China Sky One Medical (PINK:CSKI)

As of the Closing Date, the Company, the Company’s majority shareholder (the “CSKI Shareholder”) and the Investor Agent (collectively, the “Make Good Parties”) entered into a Make Good Agreement (the “Make Good Agreement”), pursuant to which the CSKI Shareholder agreed to place up to 3,000,000 shares of Common Stock of the Company (the “Escrow Shares”) into escrow for the benefit of the Investors, in the event that the Company fails to attain Earnings Per Share, as adjusted (“Adjusted EPS”) of at least

(i) $1.05 per share for the fiscal year ending December 31, 2007, based on fully diluted shares outstanding. ( $0.88 on a fully taxed basis ).

(ii) $1.61 per share for the fiscal year ending December 31, 2008, based on fully diluted shares outstanding. ( $1.35 on a fully taxed basis ).

(Source: SEC 8K Filing Feb 21, 2008 )