UNITED STATES SECURITIES AND EXCHANGE COMMISSION

FORM 10-Q

QQuarterly Report pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934For the quarterly period ended
March 31, 2008

£Transition
Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934For the transition period
__________ to __________



RUB A DUB SOAP,
INC.(Exact name of registrant
as specified in its charter)

|Nevada                                                                  | 84-1609495                                
|----------------------------------------------------------------------- | ------------------------------------------
|(State
    or other jurisdiction of 
    incorporation or organization) | (IRS
    Employer 
    Identification No.)

No. 177 Chengyang
Section
308 National Highway
Danshan Industrial Area Qingdao, China 266109(Address of principal
executive offices)

(86) 532-8779-8766(Registrant's telephone
number)

Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by Section 13 or 15(d)
of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days

Q

Indicate by check mark whether the
registrant is a large accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company. See the definitions of "large accelerated
filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the
Exchange Act. (Check one):

|Large Accelerated
    Filer£                      | Accelerated Filer£            
|------------------------------------------------- | ------------------------------
|                                                  |                               
|Non-accelerated filer£                            | Smaller reporting
    companyQ
|(Do not check
    if a smaller reporting company) |                               

Indicate by check mark
whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act).

£YesQNo

The number of shares outstanding of each of the
issuer's classes of common equity, as of May 6, 2008 is as follows:

|Class
    of Securities            | Shares
    Outstanding            
|---------------------------------- | ----------------------------------
|---------------------------------- | ----------------------------------
|Common
    Stock, $0.001 par value | 26,000,000                        

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TABLE OF CONTENTS

|         |                                                                                           |     
|-------- | ----------------------------------------------------------------------------------------- | ----
|         | PART I Financial Information                                                              | Page
|         |                                                                                           |     
|         |                                                                                           |     
|Item 1.  | Financial Statements                                                                      | 3   
|Item 2.  | Management's Discussion and Analysis of
    Financial Condition and Results of Operations | 16  
|Item 3.  | Quantitative and Qualitative Disclosures
    About Market Risk                            | 25  
|Item 4   | Controls and Procedures                                                                   | 26  
|         |                                                                                           |     
|         |                                                                                           |     
|         | PART II Other Information                                                                 |     
|         |                                                                                           |     
|         |                                                                                           |     
|Item 1.  | Legal Proceedings                                                                         | 26  
|Item 1A. | Risk Factors                                                                              | 26  
|Item 2.  | Unregistered Sales of Equity Securities and
    Use of Proceeds                           | 33  
|Item 3.  | Defaults Upon Senior Securities                                                           | 33  
|Item 4.  | Submission of Matters to a Vote of Security
    Holders                                   | 33  
|Item 5.  | Other Information                                                                         | 33  
|Item 6.  | Exhibits                                                                                  | 33  

2

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PART I
FINANCIAL INFORMATIONITEM 1. FINANCIAL STATEMENTS.RUB A DUB SOAP INC. 
Consolidated Balance Sheets

|                                                                                                                                       | March 31, 2008 |  | December 31, 2007
|-------------------------------------------------------------------------------------------------------------------------------------- | -------------- |  | -----------------
|                                                                                                                                       | Unaudited      |  | Audited          
|                                                                                                                                       | US$            |  | US$              
|ASSETS                                                                                                                                 |                |  |                  
|CURRENT ASSETS                                                                                                                         |                |  |                  
|Cash and cash equivalents                                                                                                              | 14,167,144     |  | 2,108,631        
|Restricted cash                                                                                                                        | 10,619,711     |  | 8,534,135        
|Notes receivable                                                                                                                       | 1,806,694      |  | 1,738,286        
|Accounts receivable, net                                                                                                               | 18,835,482     |  | 18,957,856       
|Related party receivables                                                                                                              | 30,892,706     |  | 31,508,703       
|Inventories, net                                                                                                                       | 15,379,681     |  | 10,384,620       
|Other receivables                                                                                                                      | 10,634,158     |  | 8,681,783        
|Prepayments and other assets                                                                                                           | 6,004,285      |  | 6,448,517        
|Total Current Assets                                                                                                                   | 108,339,861    |  | 88,362,531       
|                                                                                                                                       |                |  |                  
|RELATED PARTIES RECEIVABLES (NON CURRENT)                                                                                              | 36,501,633     |  | 28,967,410       
|                                                                                                                                       |                |  |                  
|PROPERTY, PLANT & EQUIPMENT, net                                                                                                       | 5,918,861      |  | 5,812,963        
|                                                                                                                                       |                |  |                  
|INVESTMENT                                                                                                                             | 48,418         |  | 46,486           
|                                                                                                                                       |                |  |                  
|                                                                                                                                       | 150,808,773    |  | 123,189,390      
|                                                                                                                                       |                |  |                  
|                                                                                                                                       |                |  |                  
|LIABILITIES AND STOCKHOLDERS'
    EQUITY                                                                                               |                |  |                  
|                                                                                                                                       |                |  |                  
|CURRENT LIABILITIES                                                                                                                    |                |  |                  
|Short term borrowings                                                                                                                  | 74,463,014     |  | 55,505,353       
|Notes payable                                                                                                                          | 16,846,572     |  | 16,174,239       
|Accounts payable                                                                                                                       | 17,774,828     |  | 21,121,952       
|Related party payables                                                                                                                 | 15,138,472     |  | 5,064,636        
|Other payables and accruals                                                                                                            | 827,054        |  | 1,740,015        
|Taxes payable                                                                                                                          | 2,472,197      |  | 2,059,348        
|Other liabiltities                                                                                                                     | 296,118        |  | 274,715          
|Advance from customers                                                                                                                 | 1,814,199      |  | 1,964,681        
|Total Current Liabilities                                                                                                              | 129,632,454    |  | 103,904,939      
|                                                                                                                                       |                |  |                  
|STOCKHOLDERS' EQUITY                                                                                                                   |                |  |                  
|Common stock - authorized 100,000,000 shares,
    $0.001 par value; issued and outstanding 26,000,000 shares and 25,090,000
    shares | 26,000         |  | 25,090           
|Appropriated retained earnings                                                                                                         | 1,254,002      |  | 1,254,002        
|Unappropriated retained earnings                                                                                                       | 17,478,082     |  | 16,513,120       
|Accumulated other comprehensive income                                                                                                 | 2,418,235      |  | 1,492,239        
|Total Stockholders' Equity                                                                                                             | 21,176,319     |  | 19,284,451       
|                                                                                                                                       | 150,808,773    |  | 123,189,390      

See accompanying notes.

3

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RUB A DUB SOAP INC.
Consolidated Statements of Operations and Comprehensive Income

|                                    | Three Months Ended March 31,
|----------------------------------- | ----------------------------
|                                    | 2008                        
|                                    | Unaudited                   
|                                    | US$                         
|REVENUES                            |                             
|Sales                               | 67,241,880                  
|Commissions and other               | 137,626                     
|                                    | 67,379,506                  
|COSTS AND EXPENSES                  |                             
|Cost of sales                       | 62,959,455                  
|Freight charges                     | 777,370                     
|Commissions and rebates             | -                           
|Insurance                           | 51,907                      
|Selling Expenses                    | 748,033                     
|General and Administrative Expenses | 204,991                     
|                                    | 64,741,756                  
|INCOME FROM OPERATIONS              | 2,637,750                   
|                                    |                             
|OTHER INCOME (EXPENSES)             |                             
|Miscellaneous income                | -                           
|Interest expense (net)              | (1,534,308)                 
|                                    | (1,534,308)                 
|INCOME BEFORE INCOME TAXES          | 1,103,442                   
|Provision for income taxes          | 137,569                     
|NET INCOME                          | 965,873                     
|OTHER COMPREHENSIVE INCOME          |                             
|Foreign currency translation loss   | (36,814)                    
|COMPREHENSIVE INCOME                | 929,059                     
|                                    |                             
|EARNINGS PER COMMON SHARE:          |                             
|Basic and Diluted                   | 0.04                        
|                                    |                             
|                                    |                             
|AVERAGE COMMON SHARES OUTSTANDING   | 25,610,000                  

See accompanying notes.

4

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RUB A DUB SOAP INC. 
Consolidated Statements of Cash Flows

|                                                   | Three Months Ended March 31,
|-------------------------------------------------- | ----------------------------
|                                                   | 2008                        
|                                                   | Unaudited                   
|                                                   | US$                         
|CASH FLOWS FROM OPERATING ACTIVITIES               |                             
|Net Income                                         | 965,873                     
|Adjustments to reconcile net income to net cash    |                             
|used by operating activities:                      |                             
|Depreciation                                       | 226,946                     
|Changes in operating assets and liabilities        |                             
|Accounts receivable                                | 122,374                     
|Notes receivable                                   | (68,408)                    
|Related party receivables                          | (6,918,226)                 
|Inventories                                        | (4,995,061)                 
|Other receivables                                  | (1,952,375)                 
|Prepayments and other assets                       | 444,232                     
|Accounts payable                                   | (3,347,124)                 
|Notes payable                                      | 672,333                     
|Related party payables                             | 10,073,836                  
|Other payables and accruals                        | (912,961)                   
|Taxes payable                                      | 412,849                     
|Other liabilities                                  | 21,403                      
|Advances from customers                            | (150,482)                   
|Net Cash Provided (Used) by Operating Activities   | (5,404,791)                 
|                                                   |                             
|CASH FLOWS FROM INVESTING ACTIVITIES               |                             
|Purchase of fixed assets                           | (40,479)                    
|Increase in restricted cash                        | (2,085,576)                 
|Investment                                         | (1,932)                     
|Construction in progress                           | (1,489)                     
|Net Cash Used by Investing Activities              | (2,129,476)                 
|                                                   |                             
|CASH FLOWS FROM FINANCING ACTIVITIES               |                             
|Net change in short term borrowings                | 18,957,661                  
|Net Cash Provided (Used) by Financing Activities   | 18,957,661                  
|Effect of exchange rate change on cash             | 635,119                     
|                                                   |                             
|NET INCREASE IN CASH AND CASH EQUIVALENTS          | 12,058,513                  
|CASH AND CASH EQUIVALENTS, beginning of
    period | 2,108,631                   
|CASH AND CASH EQUIVALENTS, end of period           | 14,167,144                  
|                                                   |                             
|SUPPLEMENTAL DISCLOSURES                           |                             
|Interest paid                                      | 1,553,846                   
|Income taxes paid                                  | 8,607                       

See accompanying notes.

5

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RUB A DUB SOAP INC. 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Nature of Business and Summary of Significant Accounting
Policies:

Organization

Rub A Dub Soap Inc. ("RUBD") is a Nevada corporation
originally incorporated on September 28, 2001 in Colorado and re-incorporated
in Nevada on March 6, 2006. We did not engage in active operation other than
searching for potential business opportunities for acquisition before we
completed the acquisition transaction with Zhongsen International Company Group
Limited ("Zhongsen International"), a corporation formed under the Laws of the
Special Administrative Region of Hong Kong of the People's Republic of China.

On October 26, 2007, we entered into a Stock Purchase
Agreement with Zhongsen International. Pursuant to the Agreement, at the closing
on February 5, 2008, we acquired all of the issued and outstanding capital stock
of Zhongsen from the Zhongsen shareholders in exchange for 25,090,000 shares of
our common stock. The acquisition is reverse acquisition transaction and has
been accounted for as a recapitalization effected by a share exchange. Zhongsen
International is considered as the acquirer for accounting and financial
reporting purposes and RUBD as acquired entity. The assets and liabilities of
the acquired entity have been brought forward at their book value and no
goodwill has been recognized.

We are a holding company that only operates through Zhongsen
International's wholly owned subsidiaries: Qingdao Free-Trading Zone Sentaida
International Trade Company Limited ("F.T.Z. Sentaida"), Qingdao Sentaida Tires
Limited ("Sentaida Tires") and Zhongsen Holdings Limited ("Zhongsen Holdings").
Both F.T.Z. Sentaida and Sentaida Tires are companies incorporated under the
Laws of People's Republic of China, and Zhongsen Holdings is incorporated in the
British Virgin Island under the International Business Company Act (Cap.291).

Nature of Business

We primarily engage in the global marketing and distribution
of tires and rubber without any tire manufacturing operations. We are one of the
largest integrated tire and rubber marketers and distributors in China. Our
business scope can be generally divided into three main business divisions:
rubber import and distribution, tire export, and tire domestic wholesale and
retail, which generated approximately 60%, 20% and 20% of its consolidated net
sales respectively in the quarter ended March 31, 2008. We position ourselves as
an intermediary between international rubber producers and Chinese tire
manufacturers and as an active marketer of tires for the tire manufacturers in
the very fragmented replacement tire market. We aim at becoming a major player
in the world tire and rubber market through steady organic growth, expansion
into new markets, entry into the retail service market and an aggressive
acquisition strategy.

The Company's Rubber Import/Distribution Division operates
under F.T.Z. Sentaida and Zhongsen Holdings. We have established close business
relationships with the world's top rubber suppliers in Southeast Asia and our
rubber products cover a wide range of natural rubbers and synthetic rubbers. Our
client base has covered a majority of the top Chinese and foreign-invested tire
manufacturers in China. In the first quarter of 2008, it generated about $40
million revenues, represented 60% of the Company's consolidated revenues.

The Company's Tires Export Division, operating under both F.T.Z. Sentaida and Zhongsen Holdings, has established a long-term export agent
relationship with major Chinese tire manufacturers and exports tires to over 40
countries across North America, Europe, South Asia and Africa. Our product range
includes nearly all types of rubber tires such as TBR, OTR, LTR, UHP, PCR, bias
tires and radial heavy duty tires. In the first quarter of 2008, it generated
about $13 million revenues, accounted for 20% of the Company's consolidated
revenues.

6

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RUB A DUB SOAP INC. 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Company's Tire Domestic and Distribution Division,
operating under Sentaida Tires, provides a critical link between major tire
manufacturers and the highly fragmented replacement tire market in China. We
have one of the largest independent tire distribution networks in China with
major regional distribution centers selling to around one thousand (1,000)
independent tire dealers, retailers and corporation clients. It has the most
complete product offering in the tire replacement market. In the first quarter
of 2008, it contributed about $13 million revenues, accounted for 20% of the
Company's consolidated revenues.
Principles of Consolidation

The accompanying consolidated financial statements include
the accounts of the holding company and its wholly-owned subsidiaries. All
significant intercompany accounts and transactions have been eliminated in
consolidation. Before acquisition with Zhongsen International, RUBD had "zero"
equity; and after the acquisition, RUBD did not have any operations and not
incurred any expenses. Therefore, the accompanying consolidated financial
statements include the accounts of Zhongsen International and accounts of
Zhongsen's wholly-owned subsidiaries and the shares issued in connection with
the acquisition on February 5, 2008 are treated as if they were outstanding for
all prior periods.
Use of Estimates

The preparation of financial statements on conformity with
accounting principles generally accepted in the United States requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosures of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
Cash and Cash Equivalents

The Company considers all deposits with an original maturity
of three months or less and short-term highly liquid investments, which are
readily convertible into cash to be cash and cash equivalents in the consolidated
financial statements.
All cash in banks in China is placed with accredited
financial institutions but it is uninsured. Although China is considered
economically stable, it is possible that unanticipated events could disrupt
banks' operations. Therefore, the Company has a credit risk exposure of
uninsured cash in banks.
Revenue Recognition

SAB 104 outlines four criteria that all publicly held
companies have to follow to recognize revenue: 1. Persuasive evidence of an
arrangement exists. 2. Delivery has occurred or services have been rendered. 3.
The seller's price to the buyer is fixed or determinable. 4. Collectibility is
reasonably assured. The Company recognizes revenue when title and risk of loss
passes to the customer and the above criteria have been met. Besides the above
criteria, for F.T.Z Sentaida and Zhongsen Holdings, they also recognize the
revenue upon shipment of products, provided title and responsibility have passed
and the above mentioned criteria 1, 3 and 4 have been met.
In general, the Company does not allow customers to return
products unless there are defects in manufacturing or workmanship. Sales returns
need to go through a strict process and have to be authorized by management.
Sales returns are continually monitored. Based on historical experience of
actual returns, management believes that the Company does not need to have a
provision for sales returns.
7
RUB A DUB SOAP INC. 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSConcentration of Credit Risk

In the normal course of business, the Company may give credit
to its customers after performing a credit analysis based on a number of
financial and other criteria. The Company performs ongoing credit evaluations of
customers' financial condition and does not normally require collateral.
However, letters of credit and other security are occasionally required for
certain new and existing customers.
In the consolidated net sales, the concentration of risk
mainly comes from the customers of F.T.Z. Sentaida and Zhongsen Holdings. The
top ten customers accounted for approximately 58% and 49% of the consolidated
net sales for the first quarter in 2008 and 2007, respectively.
Accounts receivable

The top ten of our customers accounted for 70% and 66% of the
accounts receivable as of March 31, 2008 and 2007, respectively. In the first
quarter of 2008, each of the two largest customers accounted for 13% of the
accounts receivable. The third and the fourth largest customers accounted for
10% and 9% of the accounts receivable, respectively.
Allowance for doubtful accounts

The Company would provide an allowance for doubtful accounts
to ensure that accounts receivable and other receivables are not overstated due
to any uncollectible accounts. Based on management's evaluation of the
customers' ability to make payment, the probability of inability to pay is low;
therefore, the Company did not make any allowance for doubtful accounts.
Inventories

For Sentaida Tires, inventories consist primarily of
automotive tires, wheels, automotive service accessories and related products.
Inventories are valued at the lower of cost (computed in accordance with the
weighted average method) or market. The Company performs periodic assessments to
determine the existence of obsolete, slow-moving and non-saleable merchandise.
If any, these merchandise would be sold on discount or returned to vendors at
discount in exchange for other merchandise relatively more easier to sell.
However, based on management's experience and assessments, the level of obsolete
and slow-moving merchandise was very low and we believe there is no need to have
an allowance for obsolescence. Terms with a majority of the Company's tires
vendors allow return of tires products, within limitations, specified in their
supply agreements. The inventory of Sentaida Tires as of March 31, 2008 was
approximately $10.3 million.
For Zhongsen Holdings and F.T.Z Sentaida, the inventory for
rubber and tires are stated at the lower of cost (computed in accordance with
the first-in-first-out method) or market. There was no inventory kept in
Zhongsen Holdings, while F.T.Z. Sentaida maintains inventory at minimum level.
Management adjusts the inventory level based on the fluctuation of the demand
for rubber. As of March 31, 2008, the inventory of rubber in F.T.Z. Sentaida was
approximately $5.0 million.
Property and Equipment

Property and equipment are stated at cost at the date of
acquisition. The Company adopts the straight-line method of depreciation at
annual rates sufficient to depreciate the cost of the assets less estimated
salvage value over the assets' estimated useful lives. Maintenance and repair
expenditures are charged to expense as incurred and expenditures for
improvements and major renewals are capitalized. When an asset is sold or
retired, the carrying amounts of the assets and the related accumulated
depreciation is removed from the account in the year of disposal, and any
resulting gain or loss is reflected in the statement of operations. Depreciation
is determined by using the straight-line method based on the following estimated
useful lives:

|Buildings               | 20 years 
|----------------------- | ---------
|Machinery and equipment | 5 years  
|Office equipment        | 5 years  
|Vehicles and other      | 5-8 years

8

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RUB A DUB SOAP INC. 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

These buildings are bought and used by the Company's Chain
Stores to provide car services, retail tires and other merchandise used in cars.
In China, land use rights are combined with buildings, especially for commercial
property.

Office building, warehouses and the related land that
currently used by the Company are not held under the Company's name. They are
held by Sentaida Rubber, one of the Company's related parties. The office
building, warehouses and related land used by the Company are free of charge.

Impairment

Impairments of long-lived assets are recognized when events
or changes in circumstances indicate that the carrying amount of the asset or
related groups of assets may not be recoverable and the Company's estimate of
undiscounted cash flows over the assets' remaining estimated useful lives are
less than the assets' carrying value. Measurement of the amount of impairment
may be based on appraisals, market values of similar assets or estimated
discounted future cash flows resulting from the use and ultimate disposition of
the asset.

Throughout the reporting periods, management has reviewed the
carrying value of long-term fixed assets for impairment when events or
circumstances indicate possible impairment. Management has concluded that the
estimated future cash flows anticipated to be generated during the remaining
life of these assets support their current net carrying value, thus, no
impairment charges have been recorded for such periods.

Goodwill and Other Intangible Assets

Under SFAS No. 142 "Goodwill and Other Intangible Assets,"
goodwill and intangible assets with indefinite lives are no longer amortized,
but are tested for impairment annually and more frequently in the event of an
impairment indicator. SFAS No. 142 also requires that intangible assets with
definite useful lives be amortized over their respective estimated useful lives,
and reviewed whenever events or circumstances indicate impairment may exist.

Foreign currency translation

The functional currency of the Company is Chinese Yuan (RMB)
and their reporting currency is the US dollar. Consolidated balance sheet
accounts are translated into US dollars at the period-end exchange rate and all
revenue and expenses are translated into US dollars at the average exchange rate
prevailing during the period in which these items arise. Translation gains and
losses are deferred and accumulated as a component of other comprehensive income
in the shareholders' equity section of the balance sheet. Exchange transaction
gains and losses that arise from exchange rate fluctuations affecting
transactions denominated in a currency other than the functional currency are
included in the statement of operation as incurred. The foreign currency
exchange loss in the first quarter 2008 was $36,814 and $6,442 for the same
period in 2007.

Fair Value of Financial Instruments

SFAS No. 107, "Disclosures about Fair Values of Financial
Instruments", requires disclosing fair value to the extent practicable for
financial instruments that are recognized or unrecognized in the balance sheet.
The fair value of the financial instruments disclosed herein is not necessarily
representative of the amount that could be realized or settled, nor does the
fair value amount consider the tax consequences of realization or settlement.

For certain financial instruments, including cash, current
accounts receivable, related party receivables and other receivables, accounts
payable, other payables and accruals, and short term debt, it is assumed that
the carrying amounts approximate fair value because of the near term maturities
of such obligations. The carrying value of revolving credit facility
approximates their fair value due to the variable rate of interest paid. For
long-term debt, the carrying amount is assumed to approximate fair value based
on the current rates at which the Company could borrow funds with similar terms.
Non-current accounts receivable is also assumed to approximate cost, because
they are expected to be settled for property and equipment in the near future.

9

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RUB A DUB SOAP INC. 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Vendor Rebates

The Company receives rebates from its vendors under a number
of different programs. Many of the vendor programs provide for the Company to
receive rebates when any of a number of measures is achieved, generally related
to the volume of purchases. These rebates are accounted for as a reduction to
the price of the product, which reduces the carrying value of inventory.
Throughout the reporting periods, the amount recognized for quarterly rebates is based on
purchases that management considers probable for the periods. These estimates
are continually revised to reflect rebates earned based on actual purchase
level.

Customer Rebates

The Company offers rebates to its customers under a number of
different programs. The majority of these programs provide for the customers to
receive rebates, generally in the form of a reduction in the related accounts
receivable balance when certain measures are achieved, generally related to the
volume of product purchased from the Company. The amount of rebates is recorded
based on the actual level of purchases made by customers that participate in the
rebate programs.

Income Taxes

The Company accounts for its income taxes under the
provisions of SFAS No. 109 "Accounting for Income Taxes." This statement
requires the use of the asset and liability method of accounting for deferred
income taxes. Deferred income taxes reflect the net tax effects of temporary
differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax reporting purposes, at
the applicable enacted tax rates. The Company provides a valuation allowance
against its deferred tax assets when the future realizability of the assets is
no longer considered to be more likely than not.

Legal and Tax Proceedings

The Company is involved occasionally in lawsuits as well as
audits and reviews regarding its state and local tax filings, arising out of the
ordinary conduct of its business. Although no assurances can be given,
management does not expect that any of these matters will have a material
adverse effect on the Company's financial statements. As to tax filings, the
Company believes that the various tax filings have been made timely, such as income tax, stamp duty,
business tax and value-added tax etc. and in accordance
with applicable national, regional and local tax code requirements. Appropriate
payments have been made of all taxes due.

Product warranty

The tires that F.T.Z. Sentaida and Sentaida Tires sell are
guaranteed directly by the manufacturers against defects in manufacturing and
workmanship, F.T.Z. Sentaida and Sentaida Tires are not accountable to
customers. In respect of rubber imported,  F.T.Z. Sentaida has insurance
coverage for the quality. Therefore, the Company does not make provisions for
warranty.

Sentaida tires, although it has no responsibility for defects
in quality or workmanship of the tires, it serves as agent for making damage
claims on behalf of its customers from manufactures. Sentaida Tires may
compensate customers first, either by replacing the tires or by a cash refund,
and then, will get reimbursement from manufacturers or suppliers in tires or
cash. Approximately $0.8 million of tires returned by customers was included in
the value of inventory as of March 31, 2008.

Freight

For the customers to whom the Company offers CIF sales terms,
the Company recognizes freight included in the prices as revenue and meanwhile,
the freight paid to common carriers is recognized as expense. Non-CIF customers
terms are "freight collect".

10

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RUB A DUB SOAP INC. 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Advertising

Almost all cost relating to advertising and promotion
expenses for different brands of tires the Company sells are provided for and
assumed by tires manufacturers. The Company usually does not bear these costs
but would expense them, if incurred.

Related Party Transactions

Related party sales were approximately $8.1 million, which
accounted for 12% of the Company's net sales in the first quarter 2008. For the
same period in 2007, related party sales were approximately $11.8 million, 17%
of the Company's net sales.

One of the related parties, Qingdao Sentaida Rubber Co. Ltd.
("Sentaida Rubber") is a subsidiary of Sentaida Group Ltd, which previously
owned 51% of the shares of Sentaida Tires and F.T.Z Sentaida before Sentaida
Tires and F.T.Z. Sentaida were acquired by Zhongsen International. Sales to
Sentaida Rubber did not occur in the first quarter of 2008. Sentaida Rubber
accounted for 54% of the related party receivables. The Company believes that
the receivables are collectable because all the related party receivable from
Sentaida Rubber is guaranteed by Sentaida Group Ltd. In addition, Sentaida
Rubber is planning to repay the debt partially by cash and partially by
transferring land and building worth approximately $27.4 million to the Company.
Actually, all these buildings and lands are used by our Company free of charge
from Sentaida Rubber in years. $36,501,633 million of the related party
receivable from Sentaida Rubber was reclassified as non current related party
receivables on consolidated balance sheets.

The Company uses office building and warehouse space free of
rental from Sentaida Rubber.

LQJ Global Tire ("LQJ") is another related party, which now
is a wholly owned subsidiary by Sentaida Group. In November 2007, LQJ's business
operation was integrated into Sentaida International Inc., which is also a
wholly owned subsidiary of Sentaida Group. Sentaida International Inc. has
assumed all the LQJ's liabilities. LQJ accounted for nearly 94% of the related
party sales, and about 42% of the related party receivables. The sales to LQJ
are normal business transactions and the documents are released against
acceptance with a maturity of 90 days (D/A 90 days).

Nanjing Sentaida Tire Company Limited ("Nanjing Sentaida") is
a related party with Sentaida Tires through one top management member in Nanjing
Sentaida's management team. It accounted for 6% of the related party sales in the
current quarter, which were all normal business transactions. Advances from Nanjing Sentaida is approximately $0.6 million as of March 31, 2008.

Dongsen Tires Company Limited ("Dongsen"), is related with
the Company through one top management member (Mr. Junfeng Liang). Mr. Liang
takes a part in decision making. In the first
quarter of 2008, the Company recently borrowed approximately $9 million from Dongsen for working capital turnover. This short term borrowing was non interest
bearing. As of March 31, 2008, approximately $11.9 million in total was payable to Dongsen.

As of March 31, 2008, about $1.7 million owed to wife of the
Company's CEO. The borrowing was short term borrowing for working capital
turnover. Approximately $0.4 million owed to Delinte Logistic Company Limited ("Delinte"),
who is a subsidiary of Sentaida Group. These were some expenses that paid by
Delinte on behalf of the Company and should be reimbursed by the Company.

2. Cash and Restricted cash

Restricted cash
consists of collateral for letters of credit, and notes payable and deposits in
foreign currency; usually the deposit terms are within 90 days, although some
are up to six months. The restricted cash was approximately $10.6 million as of
March 31, 2008.

11

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RUB A DUB SOAP INC. 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

3. Property and Equipment

Depreciation expenses both were approximately $0.2 million
for the three months ended March 31, 2008 and 2007 and it is included in selling, general
and administrative expense in the consolidated statements of operations.

A property that is worth about $1.5 million, which
approximated cost was collateralized for a short term debt for working capital
turnover. The collateral term should be one year ending November 27, 2008. The
$1.3 million borrowing was repaid in advance in February 2008; therefore the
collateral arrangement was terminated.

Another property with a cost of $2.8 million was bought under
a personal mortgage of three employees of Sentaida Group Ltd. The advance
payment of about $1.4 million was paid by Sentaida Tires and the about $1.4
million of mortgage is amortized every month under the name of the three
employees by Sentaida Rubber Ltd. There are agreements between the three
employees, Sentaida Tires and Sentaida Rubber Ltd, which clearly indicate that
the three employees are just nominal owners of the property and nominal bearers
of the mortgage. All the rights and obligations related to the property are
assumed by Sentaida Tires. The property is used by Sentaida Tires with no other
consideration in return. It is the real owner of the property. The advance
payment is paid by Sentaida Tires but the mortgage payments are currently paid
by Sentaida Rubber Ltd which will be reimbursed by Sentaida Tires later. The
interest on the mortgage is floating and it is based on 130% of the annual prime
rate of Construction Bank of China. Therefore, the mortgage's remaining balance
was based on the year 2007's prime rate, 6.84% plus 30%, which is equivalent to
the annual effective rate of 8.892%.

The required principal repayments on this mortgage are:

| | Year                     | Amount 
| | ------------------------ | -------
| | March 2008-March 2009    | 86,583 
| | March 2009-March 2010    | 86,583 
| | March 2010-March 2011    | 86,583 
| | March 2011-March 2012    | 86,583 
| | March 2012-March 2013    | 86,583 
| | March 2013November 2015 | 230,887

4. Notes Receivable

Notes receivable was approximately $1.8 million as of March 31, 2008 from
Sentaida Tires' customers. These notes are due within six months and no interest
or additional amounts are required to be received.

5. Other receivables

Other receivables were approximately $10.6 million as of March 31, 2008. Most
of the other receivables were derived from F.T.Z Sentaida. Approximately $4.8
million was borrowed by two of the Company's strategic business partners without
interest. Approximately $3.6 million should be collected from two of the
Company's suppliers. Among the $3.6 million, $3.4 million was short-term
borrowing by the two suppliers and will be paid back by offsetting the Company's
accounts payable; $0.19 million is freight charges and miscellaneous port
charges that the Company paid on behalf of the two suppliers first and will be
reimbursed later.

12

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RUB A DUB SOAP INC. 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

6. Prepayments

Prepayments were approximately $6.0 million as of March 31,
2008 in which there was approximately $0.3 million of prepayment to F.T.Z.
Sentaida's suppliers, and approximately $5.7 million were prepaid to Sentaida
Tires' suppliers.

7. Investment

The Company invested approximately $48,418 in Greatwall Fund.
As of March 31, 2008, the market value for the investment approximated cost.

8. Related party payables:

Related party payables were approximately $15 million as of
March 31, 2008. (Please see details under section of related party transaction
of this notes1).

9. Short Term Borrowings

At beginning of the first quarter of 2008 the Company had
about $1.3 million short term debt for working capital turnover, which was
repaid in the first quarter of 2008.

F.T.Z. Sentaida's total amount of credit line as of March
31, 2008 was approximately $116.9 million. The outstanding import bill advance,
export bill purchase, documents against payment and documents against acceptance
were approximately $74.4 million in total. Corresponding financial charges are
based on the interest rate defined in each individual contract between F.T.Z.
Sentaida and the banks. In general, the interest rate for import bill advances
and export bill purchases is based on the average of three months LIBOR plus
0.8%. The finance charge for opening a letter of credit is approximately 0.1%;
finance charges for documents against payment and documents against acceptance
are at a rate fluctuating around 0.1%. The letters of credit negotiation charge
is at 0.125%.

The obligations of credit are guaranteed by Sentaida Group
Ltd, Sentaida Rubber Co. Ltd, and Kaiyang Import and Export Company Limited who
is one of the Company's strategic business partners. Some of the obligations
also bear the personal guarantee of stockholders of Sentaida Group, Qingling
(president of the Company) and Xiuqin Li (Mr. Qin long's wife). The
contractual agreements with banks contain covenants which restrict the Company's
ability to incur additional debt, enter into guarantees, make loans and
investments, and modify certain material agreements, and other customary
covenants. The Company has not violated any of the covenants in the reporting
periods.

10. Notes Payable

Notes payable was approximately $16.8 million as of March 31,
2008. Most of the notes payable were issued to F.T.Z. Sentaida's suppliers and
were due within six month with no interest charge. Restricted cash for notes
payable as of March 31, 2008 was about $7.3 million.

11. Accounts Payable

Accounts payable was approximately $17.8 million as of March
31, 2008. All these amounts were payable to F.T.Z. Sentaida and Sentaida Tires'
normal business suppliers and usually were due within six months  without
interest or any other charges. The account payable to Zhaoyuan Liao Rubber products Co, Ltd. ("Zhaoyuan Liao") was about $5.9 million,
about $1.1 million to Shandong Yongtai Chemicals Company Limited ("Yongtai
Chemicals"), about $1.5 million to South China Rubber and Tires Co, Ltd. ("South
China"), and about $1.2 million to Lianyi Rubber Company Limited ("Lianyi
Rubber"). Accounts payable to the top four companies accounted for approximately
55% of consolidated accounts payable.

13

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RUB A DUB SOAP INC. 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

12. Income tax and value- added tax payables

The Company accounts for its income taxes by using the asset
and liability method of accounting for deferred income taxes. Deferred income
taxes reflect the net tax effects of temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes and the
amounts used for income tax reporting purposes, at the applicable enacted tax
rates. There are no differences between the book and tax bases of the Company's
assets and liabilities and there were no loss carryovers, therefore, there were
no deferred tax assets or liabilities as of March 31, 2008

From January 2008, the Company determines and pays the
corporate income tax in accordance with the Corporate Income Tax Law of the
People's Republic of China (hereinafter "the new CIT Law") as approved by the
National People's Congress on 16 March 2007. Under the new CIT Law, the
applicable income tax rate of the companies within the Group is 25%, which is
effective from 1 January 2008. The company makes tax provision and tax payment
quarterly, and the tax settlement for the whole year is made before the end of
April of the following year.

Tax payable as of March 31, 2008 was approximately $2.5
million.

13. Appropriated Retained Earnings

In conformity with Chinese Law and the articles of
incorporation, the company has to make an appropriation of retained earnings.
The appropriated retained earnings are 15% of each year's net income with a
maximum of 50% of paid-in capital. The appropriated retained earnings can be
used to offset the Company's loss, for business expansion or transfer to paid-in
capital as additional paid-in capital, or for dividend distribution. Except for
offset of the Company's loss, the balance of the appropriated retained earnings
should not be less than 25% of the paid-in capital after the use of the
appropriation of retained earnings. The appropriation of retained earnings is
made at the year end based on the net income for the year. Accordingly, the
Company did not make any appropriation of retained earnings in the
accompanying financial statements.

14. Common Stock

F.T.Z Sentaida and Sentaida Tires do not have authorized
shares and never issued any kind of stock. The two companies only have paid-in
capital, which equals the registered capital. For Zhongsen Holdings, it has
50,000 authorized shares, which were never issued and it has no paid-in capital
either. In addition, Zhongsen International has 10,000 authorized shares, which
have not been issued yet. It does not have paid-in capital.

Zhongsen International acquired 100% of equity interests of
F.T.Z. Sentaida and Sentaida Tires in 2007 at a cost equal to total paid-in
capital of F.T.Z Sentaida and Sentaida Tires. The reporting entity changed to
Zhongsen International. When consolidating the financial statements of Zhongsen
International and its subsidiaries, the paid-in capital of F.T.Z. Sentaida and
Sentaida Tires, $3,048,765, was eliminated.

In the reverse acquisition closed on February 5, 2008,
Zhongsen International's total outstanding 10,000 shares acquired by RUBD in
exchange for 25,090,000 shares, representing 96.5%, of RUBD's common stock
(26,000,000 outstanding shares in total) with par value at $0.001 per share.

15. Freight Charges

Freight charges, which includes freight and miscellaneous
charges such as port fees, goods handling charges, customs duty and goods
loading and unloading charges, etc. were approximately $0.8 million in the first
quarter of 2008, $0.9 million for the same period in 2007.

14

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RUB A DUB SOAP INC. 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

16. Selling Expenses

Selling expenses were approximately $0.7 million and $0.6
million for the first quarter of 2008 and 2007, respectively. Salary and wages,
depreciation, traveling expenses, auto & fuel expenses and insurance premiums
accounted for most of the selling expenses.

17. Interest Expense

Interest expense for discounting notes, short term debt for
working capital turnover, trading finance, and miscellaneous financial charges,
such as fee for issuing letter of credit and bank charges etc, are all included
in interest expenses. Interest expense for trade finance was about $0.9 million
and $0.6 million in the first quarter of 2008 and 2007, respectively. Interest
expense for discounting notes was about $0.4 million and $0.2 million in the
first quarter of 2008 and 2007, respectively. Miscellaneous bank charges and
interest expenses both were about $0.2 million in quarter one of 2008 and 2007.

18. Subsequent Events

Sentaida International Inc. is an USA based subsidiary of
Sentaida Group, mainly operates in Los Angeles and St. Louis. It accounted for
approximately 94% of the Company's related party sales and 42% of related party
receivables. The Company intends to acquire Sentaida International Inc. in the
second quarter of 2008. If the acquisition is completed, the Company's related
party receivables will be decreased dramatically. Additionally, it will bring
more revenue into the Company. The method of the acquisition is still under
discussion process between Sentaida Group and Zhongsen International Company
Group Limited.

15

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.

Special Note Regarding Forward Looking Statements

This Quarterly Report on Form 10-Q, including the following
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. Such statements include, among others, those
concerning our expected financial performance and strategic and operational
plans, as well as all assumptions, expectations, predictions, intentions or
beliefs about future events. You are cautioned that any such forward-looking
statements are not guarantees of future performance and that a number of risks
and uncertainties could cause actual results of the Company to differ materially
from those anticipated, expressed or implied in the forward-looking statements.
The words "believe," "expect," "anticipate," "project," "targets," "optimistic,"
"intend," "aim," "will" or similar expressions are intended to identify
forward-looking statements. All statements other than statements of historical
fact are statements that could be deemed forward-looking statements. Risks and
uncertainties that could cause actual results to differ materially from those
anticipated include risks related to new and existing products; any projections
of sales, earnings, revenue, margins or other financial items; any statements of
the plans, strategies and objectives of management for future operations; any
statements regarding future economic conditions or performance; uncertainties
related to conducting business in China; any statements of belief or intention;
any of the factors and risks mentioned in the "Risk Factors" sections of our SEC
filings. The Company assumes no obligation and does not intend to update any
forward-looking statements, except as required by law.

Use of Terms

Except as otherwise indicated by the context, references in
this report to:

- 

- "China" and "PRC" are references to the
  People's Republic of China and references to "Hong Kong" are to the Hong Kong
  Special Administrative Region of China;

- "RMB" are to Renminbi, the legal currency of
  China;

- "U.S. dollar," "$" and "US$" are to the
  legal currency of the United States; and

- "Securities Act" are references to the
  Securities Act of 1933, as amended and references to "Exchange Act" are
  references to the Securities Exchange Act of 1934, as amended.

Overview

We primarily engages in the global marketing and distribution
of tires and rubber without any tire manufacturing operations. We are one of the
largest integrated tire and rubber marketers and distributors in China. Our
business scope can be generally divided into three (3) main business divisions:
rubber import and distribution, tire export, and tire domestic wholesale and
retail, which generated approximately 60%, 20% and 20% of its consolidated net
sales respectively in the quarter ended March 31, 2008. We position ourselves as
an intermediary between international rubber producers and Chinese tire
manufacturers and as an active marketer of tires for the tire manufacturers in
the very fragmented replacement tire market. We aim at becoming a major player
in the world tire and rubber market through steady organic growth, expansion
into new markets, entry into the retail service market and an aggressive
acquisition strategy.



16

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Our History

We are a Nevada corporation that was originally incorporated
on September 28, 2001 in Colorado and we are headquartered in Shandong Province,
China. From our inception in 2001 until February 21, 2006, we were an online
retailer of handmade, natural, vegetable-based soaps and gift baskets in the
development stage, and we had generated only minimal revenues and a substantial
net loss from sales of soaps and gift baskets.

On February 21, 2006, Lisa Powell, the controlling
shareholder of the Company, sold 2,800,000 of her restricted shares to Halter
Capital Corporation of Frisco, Texas, representing 74.6% of all of the
outstanding shares of the Company. With the change in control, the Company
ceased its soap business and began efforts to locate a new business (operating
company), and offer itself as a merger vehicle for a company that may desire to
go public through a merger rather than through its own public stock offering.

On March 6, 2006, the stockholders approved the
re-incorporation of the Company in Nevada and in connection therewith a
one-for-ten reverse split of the common stock, both of which became effective on
April 17, 2006. All share numbers contained herein are expressed in
post-reverse-split amounts.

From the time when we began efforts to locate a new business
in the first quarter of 2006 until February 5, 2008 when we completed the
acquisition transaction with Zhongsen International, we had limited operations and did not
engage in active business operations other than our search for, and evaluation
of, potential business opportunities for acquisition or participation.

Acquisition of Zhongsen

On October 26, 2007, we entered into a Stock Purchase
Agreement with Zhongsen International Company Group Limited, a corporation
formed under the laws of Hong Kong ("Zhongsen International"), and each of Zhongsen
International's
shareholders (the "Purchase Agreement"). Pursuant to the Agreement, at the
closing on February 5, 2008, we acquired all of the issued and outstanding
capital stock of Zhongsen International from the Zhongsen International shareholders in exchange for
25,090,000 shares of our common stock.

Zhongsen International's business began in January 2000 under the name of
Qingdao Free-Trading Zone Sentaida International Trade Co., Ltd., or FTZ
Sentaida, which involved in the rubber import and domestic distribution as well
as tires export businesses. In December 2004, Qingdao Sentaida Tires Co., Ltd.,
or Sentaida Tires, was established and expanded the company's business to tires
distribution in China's domestic market. In January 2005, Zhongsen Trading Co.,
Ltd. was created and incorporated in the British Virgin Islands to handle some
of the Company's tire export business. Zhongsen Trading changed its name into
Zhongsen Holdings Co., Ltd., or Zhongsen Holdings, in August 2007. In July 2007,
Zhongsen International reached an agreement with the shareholders of both FTZ Sentaida and
Sentaida Tires to acquire 100% of the equity interest through a cash purchase.
In August 2007, such acquisitions were approved by the appropriate Chinese
authorities. Consequently, both of the companies changed their status from China
domestic companies to wholly-owned foreign invested enterprises. In October
2007, Zhongsen International Co. Group Ltd. acquired 100% of the equity interest
of Zhongsen Holdings Co. Ltd. For accounting purposes, FTZ Sentaida, Sentaida
Tires, and Zhongsen Holdings Co. are under common control because they all have
the same key management members, including our CEO, Qin Long, and our director
and prior CFO, Junbao Liang.

Zhongsen International was incorporated under the laws of Hong Kong on July
19, 2007 and is headquartered in Qingdao, China in Shandong Province. Zhongsen
International
primarily engages in the global marketing and distribution of tires and rubber
without any tire manufacturing operations.

First Fiscal Quarter Financial Performance Highlights

The Company experienced a decrease in the consolidated
revenues and an increase in net income in the first quarter of 2008. The
following are some financial highlights for the first fiscal quarter of 2008:

Revenue: The Company's total
revenue decreased by $3.5 million, or 5%, to $67.2 million for the three months
ended March 31, 2008 from $70.7 million for the same period last year.

Gross Margin: Gross margin was
6.4% for the three months ended March 31, 2008, as compared to 4% for the same
period last year.

17

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Net Income: Net income increased
$0.3 million, or 39.4%, to approximate $1 million for three months ended March
31, 2008, from $0.7 million for the same period of last year.
Earnings Per Common Share: Basic and diluted earnings per common share was $0.04 for three months ended March
31, 2008, as compared to $0.03 for the same period last year.
Revenue

Our revenue was mainly generated from rubber import and
distribution, tire export, and tire domestic wholesale and retail.
Our operations consist of three business divisions: rubber
import and distribution, tire export, and tire domestic wholesale and retail.
The rubber import and distribution business is conducted through our subsidiary,
Qingdao (FTZ) Sentaida International Trading Co. Ltd. ("FTZ Sentaida"). In the
three months ended March 31, 2008 and 2007, the rubber import and distribution
division generated revenue of $40 million and $43.3 million, which represented

60% and 61% of our total revenue, respectively. The tire export business is
conducted by our subsidiaries FTZ Sentaida and Zhongsen Holdings Ltd. In the
three months ended March 31, 2008 and 2007, the tire export division generated
revenue of $13.3 million and $16.2 million, which represented 20% and 23% of
our total revenue, respectively. The tire domestic wholesale and retail business
is conducted by our subsidiary Qingdao Sentaida Tires Co., Ltd ("Qingdao
Sentaida"). In the three months ended March 31, 2008 and 2007, the tire domestic
wholesale and retail division generated revenue of $13.8 million and $10.6
million, which represented 20% and 16% of our total revenue, respectively.
We anticipate that the price of tires globally will continue
to increase as a result of the increases in raw materials prices since the end
of 2007. As a result, our revenues may increase in coming periods, however, our
raw materials costs and cost of sales will likely increase as well. We can
provide no assurances that we will continue to be able to pass our increased raw
materials costs on to our customers in the form of increase tire prices. If we
are unable to pass along such costs, our financial condition may be adversely
affected.
Cost of sales:

Cost of sales includes the cost of rubber and tires that the
Company purchase from our suppliers.
Gross Profit and Gross Margin
Gross profit is equal to the difference between our sales and
the cost of sales. Gross margin is equal to gross profit divided by sales. In
the three months ended March 31, 2008 and 2007, our average gross margin for
rubber import and distribution division, tire export division, and tire domestic
wholesale and retail division was 6.31% and 4%, respectively.
Operating Expenses
Our operating expenses mainly consist of selling expense and
general and administrative expenses, freight charges, commission and insurance
expenses.

General and Administrative Expenses

General and Administrative expenses consist primarily of
compensation and benefits to our general management and , finance and
administrative staff, professional advisor fees, and other expenses incurred in
connection with general operation. We expect our general and administrative
expenses will increase as our business grows and we incur increased costs for
being a public company.

Selling Expenses

Selling expenses consist primarily of compensation and
benefits to our sales and marketing staff, sales commission, business travels,
after-sale support, transportation cost, depreciation expense for the
infrastructure used in operating activities and other sales related costs.

18

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Provision for Income Taxes

United States

Rub A Dub Soap, Inc. is subject to the United States federal
income tax at a tax rate of 34%. No provision for income taxes in the United
States has been made as Rub A Dub Soap, Inc. had no taxable income in fiscal
year 2007.

BVI

Our wholly owned subsidiary Zhongsen Holdings Ltd. was
incorporated in the British Virgin Island and, under the current laws of the BVI,
is not subject to income taxes.

PRC

Foreign Invested Entities ("FIE") established in the PRC are
generally subject to an enterprise income tax ("EIT") rate of 33.0%, which
includes a 30.0% state income tax and a 3.0% local income tax. Therefore, FTZ
sentaida and Sentaida Tire are pay income tax at rate of 33%

On March 16, 2007, the National People's Congress of China
passed the new Enterprise Income Tax Law, or EIT Law, and on November 28, 2007,
the State Council of China passed the Implementing Rules for the EIT Law, or
Implementing Rules, which take effect on January 1, 2008. The EIT Law and
Implementing Rules impose a unified EIT of 25.0% on all domestic-invested
enterprises and FIEs, unless they qualify under certain limited exceptions.
Therefore, nearly all FIEs are subject to the new tax rate alongside other
domestic businesses rather than benefiting from the FEIT, and its associated
preferential tax treatments, beginning January 1, 2008.

Despite these pending changes, the EIT Law gives existing
FIEs a five-year grandfather period during which they can continue to enjoy
their existing preferential tax treatments. We are expecting that the measures
to implement the grandfather period will be enacted by the Chinese government in
the coming months and will assess what the impact of the new regulations are at
that time. The discontinuation of any such special or preferential tax treatment
or other incentives would have an adverse affect on any organization's business,
fiscal condition and current operations in China.

In addition to the changes to the current tax structure,
under the EIT Law, an enterprise established outside of China with "de facto
management bodies" within China is considered a resident enterprise and will
normally be subject to an EIT of 25.0% on its global income. The Implementing
Rules define the term "de facto management bodies" as "an establishment that
exercises, in substance, overall management and control over the production,
business, personnel, accounting, etc., of a Chinese enterprise". If the PRC tax
authorities subsequently determine that Rub A Dub Soap, Inc. should be
classified as a resident enterprise, then the organization's global income will
be subject to PRC income tax of 25.0%.

Results of Operations

Three Months Ended March 31, 2008 Compared to Three Months
Ended March 31, 2007

Quarter ended March 31, 2008 compared to quarter ended March
31, 2007. The following table sets forth the period change for each category of
the statement of operations, as well as each category as a percentage of total
revenues.

19

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|                                     | Unaudited   | %        | Unaudited  | %        | %       
|------------------------------------ | ----------- | -------- | ---------- | -------- | --------
|                                     | 2008.3.31   | of       | 2007.3.31  | of       | of      
|                                     | US$         | Revenues | US$        | Revenues | Change  
|REVENUES                             |             |          |            |          |         
|Sales                                | 67,241,880  | 99.8%    | 70,723,172 | 99.8%    | (4.9%)  
|Commissions and other                | 137,626     | 0.2%     | 138,045    | 0.2%     | (0.3%)  
|                                     | 67,379,506  | 100.0%   | 70,861,217 | 100.0%   | (4.9%)  
|COST AND EXPENSES                    |             |          |            |          |         
|Cost of sales                        | 62,959,455  | 93.4%    | 67,901,096 | 95.8%    | (7.3%)  
|Freight charges                      | 777,370     | 1.2%     | 884,381    | 1.2%     | (12.1%) 
|Commissions and rebates              | -           | -        | 37,363     | 0.1%     | (100.0%)
|Insurance                            | 51,907      | 0.1%     | 51,295     | 0.1%     | 1.2%    
|Selling expenses                     | 748,033     | 1.1%     | 599,305    | 0.8%     | 24.8%   
|General and administrative expenses  | 204,991     | 0.3%     | 161,041    | 0.2%     | 27.3%   
|                                     | 64,741,756  | 96.1%    | 69,634,481 | 98.3%    | (7.0%)  
|INCOME FROM OPERATIONS               | 2,637,750   | 3.9%     | 1,226,736  | 1.7%     | 115.0%  
|OTHER INCOME (EXPENSE)               |             |          |            |          |         
|Miscellaneous income                 | -           | -        | 54,755     | 0.1%     | (100%)  
|Interest expense                     | (1,534,308) | (2.3%)   | (502,224)  | (0.7%)   | 205.5%  
|Other net                            | (1,534,308) | (2.3%)   | (447,469)  | (0.6%)   | 242.9%  
|INCOME BEFORE INCOME TAXES           | 1,103,442   | 1.6%     | 779,267    | 1.1%     | 41.6%   
|Provision for income taxes (current) | 137,569     | 0.2%     | 86,562     | 0.1%     | 58.9%   
|NET INCOME                           | 965,873     | 1.4%     | 692,705    | 1.0%     | 39.4%   
|OTHER COMPREHENSIVE INCOME           |             |          |            |          |         
|Foreign currency translation loss    | (36,814)    | 0.1%     | (6,442)    | 0.0%     | 471.5%  
|COMPREHENSIVE INCOME                 | 929,059     | 1.4%     | 686,263    | 1.0%     | 35.4%   

Revenues.

The Company's consolidated sales for the first quarter ended
March 31, 2008 were approximately $67 million, a decline of $3.5 million, or 5%,
compared with the corresponding sales of $70.7 million in the first quarter of
2007.

There was a strong growth in the domestic tire distribution
and retail division. Sales in this division increased by about $2.8 million, up
25%, to $13.8 million in the first quarter of 2008 from approximately $11
million for the same period in 2007. The Company's attention on maintaining and
developing distribution network and customers base contributed the increased
division revenues.

Net sales in our tire export division were approximately
$13.3 million in the first quarter of 2008, a decline of approximately $2.9
million, or 18%, from approximately $16.2 million in the first quarter in 2007.
The decline was primarily due to an agent sales contract with one of the
Company's main suppliers that was terminated and was under negotiation for
renewal in the first
quarter of 2008. The contract termination resulted in an approximate $4.8
million decrease in division revenue.

Our rubber import/distribution division generated approximately
$40 million revenues in the first quarter of 2008. This was a decline of
approximately $3.4 million, or 7.8%, from the corresponding period sales of $43.5
million in 2007. The rubber market fluctuated significantly in the first quarter
of 2008. The Company adjusted its operating strategy and discontinued some
rubber business with gross margin lower than 1.5%. The overall impact of the
Company's revised strategy was an approximate $5.1 million reduction in
division
revenue. Changes in the business of styrene-butadiene rubber (SBR rubber) also
contributed to the decrease in division revenue. In previous years, the Company's SBR rubber business was conducted using both purchase contracts and sales
contracts. The Company had the right to determine the sales price of SBR rubber
offered to customers and bore all the risk relating to inventory, therefore,
sales of SBR rubber were recognized as revenue. According to the new sales agent
agreements with SBR rubber suppliers, the Company now serves as their sales
agent and receives a commission. This change started gradually from last quarter
of 2006, and until the end of second quarter of 2007 approximately 90% of the
SBR rubber sales was changed to a commission based business. These contract
changes had certain influences on the division revenue when making the comparison
between division revenue for the first quarter of 2008 and 2007. The commissions
are included in revenues in the statements of operations.

20

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Costs and operating expenses.

Our total costs and operating expenses were approximately
$64.7 million in the three months ended March 31, 2008, a 7.0% reduction from
costs and operating expenses of approximately $69.6 million during the same
period in 2007. Total costs and expenses declined as a result of reductions in
costs of sales and freight charges, which were offset by increases in selling
expenses and general and administrative expenses.

Due to favorable purchase prices negotiated with our
suppliers, we were able to reduce the overall cost of goods sold as a percentage
of total revenues by 2.4% compared to the same quarter in the prior year. Costs
of good sold were approximately $63 million in the three months ended March 31,
2008, a 7.3% reduction from costs of good sold of approximately $68 million
during the same period in 2007. Overall operating expenses accounted for
approximately 2.6% of total revenues in the first quarter in 2008, increased
slightly from the level for the first quarter in 2007 in terms of percentage of
total revenues. But in terms of absolute amount of overall operating expenses,
there was no obvious
increase, with approximately $1.7 million in both first quarters of 2008 and
2007.

Freight charges decreased by $0.1 million in the first
quarter in 2008 to approximately $0.8 million, 12% lower than the
corresponding amount for the same period in 2007. Most of the freight charges
were from the tire export division. Due to the decrease in sales of the tire
export division in the first quarter of 2008, the decrease in freight charges was
expected when considering the mix of the sales terms offered to different
customers and reduction in division revenue for the first quarter in 2008.

Selling expenses increased by approximately $0.14 million
from $0.6 million in the first quarter in 2007 to approximately $0.7 million for
the same period in 2008, an increase of 24.8%. The increase in selling expenses
resulted primarily from higher employee cost related expenses such as salaries
and social welfare costs. In addition, travel cost and business entertainment
cost were bit higher than the level for the first quarter of 2007.

General and administrative expenses also increased by
approximately $0.04 million to approximately $0.2 million in the first quarter
in 2008 from approximately $0.16 million for the same period in 2007. The
Company started listing process in the second quarter of 2007 and incurred some
extra costs that did not incur in the first quarter of 2007. In addition,
increases in staff salaries contributed to the increases in general and
administrative expense as well.

Operating Income.

Income from operations was approximately $2.6 million for the
first quarter of 2008, which was more than double that of the first quarter of
2007. The increase was primarily the result of the decrease in cost of sales.

Interest Expense.:

The Company experienced an increase of approximately $1 million
in interest expense and miscellaneous financial charges to approximately $1.5
million in the first quarter of 2008 from approximately $0.5 million for the
same period in 2007. Interest expense for discounting notes, short term debt for
working capital turnover, trading finance, and miscellaneous financial charges,
such as fee for issuing letters of credit and bank charges etc, are all included
in interest expense. The increase in interest expense was primarily due to the
rise in the bank interest rate. The average annual interest rate in the first
quarter of 2007 was approximately 6%, while it was approximately 7% for the same
period in 2008. In addition, the total amount of trade finance was approximately
$61 million in the first quarter in 2008, which was approximately $21 million
higher than the amount for the same period in 2007. The increase in the amount
of trade finance contributed to the increase in interest expense.

21

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Net Income.

The Company achieved approximately $1 million of net income
in the first quarter in 2008. This is an increase of approximately $0.27
million, or 39.4%, compared with approximately $0.7 million for the same period
in 2007. the increase was primarily related to the decrease in cost of sales.

Liquidity and Capital Resources:

The following table summarizes the cash flows for the periods
ended as of March 31, 2008 and 2007.

|                                                   | March 31, 2008 | March 31, 2007
|-------------------------------------------------- | -------------- | --------------
|US$                                                | US$           
|Cash provided by (used in) operating activities    | (5,404,791)    | 4,776,611     
|Cash provided by (used in) investing activities    | (2,129,476)    | (682,721)     
|Cash provided by (used in) financing activities    | 18,957,661     | (2,850,724)   
|Effect of exchange rate change on cash             | 635,119        | (293,023)     
|Net increase in cash and cash equivalents          | 12,058,513     | 950,143       
|Cash and cash equivalents beginning of the quarter | 2,108,631      | 4,311,388     
|Cash and cash equivalents ending of the quarter    | 14,167,144     | 5,261,531     
|Cash payments for interest                         | 1,553,846      | 980,496       

Operating activities.

Total cash used in operating activities was about $5.4
million in the first quarter in 2008, an increase of approximately $10 million
from approximately $4.8 million of cash provided by operating activities in the
first quarter of 2007. The increase in cash used in operating activities was
mainly due to the increases of related party receivable, other receivables and inventory. The working capital
deficiency at March 31, 2008 was approximately $21 million compared to
approximately $15.5 million as of December 31, 2007, a significant increase of
approximately $5.5 million. The decrease in working capital was mainly
attributable to related party receivables, which were reclassified to non-
current.

Investing activities.

Net cash used in investing activities increased by
approximately $1.4 million to approximately $2.1 million in the first quarter in
2008 from about $0.7 million for the same period of 2007. This was primarily due
to an increase in restricted cash of approximately $2 million used as collateral
with a bank for issuing letters of credit and acceptances.

Financing activities.

In the first quarter of 2008, the increase in short term
borrowings of approximately $19 million was approximately $22 million higher
than the approximately $3 million of decrease for short term borrowings in the
same period in 2007. The increase in short term borrowing was due to an increase
in trade financing. Export purchases, import advances, documents against payment
and documents against acceptance constituted most of the Company's short term
borrowings. Due to the significant increase in cash used in operating
activities, the Company had to obtain additional financing.



22

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Revolving credit facility.

The Company's total amount of credit line as of March 31,
2008 was approximately $116.9 million. At March 31, 2008, the outstanding
liabilities under these facilities were $74.4 million and at December 31, 2007
were $55.5 million. Corresponding financial charges are based on the interest
rate defined in each individual contract between FTZ Sentaida and the banks. In
general, the interest rate for import bill advances and export bill purchases is
based on the average of three months LIBOR plus 0.8%. The finance charge for
opening a letter of credit is approximately 0.1%; finance charges for documents
against payment and documents against acceptance are at a rate fluctuating
around 0.1%. The letters of credit negotiation charge is at 0.125%.

The obligations of credit are guaranteed by Sentaida Group
Ltd, Sentaida Rubber Co. Ltd, and Kaiyang Import and Export Company Limited who
is one of the Company's strategic business partners. The some of the obligations
also bear the personal guarantee of stockholders of Sentaida Group, Qin Long
(president of the Company) and Xiuqin Li (Mr. Qin long's wife). The contractual
agreements with banks contain covenants which restrict the Company's ability to
incur additional debt, enter into guarantees, make loans and investments, and
modify certain material agreements, and other customary covenants. The Company
has not violated any of the covenants.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with
accounting principles generally accepted in the United States requires us to
make assumptions, estimates and judgments that affect the amounts reported in
the financial statements, including the notes thereto, and related disclosures
of commitments and contingencies, if any. We consider our critical accounting
policies to be those that require more significant judgments and estimates in
the preparation of financial statements, including the following:



Allowance for
doubtful accounts.

The Company would provide an allowance for doubtful accounts
to ensure that accounts receivable and other receivables are not overstated due
to any uncollectible accounts. Based on management's evaluation of the
customers' ability to make payment, the probability of inability to pay is low;
therefore, the Company did not make any allowance for doubtful accounts.



Inventories.

For Sentaida Tires, inventories are valued at the lower of
cost (computed in accordance with the weighted average method) or market. The
Company performs periodic assessments to determine the existence of obsolete,
slow-moving and non-saleable merchandise. Based on management's experience and
assessments, the level of obsolete and slow-moving merchandise was very low and
we believe there is no need to have an allowance for obsolescence. Terms with a
majority of the Company's tires vendors allow return of tires products, within
limitations, specified in their supply agreements.

For Zhongsen Holdings and F.T.Z Sentaida, the inventories for
rubber and tires are stated at the lower of cost (computed in accordance with
the first-in-first-out method) or market. There was no inventory kept in
Zhongsen Holdings, while F.T.Z. Sentaida maintains inventory at minimum level.
Management adjusts the inventory level based on the fluctuation of the demand
for rubber. The Company's management believes that there is no need to make an
allowance for FTZ Sentaida's inventory.



Property,
plant and equipment.

Our property, plant and equipment are stated at cost less
accumulated depreciation. Cost represents the purchase price of the asset and
other costs incurred to bring the asset into its existing use.

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Depreciation is provided on a straight-line basis over the
estimated useful life of an asset. The principal depreciation rates are as
follows:

Buildings
      20 yearsMachinery and
      equipment
      5 yearsOffice equipment
      5 yearsVehicles and other
      5-8 years


Maintenance or repairs are charged to expense as incurred.
Upon sale or disposition, the applicable amounts of asset cost and accumulated
depreciation are removed from the accounts and the net amount excluding proceeds
from disposal is charged or credited to income.



Revenue
recognition.

SAB 104 outlines four criteria that all publicly held
companies have to follow to recognize revenue: 1. Persuasive evidence of an
arrangement exists. 2. Delivery has occurred or services have been rendered. 3.
The seller's price to the buyer is fixed or determinable. 4. Collectibility is
reasonably assured. The Company recognizes revenue when title and risk of loss
pass to the customer and the above criteria have been met. Besides the above
criteria, for F.T.Z Sentaida and Zhongsen Holdings, they also recognize the
revenue upon shipment of products, provided the above mentioned criteria have
been met.



Warranty.

The tires that FTZ Sentaida and Sentaida Tires sell are
guaranteed directly by the manufacturers, FTZ Sentaida and Sentaida Tires are
not accountable to customers. In respect of rubber imported, the FTZ Sentaida
has insurance coverage for the quality. Therefore, the Company does not make
provisions for warranty.

For Sentaida Tires, although it has no responsibility for
defects in quality or workmanship of the tires, it serves as agent for making
damage claims on behalf of its customers from manufacturers. Sentaida Tires may
compensate customers first, either by replacing the tires or by a cash refund,
and then get reimbursement from manufacturers or suppliers in the form of tires
or cash.

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Off-Balance Sheet Arrangements

We do not have any off-balance arrangements.

Seasonality

Our operating results and operating cash flows historically
have not been subject to seasonal variations. This pattern may change, however,
as a result of new market opportunities or new product introductions.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET
RISK.

Interest Rate Risk

We are exposed to interest rate risk due primarily to our
short-term bank loans. Although the interest rates are fixed for the terms of
the loans, the terms are typically twelve months and interest rates are subject
to change upon renewal. Since September 2007, the People's Bank of China has
increased the interest rate of Renminbi bank loans with a term of six months or
less by 0.2% and loans with a term of six to 12 months by 0.3%. The new interest
rates are approximately 6.5% and 7.3% for Renminbi bank loans with a term six
months or less and loans with a term of six to 12 months, respectively. The
change in interest rates has will have great influence on our net income before
provision for income taxes, yet it depends on the level of trade finance used by
the company. We monitor interest rates in conjunction with our cash requirements
to determine the appropriate level of trade finance. We have not entered into
any hedging transactions in an effort to reduce our exposure to interest rate
risk.

Foreign Exchange Risk

The value of the Renminbi against the U.S. dollar and other
currencies is affected by, among other things, changes in China's political and
economic conditions. Since July 2005, the Renminbi has no longer been pegged to
the U.S. Dollar. Although the People's Bank of China regularly intervenes in the
foreign exchange market to prevent significant short-term fluctuations in the
exchange rate, the Renminbi may appreciate or depreciate significantly in value
against the U.S. dollar in the medium to long term. Moreover, it is possible
that in the future, PRC authorities may lift restrictions on fluctuations in the
Renminbi exchange rate and lessen intervention in the foreign exchange market.

Because substantially all of our earnings and cash assets are
denominated in Renminbi, but our reporting currency is the U.S. dollar,
fluctuations in the exchange rate between the U.S. dollar and the Renminbi will
affect our balance sheet and our earnings per share in U.S. dollars. In
addition, appreciation or depreciation in the value of the Renminbi relative to
the U.S. dollar would affect our financial results reported in U.S. dollar terms
without giving effect to any underlying change in our business or results of
operations. Fluctuations in the exchange rate will also affect the relative
value of any dividend we issue in the future that will be exchanged into U.S.
dollars and earnings from, and the value of, any U.S. dollar-denominated
investments we make in the future.

Very limited hedging transactions are available in China to
reduce our exposure to exchange rate fluctuations. To date, we have not entered
into any hedging transactions in an effort to reduce our exposure to foreign
currency exchange risk. While we may enter into hedging transactions in the
future, the availability and effectiveness of these transactions may be limited,
and we may not be able to successfully hedge our exposure at all. In addition,
our foreign currency exchange losses may be magnified by PRC exchange control
regulations that restrict our ability to convert Renminbi into foreign
currencies.

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Inflation

Inflationary factors, such as increases in the cost of our
products and overhead costs, could impair our operating results. Although we do
not believe that inflation has had a material impact on our financial position
or results of operations to date, a high rate of inflation in the future may
have an adverse effect on our ability to maintain current levels of gross margin
and selling, general and administrative expenses as a percentage of sales
revenue if the selling prices of our products do not increase with these
increased costs.

ITEM 4. CONTROLS AND PROCEDURES.

Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in
Rule 13a-15(e) under the Exchange Act) that are designed to ensure that
information that would be required to be disclosed in Exchange Act reports is
recorded, processed, summarized and reported within the time period specified in
the SEC's rules and forms, and that such information is accumulated and
communicated to our management, including to our Chief Executive Officer and
Chief Financial Officer, as appropriate, to allow timely decisions regarding
required disclosure.

As required by Rule 13a-15 under the Exchange Act, our
management, including Mr. Long Qin and Ms. Hailan Xu, our Chief Executive
Officer and Chief Financial Officer, evaluated the effectiveness of the design
and operation of our disclosure controls and procedures as of March 31, 2008.
Based on that evaluation, Mr. Qin and Mr. Liang concluded that as of March 31,
2008, and as of the date that the evaluation of the effectiveness of our
disclosure controls and procedures was completed, our disclosure controls and
procedures were effective to satisfy the objectives for which they are intended.

Changes in Internal Controls over Financial Reporting

During the first quarter ended March 31, 2008, there were no
changes in our internal control over financial reporting identified in
connection with the evaluation performed during the fiscal year covered by this
report that has materially affected, or is reasonably likely to materially
affect, our internal control over financial reporting.

PART II OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

From time to time, we may become involved in various lawsuits
and legal proceedings which arise in the ordinary course of business. However,
litigation is subject to inherent uncertainties, and an adverse result in these
or other matters may arise from time to time that may harm our business. We are
currently not aware of any such legal proceedings or claims that we believe will
have a material adverse affect on our business, financial condition or operating
results.

ITEM 1A. RISK FACTORS.

RISKS RELATED TO OUR BUSINESS

Our sales and operating revenues could decline due to
macro-economic and other factors outside of its control, such as changes in
consumer confidence and declines in employment levels.

Changes in national and regional economic conditions, as well
as local economic conditions where the Company conducts its operations, may
result in more caution on the part of customers and consequently fewer sales of
our products. These economic uncertainties involve, among other things,
conditions of supply and demand in local markets and changes in consumer
confidence and income, employment levels, and government regulations. These
risks and uncertainties could periodically have an adverse effect on customer
demand for and the pricing of our products, which could cause its operating
revenues to decline. In addition, we are subject to various risks, many of them
outside of our control, including availability and cost of materials and labor,
changes in government regulations, and increases in taxes and other local
government fees. A reduction in its revenues could in turn negatively affect the
market price of its securities.

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We are subject to extensive government regulation which could
cause us to incur significant liabilities or restrict our business activities.

Regulatory requirements could cause us to incur significant
liabilities and operating expenses and could restrict our business activities.
We are subject to statutes and rules regulating distribution, sales, safety
matters, products and others. Our operating expenses may be increased by
governmental regulations and other fees and taxes, which may be imposed. Any
delay or refusal from government agencies to grant us necessary licenses,
permits and approvals could have an adverse effect on our operations.

We may require additional capital in the future, which may
not be available on favorable terms or at all.

Our future capital requirements will depend on many factors,
including industry and market conditions, our ability to successfully implement
our branding and marketing initiative and expansion of our business. We
anticipate that we may need to raise additional funds in order to grow our
business and implement our business strategy. We anticipate that any such
additional funds would be raised through equity or debt financings. In addition,
we may enter into a revolving credit facility or a term loan facility with one
or more syndicates of lenders. Any equity or debt financing, if available at
all, may be on terms that are not favorable to us. Even if we are able to raise
capital through equity or debt financings, as to which there can be no
assurance, the interest of existing shareholders in our company may be diluted,
and the securities we issue may have rights, preferences and privileges that are
senior to those of our common stock or may otherwise materially and adversely
effect the holdings or rights of our existing shareholders. If we cannot obtain
adequate capital, we may not be able to fully implement our business strategy,
and our business, results of operations and financial condition would be
adversely affected. See also "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Liquidity and Capital Resources." In
addition, we have and will continue to raise additional capital through private
placements or registered offerings, in which broker-dealers will be engaged. The
activities of such broker-dealers are highly regulated and we cannot assure that
the activities of such broker-dealers will not violate relevant regulations and
generate liabilities despite our expectation otherwise.

We depend on the availability of additional human resources
for future growth.

We are currently experiencing a period of significant growth
in our sales volume. We believe that continued expansion is essential for us to
remain competitive and to capitalize on the growth potential of our business.
Such expansion may place a significant strain on our management and operations
and financial resources. As our operations continue to grow, we will have to
continually improve our management, operational and financial systems,
procedures and controls, and other resources infrastructure, and expand our
workforce. There can be no assurance that our existing or future management,
operating and financial systems, procedures and controls will be adequate to
support our operations, or that we will be able to recruit, retain and motivate
our personnel. Further, there can be no assurance that we will be able to
establish, develop or maintain the business relationships beneficial to our
operations, or to do so or to implement any of the above activities in a timely
manner. Failure to manage our growth effectively could have a material adverse
effect on our business and the results of our operations and financial
condition.

We may be adversely affected by the fluctuation in raw
material prices and selling prices of our products.

The raw materials and the products we trade and distribute
have experienced significant price fluctuations in the past. There is no
assurance that they will not be subject to future price fluctuations or pricing
control. These price changes may ultimately result in increases in the selling
prices of our products, in turn, adversely affect our sales volume, revenue and
operating profit.

We could be adversely affected by the occurrence of natural
disasters. From time to time, our developed sites may experience strong winds,
storms, flooding and earth quakes. Natural disasters could impede operations,
damage infrastructure necessary to our constructions and operations. The
occurrence of natural disasters could adversely affect our business, the results
of our operations, prospects and financial condition, even though we currently
have insurance against damages caused by natural disasters, including typhoons,
accidents or similar events.

27

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Intense competition from existing and new entities may
adversely affect our revenues and profitability.

In general, the tire distribution industry is intensely
competitive and highly fragmented. We compete with various companies. Many of
our competitors are more established than we are and have significantly greater
financial, technical, marketing and other resources than we presently possess.
Some of our competitors have greater name recognition and a larger customer
base. These competitors may be able to respond more quickly to new or changing
opportunities and customer requirements and may be able to undertake more
extensive promotional activities, offer more attractive terms to customers, and
adopt more aggressive pricing policies. We intend to create greater awareness
for our brands so that we can successfully compete with our competitors. We
cannot assure you that we will be able to compete effectively or successfully
with current or future competitors or that the competitive pressures we face
will not harm our business.

Our operating subsidiary must comply with environmental
protection laws that could adversely affect our profitability.

We are generally required to comply with the environmental
protection laws and regulations promulgated by the national and local
governments of the PRC. Some of these regulations govern the level of fees
payable to government entities providing environmental protection services. If
we fail to comply with any of these environmental laws and regulations in the
PRC, depending on the types and seriousness of the violation, we may be subject
to, among other things, warning from relevant authorities, imposition of fines,
specific performance and/or criminal liability, forfeiture of profits made,
being ordered to close down our business operations and suspension of relevant
permits.

There may be a conflict of interest which may hurt our
shareholders' interest due to related parties transactions.

Currently, we use and share resources of our affiliated and
related parties, including office space and warehouse space. There are risks
involved in such an arrangement in which the Company's interest may be harmed
due to such related party transactions.

Our success depends on our management team and other key
personnel, the loss of any of whom could disrupt its business operations.

Our future success will depend in substantial part on the
continued service of our senior management. The loss of the services of one or
more of our key personnel could impede implementation of our business plan and
result in reduced profitability. We do not carry life or other insurance
covering officers or key personnel. Our future success will also depend on the
continued ability to attract, retain and motivate highly qualified technical
sales and marketing customer support. Because of the rapid growth of the economy
in the People's Republic of China, competition for qualified personnel is
intense. We cannot guarantee that we will be able to retain our key personnel or
that we will be able to attract, assimilate or retain qualified personnel in the
future.

We may be subject to product liabilities.

Although we distribute and export products made by others, we
may be still subject to potential product related liabilities. We may not have
sufficient insurance coverage for such claims if we fail to defend against them.

RISKS RELATED TO THE PEOPLE'S REPUBLIC OF CHINA

Changes in China's political or economic situation could harm
us and our operational results.

Economic reforms adopted by the Chinese government have had a
positive effect on the economic development of the country, but the government
could change these economic reforms or any of the legal systems at any time.
This could either benefit or damage our operations and profitability. Some of
the things that could have this effect are:

- Level of government involvement in the economy;
- Control of foreign exchange;
- Methods of allocating resources;
- Balance of payments position;
- International trade restrictions; and
- International conflict.

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The Chinese economy differs from the economies of most
countries belonging to the Organization for Economic Cooperation and
Development, or OECD, in many ways. As a result of these differences, we may not
develop in the same way or at the same rate as might be expected if the Chinese
economy were similar to those of the OECD member countries.

The Chinese government exerts substantial influence over the
manner in which we must conduct our business activities.

China only recently has permitted provincial and local
economic autonomy and private economic activities. The Chinese government has
exercised and continues to exercise substantial control over virtually every
sector of the Chinese economy through regulation and state ownership. Our
ability to operate in China may be harmed by changes in its laws and
regulations, including those relating to taxation, import and export tariffs,
environmental regulations, land use rights, property and other matters. We
believe that our operations in China are in material compliance with all
applicable legal and regulatory requirements. However, the central or local
governments of these jurisdictions may impose new, stricter regulations or
interpretations of existing regulations that would require additional
expenditures and efforts on our part to ensure our compliance with such
regulations or interpretations.

Accordingly, government actions in the future, including any
decision not to continue to support recent economic reforms and to return to a
more centrally planned economy or regional or local variations in the
implementation of economic policies, could have a significant effect on economic
conditions in China or particular regions thereof, and could require us to
divest ourselves of any interest we then hold in Chinese properties or joint
ventures.

Future inflation in China may inhibit our ability to conduct
business profitably in China.

In recent years, the Chinese economy has experienced periods
of rapid expansion and high rates of inflation. During the past ten years, the
rate of inflation in China has been as high as 20.7% and as low as -2.2%. These
factors have led to the adoption by the Chinese government, from time to time,
of various corrective measures designed to restrict the availability of credit
or regulate growth and contain inflation. High inflation may in the future cause
the Chinese government to impose controls on credit and/or prices, or to take
other action, which could inhibit economic activity in China, and thereby harm
the market for our products.

Any recurrence of severe acute respiratory syndrome, or SARS,
or another widespread public health problem, could harm our operations.

A renewed outbreak of SARS or another widespread public
health problem in China, where our operations are conducted, could have a
negative effect on our operations.

Our operations may be impacted by a number of health-related
factors, including the following:

- quarantines or closures of some of our offices which would
  severely disrupt our operations,
- the sickness or death of our key officers and employees,
- and a general slowdown in the Chinese economy.

Any of the foregoing events or other unforeseen consequences
of public health problems could damage our operations.

Capital outflow policies in the People's Republic of China
may hamper our ability to remit income to the United States.

The People's Republic of China has adopted currency and
capital transfer regulations. These regulations may require us to comply with
complex regulations for the movement of capital. Although our directors believe
that it is currently in compliance with these regulations, should these
regulations or the interpretation of them by courts or regulatory agencies
change; we may not be able to remit all income earned and proceeds received in
connection with our operations or from the sale of our operating subsidiary to
our stockholders.

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It may be difficult to effect service of process and
enforcement of legal judgments upon our company and our officers and directors
because some of them reside outside the United States.

As our operations are presently based in China and some of
our key directors and officers reside outside the United States, service of
process on our key directors and officers may be difficult to effect within the
United States. Also, substantially all of our assets are located outside the
United States and any judgment obtained in the United States against us may not
be enforceable outside the United States.

If relations between the United States and China worsen, our
stock price may decrease and we may have difficulty accessing the U.S. capital
markets.

At various times during recent years, the United States and
China have had disagreements over political and economic issues. Controversies
may arise in the future between these two countries. Any political or trade
controversies between the United States and China could adversely affect the
market price of our common stock and our ability to access U.S. capital markets.

We may have difficulty establishing adequate management,
legal and financial controls in the People's Republic of China.

The People's Republic of China historically has not adopted a
Western style of management and financial reporting concepts and practices,
modern banking, computer or other control systems. We may have difficulty in
hiring and retaining a sufficient number of qualified employees to work in the
People's Republic of China. As a result of these factors, we may experience
difficulty in establishing management, legal and financial controls, collecting
financial data and preparing financial statements, books of account and
corporate records and instituting business practices that meet Western
standards.

It will be extremely difficult to acquire jurisdiction and
enforce liabilities against our officers, directors and assets based in the
People's Republic of China.

Because the Company's executive officers and directors,
including, the chairman of its board of directors, are Chinese citizens, it may
be difficult, if not impossible, to acquire jurisdiction over these persons in
the event a lawsuit is initiated against us and/or its officers and directors by
a stockholder or group of stockholders in the United States. Also, because the
majority of our assets are located in the People's Republic of China it would
also be extremely difficult to access those assets to satisfy an award entered
against it in a United States court.

Restrictions on currency exchange may limit our ability to
receive and use our revenues effectively.

The majority of our revenue will be settled in RMB and U.S.
Dollars, and any future restrictions on currency exchanges may limit our ability
to use revenue generated in RMB to fund any future business activities outside
China or to make dividend or other payments in U.S. dollars. Although the
Chinese government introduced regulations in 1996 to allow greater
convertibility of the RMB for current account transactions, significant
restrictions still remain, including primarily the restriction that
foreign-invested enterprises may only buy, sell or remit foreign currencies
after providing valid commercial documents at those banks in China authorized to
conduct foreign exchange business. In addition, conversion of RMB for capital
account items, including direct investment and loans, is subject to governmental
approval in China, and companies are required to open and maintain separate
foreign exchange accounts for capital account items. We cannot be certain that
the Chinese regulatory authorities will not impose more stringent restrictions
on the convertibility of the RMB.

We may be unable to complete a business combination
transaction efficiently or on favorable terms due to complicated merger and
acquisition regulations which became effective on September 8, 2006.

On August 8, 2006, six PRC regulatory agencies, including the
CSRC, promulgated the Regulation on Mergers and Acquisitions of Domestic
Companies by Foreign Investors, which became effective on September 8, 2006.
This new regulation, among other things, governs the approval process by which a
PRC company may participate in an acquisition of assets or equity interests.
Depending on the structure of the transaction, the new regulation will require
the PRC parties to make a series of applications and supplemental applications
to the government agencies. In some instances, the application process may
require the presentation of economic data concerning a transaction, including
appraisals of the target business and evaluations of the acquirer, which are
designed to allow the government to assess the transaction. Government approvals
will have expiration dates by which a transaction must be completed and reported
to the government agencies. Compliance with the new regulations is likely to be
more time consuming and expensive than in the past and the government can now
exert more control over the combination of two businesses. Accordingly, due to
the new regulation, our ability to engage in business combination transactions
has become significantly more complicated, time consuming and expensive, and we
may not be able to negotiate a transaction that is acceptable to our
stockholders or sufficiently protect their interests in a transaction.

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The new regulation allows PRC government agencies to assess
the economic terms of a business combination transaction. Parties to a business
combination transaction may have to submit to the Ministry of Commerce and other
relevant government agencies an appraisal report, an evaluation report and the
acquisition agreement, all of which form part of the application for approval,
depending on the structure of the transaction. The regulations also prohibit a
transaction at an acquisition price obviously lower than the appraised value of
the PRC business or assets and in certain transaction structures, require that
consideration must be paid within defined periods, generally not in excess of a
year. The regulation also limits our ability to negotiate various terms of the
acquisition, including aspects of the initial consideration, contingent
consideration, holdback provisions, indemnification provisions and provisions
relating to the assumption and allocation of assets and liabilities. Transaction
structures involving trusts, nominees and similar entities are prohibited.
Therefore, such regulation may impede our ability to negotiate and complete a
business combination transaction on financial terms that satisfy our investors
and protect our stockholders' economic interests.

The value of our securities will be affected by the foreign
exchange rate between U.S. dollars and RMB.

The value of our common stock will be affected by the foreign
exchange rate between U.S. dollars and RMB, and between those currencies and
other currencies in which our sales may be denominated. Currently, RMB is
stronger than U.S. Dollars. For example, to the extent that we need to convert
U.S. dollars into RMB for our operational needs and should RMB appreciate
against the U.S. dollar at that time, our financial position, the business of
the Company, and the price of our common stock may be harmed. Conversely, if we
decide to convert our RMB into U.S. dollars for the purpose of declaring
dividends on our common stock or for other business purposes and the U.S. dollar
appreciates against RMB, the U.S. dollar equivalent of our earnings from our
subsidiaries in China would be reduced.

We are subject to the risks related to the evolving legal
systems in China.

China's legal system is still evolving with many
uncertainties, particularly in the promulgation and implementation and
interpretation of rules and laws that are changing, being adopted and being
interpreted and applied on an uneven basis, sometimes arbitrarily. Our Company,
its structure and organization are subject to those risks. If such laws and
rules are applied or interpreted against the Company in an unfavorable way, we
may be subject to penalties or even lose our business license and you may lose
your investment in us.

RISKS RELATED TO OUR SHARES

Our common stock is quoted on the OTC Bulletin Board which
may have an unfavorable impact on our stock price and liquidity.

Our common stock is quoted on the OTC Bulletin Board. The OTC
Bulletin Board is a significantly more limited market than the New York Stock
Exchange or Nasdaq system. The quotation of our shares on the OTC Bulletin Board
may result in a less liquid market available for existing and potential
stockholders to trade shares of our common stock, could depress the trading
price of our common stock and could have a long-term adverse impact on our
ability to raise capital in the future.

We may be subject to penny stock regulations and restrictions
and you may have difficulty selling shares of our common stock.

The SEC has adopted regulations which generally define
so-called "penny stocks" to be an equity security that has a market price less
than $5.00 per share or an exercise price of less than $5.00 per share, subject
to certain exemptions. If our common stock becomes a "penny stock", we may
become subject to Rule 15g-9 under the Exchange Act, or the "Penny Stock Rule".
This rule imposes additional sales practice requirements on broker-dealers that
sell such securities to persons other than established customers and "accredited
investors" (generally, individuals with a net worth in excess of $1,000,000 or
annual incomes exceeding $200,000, or $300,000 together with their spouses). For
transactions covered by Rule 15g-9, a broker-dealer must make a special
suitability determination for the purchaser and have received the purchaser's
written consent to the transaction prior to sale. As a result, this rule may
affect the ability of broker-dealers to sell our securities and may affect the
ability of purchasers to sell any of our securities in the secondary market.

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For any transaction involving a penny stock, unless exempt,
the rules require delivery, prior to any transaction in a penny stock, of a
disclosure schedule prepared by the SEC relating to the penny stock market.
Disclosure is also required to be made about sales commissions payable to both
the broker-dealer and the registered representative and current quotations for
the securities. Finally, monthly statements are required to be sent disclosing
recent price information for the penny stock held in the account and information
on the limited market in penny stock.

There can be no assurance that our common stock will qualify
for exemption from the Penny Stock Rule. In any event, even if our common stock
were exempt from the Penny Stock Rule, we would remain subject to Section
15(b)(6) of the Exchange Act, which gives the SEC the authority to restrict any
person from participating in a distribution of penny stock, if the SEC finds
that such a restriction would be in the public interest.

Our principal stockholders, current executive officers and
directors own a significant percentage of our company and will be able to
exercise significant influence over our company.

Our executive officers and directors and principal
stockholders together will beneficially own a majority of the total voting power
of our outstanding voting capital stock. These stockholders will be able to
determine the composition of our Board of Directors, will retain the voting
power to approve all matters requiring stockholder approval and will continue to
have significant influence over our affairs. This concentration of ownership
could have the effect of delaying or preventing a change in our control or
otherwise discouraging a potential acquirer from attempting to obtain control of
us, which in turn could have a material and adverse effect on the market price
of the common stock or prevent our stockholders from realizing a premium over
the market prices for their shares of common stock. See "Principal Stockholders"
for information about the ownership of common by our executive officers,
directors and principal stockholders.

We do not anticipate paying dividends on the Common Stock.

We have never paid dividends on our common stock and do not
anticipate paying dividends in the foreseeable future. Our directors intend to
follow a policy of retaining all of our earnings, if any, to finance the
development and expansion of our business.

Broker-dealer requirements may affect trading and liquidity.

Section 15(g) of the Securities Exchange Act of 1934, as
amended, and Rule 15g-2 promulgated thereunder by the SEC require broker-dealers
dealing in penny stocks to provide potential investors with a document
disclosing the risks of penny stocks and to obtain a manually signed and dated
written receipt of the document before effecting any transaction in a penny
stock for the investor's account.

Potential investors in our common stock are urged to obtain
and read such disclosure carefully before purchasing any shares that are deemed
to be "penny stock." Moreover, Rule 15g-9 requires broker-dealers in penny
stocks to approve the account of any investor for transactions in such stocks
before selling any penny stock to that investor. This procedure requires the
broker-dealer to (i) obtain from the investor information concerning his or her
financial situation, investment experience and investment objectives; (ii)
reasonably determine, based on that information, that transactions in penny
stocks are suitable for the investor and that the investor has sufficient
knowledge and experience as to be reasonably capable of evaluating the risks of
penny stock transactions; (iii) provide the investor with a written statement
setting forth the basis on which the broker-dealer made the determination in
(ii) above; and (iv) receive a signed and dated copy of such statement from the
investor, confirming that it accurately reflects the investor's financial
situation, investment experience and investment objectives. Compliance with
these requirements may make it more difficult for holders of our common stock to
resell their shares to third parties or to otherwise dispose of them in the
market or otherwise.

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Shares eligible for future sale may adversely affect the
market price of our common stock, as the future sale of a substantial amount of
our restricted stock in the public marketplace could reduce the price of our
common stock.

From time to time, certain of our stockholders may be
eligible to sell all or some of their shares of common stock by means of
ordinary brokerage transactions in the open market pursuant to Rule 144,
promulgated under the Securities Act ("Rule 144"), subject to certain
limitations. Under Rule 144, a person who is not deemed to have been one of our
affiliates at the time of or at any time during the three months preceding a
sale, and who has beneficially owned the restricted ordinary shares proposed to
be sold for at least six months, including the holding period of any prior owner
other than an affiliate, is entitled to sell their ordinary shares without
complying with the manner of sale and volume limitation or notice provisions of
Rule 144. We must be current in our public reporting if the non-affiliate is
seeking to sell under Rule 144 after holding his ordinary shares between six
months and one year. After one year, non-affiliates do not have to comply with
any other Rule 144 requirements. Any substantial sale of common stock pursuant
to Rule 144 or pursuant to any resale prospectus may have an adverse effect on
the market price of our securities.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS.

Except the unregistered sales of equity securities previously
disclosed in a Current Report Amendment No. 1 on Form 8-K/A filed with SEC on
April 29, 2008, there is no other unregistered sales of equity securities.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

None.

ITEM 5. OTHER INFORMATION.

None.

ITEM 6. EXHIBITS.

|EXHIBITS.
|---------
|         
|31.1*    
|         
|31.2*    
|         
|32.1*    
|         
|32.2*    

* Filed herewith.

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SIGNATURES

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 thereunto duly authorized.

DATED: May 9, 2008

RUB A DUB SOAP, INC.By: /s/ Long QinLong QinChief Executive Officer(On behalf of the Registrant and asPrincipal Executive Officer)By: /s/ Hailan XuHailan XuChief Financial Officer(On behalf of the Registrant and asPrincipal Financial Officer)


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EXHIBIT INDEX

|Exhibit
    Number | Description                                                                                                                                                             
|------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                   |                                                                                                                                                                         
|31.1*              | Certification of Principal Executive Officer
    filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                       
|                   |                                                                                                                                                                         
|31.2*              | Certification of Principal Financial Officer
    filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                       
|                   |                                                                                                                                                                         
|32.1*              | Certification of Principal Executive Officer
    furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
    906 of the Sarbanes-Oxley Act of 2002.
|                   |                                                                                                                                                                         
|32.2*              | Certification of Principal Financial Officer
    furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
    906 of the Sarbanes-Oxley Act of 2002.

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