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
June 30, 2008

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



SENTAIDA TIRE
COMPANY LIMITED(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 August 8, 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                                                                      | 1   
|Item 2.  | Management's Discussion and Analysis of
    Financial Condition and Results of Operations | 18  
|Item 3.  | Quantitative and Qualitative Disclosures
    About Market Risk                            | 29  
|Item 4   | Controls and Procedures                                                                   | 29  
|         |                                                                                           |     
|         |                                                                                           |     
|         | PART II Other Information                                                                 |     
|         |                                                                                           |     
|         |                                                                                           |     
|Item 1.  | Legal Proceedings                                                                         | 30  
|Item 1A. | Risk Factors                                                                              | 30  
|Item 2.  | Unregistered Sales of Equity Securities and
    Use of Proceeds                           | 30  
|Item 3.  | Defaults Upon Senior Securities                                                           | 30  
|Item 4.  | Submission of Matters to a Vote of Security
    Holders                                   | 30  
|Item 5.  | Other Information                                                                         | 30  
|Item 6.  | Exhibits                                                                                  | 30  

2

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PART I 
FINANCIAL INFORMATION
SENTAIDA TIRE COMPANY LIMITED
Consolidated Balance Sheets

|                                                             | June 30, 2008 |  | December 31, 2007
|------------------------------------------------------------ | ------------- |  | -----------------
|                                                             | Unaudited     |  | Audited          
|                                                             | US$           |  | US$              
|ASSETS                                                       |               |  |                  
|CURRENT ASSETS                                               |               |  |                  
|Cash and cash equivalents                                    | 4,847,871     |  | 2,108,631        
|Restricted cash                                              | 12,530,073    |  | 8,534,135        
|Notes receivable                                             | 3,782,822     |  | 1,738,286        
|Accounts receivable, net                                     | 20,898,084    |  | 18,957,856       
|Accounts receivable-related party                            | 38,417,301    |  | 28,907,450       
|Loan receivable-related party                                | 5,356,899     |  | 2,601,253        
|Inventories, net                                             | 12,087,241    |  | 10,384,620       
|Other receivables                                            | 13,288,841    |  | 8,681,783        
|Prepayments and other assets                                 | 6,055,532     |  | 6,448,517        
|Total Current Assets                                         | 117,264,664   |  | 88,362,531       
|                                                             |               |  |                  
|RELATED PARTY RECEIVABLE (NON CURRENT)                       | 38,235,430    |  | 28,967,410       
|                                                             |               |  |                  
|PROPERTY, EQUIPMENT AND LAND USE RIGHTS,                     |               |  |                  
|at cost-net of accumulated depreciation and
    amortization | 6,003,497     |  | 5,812,963        
|INVESTMENT                                                   | 49,480        |  | 46,486           
|                                                             | 161,553,071   |  | 123,189,390      
|                                                             |               |  |                  
|LIABILITIES AND STOCKHOLDERS'
    EQUITY                     |               |  |                  
|CURRENT LIABILITIES                                          |               |  |                  
|Short term borrowings                                        | 76,679,684    |  | 55,505,353       
|Notes payable                                                | 17,462,674    |  | 16,174,239       
|Accounts payable                                             | 23,167,235    |  | 21,121,952       
|Loan payable-related party                                   | 14,844,470    |  | 5,064,636        
|Other payables and accruals                                  | 971,684       |  | 1,740,015        
|Taxes payable                                                | 2,489,976     |  | 2,059,348        
|Other liabilities                                            | 278,562       |  | 274,715          
|Advance from customers                                       | 2,486,379     |  | 1,964,681        
|Total Current Liabilities                                    | 138,380,664   |  | 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                             | 19,163,875    |  | 16,513,120       
|Accumulated other comprehensive income                       | 2,728,530     |  | 1,492,239        
|Total Stockholders' Equity                                   | 23,172,407    |  | 19,284,451       
|                                                             | 161,553,071   |  | 123,189,390      

See notes to consolidated financial statements

3

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SENTAIDA TIRE COMPANY LIMITED
Consolidated Statements of Operations and Comprehensive Income

|                                    | Three Months Ended June 30, |  | Six Months Ended June 30,
|----------------------------------- | --------------------------- |  | -------------------------
|                                    | 2008                        |  | 2007                     
|                                    | Unaudited                   |  | Unaudited                
|                                    | US$                         |  | US$                      
|REVENUES                            |                             |  |                          
|Sales                               | 84,604,034                  |  | 93,151,340               
|Commissions and other               | 153,670                     |  | 189,745                  
|                                    | 84,757,704                  |  | 93,341,085               
|COSTS AND EXPENSES                  |                             |  |                          
|Cost of sales                       | 79,970,312                  |  | 87,743,015               
|Freight charges                     | 1,139,895                   |  | 1,392,322                
|Commissions and rebates             | -                           |  | 16,588                   
|Insurance                           | 17,110                      |  | 69,490                   
|Selling Expenses                    | 543,535                     |  | 898,447                  
|General and Administrative Expenses | 374,229                     |  | 246,285                  
|                                    | 82,045,081                  |  | 90,366,147               
|INCOME FROM OPERATIONS              | 2,712,623                   |  | 2,974,938                
|                                    |                             |  |                          
|OTHER INCOME (EXPENSE)              |                             |  |                          
|Miscellaneous income (expense)      | (12,215)                    |  | 24,187                   
|Interest expense/income, net        | (959,324)                   |  | (1,100,175)              
|                                    | (971,539)                   |  | (1,075,988)              
|INCOME BEFORE INCOME TAXES          | 1,741,084                   |  | 1,898,950                
|PROVISION FOR INCOME TAXES          | 55,293                      |  | 190,096                  
|NET INCOME                          | 1,685,791                   |  | 1,708,854                
|OTHER COMPREHENSIVE INCOME          |                             |  |                          
|Foreign currency translation loss   | (255,232)                   |  | (82,118)                 
|COMPREHENSIVE INCOME                | 1,430,559                   |  | 1,626,736                
|                                    |                             |  |                          
|EARNINGS PER COMMON SHARE:          |                             |  |                          
|Basic and Diluted                   | 0.06                        |  | 0.06                     
|                                    |                             |  |                          
|AVERAGE COMMON SHARES OUTSTANDING   | 26,000,000                  |  | 25,090,000               

See notes to consolidated financial statements

4

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SENTAIDA TIRE COMPANY LIMITED 
Consolidated Statements of Cash Flows

|                                                         | Six Months Ended June 30,
|-------------------------------------------------------- | -------------------------
|                                                         | 2008                     
|                                                         | Unaudited                
|                                                         | US$                      
|CASH FLOWS FROM OPERATING ACTIVITIES                     |                          
|Net Income                                               | 2,651,664                
|Adjustments to reconcile net income to net cash          |                          
|(used in) provided by operating activities:              |                          
|Depreciation                                             | 351,922                  
|Changes in operating assets and liabilities              |                          
|Accounts receivable, net                                 | (699,570)                
|Notes receivable                                         | (1,877,774)              
|Accounts receivable-related party                        | (5,806,869)              
|Inventories                                              | (1,004,853)              
|Other receivables                                        | (2,417,293)              
|Prepayments and other assets                             | (730,918)                
|Accounts payable                                         | 666,306                  
|Notes payable                                            | 240,363                  
|Other payables and accruals                              | (855,328)                
|Taxes payable                                            | 289,615                  
|Other liabilities                                        | (762,463)                
|Advances from customers                                  | 1,133,040                
|Net Cash (Used in) Provided by Operating
    Activities  | (8,822,158)              
|                                                         |                          
|CASH FLOWS FROM INVESTING ACTIVITIES                     |                          
|Purchase of fixed assets                                 | (178,592)                
|Net change in loan receivable-related party              | (10,237,867)             
|Increase in restricted cash                              | (3,446,642)              
|Proceeds from sale of investment                         | -                        
|Net Cash Used by Investing Activities                    | (13,863,101)             
|                                                         |                          
|CASH FLOWS FROM FINANCING ACTIVITIES                     |                          
|Net change in loan payable-related party                 | 8,305,189                
|Net change in short term borrowings                      | 17,601,756               
|                                                         |                          
|Net Cash Provided by (Used in) Financing
    Activities  | 25,906,945               
|                                                         |                          
|Effect of exchange rate change on cash                   | (482,446)                
|                                                         |                          
|NET INCREASE (DECREASE) IN CASH AND
    CASH EQUIVALENTS | 2,739,240                
|CASH AND CASH EQUIVALENTS, beginning of
    period       | 2,108,631                
|CASH AND CASH EQUIVALENTS, end of period                 | 4,847,871                
|                                                         |                          
|SUPPLEMENTAL DISCLOSURES OF CASH FLOW
    INFORMATION    |                          
|Interest paid                                            | 3,882,951                
|Income taxes paid                                        | 136,518                  

See notes to consolidated financial statements

5

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SENTAIDA TIRE COMPANY LIMITED 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Organization

The Company's name has been changed from "RUB A DUB SOAP
INC." ("RUBD") to "Sentaida Tire Company Limited", effective on July 3, 2008.

We are a holding company and did not engage in any active
operations before and after the reverse acquisition transaction with Zhongsen
International Company Group Limited, or Zhongsen International completed on
February 5, 2008. We only operate through Zhongsen International's wholly-owned
subsidiaries: Qingdao Free-Trading Zone Sentaida International Trade Company
Limited ("F.T.Z. Sentaida"), Qingdao Sentaida Tires Limited ("Qingdao Sentaida")
and Zhongsen Holdings Limited ("Zhongsen Holdings"). Both F.T.Z. Sentaida and
Qingdao Sentaida are companies incorporated under the Laws of People's Republic
of China, and Zhongsen Holdings is incorporated in the British Virgin Islands
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%, 19% and 21% of its consolidated net
sales respectively for the six months ended June 30, 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.

Principles of Consolidation

The accompanying consolidated financial statements include
the accounts of the Company and its wholly-owned subsidiaries. All significant
intercompany accounts and transactions have been eliminated in consolidation.
Before the reverse acquisition of Zhongsen International, RUBD had "zero"
equity; and after the acquisition, RUBD has not had any operations and has not
incurred any expenses. Therefore, the accompanying consolidated financial
statements include the accounts of Zhongsen International and its 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.

Reclassification

Certain amounts in the 2007 financial statements have been
reclassified to conform to the current financial statement presentation with no
impact on previous reported net income or stockholder's equity. The related
party receivables in previous presentation were reclassified as accounts
receivable-related party and loan receivable-related party. Related party payables were reclassified as loan
payable-related party in current presentation.

6

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SENTAIDA TIRE COMPANY LIMITED 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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 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
pass to the customers 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 that 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.
Concentration 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 required for certain new and
existing customers.
7SENTAIDA TIRE COMPANY LIMITED 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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 50% and 49% of the consolidated
net sales for the six months ended June 30, 2008 and 2007, respectively.
Accounts receivable
The top ten of our customers accounted for 73% of the
accounts receivable as of June 30, 2008 and 85% as of December 31, 2007. As of
June 30, 2008, the top one customer accounted for 19% of the accounts
receivable; the second and the third largest customers represented 9% and 8%,
respectively; and the fourth one accounted for 7% of accounts receivable.
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 Qingdao Sentaida, 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 merchandises.
If any, these merchandises would be sold on discount or returned to vendors at
discount in exchange for other merchandises relatively easier to sell. However,
based on management's experience and assessments, the level of obsolete and
slow-moving merchandises 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 Qingdao Sentaida as of June 30, 2008 was
approximately $9.8 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 June 30, 2008, the inventory of rubber in F.T.Z. Sentaida was
approximately $2.3 million.
Property, Equipment, and Land Use Rights
Property, equipment, and land use rights are stated as cost
at the date of acquisition. The Company adopts the straight-line method of
depreciation and amortization at annual rates sufficient to depreciate or
amortize the cost of the assets less estimated salvage value over the assets'
estimated useful lives. Maintenance and repairs are charged to expense as
incurred and expenditures for improvements and major renewals are capitalized.
When an asset is sold or retired, the carrying amount of the asset 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:
8SENTAIDA TIRE COMPANY LIMITED 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

These buildings are bought and used by the Company's Chain
Stores to provide car services, retail tires and other merchandise used in cars.

Office building, warehouses and the related land that are
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
lives 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 U.S. dollar. Consolidated balance sheet accounts
are translated into U.S. dollars at the period-end exchange rate and all revenue
and expenses are translated into U.S. dollars at the average exchange rate
prevailing during the periods 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.

9

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SENTAIDA TIRE COMPANY LIMITED 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 six months ended June 30,
2008 was $292,045 and $88,560 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.

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.

10

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SENTAIDA TIRE COMPANY LIMITED 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

For Qingdao Sentaida, 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 against manufacturers. Qingdao Sentaida
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 $0.4 million of tires returned by customers was
included in the value of inventory as of June 30, 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."

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 expend them, if and when incurred.

Related Party Transactions

Related party sales were approximately $16.9 million, which
accounted for 11% of the Company's net sales in the six months ended June 30,
2008. For the same period in 2007, related party sales were approximately $28.5
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 Qingdao Sentaida and F.T.Z. Sentaida before Qingdao
Sentaida and F.T.Z. Sentaida were acquired by Zhongsen International. Sales to
Sentaida Rubber did not occur in the six months ended June 30, 2008. The amounts
due from Sentaida Rubber increased approximately $10 million as of June 30, 2008,
which primarily due to the increased payments made by F.T.Z. Sentaida and
Zhongsen Holdings on behalf of Sentaida Rubber, which payments will be
reimbursed by Sentaida Rubber later. The amount owed by Sentaida Rubber
accounted for 47% 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 $24 million to the Company.
All these buildings and lands have been currently being used by the Company free
of charge from Sentaida Rubber for several years based on the agreements between
the Company and Sentaida Rubber. The $38.2 million of the related party
receivable from Sentaida Rubber was reclassified as non current related party
receivables on consolidated balance sheets.

11

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SENTAIDA TIRE COMPANY LIMITED 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

LQJ Global Tire ("LQJ") is another related party, which now
is a wholly-owned subsidiary of Sentaida Group. On December 1, 2007, Sentaida
Group authorized the transfer of LQJ's tire business operation 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 90% of the related party sales, and about 46% of the related party
receivables in the six months ended June 30, 2008. 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")
became a related party of the Company through one top management member in
Nanjing Sentaida's management team, Mr. Junfeng Liang, one of our directors. It
accounted for 7.1% of the related party sales in the six months ended June 30,
2008, which were all normal business transactions. Advances from Nanjing
Sentaida were approximately $0.3 million as of June 30, 2008.

Sentaida Group is related to the Company through Mr. Qin (our
Chief Executive Officer), who owns 76% of Sentaida Group's shares. Amounts due
from Sentaida Group were approximately $2.5 million and accounted for 3% of the
related party receivables as of June 30, 2008, which were short-term debt
without interest or any other charges.

Qingdao Delinte Investment Co., Limited ("Delinte") is a
subsidiary of Sentaida Group, which owns 93% of Delinte's shares. Amounts due
from Delinte were $1.7 million as of June 30, 2008, accounted for 2% of the
related party receivables, which were short-term borrowings for Delinte's
working capital's turnover without interest or any other charges.

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. Approximately $11.4 million was borrowed from Dongsen
for our working capital turnover in the six months ended June 30, 2008. This
short-term borrowing has no interest bearing.

As of June 30, 2008, about $1.7 million owed to Ms. Xiuqin
Li, our CEO's wife. The borrowing was short-term borrowing for working capital
turnover. Approximately $0.4 million owed to Delinte Logistic Company Limited ("Delinte
Logistic"), a subsidiary of Sentaida Group, which were expenses paid by
Delinte Logistic on behalf on the Company and will be reimbursed by the Company.

12

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SENTAIDA TIRE COMPANY LIMITED 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2.     Cash and Restricted cash

Restricted cash consists of collateral for letters of credit,
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 $12.5 million as of June 30, 2008.

3.     Property and Equipment

Depreciation expenses were approximately $0.4 million and
$0.3 million for the six months ended June 30, 2008 and 2007, respectively.
Depreciation expenses were included in selling, general and administrative
expense in the consolidated statements of operations.

A commercial real property with a cost of $2.8 million was
bought under a personal mortgage of three employees of Sentaida Rubber Co., Ltd. The
advance payment of about $1.4 million was paid by the Company and another $1.4
million of mortgage is amortized every month under the name of the three
employees of Sentaida Rubber. There are agreements among the three
employees, the Company, and Sentaida Rubber, which clearly indicate that the
three employees are just nominal owners of the property and nominal bearers of
the mortgage and the Company is the real owner of the property. All the rights
and obligations related to the property are assumed by the Company and the
property is used by the Company without other consideration in return. The
Company made the advance payment but Sentaida Rubber is currently making the
mortgage payments, which will be reimbursed by the Company 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 2008's prime rate, 7.83% plus 30%, which is equivalent to the
annual effective rate of 10.179%.

The required unpaid principal on this mortgage are:

| | Year                    | Amount  
| | ----------------------- | --------
| | July 2008-June 2009     | $88,478 
| | July 2009-June 2010     | $88,478 
| | July 2010-June 2011     | $88,478 
| | July 2011-June 2012     | $88,478 
| | July 2012-June 2013     | $88,478 
| | July 2013November 2015 | $213,821

4.     Notes Receivable

Notes receivable were approximately $3.8 million as of June 30, 2008 from
Qingdao Sentaida's customers. These notes are due within six months with no
interest or additional amounts required to be received.

13

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SENTAIDA TIRE COMPANY LIMITED 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

5.     Other receivables

Other receivables were approximately $13.3 million as of June
30, 2008. Among them, approximately $13.1 million was derived from F.T.Z.
Sentaida. Approximately $8.3 million was borrowed by two of the Company's
strategic business partners without interest. Approximately $3.7 million was
owed by two of the Company's suppliers, among which $3.5 million was short-term
borrowing by the two suppliers and will be paid back by offsetting the Company's
accounts payable, and $0.2 million is freight charges and miscellaneous port
charges that the Company paid on behalf of the two suppliers and will be
reimbursed later.

6.     Prepayments

Prepayments were approximately $6.0 million as of June 30,
2008, among which there was approximately $1.8 million of prepayment made to
F.T.Z. Sentaida's suppliers, and approximately $4.2 million made to Qingdao
Sentaida's suppliers.

7.     Investment

The Company invested $49,480 in Greatwall Fund. As of June
30, 2008, the market value for the investment was $38,113.

8.     Loan payable-related party

Loan payable to related party was approximately $14.8 million
as of June 30, 2008 (Please see details under section of related party
transaction of note 1).

9.     Short-Term Borrowings

F.T.Z. Sentaida's total amount of credit line as of June 30,
2008 was approximately $141.9 million. The outstanding import bill advance,
export bill purchase, documents against payment and documents against acceptance
were approximately $76.7 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
approximately 2%. 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 Qingdao Sentaida,
Sentaida Group Ltd, Sentaida Rubber Co. Ltd., and Kaiyang Import and Export
Company Limited which is one of the Company's strategic business partners. Some
of the obligations also bear the personal guaranty by stockholders of Sentaida
Group, such as Mr. Qinlong, our Chairman of the Board and CEO. The 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 contain other customary covenants. The Company has not violated
any of the covenants in the reporting periods.

14

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SENTAIDA TIRE COMPANY LIMITED 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

10.     Notes Payable

Notes payable were approximately $17.5 million as of June 30,
2008. Most of the notes payable were issued to F.T.Z. Sentaida's suppliers and
were due within six months with no interest charge. Restricted cash for notes
payable as of June 30, 2008 was about $7.9 million.

11.     Accounts Payable

Accounts payable were approximately $23.2 million as of June
30, 2008. Substantially all these amounts were payable to F.T.Z. Sentaida's and
Qingdao Sentaida's normal business suppliers and usually were due within six
months without interest or any other charges. The accounts payable to Reginal
Rubber Trading were about $7.8 million, about $3.5 million to Zhaoyuan Liao
Rubber Products Co, Ltd., about $2.7 million to Louis Dreyfus, about $2.0
million to South China and Tires Co., Ltd., and about $1.2 million to Shandong Yongtai Chemical Company Limited. Accounts payable to the top five companies
accounted for approximately 75% of consolidated accounts payable.

12.     Income tax payable

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 June 30, 2008.

According to the Corporate Income Tax Law of the People's
Republic of China ("the new CIT Law"), the new applicable income tax rate of our
Chinese subsidiaries is 25%, which is effective from January 1, 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 June 30, 2008 was approximately $2.5
million.

13.     Appropriated Retained Earnings

The Company's income is distributable to its owners after
transfer to statutory reserves as required under relevant PRC laws and
regulations and the Company's Articles of Incorporation. As stipulated by
relevant laws and regulations in PRC, the Company is required to maintain a
statutory surplus reserve fund which is non-distributable. Appropriations to
such reserve are 10% to 15% of net profit after taxation as per the statutory
financial statements of the Company.

The statutory surplus reserve fund can be used to make up
prior year losses, if any, for business expansion, or for dividend distribution,
and also can be applied in conversion into capital by means of capitalization
issue. 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 may cease to
apply if the balance of the fund has reached 50% of the Company's registered
capital.

15

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SENTAIDA TIRE COMPANY LIMITED 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 Qingdao Sentaida 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 Qingdao Sentaida in 2007 at a cost equal to total paid-in
capital of F.T.Z. Sentaida and Qingdao Sentaida. 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
Qingdao Sentaida, $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 include freight and miscellaneous
charges such as port fees, goods handling charges, customs duty and goods
loading and unloading charges, etc. were approximately $1.9 million and $2.3
million for the six months ended June 30, 2008 and 2007, respectively.

16.     Selling Expenses

Selling expenses were approximately $1.3 million and $1.5
million for the six months ended June 30, 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 expense. Total interest expense for trade finance, discounting
notes and short-term borrowing was about $3.4 million and $1.8 million for the
six months ended June 30, 2008 and 2007, respectively. Miscellaneous bank
charges were about $0.5 million and 0.3 million for the same period in 2008 and
2007, respectively.

16

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SENTAIDA TIRE COMPANY LIMITED 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

18.    
Subsequent Events

Sentaida International Inc. is a USA based subsidiary of
Sentaida Group, and mainly operates in Los Angeles and St. Louis. It accounted
for approximately 97% of the Company's related party sales and 47% of related
party receivables. The plan to acquire Sentaida International Inc. was postponed
from the second quarter of 2008 to the end of 2008. If the acquisition is
completed, the Company's related party receivables will decrease dramatically.
The method of the acquisition is still under discussion process between the
Company and Sentaida Group.

17

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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, revenues, 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:

- 

"Zhongsen International" are references to Zhongsen
  International Company Group Limited, a corporation formed under the laws of
  Hong Kong;

"F.T.Z. Sentaida" are references to Qingdao (F.T.Z.)
  Sentaida International Trading Co. Ltd., a corporation incorporated in the
  People's Republic of China;

"Qingdao Sentaida" are references to Qingdao
  Sentaida Tires Co., Ltd, a corporation incorporated in the People's Republic
  of China;

"Zhongsen Holdings" are references to Zhongsen
  Holdings Ltd., a British Virgin Islands company;

"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;

18

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"BVI" are references to the British
  Virgin Islands;"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" is reference 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 of Our Business

We are one of the largest integrated tire and rubber
marketers and distributors in China. Through our Chinese subsidiaries, we
primarily engage in the global marketing and distribution of tires and rubber
without any tire manufacturing operations. 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%, 18% and 22% of its consolidated net sales respectively in the
quarter ended June 30, 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.

Recent Developments

Name Change

On July 3, 2008, we changed our name from "Rub A Dub Soap,
Inc." to "Sentaida Tire Company Limited" to better reflect our business. The new
CUSIP number for our common stock is 81726L 106. Our common stock is quoted on
the Over The Counter Bulletin Board under the new symbol SDTC.OB. See the
Company's current Report on Form 8-K filed on July 10, 2008 for additional
information on the amendment and a copy of the Certificate of Amendment to
Articles of Incorporation.

Second Fiscal Quarter Financial Performance Highlights

We experienced a decline in consolidated revenues in the second quarter of 2008,
but our net income for the period remained substantially constant. The following are some
financial highlights for the second fiscal quarter of 2008:

Revenue: The Company's total
revenue decreased by $8.5 million, or 9.2%, to $84.6 million for the three
months ended June 30, 2008 from $93.2 million for the same period last year.

Gross Margin: Gross margin was
5.5% for the three months ended June 30, 2008, as compared to 5.8% for the same
period last year.

Net Income: Net income decreased
by less than $0.1 million, or 1.3%, to approximately $1.7 million for three
months ended June 30, 2008, from $1.7 million for the same period of last year.

Fully diluted net income per share:Fully diluted net income per share both were $0.06 for three months ended
June 30, 2008 and 2007.

19

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Revenues

Our revenues were mainly generated from rubber import and
distribution, tire export, and tire domestic wholesale and retail.
Cost of Revenues:

Cost of revenues 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 June 30, 2008, the average gross margins percentages for
rubber import and distribution division, tire export division, and tire domestic
wholesale and retail division were 2.7%, 13.7% and 6.1%, respectively. For the three months
ended June 30, 2007, the average gross margins percentages were 1.3%, 11.2% and
7.6%, respectively.
Operating Expenses
Our operating expenses mainly consist of selling expenses and
general and administrative expenses, freight charges, commission and insurance
expenses. We expect our operating expenses will increase as our business grows
and we incur increased costs for being a public company.

Provision for Income Taxes

United States

Sentaida Tire Company Limited is subject to United States tax
at a tax rate of 34%. No provision for income taxes in the United States of
America ("USA") has been made, as Sentaida Tire Company Limited had no taxable
income in the second quarter of 2008 in the USA.

British Virgin Islands

Our wholly-owned subsidiary Zhongsen Holdings Ltd. was
incorporated in the British Virgin Islands, or BVI. Under the current laws of the BVI, it
is not subject to income taxes.

PRC

Before the implementation of the Corporate Income Tax ("CIT")
law (as discussed below), Foreign Invested Enterprises ("FIE") established in
the PRC are generally subject to an CIT rate of 33.0%, which includes a 30.0%
state income tax and a 3.0% local income tax. On March 16, 2007, the National
People's Congress of China passed the new Corporate Income Tax Law ("CIT Law"),
and on November 28, 2007, the State Council of China passed the Implementing
Rules for the CIT Law ("Implementing Rules") which took effect on January 1,
2008. The CIT Law and Implementing Rules impose a unified CIT 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 old tax laws
applicable to FIEs, and its associated preferential tax treatments, beginning
January 1, 2008.

20

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These changes do not have any adverse impact on the Company,
due to F.T.Z. Sentaida and Qingdao Sentaida were not FIEs before March 16,
2007 and did not enjoy any preferential tax treatments. The new CIT Law is much
preferential to us and F.T.Z. Sentaida and Qingdao Sentaida enjoy 25% income tax
rate, which was 33% under old CIT Law.

In addition to the changes to the current tax structure,
under the CIT 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 CIT 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 the Company 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 June 30, 2008 Compared to Three Months Ended June 30, 2007

The following table summarizes the results of our operations
during the three-month periods ended June 30, 2008 and 2007, and
provides information regarding the dollar and percentage increase or (decrease)
from the three-month period ended June 30, 2007 to the three-month period ended
June 30, 2008.

21

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|                                        | Three Months
    Ended June 30, |  |             |  | %          
|--------------------------------------- | ------------------------------- |  | ----------- |  | -----------
|                                        | 2008                            |  | 2007        |  | Increase   
|                                        | Unaudited                       |  | Unaudited   |  | (Decrease) 
|                                        | US$                             |  | US$         |  |            
|REVENUES                                |                                 |  |             |  |            
|Sales                                   | 84,604,034                      |  | 93,151,340  |  | (8,547,306)
|Commissions and other                   | 153,670                         |  | 189,745     |  | (36,075)   
|                                        | 84,757,704                      |  | 93,341,085  |  | (8,583,381)
|Costs and expenses                      |                                 |  |             |  |            
|Cost of sales                           | 79,970,312                      |  | 87,743,015  |  | (7,772,703)
|Freight charges                         | 1,139,895                       |  | 1,392,322   |  | (252,427)  
|Commissions and rebates                 | -                               |  | 16,588      |  | (16,588)   
|Insurance                               | 17,110                          |  | 69,490      |  | (52,380)   
|Selling expenses                        | 543,535                         |  | 898,447     |  | (354,912)  
|General and administrative expenses     | 374,229                         |  | 246,285     |  | 127,944    
|                                        | 82,045,081                      |  | 90,366,147  |  | (8,321,066)
|Income from operations                  | 2,712,623                       |  | 2,974,938   |  | (262,315)  
|Other income (expense)                  |                                 |  |             |  |            
|Miscellaneous income                    | (12,215)                        |  | 24,187      |  | (36,402)   
|Interest expense                        | (959,324)                       |  | (1,100,175) |  | 140,851    
|Other net                               | (971,539)                       |  | (1,075,988) |  | 104,449    
|Income from operation before income tax | 1,741,084                       |  | 1,898,950   |  | (157,866)  
|Provision for income taxes (current)    | 55,293                          |  | 190,096     |  | (134,803)  
|Net income                              | 1,685,791                       |  | 1,708,854   |  | (23,063)   
|Other comprehensive income              |                                 |  |             |  |            
|Foreign currency translation loss       | (255,232)                       |  | (82,118)    |  | (173,114)  
|Comprehensive income                    | 1,430,559                       |  | 1,626,736   |  | (196,177)  

Revenues

Revenues decreased by $8.6 million, or 9.2%, to $84.6 million for the three
months ended June 30, 2008 from $93.2 million for the same period in 2007.

The decrease in consolidated revenues was primarily the
result of a decline in revenue in our tire export division. Net sales in this
division were approximately $14.9 million in the quarter ended June 30, 2008, a
decline of approximately $17.5 million, or 54%, from approximately $32.3 million
in the same period of 2007. The decline was primarily due to suspension of agent
sales business for one of the Company's main suppliers during the first quarter
of 2008, although the contract has not been terminated. In addition, raw
material prices increased significantly in China since last year, which caused
most of our suppliers to raise their prices frequently during
the last six months. Furthermore, due to the increased raw material prices, most
tire manufacturer's purchasing capability for raw materials declined, which
reduced their production capacity. Our purchasing volume declined as
manufacturers' supply volume declined. All these factors have direct impact on
the tire export division's sales and revenues.

The domestic tire distribution and retail division experienced steady
growth in the quarter ended June 30, 2008. Net sales were approximately $18.6
million, an increase of approximately $4.6 million, or 33%, compared with sales
of approximately $14 million in the same period in 2007. Auto demand and sales
in China have continued to grow at approximately 20% year to year, which
corresponds to the increase in tire demand. Our continued efforts to develop and
expand our customer base also contributed to the increased division revenues.

22

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The rubber import/distribution division generated
approximately $50.4 million of revenues in the quarter ended June 30, 2008, an
increase of 9% from the corresponding period sales of $46.2 million in the
second quarter of 2007. Since 2007, raw material prices have increased
significantly, which has resulted in significant increases in rubber prices. The
increased division revenues were primarily due to the significant increase in
rubber prices.

The following table shows the different components comprising
our total revenues during the three month periods ended June 30, 2008 and 2007.

|Divisions                             | % of
    Consolidated Revenues 
|------------------------------------- | -------------------------------
|                                      | Three Months
    Ended June 30,
|                                      | 2008                           
|Rubber Import/Distribution            | 60%                            
|Tire Export                           | 18%                            
|Domestic Tire Distribution and Retail | 22%                            

As the table above indicates, the rubber import and
distribution division accounted for an aggregate of 60% and 50% of our revenues
for the three months ended June 30, 2008 and 2007, respectively. The tire export
division accounted for 18% and 35% of our revenues for the three months ended
June 30, 2008 and 2007, respectively. The tire domestic distribution and retail
division accounted for 22% and 15% of our revenues for the three months ended
June 30, 2008 and 2007, respectively.

Costs and Operating Expenses:

Our total costs and operating expenses were approximately $82
million for the three months ended June 30, 2008, a 9% reduction from costs and
operating expenses of approximately $90 million for the same period in 2007.
Costs and operating expenses declined due to reductions in cost of good sold,
freight charges and selling expenses.

Cost of sales declined by approximately $8 million, or 8.9%,
to $80 million for the three months ended June 30, 2008 from about $88 million
during the same period in 2007. This decrease was mainly due to purchase and
sales reduction in tire export division. As a percentage of revenues, there was
no material change in the cost of good sold, which accounted for approximately
94% of the total revenues for the three months ended June 30, 2008 and 2007.

Operating expenses consist primarily of freight charges,
commissions and rebates, insurance, selling expenses general and administrative
expenses.

Overall operating expenses were approximately $2.1 million in
the three months ended June 30, 2008, a decline of approximately $0.6 million,
or 20.9%, from operating expenses of approximately $2.6 million for the same
period in 2007. As a percentage of total revenues, total operating expenses
accounted for about 2.4% of the total revenues for the three months ended June
30, 2008, improved slightly from 2.8% for the same period in 2007.

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Freight charges, commissions and rebates, insurance and
selling expenses all declined in this period, which together contributed to the
decline in total operating expenses. We believe the reduction in those expenses
was the result of declines in sales in our tire export division.

Administrative expenses include the costs associated with
staff and support personnel who manage our business activities and professional
fees paid to third party service providers. Our administrative expenses were
$0.4 million (0.4% of total revenues) and $0.2 million (0.2% of total revenues)
for the three months ended June 30, 2008 and 2007, respectively. The increase in
these expenses was related primarily to public listing expenditures such as
legal fees, accounting professional fees and other consulting fees. Those
expenses did not occur in the same period in 2007.

Net income decreased by less than $0.1 million, to
approximately $1.7 million for the three months ended June 30, 2008 as a result
of the factors described above.

Six Months Ended June 30, 2008 Compared to Six Months Ended
June 30, 2007

The following table summarizes the results of our operations
during the six-month periods ended June 30, 2008 and 2007, and
provides information regarding the dollar and percentage increase or (decrease)
from the six-month period ended June 30, 2007 to the six-month period ended June
30, 2008.

24

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|                                        | Six Months
    Ended June 30, |  |             |  | %           
|--------------------------------------- | ----------------------------- |  | ----------- |  | ------------
|                                        | 2008                          |  | 2007        |  | Increase    
|                                        | Unaudited                     |  | Unaudited   |  | (Decrease)  
|                                        | US$                           |  | US$         |  |             
|REVENUES                                |                               |  |             |  |             
|Sales                                   | 151,845,914                   |  | 163,874,511 |  | (12,028,597)
|Commissions and other                   | 291,296                       |  | 327,790     |  | (36,494)    
|                                        | 152,137,210                   |  | 164,202,301 |  | (12,065,091)
|Costs and expenses                      |                               |  |             |  |             
|Cost of sales                           | 142,929,767                   |  | 155,644,111 |  | (12,714,344)
|Freight charges                         | 1,917,265                     |  | 2,276,703   |  | (359,438)   
|Commissions and rebates                 | -                             |  | 53,952      |  | (53,952)    
|Insurance                               | 69,017                        |  | 120,785     |  | (51,768)    
|Selling expenses                        | 1,291,568                     |  | 1,497,752   |  | (206,184)   
|General and administrative expenses     | 579,220                       |  | 407,327     |  | 171,893     
|                                        | 146,786,837                   |  | 160,000,630 |  | (13,213,793)
|Income/loss from operations             | 5,350,373                     |  | 4,201,671   |  | 1,148,702   
|Other income (expense)                  |                               |  |             |  |             
|Miscellaneous income                    | (12,215)                      |  | 78,942      |  | (91,157)    
|Interest expense                        | (2,493,632)                   |  | (1,602,399) |  | (891,233)   
|Other net                               | (2,505,847)                   |  | (1,523,457) |  | (982,390)   
|Income from operation before income tax | 2,844,526                     |  | 2,678,214   |  | 166,312     
|Provision for income taxes (current)    | 192,862                       |  | 276,658     |  | (83,796)    
|Net income                              | 2,651,664                     |  | 2,401,556   |  | 250,108     
|Other comprehensive income              |                               |  |             |  |             
|Foreign currency translation loss       | (292,045)                     |  | (88,560)    |  | (203,485)   
|Comprehensive income                    | 2,359,619                     |  | 2,312,996   |  | 46,623      

Revenues

Revenues decreased by $12 million, or 7.3% to approximately $152 million for
the six months ended June 30, 2008 from approximately $164 million for the same
period in 2007.

The decrease in consolidated revenues was primarily the
result of a decline in revenue in our tire export division. Net sales in this
division were approximately $28.2 million in the six months ended June 30, 2008,
a decline of approximately $20.8 million, or 42%, from approximately $49 million
in the same period of 2007. The decline was primarily due to suspension of agent
sales business for one of the Company's main suppliers during the first quarter
of 2008, although the contract has not been terminated. In addition, raw
material prices increased significantly in China since last year, which caused
most of our suppliers to raise their prices frequently during
the last six months. Furthermore, due to the increased raw material prices, most
tire manufacturer's purchasing capability for raw materials declined, which
reduced their production capacity. Our purchasing volume declined as
manufacturers' supply volume declined. All these factors have direct impact on
the tire export division's sales and revenues.

The domestic tire distribution and retail division experienced steady
growth in the six months ended June 30, 2008. Net sales were approximately $32.4
million, an increase of approximately $7.4 million, or 30%, compared with sales
of approximately $25 million in the same period in 2007. Auto demand and sales
in China have continued to grow at approximately 20% year to year, which
corresponds to the increase in tire demand. Our continued efforts to develop and
expand our customer base also contributed to the increased division revenues.

25

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The rubber import/distribution division generated
approximately $90.5 million of revenues in the six months ended June 30, 2008,
an increase of 0.9% from the corresponding period sales of $89.7 million in the
same period in 2007. Since 2007, raw material prices have increased
significantly, which has resulted in significant increases in rubber prices. The
increased division revenues were primarily due to the significant increase in
rubber prices.

The following table shows the different components comprising our total
revenues during the six month periods ended June 30, 2008 and 2007.

|Divisions                             | % of
    Consolidated Revenues
|------------------------------------- | ------------------------------
|                                      | Six Months
    Ended June 30, 
|                                      | 2008                          
|Rubber Import/Distribution            | 60%                           
|Tire Export                           | 19%                           
|Domestic Tire Distribution and Retail | 21%                           

As the table above indicates, the rubber import and
distribution division accounted for an aggregate of 60% and 55% of our revenues
for the six months ended June 30, 2008 and 2007, respectively. The tire export
division accounted for 19% and 30% of consolidated revenues for the six months
ended June 30, 2008 and 2007, respectively. The tire domestic distribution and
retail division accounted for 21% and 15% of our revenues for the six months
ended June 30, 2008 and 2007, respectively.

In the six months ended June 30, 2008, our related party
sales were approximately $16.9 million, which accounted for 11% of our net
sales.

Costs and Operating Expenses

Overall costs and operating expenses declined approximately
$13.2 million, or 8%, to $146.8 million in the six months ended June 30, 2008,
from approximately $160 million for the same period in 2007. This decline
resulted from the decline in sales in our tire export division.

Total operating expenses were approximately $3.9 million for
the six months ended June 30, 2008, a decline of approximately $0.5 million, or
11.5%, compared with approximately $4.4 million for the same period in 2007.
Operating expenses were 2.5% of total revenues during the first six months of
2008, a decline of 0.2% from the level for the same period in 2007. The
reduction in overall operating expenses was primarily related to the decline in
freight charges and selling expenses, which were related to fewer sales in our
tire export division.

Administrative expenses include the costs associated with
staff and support personnel who manage our business activities and professional
fees paid to third party service providers. Our administrative expenses were
about $0.6 million (0.4% of total revenues) and $0.4 million (0.2% of total
revenues) for the six months ended June 30, 2008 and 2007, respectively. The
increased expenses were primarily due to public listing related fees which did
not occur in the same period in 2007.

Interest Expense

Interest expense consists of interest for discounting notes, short-term
debt for working capital turnover, trading finance such as import bill advance
and export bill purchases, and miscellaneous financial charges, such as fees for
issuing letters of credit and bank charges.

26

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For the six months ended June 30, 2008, the Company
experienced an increase of approximately $1.8 million in interest expense and
miscellaneous financial charges to approximately $3.9 million, from
approximately $2.1 million for the same period in 2007. The increase in interest
expense was partially due to the increase in bank interest rates. The average
annual interest rate was at 6% in the six months ended June 30, 2007, while it
was approximately at 7.8% for the six months ended June 30, 2008. In addition,
the total amount of trade finance occurred in the six months ended June 30, 2008
was approximately $130 million, while it was only $67.7 million for the same
period in 2007. The increased trade finance contributed to the increase in
interest expense.

Net Income

Although revenues from tire export division declined in the
six months ended June 30, 2008 compared with the same period in 2007, the tire
export division only accounted for less than 20% of the Company's consolidated
revenues. Rubber import and distribution division and domestic tire distribution
and retail division both experienced steady growth, therefore, net income
increased by approximately $0.4 million, or 16% to about $2.8 million for the
six months ended June 30, 2008 from approximately $2.4 million for the same
period of 2007.

Liquidity and Capital Resources

As of June 30, 2008, we had cash and cash equivalents
(excluding restricted cash) of approximately $4.8 million. The following table
provides detailed information about our net cash flow:

|                                                         | Six Months
    Ended June 30,
|-------------------------------------------------------- | -----------------------------
|                                                         | 2008                         
|                                                         | US$                          
|                                                         |                              
|Cash (used in) provided by operating
    activities      | (8,822,158)                  
|Cash used in investing activities                        | (13,863,101)                 
|Cash provided by (used in) financing
    activities      | 25,906,945                   
|Effect of exchange rate change on cash                   | (482,446)                    
|Net increase (decrease) in cash and cash
    equivalents | 2,739,240                    
|Cash and cash equivalents beginning of the
    year      | 2,108,631                    
|Cash and cash equivalents ending of the year             | 4,847,871                    

27

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Operating Activities

Net cash used in operating activities was approximately $8.8
million for the six-month period ended June 30, 2008, which was an increase of
approximately $29.6 million from approximately $20.8 million of cash provided by
operating activities for the same period of 2007. The increaseof the
cash usedin operating activities was primarily due to increases in
related party receivables for trade, other receivables and inventory; and the
decrease in accounts payable. The working capital deficiency was approximately
$22.8 million as of June 30, 2008, compared to approximately $15.5 million
working capital deficiency as of June 30, 2007. The decrease in working capital
was attributable to a significant increase in outstanding trade finance,
including import bill advance, export bill purchase, and letter of credit, which
are used in our normal business operation.

Investing Activities

Net cash used ininvesting activities for the
six-month period ended June 30, 2008 was $13.9 million, which is a decrease of
approximately $7.1 million from net cash used in investing activities of
approximately $20.9 million for the same period of 2007. The decrease in cash
used in investing activities was primarily due to the decrease of net change in
loan related party receivables compared with the same period of 2007. These loan
related party receivables consist of loans made to related parties, which will
be paid by these related parties in ordinary course of business. We and certain
of our related parties make inter-company loans from time to time in the
ordinary course of business. We periodically borrow money from certain of
related parties on terms more favorable than those we could obtain from
commercial banks and we periodically lend money to certain of our related
parties on similar terms.

Financing Activities

Net cash provided byfinancing activities for the
six-month period ended June 30, 2008 was approximately $25.9 million, which was
anincrease of approximately $26.5 million from approximately $0.6
million net cash used infinancing activities during the same period of
2007. The increase of the cash provided by financing activities was mainly due
to the increase in short-term borrowing. Trade finance such as import advances,
export purchases, documents against payment, and documents against acceptance
constitute most of the Company's short-term borrowings. In addition, as
discussed above, we periodically borrow money from certain of related parties on
more favorable terms. Such loans provide more flexibility for us because they
are typically free of interest and it is less time consuming to obtain such
loans than to seek commercial bank financing. Nevertheless, we believe that we
can obtain adequate commercial bank financing if necessary in lieu of such
inter-company loans. As of June 30, 2008, we had a line of credit of
approximately $141.9 million as described below. During the six months ended
June 30, 2008, we borrowed more funds from related parties for our working
capital turnover compared with the same period of 2007. Due to the significant
increase in cash used in operating activities, the Company had to obtain
additional financing.

Revolving credit facility

The Company's total amount of credit line as of June 30, 2008
was approximately $141.9 million. At June 30, 2008, the outstanding liabilities
under these facilities were $76.7 million. Corresponding financial charges are
based on the interest rate defined in each individual contract between the
Company 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 2%.
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 Qingdao Sentaida,
Sentaida Group Ltd, Sentaida Rubber Co. Ltd, and Kaiyang Import and Export
Company Limited which is one of the Company's strategic business partners. Some of
the obligations also bear the personal guaranty of one of the stockholders of Sentaida
Group, Long Qin (Chairman of the Board of the Company). 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

28

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Depending on our future needs, changes and trends in the capital markets
affecting our shares and the Company, we may determine to seek additional equity
or debt financing in the private or public markets.

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.

Not applicable.

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 June 30, 2008.
Based on that evaluation, Mr. Qin and Ms. Xu concluded that as of June 30, 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 second quarter ended June 30, 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.

29

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PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.

From time to time, we may involve 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.

Not applicable.

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

There is no unregistered sales of equity securities during the three-month
period ended June 30, 2008.

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



30

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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: August 13, 2008

SENTAIDA TIRE COMPANY LIMITEDBy: /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)


31

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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.

*Filed herewith.

32

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