---

UNITED STATESSECURITIES
AND EXCHANGE COMMISSIONWashington, DC 20549

FORM 10-Q

[ x ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2008

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______________________To
______________________

Commission file number 000-52749

CHANG-ON INERNATIONAL,
INC.(Exact name of registrant as specified in its charter)

|Utah                                             | 87-0302579                          
|------------------------------------------------ | ------------------------------------
|(State or other jurisdiction of incorporation or | (I.R.S. Employer Identification No.)
|organization)                                    |                                     
|                                                 |                                     
|514 No. 18 Building                              |                                     
|High New Technology Development                  |                                     
|Harbin, Heilongjiang Province, China             | N/A                                 
|(Address of principal executive offices)         | (Zip Code)                          

+86 451 82695010(Registrants telephone
number, including area code)

Indicate by check mark whether the registrant (1) filed all
reports required to be filed by Section 13 or 15(d) of the Exchange Act during
the past 12 months (or for such shorter period that the registrant was require
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes [X]No [ ]

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

Large accelerated filer [ ] Accelerated filer [
] Non-accelerated filer [ ] Smaller reporting company[ x
]

Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS:

Check whether the registrant has filed all documents and reports
required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act
of 1934 subsequent to the distribution of securities under a plan confirmed by a
court. [ ] Yes [ ] No

APPLICABLE ONLY TO CORPORATE ISSUERS:

As of May 17, 2008, the registrants outstanding common stock
consisted of 67,307,366shares.

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Table of Contents

|PART I  FINANCIAL
      INFORMATION | F-1                                                                                      
|------------------------------------ | -----------------------------------------------------------------------------------------
|ITEM 1.                              | FINANCIAL STATEMENTS                                                                     
|ITEM 2.                              | MANAGEMENT DISCUSSION
      AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|ITEM 3.                              | QUANTITATIVE AND QUALITATIVE
      DISCLOSURES ABOUT MARKET RISKS                        
|ITEM 4.                              | CONTROLS AND
      PROCEDURES.                                                           
|ITEM 4T.                             | CONTROLS AND PROCEDURES.                                                                 
|PART II 
      OTHER INFORMATION    | 9                                                                                        
|ITEM 1A.                             | RISK FACTORS.                                                                            
|ITEM 2.                              | UNREGISTERED
      SALES OF EQUITY SECURITIES AND USE OF PROCCEDS                        
|ITEM 3.                              | DEFAULTS UPON SENIOR SECURITIES                                                          
|ITEM 4.                              | SUBMISSION OF
      MATTERS TO A VOTE OF SECURITY HOLDERS                                
|ITEM 5.                              | OTHER INFORMATION                                                                        
|ITEM 6.                              | EXHIBITS                                                                                 

2

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PART I  FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

The unaudited financial statements of Chang-On International,
Inc. (the Company, Chang-On, we, our, us) follow. All currency
references in this report are in US dollars unless otherwise noted.

|Chang-On International, Inc.  
|------------------------------
|(An Development Stage Company)
|(unaudited)                   
|                              
|                              
|March 31, 2008                

|                                               | Index
|---------------------------------------------- | -----
|                                               |      
|Consolidated Balance Sheets                    | F-2  
|                                               |      
|Consolidated Statements of Operations          | F-3  
|                                               |      
|Consolidated Statements of Cash Flows          | F-4  
|                                               |      
|Notes to the Consolidated Financial Statements | F-5  

F-1

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|CHANG-ON INTERNATIONAL, INC. AND SUBSIDIARIES
|---------------------------------------------
|(A Development Stage Company)                
|BALANCE SHEETS                               

|                                                       |   | March 31,   |   |   | December 31, |  
|------------------------------------------------------ | - | ----------- | - | - | ------------ | -
|                                                       |   | 2008        |   |   | 2007         |  
|                                                       |   | (Unaudited) |   |   |              |  
|ASSETS                                                 |   |             |   |   |              |  
|Current Assets                                         |   |             |   |   |              |  
|Cash (Note 4)                                          | $ | 96,400      |   | $ | 7,380        |  
|Prepaid and other receivables                          |   | 285         |   |   | 960          |  
|Inventories                                            |   | 78,670      |   |   | 50,702       |  
|Total Current Assets                                   |   | 175,355     |   |   | 59,042       |  
|                                                       |   |             |   |   |              |  
|Property, plant and equipment, net (Note 5)            |   | 408,760     |   |   | 400,965      |  
|                                                       |   |             |   |   |              |  
|Total Assets                                           | $ | 584,115     |   | $ | 460,007      |  
|                                                       |   |             |   |   |              |  
|LIABILITIES AND STOCKHOLDERS' EQUITY                   |   |             |   |   |              |  
|Current Liabilities                                    |   |             |   |   |              |  
|Trade accounts payable                                 | $ | 15,665      |   | $ | 15,059       |  
|Accrued expenses                                       |   | 5,345       |   |   | 1,143        |  
|Government subsidy (Note 6)                            |   | 54,638      |   |   | 52,521       |  
|Due to
      shareholders (Note 7)                     |   | 794,586     |   |   | 657,017      |  
|Total Current Liabilities                              |   | 870,234     |   |   | 725,740      |  
|                                                       |   |             |   |   |              |  
|Minority interest                                      |   | -           |   |   | -            |  
|                                                       |   |             |   |   |              |  
|Stockholders' Equity:                                  |   |             |   |   |              |  
|Common stock, par value
      $0.001, authorized       |   |             |   |   |              |  
|100,000,000
      shares, issue and outstanding        |   |             |   |   |              |  
|61,307,366 shares (Note 8)                             |   | 67,307      |   |   | 67,307       |  
|Additional paid in capital (Note
      8)              |   | 2,708,602   |   |   | 2,708,602    |  
|Deficit
      accumulated during the development stage |   | (2,142,242  | ) |   | (1,817,769   | )
|Deferred compensation (Note 9)                         |   | (915,833    | ) |   | (1,230,833   | )
|Accumulated
      comprehensive income                 |   | (3,953      | ) |   | 6,960        |  
|Stockholders'
      equity:                            |   | (286,119    | ) |   | (265,733     | )
|Total Liabilities and Owners' Equity                   | $ | 584,115     |   | $ | 460,007      |  

See Notes to Financial Statements 
  F-2

---

|CHANG-ON INTERNATIONAL, INC. AND SUBSIDIARIES
|---------------------------------------------
|(A Development Stage Company)                
|STATEMENTS OF OPERATIONS                     
|(UNAUDITED)                                  

|                                                         |   |                |   |   |                |   |   | For the Period   |  
|-------------------------------------------------------- | - | -------------- | - | - | -------------- | - | - | ---------------- | -
|                                                         |   | For the Threee |   |   | For the Threee |   |   | November 26,     |  
|                                                         |   | Months Ended   |   |   | Months Ended   |   |   | 2004 (inception) |  
|                                                         |   | March 31,      |   |   | March 31,      |   |   | to March 31,     |  
|                                                         |   | 2008           |   |   | 2007           |   |   | 2008             |  
|                                                         |   |                |   |   |                |   |   |                  |  
|Net sales                                                | $ | -              |   | $ | -              |   | $ | 57,484           |  
|Cost of sales                                            |   | -              |   |   | -              |   |   | (41,797          | )
|Gross profit                                             |   | -              |   |   | -              |   |   | 15,687           |  
|Expenses                                                 |   |                |   |   |                |   |   |                  |  
|Salaries                                                 |   | 6,937          |   |   | 3,715          |   |   | 91,999           |  
|Transportation                                           |   | 1,321          |   |   | 563            |   |   | 5,946            |  
|Office equipment                                         |   | 336            |   |   | 164            |   |   | 5,075            |  
|Water, electricity and gas                               |   | 1,257          |   |   | 14,586         |   |   | 69,791           |  
|Other expenses                                           |   | 2,476          |   |   | 6,644          |   |   | 33,288           |  
|Advertisement                                            |   | -              |   |   | -              |   |   | 556              |  
|Rent expense                                             |   | -              |   |   | -              |   |   | 3,811            |  
|Depreciation                                             |   | 4,126          |   |   | 16,112         |   |   | 107,136          |  
|R & D expense                                            |   | -              |   |   | -              |   |   | 22,578           |  
|Repairs and maintenance                                  |   | -              |   |   | -              |   |   | 1,025            |  
|Gain on disposal of
      fixed assets                   |   | -              |   |   | -              |   |   | (7,730           | )
|Stock Compensation                                       |   | 315,000        |   |   | -              |   |   | 1,484,167        |  
|Fixed assets impairment                                  |   | -              |   |   | -              |   |   | 345,962          |  
|Intangibles writedown                                    |   | -              |   |   | -              |   |   | 241,639          |  
|Total Expenses                                           |   | 331,453        |   |   | 41,784         |   |   | 2,405,243        |  
|                                                         |   |                |   |   |                |   |   |                  |  
|Other income                                             |   | 6,981          |   |   | -              |   |   | 6,981            |  
|                                                         |   |                |   |   |                |   |   |                  |  
|Income(Loss) before provision for income
      tax       |   |                |   |   |                |   |   |                  |  
|and minority interest                                    |   | (324,472       | ) |   | (41,784        | ) |   | (2,382,574       | )
|                                                         |   |                |   |   |                |   |   |                  |  
|Income tax provision                                     |   | -              |   |   | -              |   |   | -                |  
|                                                         |   |                |   |   |                |   |   |                  |  
|Income(Loss) before minority interest                    |   | (324,472       | ) |   | (41,784        | ) |   | (2,382,574       | )
|                                                         |   |                |   |   |                |   |   |                  |  
|Minority interest                                        |   | -              |   |   | 16,287         |   |   | 240,333          |  
|                                                         |   |                |   |   |                |   |   |                  |  
|Net income(loss)                                         |   | (324,472       | ) |   | (25,497        | ) |   | (2,142,242       | )
|                                                         |   |                |   |   |                |   |   |                  |  
|Other comprehensive income- Foreign exchange gain (loss) |   | (10,913        | ) |   | 2,606          |   |   | (3,953           | )
|                                                         |   |                |   |   |                |   |   |                  |  
|Total comprehensive income                               |   | (335,385       | ) |   | (22,891        | ) |   | (2,146,195       | )
|                                                         |   |                |   |   |                |   |   |                  |  
|Basic and Fully Diluted Earnings per Share               | $ | -              |   | $ | -              |   | $ | (0.03            | )
|                                                         |   |                |   |   |                |   |   |                  |  
|Weighted average shares outstanding                      |   | 67,307,366     |   |   | 61,776,629     |   |   | 62,290,262       |  

See Notes to Financial Statements. 
  F-3

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CHANG-ON INTERNATIONAL, INC. AND SUBSIDIARIES (A
Development Stage Company) STATEMENTS OF CASH
FLOWS(UNAUDITED)

|                                                                       |   |               |   |   |               |   |   | For the Period   |  
|---------------------------------------------------------------------- | - | ------------- | - | - | ------------- | - | - | ---------------- | -
|                                                                       |   | For the Three |   |   | For the Three |   |   | November 26,     |  
|                                                                       |   | Months Ended  |   |   | Months Ended  |   |   | 2004 (inception) |  
|                                                                       |   | March 31,     |   |   | March 31,     |   |   | to March 31,     |  
|                                                                       |   | 2008          |   |   | 2007          |   |   | 2008             |  
|Operating Activities:                                                  |   |               |   |   |               |   |   |                  |  
|Net loss                                                               | $ | (324,472      | ) | $ | (25,497       | ) | $ | (2,142,242       | )
|Adjustments to reconcile net loss to net cash used by
      operations |   |               |   |   |               |   |   |                  |  
|Depreciation (cost and expense)                                        |   | 8,189         |   |   | 16,112        |   |   | 115,062          |  
|Impairment loss on intangible assets                                   |   | -             |   |   | -             |   |   | 241,639          |  
|Impairment loss on fixed assets                                        |   | -             |   |   | -             |   |   | 345,962          |  
|Gain on disposal of fixed assets                                       |   | -             |   |   | -             |   |   | (7,730           | )
|Stock compensation                                                     |   | 315,000       |   |   | -             |   |   | 1,482,167        |  
|Minority interest (loss)                                               |   | -             |   |   | (16,287       | ) |   | (240,333         | )
|Changes in operating assets and
      liabilities:                     |   |               |   |   |               |   |   |                  |  
|(Increase)/decrease in account receivable                              |   | -             |   |   | 7,381         |   |   | -                |  
|(Increase)/decrease in prepaid and other
      receivables             |   | 675           |   |   | (50,720       | ) |   | (285             | )
|(Increase)/decrease in inventory                                       |   | (27,968       | ) |   | (11,194       | ) |   | (78,670          | )
|Increase/(decrease) in accounts payable                                |   | 606           |   |   | 748           |   |   | 15,664           |  
|Increase/(decrease) in accrued expenses                                |   | 4,202         |   |   | (959          | ) |   | 5,345            |  
|Decrease in government subsidy                                         |   | -             |   |   | -             |   |   | (50,038          | )
|Net cash used by operating activities                                  |   | (23,768       | ) |   | (80,416       | ) |   | (313,458         | )
|                                                                       |   |               |   |   |               |   |   |                  |  
|Investing Activities                                                   |   |               |   |   |               |   |   |                  |  
|Purchase of fixed assets                                               |   | -             |   |   | (21,499       | ) |   | (708,266         | )
|Loan to shareholders                                                   |   | -             |   |   | -             |   |   | (24,659          | )
|Repay of loan to shareholders                                          |   | -             |   |   | -             |   |   | 24,659           |  
|Net cash (used) by investing activities                                |   | -             |   |   | (21,499       | ) |   | (708,266         | )
|                                                                       |   |               |   |   |               |   |   |                  |  
|Financing Activities                                                   |   |               |   |   |               |   |   |                  |  
|Distribution to shareholders                                           |   | -             |   |   | -             |   |   | (24,994          | )
|Capital contribution                                                   |   | -             |   |   | -             |   |   | 274,103          |  
|Proceeds from government subsidy                                       |   | -             |   |   | -             |   |   | 99,130           |  
|Proceeds from shareholder loans                                        |   | 137,569       |   |   | 41,875        |   |   | 780,204          |  
|Repay of loan to shareholders                                          |   | -             |   |   | -             |   |   | (12,299          | )
|Net cash provided by financing activities                              |   | 137,569       |   |   | 41,875        |   |   | 1,116,144        |  
|                                                                       |   |               |   |   |               |   |   |                  |  
|Effect of exchange rate changes on cash                                |   | (24,781       | ) |   | 3,120         |   |   | 1,981            |  
|                                                                       |   |               |   |   |               |   |   |                  |  
|Increase(decrease) in cash                                             |   | 89,020        |   |   | (56,920       | ) |   | 96,400           |  
|Cash at beginning of period                                            |   | 7,380         |   |   | 64,069        |   |   | -                |  
|Cash at end of period                                                  | $ | 96,400        |   | $ | 7,149         |   | $ | 96,400           |  
|                                                                       |   |               |   |   |               |   |   |                  |  
|Supplemental Cash Flow Information:                                    |   |               |   |   |               |   |   |                  |  
|Interest received (paid) during the year                               | $ | 4             |   | $ | 141           |   | $ | 264              |  
|Non-cash financing activities:                                         |   |               |   |   |               |   |   |                  |  
|Contribution of patent for
      equity                                | $ | -             |   | $ | -             |   | $ | 241,639          |  
|Contribution of fixed assets for equity                                | $ | -             |   | $ | -             |   | $ | 125,497          |  
|Stock issued in exchange for
      consulting services                 | $ | -             |   | $ | -             |   | $ | 2,400,000        |  

See Notes to Financial Statements. 
  F-4

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|Chang-On International, Inc.                  
|----------------------------------------------
|(An Development Stage Company)                
|Notes to the Consolidated Financial Statements
|(Expressed in US dollars)                     

Note 1- ORGANIZATION AND BUSINESS BACKGROUND

Chang-On International, Inc., (the Company) was incorporated
under the law of the State of Utah as Gold Standard, Inc. (Gold Standard) on
November 28, 1972 and changed its name to Chang-On International, Inc. on April
18, 2007. The Company is principally engaged in the business of waste recycling
and reutilization in the Peoples Republic of China (PRC) through its
majority-owned subsidiary, Chang-On International Limited (Chang-On).

Chang-On International Limited (Chang-On) was incorporated as
a Hong Kong limited liability company on September 8, 2006. Chang-On was formed
to facilitate a merger between a US company and a PRC business entity. On
December 29, 2006, under the terms of the Agreement for the Share Exchange, the
Company acquired all the outstanding capital stock of Chang-On in return for the
issuance of 60,000,000 shares of common stock.

Chang-On is a holding company that owns 61% of the registered
capital of Harbin Hongbo Environment Protection Material, Inc. (Hongbo) a
corporation formed under the laws of the PRC on November 26, 2004. Hongbo is
engaged in the business of manufacturing construction materials from waste
products. All Hongbos business is currently in the PRC.

The Company is considered to be a development stage company, as
it has not generated substantial revenues from operations.

Note 2- GOING CONCERN

As of March 31, 2008, the Company had incurred accumulated
losses of $2,142,242 from operations since inception and has limited operations.
The Company is actively pursuing additional funding and a potential merger or
acquisition candidate and strategic partners, which would enhance owners
investment.

Note 3- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

• Basis of presentation

These accompanying financial statements have been prepared in
accordance with generally accepted accounting principles in the United States of
America and are presented in U.S. dollars.

• Principles of Consolidation

The consolidated financial statements include the accounts of
the Company and all its majority-owned subsidiaries which require consolidation.
Inter-company transactions have been eliminated in consolidation. The functional
currency of the Companys operation is Reminbi (RMB)

F-5

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|Chang-On International, Inc.                  
|----------------------------------------------
|(An Development Stage Company)                
|Notes to the Consolidated Financial Statements
|(Expressed in US dollars)                     

Note 3- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)

• Use of estimates

In preparing these financial statements, management makes
estimates and assumptions that affect the reported amounts of assets and
liabilities in the balance sheets and revenues and expenses during the year
reported. Actual results may differ from these estimates.

• Revenue recognition

Revenues are recognized when finished products are shipped to
unaffiliated customers, both title and the risks and rewards of ownership are
transferred or services have been rendered and accepted, and collectibility is
reasonably assured.

• Inventories

Inventories are stated at the lower of cost or market. Cost is
determined using the average cost method. Costs include direct material, direct
labor and applicable manufacturing overhead.

• Property, Plant and Equipment

Property, plant and equipment are stated at cost. Depreciation
is computed using the straight-line method. Additions and improvement that
substantially extend the useful life of the properties, plan and equipment are
capitalized. Property, plant and equipment are depreciated to their estimated
residual values over their estimated useful lives, and reviewed for impairment
in accordance with Statement of Financial Accounting Standard No.144 Accounting
for the Impairment or Disposal of Long-Lived Assets.

• Intangible Assets

The Company periodically analyzes its intangible assets for
potential impairment, assessing the appropriateness of lives and recoverability
of unamortized balances through measurement of undiscounted operating cash flows
on a basis consistent with US GAAP.

• Related Parties

The caption "Due from shareholders" represents loans receivable
that are unsecured, non-interest bearing and have no fixed terms of repayment,
and therefore are not considered current assets.

The caption "Due to shareholders" represents loans payable that
are unsecured, non-interest bearing and have no fixed terms of repayment,
therefore, deemed payable on demand. Refer to Note 7.

• Income Tax

Income tax expense is based on reported income before income
taxes. Deferred income taxes reflect the effect of temporary differences between
assets and liabilities that are recognized for financial reporting purposes and
the amounts that are recognized for income tax purposes. In accordance with
Statement of Financial Accounting Standards (SFAS) No. 109, "Accounting for
Income Taxes," these deferred taxes are measured by applying currently enacted
tax laws.

The Company did not provide any current or deferred income tax
provision or benefit for any period presented to date because there is no income
from operations, with only minor timing differences with regard to the
depreciation of fixed assets. Management has determined that any deferred tax
asset or liability is inconsequential, and not material to the financial
statements.

F-6

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|Chang-On International, Inc.                  
|----------------------------------------------
|(An Development Stage Company)                
|Notes to the Consolidated Financial Statements
|(Expressed in US dollars)                     

Note 3- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(continued)

• Fair Value of Financial Instruments

The carrying value of financial instruments, including cash and
cash equivalents, receivables, accounts payable and accrued expenses,
approximates their fair value at December 31, 2007, due to the relatively
short-term nature of these instruments. Unless otherwise noted, it is management
opinion that the Company is not exposed to significant interest, currency or
credit risk arising from those financial instruments.

• Foreign currencies translation

The functional currency of the Company is the Reminbi (RMB).
The accompanying financial statements have been expressed in United States
dollars, the reporting currency of the Company. The balance sheet is translated
into United States dollars based on the rates of exchange ruling at the balance
sheet date. The statement of operations is translated using a weighted average
rate for the period. Translation adjustments are reflected as accumulated
comprehensive income in shareholders equity.

• New Accounting Pronouncements

In February 2007, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 159 (SFAS 159), The
Fair Value Option for Financial Assets and Financial LiabilitiesIncluding an
amendment of FASB Statement No. 115. This Statement permits entities to choose
to measure many financial instruments and certain other items at fair value. The
objective is to improve financial reporting by providing entities with the
opportunity to mitigate volatility in reported earnings caused by measuring
related assets and liabilities differently without having to apply complex hedge
accounting provisions. This Statement is expected to expand the use of fair
value measurement, which is consistent with the Boards long-term measurement
objectives for accounting for financial instruments. SFAS 157 is effective for
financial statements issued for fiscal years beginning after November 15, 2007.
The adoption of this statement is not expected to have a material effect on the
Companys consolidated financial statements.

On December 4, 2007, the FASB issued SFAS No. 160,
Noncontrolling interest in Consolidated Financial Statements(SFAS No.
160). SFAS No. 160 requires all entities to report noncontrolling (minority)
interests in subsidiaries as equity in the consolidated financial statements.
The statement establishes a single method of accounting for changes in a
parents ownership interest in a subsidiary that do not result in
deconsolidation and expands disclosures in the consolidated financial
statements. SFAS No. 160 is effective for fiscal years beginning after December
15, 2008 and interim periods within those fiscal years. We have not yet
determined the impact of the adoption of SFAS No. 160 on our consolidated
financial statements and footnote disclosures.

On December 4, 2007, the FASB issued SFAS No.141R, Business
  Combinations (SFAS No. 141R). SFAS No. 141R requires the acquiring entity
  in a business combination to recognize all the assets acquired and liabilities
  assumed, establishes the acquisition date fair value as the measurement objective
  for all assets acquired and liabilities assumed, and requires the acquirer to
  expand disclosures about the nature and financial effect of the business combination.
  SFAS No. 141R is effective for business combinations for which the acquisition
  date is on or after the beginning of the first annual reporting period beginning
  on or after December 15, 2008. We have not yet determined the impact of the
  adoption of SFAS No. 141R on our consolidated financial statements and footnote
  disclosures.

• Interim Financial Information

The unaudited interim financial statements have been prepared
  in accordance with United States generally accepted accounting principles for
  interim financial information. In the opinion of management, all adjustments
  considered necessary for a fair presentation of the financial position, results
  of operations and cash flows as at March 31, 2008, and 2007, have been included.
  Readers of these financial statements should note that the interim results for
  the three months period ended March 31, 2008, are not necessarily indicative
  of the results that may be expected for the fiscal year as a whole.

F-7

---

|Chang-On International, Inc.                  
|----------------------------------------------
|(An Development Stage Company)                
|Notes to the Consolidated Financial Statements
|(Expressed in US dollars)                     

Note 4- CASH

|Cash consists of the following: |   | March 31, |  |   | December 31, | 
|------------------------------- | - | --------- |  | - | ------------ | 
|                                |   | 2008      |  |   | 2007         | 
|                                |   |           |  |   |              | 
|Cash on hand                    | $ | 94,388    |  | $ | 5,246        | 
|Cash in bank                    |   | 2,012     |  |   | 2,134        | 
|                                | $ | 96,400    |  | $ | 7,380        | 

Note 5- PROPERTY, PLANT AND EQUIPMENT

Property, Plant and Equipment consist of the following:

|                               |   | March 31, |   |   | December 31, |  
|------------------------------ | - | --------- | - | - | ------------ | -
|                               |   | 2008      |   |   | 2007         |  
|                               |   |           |   |   |              |  
|Machinery and Equipment        | $ | 324,940   |   | $ | 241,332      |  
|Office Equipment               |   | 7,469     |   |   | 7,179        |  
|Vehicle                        |   | 6,703     |   |   | 6,443        |  
|Construction in Progress       |   | 133,185   |   |   | 199,056      |  
|                               |   |           |   |   |              |  
|Less: Accumulated Depreciation |   | (63,537   | ) |   | (53,035      | )
|                               | $ | 408,760   |   | $ | 400,965      |  

Depreciation is calculated on a straight-line basis over the
estimated useful life of the assets. The annual percentages applied are:

Machinery and Equipment
    10%Office Equipment
    20%Vehicle
    10%


Note 6- GOVERNMENT SUBSIDY

During 2005, the Company received approximately $100,000 in a
government subsidy from the Finance Department of Heilongjiang Province to be
used for research and development activities. This subsidy reduces the cost of
the Companys research and development activities. Any unused portion of the
subsidy has to be returned to the province. At March 31, 2008, the Company had
not used $54,638 of the subsidy.

F-8

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|Chang-On International, Inc.                  
|----------------------------------------------
|(An Development Stage Company)                
|Notes to the Consolidated Financial Statements
|(Expressed in US dollars)                     

Note 7- DUE TO SHAREHOLDERS

Due to Shareholders consists of the following:

March 31,
      
      
      December 31,2008
      
      
      2007Li, Yukun
      $
      34,555
      
      $
      15,395Li, Guomin
      
      758,108
      
      
      639,699Zhou, Qingwei
      
      1,923
      
      
      1,923$
      794,586
      
      $
      657,017


Li Guomin had been a shareholder of Hongbo since November 2006.
Zhou, Qingwei has been a shareholder of Chang-On since September 2006. Under the
Agreement for the Share Exchange on December 29, 2006, Li, Guomin and Zhou,
Qingwei acquired 17,400,000 and 36,600,000 shares of Gold Standard, Inc.
respectively.

Note 8- COMMON STOCK

Under the Agreement for the Share Exchange, Gold Standard, Inc.
issued to the shareholders of Chang-On 60,000,000 shares of common stock. With
1,307, 366 shares issued and outstanding before the shares exchange. On March
23, 2007, the Company filed S-8 to register 6,000,000 common shares for stock
based compensation (Note 9). There is a total of 67,307,366 shares issued and
outstanding for the Company as of March 31, 2008.

Note 9-STOCK BASED COMPENSATION

On January 19, 2007, the Company entered into an agreement with
Li, Yaru for legal services in PRC for a term of two years, pursuant to which
the Company issued 900,000 shares of common stock in Apr 2007. The fair market
value amounted to $360,000, which is being amortized over the term of the
agreement.

On January 31, 2007, the Company entered into an agreement with
Canyon Red Group Limited, an incorporation of British Virgin Island for advisory
services on the marketing strategy and implementation of corporate identity for
a term of twelve months, pursuant to which the Company issued 700,000 shares of
common stock in Apr 2007. The fair market value amounted to $280,000, which is
being amortized over the term of the agreement.

On March 30, 2007, the Company entered into an agreement with
Mu, Shiwei for internal audit services for a term of three years, pursuant to
which the Company issued 1,500,000 shares of common stock in Apr 2007. The fair
market value amounted to $600,000, which is being amortized over the term of the
agreement.

F-9

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|Chang-On International, Inc.                  
|----------------------------------------------
|(An Development Stage Company)                
|Notes to the Consolidated Financial Statements
|(Expressed in US dollars)                     

Note 9-STOCK BASED COMPENSATION (continued)

On March 30, 2007, the Company entered into an agreement with I
&V Limited, an incorporation of British Virgin Island for advisory services
on the sales and distribution channels of certain environmental friendly
construction materials in Northern China for a term of eighteen months, pursuant
to which the Company issued 1,000,000 shares of common stock in Apr 2007. The
fair market value amounted to $400,000, which is being amortized over the term
of the agreement.

On March 30, 2007, the Company entered into an agreement with
Billion Profit International Holdings Limited, an incorporation of British
Virgin Island for advisory services on the sales and distribution channels of
certain environmental friendly construction materials in Hainan Province of
China for a term of twelve months, pursuant to which the Company issued 700,000
shares of common stock in Apr 2007. The fair market value amounted to $280,000,
which is being amortized over the term of the agreement.

On March 30, 2007, the Company entered into an agreement with
Prospect Bright Holdings Limited, an incorporation of British Virgin Island for
advisory services on the sales and distribution channels of certain
environmental friendly construction materials in Northeast China for a term of
twenty-four months, pursuant to which the Company issued 1,200,000 shares of
common stock in Apr 2007. The fair market value amounted to $480,000, which is
being amortized over the term of the agreement.

For the three months ended March 31, 2008, $315,000 of the
above stock compensation was charged to operating expenses and $925,833 was
recorded as deferred compensation.

Note 10- GEOGRAPHIC INFORMATION

All of the Company's sales and all of the Company's long-lived
assets are located in the PRC.

Note 11- OPERATING RISK

Concentrations of credit risk

Financial instruments that subject the Company to
concentrations of credit risk consist primarily of cash and cash equivalents.
The Company maintains its cash and cash equivalents with high-quality
institutions to mitigate the fact there is no deposit insurance.

Country risk

The Company has significant investments in the PRC. The
operating results of the Company may be adversely affected by changes in the
political and social conditions in the PRC and by changes in Chinese government
policies with respect to laws and regulations, anti-inflationary measures,
currency conversion and remittance abroad, and rates and methods of taxation,
among other things. There can be no assurance; however, those changes in
political and other conditions will not result in any adverse impact.

F-10

---

|Chang-On International, Inc.                  
|----------------------------------------------
|(An Development Stage Company)                
|Notes to the Consolidated Financial Statements
|(Expressed in US dollars)                     

NOTE 12- EMPLOYEE BENEFIT PLAN

Full time employees of the Company participate in a government
mandated multi-employer defined contribution plan pursuant to which certain
pension benefits, medical care, unemployment insurance, employee housing fund
and other welfare benefits are provided to employees. Chinese labor regulations
require the Company to accrue for these benefits based on certain percentages of
the employees' salaries. The total provisions for such employee benefits were $0
for the three months ended March 31, 2008 and 2007.

NOTE 13- RESTRICTED RETAINED EARNINGS

Pursuant to the laws applicable to the PRC, PRC entities must
make appropriations from after-tax profit to the non-distributable statutory
surplus reserve fund. Subject to certain cumulative limits, the statutory
surplus reserve fund requires annual appropriations of 10% of after-tax profit
until the aggregated appropriations reach 50% of the registered capital (as
determined under accounting principles generally accepted in the PRC ("PRC
GAAP") at each year-end). For foreign invested enterprises and joint ventures in
the PRC, annual appropriations should be made to the reserve fund. For foreign
invested enterprises, the annual appropriation for the reserve fund cannot be
less than 10% of after-tax profits until the aggregated appropriations reach 50%
of the registered capital (as determined under PRC GAAP at each year-end). The
Company did not make any appropriations to the reserve funds mentioned above due
to lack of profit after tax since commencement of operations.

F-11

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

Forward Looking Statements

This report on Form 10-Q contains certain forward-looking
statements. All statements other than statements of historical fact are
forward-looking statements for purposes of these provisions, including any
projections of earnings, revenues, or other financial items; any statements of
the plans, strategies, and objectives of management for future operation; any
statements concerning proposed new products, services, or developments; any
statements regarding future economic conditions or performance; statements of
belief; and any statement of assumptions underlying any of the foregoing. Such
forward-looking statements are subject to inherent risks and uncertainties, and
actual results could differ materially from those anticipated by the
forward-looking statements.

These forward-looking statements involve significant risks and
uncertainties, including, but not limited to, the following: competition,
promotional costs, and risk of declining revenues. Our actual results could
differ materially from those anticipated in such forward-looking statements as a
result of a number of factors. These forward-looking statements are made as of
the date of this filing, and we assume no obligation to update such
forward-looking statements. The following discusses our financial condition and
results of operations based upon our consolidated financial statements which
have been prepared in conformity with accounting principles generally accepted
in the United States. It should be read in conjunction with our financial
statements and the notes thereto included elsewhere herein.

Business Overview

We were incorporated under the laws of the State of Utah as
Gold Standard, Inc., on November 28, 1972 and changed our name to Chang-On
International, Inc. on April 18, 2007. We are principally engaged in the
business of waste recycling and reutilization in the Peoples Republic of China
(China) through our wholly owned subsidiary, Chang-On International Limited, a
company incorporated under the laws of Hong Kong as a limited liability company
on September 8, 2006 (Chang-On HK).

Chang-On HK is a holding company with one asset: 61% of the
equity in Harbin Hongbo Environment Protection Material, Inc. (Hongbo), a
corporation organized under the laws of China. The remaining 39% of the
registered capital of Hongbo is owned by Guomin Li (29%) and Su Yu (10%), who
are members of our Board of Directors. Hongbo was incorporated in November 2004.
Until September 2006, it was entirely engaged in developing its technology and
the factory where its products will be produced. From September to December
2006, it completed its first sales, realizing $43,023 in revenue from the sale
of its products. Because Hongbo has not yet produced significant revenues, it is
still a development stage company for financial reporting purposes.

3

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Hongbos business is the development and production of products
utilizing SF synthetic material. SF material is a composite of waste plastic and
coal ash. We currently obtain the waste plastic from six recycling facilities in
Harbin and we obtain the coal ash from the Harbin Power Station. Hongbo removes
these two burdens from the environment and transforms them into a highly
variable construction material. In the process, we produce no pollution, and
incur insignificant expenses relating to compliance with environmental
regulations.

Liquidity and Capital Resources

As of March 31, 2008, we had cash of $96,400 and a working
capital deficiency of $694,879. Our accumulated deficit was $2,142,242 at March
31, 2008. Our net loss of $324,472 for the three months ended March 31, 2008 was
mostly funded by shareholder loans. During the three months ended March 31,
2008, we did not raise any money in equity financing. During the three months
ended March 31, 2008 our cash position increased by $89,020, mainly due to the
cash provided by proceeds from shareholder loans.

We used net cash of $23,768 in operating activities for the
three months ended March 31, 2008 compared to net cash of $80,416 in operating
activities for the same period in 2007. We did not use net cash in investing
activities for the three months ended March 31, 2008 compared to net cash of
$21,449 in purchase of fixed assets for our manufacturing plant during the same
period in 2007. We received net cash of $137,569 from financing activities for
the three months ended March 31, 2008 compared to net cash of $41,875 during the
same period in 2007. The effect of exchange rates on cash was a decrease in cash
of $24,781 for the three months ended March 31, 2008. The effect of exchange
rates on cash was an increase in cash of $3,120 for the three months ended March
31, 2007.

During the three months ended March 31, 2008 our monthly cash
requirement was approximately $7,900, compared to approximately $34,000 for the
same period in 2007. At the end of the period as at March 31, 2008, we had cash
of $96,400, which will cover our costs for twelve months according to our
current monthly burn rate.

4

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We expect to require a total of approximately $1,800,000 set
out as follows to fully carry out our business plan over the next twelve months
beginning July 2008.

|Description                                                   |  | Estimated | 
|------------------------------------------------------------- |  | --------- | 
|                                                              |  | Expenses  | 
|                                                              |  | ($)       | 
|Research and development costs for further
      products and |  | 250,000   | 
|manufacturing processes                                       |  |           | 
|Consulting fees (including legal and auditing fees)           |  | 100,000   | 
|Rent expenses                                                 |  | 20,000    | 
|Marketing expenses                                            |  | 400,000   | 
|Investor relations
      costs                                |  | 80,000    | 
|Equipment purchases for Hongbos factory                      |  | 350,000   | 
|Other
      administrative expenses                           |  | 80,000    | 
|Total                                                         |  | 1,180,000 | 

While we are currently in relatively good short-term financial
  standing, we anticipate that our future revenues will be nominal and we do not
  anticipate enough positive internal operating cash flow until we can generate
  substantial revenues, which may take the next few years to fully realize. There
  is no assurance we will achieve profitable operations.

We have historically financed our operations primarily by cash
  flows generated from the sale of our equity securities and through cash infusions
  from officers and affiliates in exchange for debt and/or common stock. No officer
  or affiliate has made any commitment or is obligated to continue to provide
  cash through loans or purchases of equity.

We estimate that we require approximately an additional
$1,080,000 (total requirements of $1,180,000 less cash of $96,400) to carry out
our planned business operations and expansion over the next 12 months.

We intend to meet the balance of our cash requirements for the
next 12 months through external sources: a combination of debt financing and
equity financing through private placements. Currently we are active in
contacting broker/dealers in North America and elsewhere regarding possible
financing arrangements. However, we currently do not have any arrangements in
place for the completion of any further private placement financings and there
is no assurance that we will be successful in completing any further private
placement financings. If we are unsuccessful in raising enough money through
future capital raising efforts, we may review other financing possibilities such
as bank loans. If we are unsuccessful in raising enough money, we may not fully
carry out our business plan.

5

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Results of Operations for the three months ended March 31,
2008

Revenues

We did not generate any revenues during the three months ended
March 31, 2008 or during the three months ended March 31, 2007. The lack of
revenues was a product of a lack of sales of our SF building materials. As we
are a development stage company, our revenue streams are not established and
thus our product sales are unstable. Since inception on November 26, 2004 to
March 31, 2008 we generated total revenues of $57,484.

Net Loss

We incurred net loss of $324,472 for the three months ended March
  31, 2008, compared to net loss of $25,497 for the same period in 2007. The increase
  of $298,975 in net loss was a result of the recognition of $315,000 of previously
  issued stock-based compensation during the three months ended March 31, 2008.
  Since inception on November 26, 2004 to March 31, 2008, we incurred net loss
  of $2,142,242.

Our net loss per share was $nil for the three months ended March
  31, 2008 and the same for the same period in 2007.

Expenses

Our total operating expenses increased by $289,669 to $331,453
  for the three months ended March 31, 2008 from $41,784 for the same period in
  2007. The reason for the drastic increase in operating expenses for the period
  ended March 31, 2008 as compared to the same period in 2007 was the recognition
  $315,000 of previously issued stock based compensation. Since inception on November
  26, 2004 to March 31, 2008, we incurred total operating expenses of $2,405,243.

Our general and administrative expenses (net of stock-based
compensation) decreased $25,331 to $16,453 for the three months ended March 31,
2008 from $41,784 for the same period in 2007. The decrease in general and
administrative expenses was mainly due to a decrease in water, electricity and
gas costs as well as lower depreciation of our assets. Our general and
administrative expenses consist of transportation, utilities, salaries,
management fees, and legal and auditing consulting fees.

Our stock compensation increased $315,000 to $315,000 for the
three months ended March 31, 2008 from $nil for the same period in 2007. Since
inception on November 26, 2004 to March 31, 2008, we incurred stock compensation
expenses of $1,484,167.

We did not incur research and development expenses for the
three months ended March 31, 2008 or for the three months ended March 31, 2007.
Since our inception on November 26, 2004 until March 31, 2008 we spent $22,578
on research and development. Going forward, we anticipate that we will spend
approximately $250,000 on research and development during the next 12
months.

6

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Inflation

The amounts presented in the financial statements do not
provide for the effect of inflation on our operations or financial position. The
net operating losses shown would be greater than reported if the effects of
inflation were reflected either by charging operations with amounts that
represent replacement costs or by using other inflation adjustments.

Off-Balance Sheet Arrangements

As of March 31, 2008, we had no off balance sheet transactions
that have or are reasonably likely to have a current or future effect on our
financial condition, changes in our financial condition, revenues or expenses,
results of operations, liquidity, capital expenditures or capital resources.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISKS.

Not applicable.

ITEM 4. CONTROLS AND PROCEDURES.

Not applicable.

ITEM 4T. CONTROLS AND PROCEDURES.

Our management, with the participation of our Chief Executive
Officer and Chief Financial Officer, has evaluated the effectiveness of our
disclosure controls and procedures as of March 31, 2008. Based on this
evaluation, our management has concluded that our disclosure controls and
procedures adequately ensure that information required to be disclosed in our
reports filed or submitted under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the SEC's rules and
forms. The evaluation did not identify any change in our internal control over
financial reporting that occurred during the three months ended March 31, 2008
that has materially affected or is reasonably likely to materially affect our
internal control over such reporting.

The term "internal control over financial reporting" is defined
as a process designed by, or under the supervision of, the registrant's
principal executive and principal financial officers, or persons performing
similar functions, and effected by the registrant's Board of Directors,
management and other personnel, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting
principles and includes those policies and procedures that:

7

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|(1) | Pertain to the maintenance of records that in reasonable
      detail accurately and fairly reflect the transactions and dispositions of
      the assets of the registrant;                                                                                                                                                                                                   
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                
|(2) | Provide reasonable assurance that transactions are
      recorded as necessary to permit preparation of financial statements in
      accordance with generally accepted accounting principles, and that
      receipts and expenditures of the registrant are being made only in
      accordance with authorizations of management and directors of the
      registrant; and
|    |                                                                                                                                                                                                                                                                                                                                                                                
|(3) | Provide reasonable assurance regarding prevention or
      timely detection of unauthorized acquisition, or use or disposition of the
      registrant's assets that could have a material effect on the financial
      statements.                                                                                                                                           

Managements Report on Internal Control over Financial
Reporting

Our management is responsible for establishing and maintaining
adequate internal control over financial reporting (as defined in Exchange Act
Rule 13a-15(f)). Our internal control over financial reporting is designed to
provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles.

Because of our inherent limitations, our internal control over
financial reporting may not prevent or detect misstatements. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk
that controls may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate.

Our Chief Executive Officer and Chief Financial Officer
assessed the effectiveness of our internal control over financial reporting as
of March 31, 2008. In making this assessment, our management used the criteria
set forth by the Committee of Sponsoring Organizations of the Treadway
Commission in Internal Control  Integrated Framework.

Management conducted a walk through of the procedures and
controls documented in this memo or relied on personal knowledge where no walk
through was possible in order to test the effectiveness of our internal control
over financial reporting.

Management believes that our internal control over financial
reporting is effective at preventing or detecting a material misstatement in the
financial statements.

This annual report does not include an attestation report of
our registered public accounting firm regarding internal control over financial
reporting. Management's report was not subject to attestation by our registered
public accounting firm pursuant to temporary rules of the Securities and
Exchange Commission that permit us to provide only management's report in this
annual report.

We did not change our internal control over financial reporting
during our last fiscal quarter of 2007 in connection with the results of
Managements report, nor have we made any changes to our internal control over
financial reporting as of March 31, 2008.

8

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Changes in Internal Control over Financial
Reporting

Our Chief Executive Officer and Chief Financial Officer have
concluded that there have not been any changes in our internal control over
financial reporting during the three months ended March 31, 2008 that have
materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting.

PART II  OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Management is not aware of any legal proceedings contemplated
by any governmental authority or any other party against us. None of our
directors, officers or affiliates are (i) a party adverse to us in any legal
proceedings, or (ii) have an adverse interest to us in any legal proceedings.
Management is not aware of any other legal proceedings that have been threatened
against us.

ITEM 1A. RISK FACTORS.

Not applicable.

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

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

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

None.

ITEM 5. OTHER INFORMATION

None.

9

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ITEM 6. EXHIBITS

|ExhibitNumber | **Exhibit** **Description**                                                                                                                                                                               
|------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|31.1          | Certification of the
      Chief Executive Officer and Chief Financial Officer Pursuant to Rule 13a-14
      or 15d-14 of the Exchange Act pursuant to Section 302 of the Sarbanes-Oxley
      Act of 2002
|32.1          | Certification
      of the Chief Executive Officer and Chief Financial Officer Pursuant to 18
      U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-
      Oxley Act of 2002       

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the
Exchange Act, the Registrant has duly caused this Quarterly Report to be signed
on its behalf by the undersigned thereunto duly authorized.

|                   | Chang-On International, Inc.               
|------------------ | -------------------------------------------
|                   |                                            
|                   | By: /s/Guomin Li                           
|                   |                                            
|Date: May 20, 2008 | Guomin Li                                  
|                   | President, Chief Executive Officer         
|                   | Chief Financial Officer, Principal         
|                   | Accounting Officer, Director               
|                   | (Authorized Officer and Principal Financial
|                   | Officer)                                   

10

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