**CHINA      SKY ONE MEDICAL, INC.**

**Audit      Committee Charter**

**I.**
**General      Statement of Purpose**

|  | · | assist                the Board of Directors (the “Board”) in its oversight of (1) the integrity                of the Company’s financial statements, (2) the Company’s compliance with                legal and regulatory requirements, and (3) the qualifications,                independence and performance of the Company’s independent auditors;                and |
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|  | · | prepare                the report required by the rules of the Securities and Exchange Commission                (the “SEC”) to be included in the Company’s annual proxy                statement. |
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**II.**
**Composition**

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**III.**
**Compensation**

**IV.**
**Meetings**

**V.**
**Responsibilities      and Authority**

**A.**
**Review      of Charter**

|   | · | The                Audit Committee shall review and reassess the adequacy of this Charter                annually and recommend to the Board any amendments or modifications                to the                Charter that the Audit Committee deems                appropriate. |
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**B.**
**Annual      Performance Evaluation of the Audit Committee**

|   | · | At                least annually, the Audit Committee shall evaluate its own performance                and                report the results of such evaluation to the Nominating and Corporate                Governance Committee. |
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**C.**
**Matters      Relating to Selection, Performance and Independence of Independent      Auditor**

|   | · | The                Audit Committee shall be directly responsible for the appointment,                retention and termination of the Company’s independent auditor, and                determining compensation for the independent auditor, engaged for                the                purpose of preparing or issuing an audit report or related work or                performing other audit, review or attest services for the Company.                The                Audit Committee may consult with management in fulfilling these duties,                but may not delegate these responsibilities to                management. |
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|   | · | The                Audit Committee shall be directly responsible for oversight of the                work of                the independent auditor (including resolution of disagreements between                management and the independent auditor regarding financial reporting)                engaged for the purpose of preparing or issuing an audit report or                related                work or performing other audit, review or attest services for the                Company. |
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|   | · | The                Audit Committee shall instruct the independent auditor that the                independent auditor shall report directly to the Audit                Committee. |
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|   | · | The                Audit Committee shall pre-approve all auditing services and the terms                thereof (which may include providing comfort letters in connection                with                securities underwritings) and nonaudit services (other than non-audit                services prohibited under Section 10A(g) of the Exchange Act or the                applicable rules of the SEC or the Public Company Accounting Oversight                Board) to be provided to the Company by the independent auditor;                provided,                however, the pre-approval requirement is waived with respect to the                provision of non-audit services for the Company if the “de minimus”                provisions of Section 10A(i)(1)(B) of the Exchange Act are satisfied.                This                authority to pre-approve non-audit services may be delegated to one                or                more members of the Audit Committee, who shall present all decisions                to                pre-approve an activity to the full Audit Committee at its first                meeting                following such decision. |
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|   | · | The                Audit Committee may review and approve the scope and staffing of                the                independent auditors’ annual audit                plan(s). |
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|   | · | The                Audit Committee shall request that the independent auditor provide                the                Audit Committee with the written disclosures and the letter required                by                Independence Standards Board Standard No. 1, as modified or supplemented,                require that the independent auditor submit to the Audit Committee                on a                periodic basis a formal written statement delineating all relationships                between the independent auditor and the Company, discuss with the                independent auditor any disclosed relationships or services that                may                impact the objectivity and independence of the independent auditor,                and                based on such disclosures, statement and discussion take or recommend                that                the Board take appropriate action in response to the independent                auditor’s                report to satisfy itself of the independent auditor’s                independence. |
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|   | · | The                Audit Committee shall evaluate the independent auditors’ qualifications,                performance and independence, and shall present its conclusions with                respect to the independent auditors to the full Board. As part of                such                evaluation, at least annually, the Audit Committee                shall: |
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|   | · | obtain                and review a report or reports from the independent auditor describing                (1)                the auditor’s internal quality-control procedures, (2) any material issues                raised by the most recent internal quality-control review or peer                review                of the auditors or by any inquiry or investigation by government                or                professional authorities, within the preceding five years, regarding                one                or more independent audits carried out by the auditors, and any steps                taken to address any such issues, and (3) to assess the auditor’s                independence, all relationships between the independent auditor and                the                Company; |
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|   | · | review                and evaluate the performance of the independent auditor and the lead                partner (and the Audit Committee may review and evaluate the performance                of other members of the independent auditor’s audit staff);                and |
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|   | · | assure                the regular rotation of the audit partners (including, without limitation,                the lead and concurring partners) as required under the Exchange                Act and                Regulation S-X. |
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|   | · | The                Audit Committee shall set clear policies with respect to the potential                hiring of current or former employees of the independent                auditor. |
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**D.**
**Audited      Financial Statements and Annual Audit**

|   | · | The                Audit Committee shall review the overall audit plan with the independent                auditor and the members of management who are responsible for preparing                the Company’s financial statements, including the Company’s Chief                Financial Officer and/or principal accounting officer or principal                financial officer (the Chief Financial Officer and such other officer                or                officers are referred to herein collectively as the “Senior Accounting                Executive”). |
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|   | · | The                Audit Committee shall review and discuss with management (including                the                Company’s Senior Accounting Executive) and with the independent auditor                the Company’s annual audited financial statements, including (a) all                critical accounting policies and practices used or to be used by                the                Company, (b) the Company’s disclosures under “Management’s Discussion and                Analysis of Financial Conditions and Results of Operations,” prior to the                filing of the Company’s Annual Report on Form 10-K, and (c) any                significant financial reporting issues that have arisen in connection                with                the preparation of such audited financial                statements. |
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|   | · | The                Audit Committee must review: |
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|   | (i) | any                analyses prepared by management and/or the independent auditors setting                forth significant financial reporting issues and judgments made in                connection with the preparation of the financial statements, including                analyses of the effects of alternative GAAP methods on the financial                statements. The Audit Committee may consider the ramifications of                the use                of such alternative disclosures and treatments on the financial                statements, and the treatment preferred by the independent auditor.                The                Audit Committee may also consider other material written communications                between the registered public accounting firm and management, such                as any                management letter or schedule of unadjusted differences; |
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|   | (ii) | major                issues as to the adequacy of the Company’s internal controls and any                special audit steps adopted in light of material control deficiencies; |
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|  | (iii) | major                issues regarding accounting principles and procedures and financial                statement presentations, including any significant changes in the                Company’s selection or application of accounting principles; and |
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|  | (iv) | the                effect of regulatory and accounting initiatives, as well as off-balance                sheet transactions and structures, on the financial statements of                the                Company. |
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|   | · | The                Audit Committee shall review and discuss with the independent auditor                (outside of the presence of management) how the independent auditor                plans                to handle its responsibilities under the Private Securities Litigation                Reform Act of 1995, and request assurance from the auditor that Section                10A of the Private Securities Litigation Reform Act of 1995 has not                been                implicated. |
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|   | · | The                Audit Committee shall review and discuss with the independent auditor                any                audit problems or difficulties and management’s response thereto. This                review shall include (1) any difficulties encountered by the auditor                in                the course of performing its audit work, including any restrictions                on the                scope of its activities or its access to information, and (2) any                significant disagreements with management. This review may also include: |
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|   | (i) | any                accounting adjustments that were noted or proposed by the auditors                but                were “passed” (as immaterial or otherwise); |
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|   | (ii) | any                communications between the audit team and the audit firm’s national office                regarding auditing or accounting issues presented by the engagement;                and |
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|   | (iii) | any                management or internal control letter issued, or proposed to be issued,                by                the auditors. |
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|   | · | The                Audit Committee shall discuss with the independent auditors those                matters                brought to the attention of the Audit Committee by the auditors pursuant                to Statement on Auditing Standards No. 61 (“SAS                61”). |
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|   | · | The                Audit Committee shall also review and discuss with the independent                auditors the report required to be delivered by such auditors pursuant                to                Section 10A(k) of the Exchange Act. |
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|   | · | If                brought to the attention of the Audit Committee, the Audit Committee                shall                discuss with the CEO and CFO of the Company (1) all significant                deficiencies and material weaknesses in the design or operation of                internal controls and procedures for financial reporting which could                adversely affect the Company’s ability to record, process, summarize and                report financial information required to be disclosed by the Company                in                the reports that it files or submits under the Exchange Act, within                the                time periods specified in the SEC’s rules and forms, and (2) any fraud                involving management or other employees who have a significant role                in the                Company’s internal controls and procedures for financial                reporting. |
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|   | · | Based                on the Audit Committee’s review and discussions (1) with management of the                audited financial statements, (2) with the independent auditor of                the                matters required to be discussed by SAS 61, and (3) with the independent                auditor concerning the independent auditor’s independence, the Audit                Committee shall make a recommendation to the Board as to whether                the                Company’s audited financial statements should be included in the Company’s                Annual Report on Form 10-K for the last fiscal                year. |
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|   | · | The                Audit Committee shall prepare the Audit Committee report required                by Item                306 of Regulation S-K of the Exchange Act (or any successor provision)                to                be included in the Company’s annual proxy                statement. |
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**E.**
**Unaudited      Quarterly Financial Statements**

|   | · | The                Audit Committee shall discuss with management and the independent                auditor,                prior to the filing of the Company’s Quarterly Reports on Form 10-Q: (1)                the Company’s quarterly financial statements and the Company’s related                disclosures under “Management’s Discussion and Analysis of Financial                Condition and Results of Operations”; (2) such issues as may be brought to                the Audit Committee’s attention by the independent auditor pursuant to                Statement on Auditing Standards No. 71; and (3) any significant financial                reporting issues that have arisen in connection with the preparation                of                such financial statements. |
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|   | **F.** | **Earnings                Press Releases** |
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|   | · | The                Audit Committee shall discuss the Company’s earnings press releases, as                well as financial information and earnings guidance provided to analysts                and rating agencies, including, in general, the types of information                to be                disclosed and the types of presentation to be made (paying particular                attention to the use of “pro forma” or “adjusted” non-GAAP                information). |
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**G.**
**Related      Party Transactions**

|   | · | The                Audit Committee shall review all related party transactions involving                the                Company’s directors and officers and their immediate family                members. |
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**H.**
**Risk      Assessment and Management**

|   | · | The                Audit Committee shall discuss the guidelines and policies that govern                the                process by which the Company’s exposure to risk is assessed and managed by                management. |
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|   | · | In                connection with the Audit Committee’s discussion of the Company’s risk                assessment and management guidelines, the Audit Committee may discuss                or                consider the Company’s major financial risk exposures and the steps that                the Company’s management has taken to monitor and control such                exposures. |
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**I.**
**Procedures      for Addressing Complaints and Concerns**

|   | · | The                Audit Committee shall establish procedures for (1) the receipt, retention                and treatment of complaints received by the Company regarding accounting,                internal accounting controls, or auditing matters and (2) the                confidential, anonymous submission by employees of the Company of                concerns                regarding questionable accounting or auditing                matters. |
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|   | · | The                Audit Committee may review and reassess the adequacy of these procedures                periodically and adopt any changes to such procedures that the Audit                Committee deems necessary or                appropriate. |
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**J.**
**Regular      Reports to the Board**

|   | · | The                Audit Committee shall regularly report to and review with the Board                any                issues that arise with respect to the quality or integrity of the                Company’s financial statements, the Company’s compliance with legal or                regulatory requirements, the performance and independence of the                independent auditors and any other matters that the Audit Committee                deems                appropriate or is requested to review for the benefit of the                Board. |
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**K.**
**Legal      and Regulatory Compliance**

|   | · | The                Audit Committee shall discuss with management and the independent                auditor                and review with the Board1                the                legal and regulatory requirements applicable to the Company and its                subsidiaries and the Company’s compliance with such requirements. After                these discussions, the Audit Committee may, if it determines it to                be                appropriate, make recommendations to the Board with respect to the                Company’s policies and procedures regarding compliance with applicable                laws and regulations. |
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|   | · | The                Audit Committee shall discuss with management legal matters (including                pending or threatened litigation) that may have a material effect                on the                Company’s financial statements or its compliance policies and                procedures. |
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**VI.      **
**Additional      Authority**

**A.**
**Engagement      of Advisors**

|   | · | The                Audit Committee may engage independent counsel and such other advisors                it                deems necessary to carry out its responsibilities and powers, and,                if such                counsel or other advisors are engaged, shall determine the compensation                or                fees payable to such counsel or other                advisors. |
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**B.**
**General**

|   | · | The                Audit Committee may form and delegate authority to subcommittees                consisting of one or more of its members as the Audit Committee deems                appropriate to carry out its responsibilities and exercise its powers. |
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|   | · | The                Audit Committee may perform such other oversight functions outside                of its                stated purpose as may be requested by the Board from time to                time. |
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|   | · | In                performing its oversight function, the Audit Committee shall be entitled                to rely upon advice and information that it receives in its discussions                and communications with management, the independent auditor and such                experts, advisors and professionals as may be consulted with by the                Audit                Committee. |
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|   | · | The                Audit Committee is authorized to request that any officer or employee                of                the Company, the Company’s outside legal counsel, the Company’s                independent auditor or any other professional retained by the Company                to                render advice to the Company attend a meeting of the Audit Committee                or                meet with any members of or advisors to the Audit                Committee. |
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