternate Base Rate or 3.5% at December 31, 2010. Aceto may repay the Revolving Loan during the period ending December 31, 2015. The Term Loan is payable as to principal in twenty (20) consecutive quarterly installments, commencing March 31, 2011 and on each June 30, September 30 and December 31st thereafter.

O. To reflect interest expense associated with the discount of the deferred consideration and the contingent consideration.

P. Adjustment to record an income tax provision for Rising and pro forma adjustments using a 39% tax rate. Prior to the acquisition, Rising was an S Corporation and was not taxed at the Corporation level.

The pro forma adjustments included in the income statements do not give effect to the impact on gross profit of the adjustment to increase inventory by approximately $258 to its estimated fair value and the impact of non-recurring acquisition-related transaction costs of approximately $1,060. The pro forma adjustments included in the income statements also do not give effect to the impact of the $2,600 tax charge related to the repatriation of earnings from certain foreign subsidiaries to assist with the funding of the acquisition.

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