TCP: CSKI increased its full-year 2008 revenue guidance by 9% from $82 million to $89 million and its net income guidance by 5% from $26.3 million to $27.5 million. Why did you raise guidance?

China Sky One Medical, Inc. (“China Sky One Medical” or “the Company”) has performed well and has been developing quickly, especially in 2008, when we acquired two pharmaceutical companies, Heilongjiang Tianlong Pharmaceutical, Inc. and Peng Lai Jin Chuang Company.

The Company recently increased its FY 2008 revenue guidance to $88-$90 million and its net income guidance to $27-$28 million. The Company raised guidance because it just completed the acquisition of Peng Lai Jin Chuang Pharmaceutical Company, which will contribute to revenues this year. We started production at Peng Lai Jin Chuang in October, which is an important event for the company. We expect Peng Lai Jin Chuang to contribute $3-$5 million in sales in fiscal 2008 and about $0.95-$1.55 million in net profit for the year. This is why we increased guidance.

TCP: CSKI acquired newly established pharmaceutical company Peng Lai Jin Chuang in June. Jin Chuang’s production facilities are still being developed, but what will the company produce, and how will it affect revenues and profits going forward?

We started production at Peng Lai Jin Chuang in October and the manufacturing facilities are complete. As a result of the acquisition, we obtained the rights to develop and market a portfolio of twenty drugs approved by State Food and Drug Administration (SFDA). Below is a list of newly developed products currently being manufactured at Peng Lai Jin Chuang:

The Company has not suffered from the global financial crises. Production and operations have remained stable, our exports have not been affected, and we enjoy strong cash flow. Given this solid foundation, we are confident that the Company will continue to develop quickly in 2009. As a result of our two acquisitions, our return on revenue and profit will reach optimization in 2009 with the increase of production capacity. We are currently calculating our estimated sales and net profits from Jin Chuang for 2009 and we believe they will continue to increase our financial performance going forward.

TCP: What other benefits will you gain from this acquisition and are you looking to acquire other pharmaceutical manufactures after the successful integration acquisition?

This year, the Jin Chang acquisition will contribute to overall revenue growth and enhance our product portfolio. It has also brought us additional R&D capability. We are always on the lookout for good acquisitions and we think there are a lot of attractive targets now. We are currently in talks with potential candidates.

TCP: How does the baby formula and milk scandal affect confidence in safety regulation in China and can you see it having an impact on your sales? How can you assure consumers that your products are safe?

The baby milk scandal does not affect our sales. We produce pharmaceuticals. Pharmaceuticals have a much more strict quality assurance system than food products in China. We strictly follow GMP (Good Manufacturing Practice) regulations during the manufacturing process to ensure the quality of our products.

TCP: You have announced plans to increase R&D capacity. How much do you currently spend on R&D, and how much do you plan to spend in the future. What key products or product categories are you working on?

For the first nine months in 2008, we spent nearly $4.7 million on R&D. For 2008 overall, we plan to spend $7.5 million on R&D.

Our R&D focus will be on clinical medicines for first-line disease treatment, including those that treat cardiovascular diseases and antibiotics that treat infections. To further diversify our product portfolio, we will invest more in developing drugs that are used to treat eye diseases. Our goal is to be the largest manufacturer with the most complete line of products for eye diseases. This strategy will help enhance brand awareness for our products.

The categories of currently R & D projects include Biochemical Products, such as Endostatin, Lung Cancer Diagnostic Kit and Calcium Diagnostic Kit; drops, such as Compound Zinc Sulfate Eye Drops, Tobramycin Eye Drops and Ofloxacin Eye Drop; Suppositories, such as Diclofenac Sodium Suppositories, Ofloxacin Suppositories and Pediatric Ibuprofen Suppositories; Ointments, such as Paeonol Gel, Boric Acid Ointment and Moschus Ointment; Sprays, such as Compound Naphazoline Spray; Injections, such as Doxofylline Injection, Methionine Vitamin B1 for Injection and Pantoprazole Sodium for Injection; Gargle, such as Chlorhexidine Gluconate Gargle, Cetylpyridinium Chloride Gargle and Compound Chlorhexidine Gargle; and lotion, such as Hemorrhoid Lotion.

TCP: You announced in September you had successfully developed 26 new drugs that are in clinical trials and have been submitted to the State Food and Drug Administration (SFDA) in the PRC for approval. Can you tell us more about these drugs?

Yes, below is a list of these drugs and their applications:

TCP: CSKI also recently announced a deal with Shaanxi Xintai to distribute your new asthma patch. Will CSKI pursue further distribution deals with some of your other products with Shaanxi Xintai and are there other distributors out there that you are discussing distribution deals with?

Our Slim Patch, one of our best selling products, is being distributed by Shaanxi Xintai Pharmaceutical Company in an agreement that runs over three years. We have worked with them before and have been successful distributing our Asthma Patch product through their network. We are also talking to other distributors for our products. These are channel distributors, and their sales models can help to optimize ours sales. Collaboration of this kind will bring our products to more diversified markets and bring down the expense in exploring these new markets ourselves.

TCP: With your strong cash position and solid balance sheet, is management considering a share repurchase program or do you see greater opportunity with acquisition and further product development?

Despite our strong performance, breakthroughs in R&D and the success of new products, the stock price is going down because of the financial crisis. As CEO of China Sky One, I believe that the decline in stock price does not truly reflect our business and that it is temporary. I am not considering any share repurchase programs.

Not only will China Sky One will perform well in 2009, but we expect to grow rapidly over the next five years due to our strategic acquisitions, new product successes, a more mature business model, and an experienced executive management team.

TCP: Lastly, what is your view of the 2008 global economic crisis and its impact on China Sky One?

We are encountering the worst financial crisis of this century. But so far, it has had no impact on our production, operations and exports. We generated more than $65 million in revenues this year, an 80% increase over last year, and continue to enjoy strong free cash flow. With this solid footing, we are confident that our robust organic growth will continue well into the foreseeable future. In addition, our recent acquisitions of Hailongjiang Tianlong Pharmaceutical Company and Peng Lai Jin Chuang Pharmaceutical Company have already started contributing to our sales and profits. As a result, our production capability and market expansion will increase further in 2009. In addition, our pipeline is very robust. In the third quarter of 2008 we developed 37 new drugs that are currently in clinical trials.

Even in this very challenging market environment, we continue to receive the support and confidence of our investors, and we will continue to reward them with exceptional financial results by supporting the profitable growth of the Company. We believe the fluctuation in our stock price is due to overall market conditions and is not directly related to our operations, performance, or execution. We continue to actively communicate with our investors via in-person meetings, investment conferences, e-mails and conference calls. Recently, we appointed Mr. Stanley Hao as our new Chief Financial Officer, who has already been working closely with our finance and accounting team since June. We are committed to providing transparency and enhancing our corporate governance in keeping with our status as a U.S.-listed public company.