---

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549Form 10-Q(Mark
One)[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended
March 31, 2011or[ ] TRANSITION REPORT UNDER
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the
transition period from ______________to ______________Commission File
Number 001-08937CHANG-ON INTERNATIONAL,
INC.(Exact name of registrant as specified in its
charter)

|Utah                                                                 | 87-0302579                       
|-------------------------------------------------------------------- | ---------------------------------
|(State or other jurisdiction of incorporation or
      organization) | (IRS Employer Identification No.)
|                                                                     |                                  
|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)N/A(Former name, former address
and former fiscal year, if changed since last report)

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.
[X] YES      [ ] NO

Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation
S-T (§232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such
files).
[ ] YES      [ ] NO

Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or a small
reporting company. See the definitions of large accelerated filer,
accelerated filer and smaller reporting company in Rule 12b-2 of the
Exchange Act.

Large accelerated filer
    [ ]
    
    Accelerated filer [ ]Non-accelerated filer
    [ ]
    (Do not check if a smaller reporting company)
    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      [X] NO

APPLICABLE ONLY TO ISSUERS INVOLVED IN
BANKRUPTCYPROCEEDINGS 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 Exchange Act after the
distribution of securities under a plan confirmed by a court.
[ ] YES      [ ] NO

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the
issuers classes of common stock, as of the latest practicable
date.67,307,366 common shares issued and outstanding as of May 16,
2011.

1

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Table of Contents

|PART
    I  FINANCIAL INFORMATION | 3                                                                                                        
|---------------------------------- | ---------------------------------------------------------------------------------------------------------
|                                   | Item
      1. Financial Statements                                                                       
|                                   | Item
      2. Management's Discussion and Analysis of Financial Condition and Results
      of Operations
|                                   | Item
      3. Quantitative and Qualitative Disclosures About Market Risk                                 
|                                   | Item
      4. Controls and Procedures                                                                    
|PART
    II  OTHER INFORMATION    | 12                                                                                                       
|                                   | Item
      1. Legal Proceedings                                                                          
|                                   | Item
      2. Unregistered Sales of Equity Securities                                                    
|                                   | Item
      3. Defaults Upon Senior Securities                                                            
|                                   | Item
      4. (Removed and Reserved)                                                                     
|                                   | Item
      5. Other Information                                                                          
|                                   | Item
      6. Exhibits                                                                                   
|SIGNATURES                         | 14                                                                                                       

2

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PART I  FINANCIAL INFORMATION

Item 1. Financial Statements

The unaudited interim consolidated financial statements of
Chang-On International, Inc. (we, us, our and our company) follow. All
currency references in this report are to U.S. dollars unless otherwise
indicated.

3

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CHANG-ON INTERNATIONAL, INC.(A Development Stage
Company )FINANCIAL STATEMENTSMARCH 31,
2011

4

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CHANG-ON INTERNATIONAL, INC.(A Development Stage
Company)INDEX TO MARCH 31, 2011 FINANCIAL
STATEMENTS

****

|                                                                        | PAGE  
|----------------------------------------------------------------------- | ------
|                                                                        |       
|CONSOLIDATED BALANCE
      SHEETS                                       | F2    
|                                                                        |       
|CONSOLIDATED
      STATEMENTS OF OPERATIONS (UNAUDITED)                 | F3    
|                                                                        |       
|CONSOLIDATED
      STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED)         | F4    
|                                                                        |       
|CONSOLIDATED
      STATEMENTS OF CHANGES IN EQUITY(DEFICIT) (UNAUDITED) | F5    
|                                                                        |       
|CONSOLIDATED
      STATEMENTS OF CASH FLOWS (UNAUDITED)                 | F6    
|                                                                        |       
|NOTES TO
      CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)            | F7-F16

F-1

---

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

|                                                                                                                                                                        |   |             |   |   | December   |  
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ----------- | - | - | ---------- | -
|                                                                                                                                                                        |   | March 31,   |   |   | 31,        |  
|                                                                                                                                                                        |   | 2011        |   |   | 2010       |  
|                                                                                                                                                                        |   | (Unaudited) |   |   |            |  
|ASSETS                                                                                                                                                                  |   |             |   |   |            |  
|Current Assets                                                                                                                                                          |   |             |   |   |            |  
|Cash                                                                                                                                                                    | $ | 3,091       |   | $ | 3,924      |  
|Prepaid and other receivables                                                                                                                                           |   | 305         |   |   | 303        |  
|Total Current Assets                                                                                                                                                    |   | 3,396       |   |   | 4,227      |  
|Property, plant and equipment, net (Note 4)                                                                                                                             |   | 5,256       |   |   | 5,759      |  
|                                                                                                                                                                        |   |             |   |   |            |  
|Total
      Assets                                                                                                                                                      | $ | 8,652       |   | $ | 9,986      |  
|LIABILITIES                                                                                                                                                             |   |             |   |   |            |  
|Current Liabilities                                                                                                                                                     |   |             |   |   |            |  
|Trade accounts payable                                                                                                                                                  | $ | 725         |   | $ | 719        |  
|Accrued expenses                                                                                                                                                        |   | 6,207       |   |   | 26,181     |  
|Deferred
      income-government grants (Note 5)                                                                                                                        |   | 113,477     |   |   | 112,554    |  
|Due to shareholders (Note 6)                                                                                                                                            |   | 320,883     |   |   | 293,037    |  
|Total Current Liabilities                                                                                                                                               |   | 441,292     |   |   | 432,491    |  
|Total
      Liabilities                                                                                                                                                 |   | 441,292     |   |   | 432,491    |  
|EQUITY                                                                                                                                                                  |   |             |   |   |            |  
|Chang-On International, Inc Stockholders' Equity:                                                                                                                       |   |             |   |   |            |  
|Common stock,
      par value $0.001,
      authorized              100,000,000
      shares, issue and
      outstanding              67,307,366
      shares (Note 7) |   | 67,307      |   |   | 67,307     |  
|Additional paid in capital                                                                                                                                              |   | 3,067,959   |   |   | 3,067,959  |  
|Deficit                                                                                                                                                                 |   | (3,414,427  | ) |   | (3,408,779 | )
|Deferred Compensation (Note 8)                                                                                                                                          |   | -           |   |   | -          |  
|Accumulated
      comprehensive income                                                                                                                                  |   | (22,021     | ) |   | (20,281    | )
|Total
      Chang-On International, Inc Stockholders' equity                                                                                                            |   | (301,182    | ) |   | (293,794   | )
|Noncontrolling interest                                                                                                                                                 |   | (131,458    | ) |   | (128,711   | )
|                                                                                                                                                                        |   |             |   |   |            |  
|Total Equity                                                                                                                                                            |   | (432,640    | ) |   | (422,505   | )
|                                                                                                                                                                        |   |             |   |   |            |  
|Total Liabilities and Equity                                                                                                                                            | $ | 8,652       |   | $ | 9,986      |  

See accompanying notes to consolidated financial
statements

F-2

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

|                                                                  |   | For the Three Months Ended |   |              | For the Period |  
|----------------------------------------------------------------- | - | -------------------------- | - | ------------ | -------------- | -
|                                                                  |   |                            |   | November 26, |               
|                                                                  |   |                            |   |              |                |  
|                                                                  |   |                            |   |              |                |  
|                                                                  |   | March 31,                  |   |              | March 31,      |  
|                                                                  |   | 2011                       |   |              | 2010           |  
|Net sales                                                         | $ | -                          |   | $            | -              |  
|Cost of sales                                                     |   | -                          |   |              | -              |  
|Gross profit                                                      |   | -                          |   |              | -              |  
|Expenses                                                          |   |                            |   |              |                |  
|Salaries                                                          |   | 3,648                      |   |              | 3,515          |  
|Transportation                                                    |   | -                          |   |              | -              |  
|Office equipment                                                  |   | -                          |   |              | -              |  
|Water, electricity and gas                                        |   | -                          |   |              | 7,323          |  
|                                                                  |   |                            |   |              |                |  
|Other expenses                                                    |   | 87                         |   |              | 190            |  
|Advertisement                                                     |   | -                          |   |              | -              |  
|Rent expense                                                      |   | -                          |   |              | -              |  
|Depreciation                                                      |   | 548                        |   |              | 8,645          |  
|R & D expense                                                     |   | -                          |   |              | -              |  
|Repairs and maintenance                                           |   | -                          |   |              | -              |  
|Gain on disposal of fixed assets                                  |   | -                          |   |              | -              |  
|Stock compensation                                                |   | -                          |   |              | 50,000         |  
|Professional fees                                                 |   | 3,000                      |   |              | 3,000          |  
|Fixed assets impairment                                           |   | -                          |   |              | -              |  
|Intangibles writedown                                             |   | -                          |   |              | -              |  
|Inventory obsolescence                                            |   | -                          |   |              | -              |  
|Total Expenses                                                    |   | 7,283                      |   |              | 72,673         |  
|Other income                                                      |   | -                          |   |              | -              |  
|                                                                  |   |                            |   |              |                |  
|Loss before provision for income tax                              |   | (7,283                     | ) |              | (72,673        | )
|Income tax provision                                              |   | -                          |   |              | -              |  
|Net loss                                                          |   | (7,283                     | ) |              | (72,673        | )
|Less: Net loss attributable to the
      noncontrolling interest  |   | 1,635                      |   |              | 7,634          |  
|Net loss attributable to Chang-On
      International, Inc common |   |                            |   |              |                |  
|Stockholders                                                      | $ | (5,648                     | ) |              | (65,039        | )
|Basic and Fully Diluted Earnings per Share                        | $ | (0.00                      | ) | $            | (0.00          | )
|Weighted average shares outstanding                               |   | 67,307,366                 |   |              | 67,307,366     |  

See accompanying notes to consolidated financial
statements

F-3

---

|CHANG-ON INTERNATIONAL, INC.                 
|---------------------------------------------
|(A Development Stage Company)                
|CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
|(UNAUDITED)                                  

|                                                                     |   |                            |   |   |                |   |   | For the Period    |  
|-------------------------------------------------------------------- | - | -------------------------- | - | - | -------------- | - | - | ----------------- | -
|                                                                     |   |                            |   |   |                |   |   | November 26, 2004 |  
|                                                                     |   | For the Three Months Ended |   |   | (inception) to |  
|                                                                     |   | March 31,                  |   |   | March 31,      |  
|                                                                     |   | 2011                       |   |   | 2010           |   |   | 2011              |  
|Net loss                                                             | $ | (7,283                     | ) | $ | (72,673        | ) | $ | (4,011,775        | )
|Other comprehensive income(loss), net of tax:                        |   |                            |   |   |                |   |   |                   |  
|Foreign currency translation
      gain(loss)                        |   | (2,852                     | ) |   | 14             |   |   | (18,551           | )
|                                                                     |   |                            |   |   |                |   |   |                   |  
|Comprehensive loss                                                   |   | (10,135                    | ) |   | (72,659        | ) |   | (4,030,326        | )
|Comprehensive loss attributable to the
      noncontrolling interest |   | 2,747                      |   |   | 7,629          |   |   | 324,559           |  
|                                                                     |   |                            |   |   |                |   |   |                   |  
|Comprehensive loss attributable to WWBP                              | $ | (7,388                     | ) | $ | (65,030        | ) | $ | (3,705,767        | )

See accompanying notes to consolidated financial
statements

F-4

---

|CHANG-ON INTERNATIONAL, INC.                                
|------------------------------------------------------------
|(A Development Stage Company)                               
|CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
      (DEFICIT)
|FOR THE THREE MONTHS ENDED MARCH 31, 2011                   
|(UNAUDITED)                                                 

|                                               |   |          |   |   |               |   | Chang-On International, Inc. Stockholders |  |   |            | 
|---------------------------------------------- | - | -------- | - | - | ------------- | - | ----------------------------------------- |  | - | ---------- | 
|                                               |   |          |   |   |               |   | Common Stock                              |  |   | Additional | 
|                                               |   |          |   |   | Comprehensive |   | $0.001 Par Value                          |  |   | Paid-in    | 
|                                               |   | Total    |   |   | Income        |   | Shares                                    |  |   | Amount     | 
|                                               |   |          |   |   |               |   |                                           |  |   |            | 
|Balance December 31, 2010                      | $ | (422,505 | ) |   |               |   | 67,307,366                                |  | $ | 67,307     | 
|Comprehensive loss:                            |   |          |   |   |               |   |                                           |  |   |            | 
|                                               |   |          |   |   |               |   |                                           |  |   |            | 
|Net loss                                       |   | (7,283   | ) |   | (7,283        | ) |                                           |  |   |            | 
|Other comprehensive loss, net
      of tax:    |   |          |   |   |               |   |                                           |  |   |            | 
|                                               |   |          |   |   |               |   |                                           |  |   |            | 
|Foreign currency translation
      gain (loss) |   | (2,852   | ) |   | (2,852        | ) |                                           |  |   |            | 
|                                               |   |          |   |   |               |   |                                           |  |   |            | 
|Comprehensive loss                             |   | (10,135  | ) | $ | (10,135       | ) |                                           |  |   |            | 
|                                               |   |          |   |   |               |   |                                           |  |   |            | 
|Balance March 31, 2011                         | $ | (432,640 | ) |   |               |   | 67,307,366                                |  | $ | 67,307     | 

See accompanying notes to consolidated financial
statements

F-5

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

|                                                                       |   | Three Months Ended |   |                   | For the Period |  
|---------------------------------------------------------------------- | - | ------------------ | - | ----------------- | -------------- | -
|                                                                       |   |                    |   | November 26, 2004 |               
|                                                                       |   |                    |   |                   |                |  
|                                                                       |   | March 31,          |   |                   | March 31,      |  
|                                                                       |   | 2011               |   |                   | 2010           |  
|Operating Activities:                                                  |   |                    |   |                   |                |  
|                                                                       |   |                    |   |                   |                |  
|Net loss                                                               | $ | (7,283             | ) | $                 | (72,673        | )
|Adjustments to reconcile net loss to net cash used by
      operations |   |                    |   |                   |                |  
|Depreciation (cost and expense)                                        |   | 548                |   |                   | 8,645          |  
|Provision for obsolete inventories                                     |   | -                  |   |                   | -              |  
|Impairment loss on intangible assets                                   |   | -                  |   |                   | -              |  
|Impairment loss on fixed assets                                        |   | -                  |   |                   | -              |  
|Gain on disposal of fixed assets                                       |   | -                  |   |                   | -              |  
|Stock compensation                                                     |   | -                  |   |                   | 50,000         |  
|Changes in operating assets and
      liabilities:                     |   |                    |   |                   |                |  
|(Increase)/decrease in account receivable                              |   | -                  |   |                   | -              |  
|(Increase)/decrease in prepaid and other
      receivables             |   | -                  |   |                   | -              |  
|(Increase)/decrease in inventory                                       |   | -                  |   |                   | -              |  
|Increase/(decrease) in accounts payable                                |   | -                  |   |                   | -              |  
|Increase/(decrease) in accrued expenses                                |   | (19,974            | ) |                   | (15,448        | )
|Decrease in deferred income-government
      grants                    |   | -                  |   |                   | 30,784         |  
|Net cash used by operating activities                                  |   | (26,709            | ) |                   | 1,308          |  
|Investing Activities                                                   |   |                    |   |                   |                |  
|Purchase of fixed assets                                               |   | -                  |   |                   | -              |  
|Loan to shareholders                                                   |   | -                  |   |                   | -              |  
|Repay of loan from shareholders                                        |   | -                  |   |                   | -              |  
|                                                                       |   |                    |   |                   |                |  
|Net cash (used) by investing activities                                |   | -                  |   |                   | -              |  
|Financing Activities                                                   |   |                    |   |                   |                |  
|Distribution to shareholders                                           |   | -                  |   |                   | -              |  
|Capital contribution                                                   |   | -                  |   |                   | -              |  
|Proceeds from shareholder loans                                        |   | 27,846             |   |                   | 21,378         |  
|Repayment of loan to shareholders                                      |   | -                  |   |                   | -              |  
|                                                                       |   |                    |   |                   |                |  
|Net cash provided by financing activities                              |   | 27,846             |   |                   | 21,378         |  
|                                                                       |   |                    |   |                   |                |  
|Effect of exchange rate changes on cash                                |   | (1,970             | ) |                   | (13            | )
|                                                                       |   |                    |   |                   |                |  
|Increase(decrease) in cash                                             |   | (833               | ) |                   | 22,673         |  
|Cash at beginning of period                                            |   | 3,924              |   |                   | 27,884         |  
|Cash at end of period                                                  | $ | 3,091              |   | $                 | 50,557         |  
|Supplemental Cash Flow Information:                                    |   |                    |   |                   |                |  
|Interest received (paid) during the year                               | $ | -                  |   | $                 | -              |  
|Non-cash financing activities:                                         |   |                    |   |                   |                |  
|Contribution of patent for
      equity                                | $ | -                  |   | $                 | -              |  
|Contribution of fixed assets for equity                                | $ | -                  |   | $                 | -              |  
|Stock issued in exchange for
      consulting services                 | $ | -                  |   | $                 | -              |  
|Conversion of shareholder's loan to paid in
      capital              | $ | -                  |   | $                 | -              |  

See accompanying notes to consolidated financial
statements

F-6

---

|CHANG-ON INTERNATIONAL, INC.              
|------------------------------------------
|(A Development Stage Company)             
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|(UNAUDITED)                               

Note 1 - ORGANIZATION AND BUSINESS BACKGROUND

Chang-On International, Inc. (the Company) was incorporated
under the laws of the State of Utah as Gold Standard, Inc. 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 was incorporated as a Hong Kong limited liability
company on September 8, 2006 to facilitate a merger between a U.S. company and a
PRC business entity. On December 29, 2006, under the terms of a Share Exchange
Agreement, the Company agreed to acquire 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 reflected in the accompanying consolidated financial
statements, the Company has accumulated deficits of $3,414,427 at March 31, 2011
that includes losses of $7,283 for the three months ended March 31, 2011. These
factors raise substantial doubt about the ability of the Company to continue as
a going concern. The consolidated financial statements have been prepared on a
going basis and do not include any adjustments that might result from the
outcome of this uncertainty.

At March 31, 2011, the Company has suffered losses from
development stage activities to date. Although management is currently
attempting to implement its business plan, and is seeking additional sources of
equity or debt financing, there is no assurance these activities will be
successful.

Note 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 Basis of Presentation

These consolidated financial statements have been prepared in
accordance with generally accepted accounting principles in the United States of
America (U.S. GAAP) and are presented in U.S. dollars.

These consolidated financial statements have been prepared in
accordance with U.S. GAAP for interim financial information and the instructions
to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include
all of the information and footnotes required by U.S. GAAP for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation of
the financial position, results of operations and cash flows for the interim
periods have been included. These consolidated financial statements should be
read in conjunction with the consolidated financial statements of the Company
for the year ended December 31, 2010 and notes thereto contained in the Annual
Report on Form 10-K of the Company filed with the United States Securities and
Exchange Commission (the SEC) on March 31, 2011. Interim results are not
necessarily indicative of the results for the full year.

F-7

---

|CHANG-ON INTERNATIONAL, INC.              
|------------------------------------------
|(A Development Stage Company)             
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|(UNAUDITED)                               

 Principles of Consolidation

These 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 operations is Reminbi (RMB)

 Use of Estimates

In preparing these consolidated 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. The Company
regularly evaluates estimates and assumptions related to obsolete inventory,
useful life and recoverability of long lived assets, and goodwill. The Company
bases its estimates and assumptions on current facts, historical experience and
various other factors that it believes to be reasonable under the circumstances,
the results of which form the basis for making judgments about the carrying
values of assets and liabilities and the accrual of costs and expenses that are
not readily apparent from other sources. The actual results experienced by the
Company may differ materially and adversely from the Companys estimates. To the
extent there are material differences between the estimates and the actual
results, future results of operations will be affected.

 Fair Value of Financial Instruments

The Company adopted the standard Fair Value Measurements,
codified with ASC 820 and effective January 1, 2008. The provisions of ASC 820
are to be applied prospectively.

ASC 820 clarifies that fair value is an estimate of the exit
price, representing the amount that would be received to sell an asset or paid
to transfer a liability in an orderly transaction between market participants
(i.e. the exit price at the measurement date). Under ASC 820, fair value
measurements are not adjusted for transaction cost. ASC 820 provides for use of
a fair value hierarchy that prioritizes inputs to valuation techniques used to
measure fair value into three levels:

|Level 1: | Unadjusted quoted prices in active markets for
      identical assets or liabilities.                                                                                                                                                                                                                                                         
|-------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|         |                                                                                                                                                                                                                                                                                                                                               
|Level 2: | Input other than quoted market prices that are
      observable, either directly or indirectly, and reasonably available.
      Observable inputs reflect the assumptions market participants would use in
      pricing the asset or liability and are developed based on market data
      obtained from sources independent of the Company.
|         |                                                                                                                                                                                                                                                                                                                                               
|Level 3: | Unobservable inputs. Unobservable inputs
      reflect the assumptions that the Company develops based on available
      information about what market participants would use in valuing the asset
      or liability.                                                                                                                       

An asset or liabilitys level within the fair value hierarchy
is based on the lowest level of any input that is significant to the fair value
measurement. Availability of observable inputs can vary and is affected by a
variety of factors. The Company uses judgment in determining fair value of
assets and liabilities and Level 3 assets and liabilities involve greater
judgment than Level 1 and Level 2 assets or liabilities.

F-8

---

|CHANG-ON INTERNATIONAL, INC.              
|------------------------------------------
|(A Development Stage Company)             
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|(UNAUDITED)                               

 Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, demand deposits
with banks and liquid investments with an original maturity of three months or
less. Cash deposits with banks are held in financial institutions in China,
which has no federally insured deposit protection. Accordingly, the Company has
a concentration of credit risk related to these uninsured deposits.

 Inventories

Inventories are stated at the lower of cost or market value.
Cost is determined using the weighted average cost method. Costs include direct
material, direct labor and applicable manufacturing overhead. Market value is
determined by reference to selling prices after the balance sheet date or to
managements estimates based on prevailing market conditions. Management writes
down the inventories to market value if market value is below cost. Management
also regularly evaluates the composition of the Companys inventories to
identify slow-moving and obsolete inventories to determine if a valuation
allowance is required.

 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 property, plant 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 the standard, Accounting for the Impairment or Disposal of
Long-Lived Assets, codified with ASC 360.

 Construction in Progress

Construction in progress represents direct costs of
construction or acquisition incurred. Capitalization of these costs ceases and
construction in progress is transferred to property and equipment when
substantially all the activities necessary to prepare the assets for their
intended use are completed.

 Intangible Assets

The Company periodically analyzes its intangible assets for
potential impairment, assessing the appropriateness of lives and recoverability
of unamortized balances through the measurement of undiscounted operating cash
flows on a basis consistent with U.S. 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, and
therefore are deemed payable on demand. Refer to Note 6.

F-9

---

|CHANG-ON INTERNATIONAL, INC.              
|------------------------------------------
|(A Development Stage Company)             
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|(UNAUDITED)                               

 Comprehensive Income

The standard, Reporting Comprehensive Income, codified with
ASC 220, requires disclosure of all components of comprehensive income and loss
on an annual and interim basis. Comprehensive income and loss is defined as the
change in equity of a business enterprise during a period from transactions and
other events and circumstances from non-owner sources. The Companys other
comprehensive income arose from the effect of foreign currency translation
adjustments.

 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.

 Research and Development Costs

Research and development costs are expensed to operations as
incurred.

 Income Tax

The Company accounts for income taxes in accordance with the
standard, Accounting for Income Taxes, codified with ASC 740. ASC 740 requires
an asset and liability approach for financial accounting and reporting for
income taxes and allows recognition and measurement of deferred tax assets based
upon the likelihood of realization of tax benefits in future years. Under the
asset and liability approach, deferred taxes are provided for 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
purposes. A valuation allowance is provided for deferred tax assets if it is
more likely than not these items will either expire before the Company is able
to realize their benefits, or that future deductibility is uncertain.

 Segment Information

The standard, Disclosures about Segments of an Enterprise and
Related Information, codified with ASC 280, requires certain financial and
supplementary information to be disclosed on an annual and interim basis for
each reportable segment of an enterprise. The Company believes that it operates
in one business segment (research, development, production, marketing and sales)
and in one geographical segment (China), as all of the Companys current
operations are carried out in China.

 Foreign Currency Translation

The Companys functional currency is Chinese Renminbi (RMB)
and its reporting currency is the U.S. dollar. Transactions denominated in
foreign currencies are translated into U.S. dollars at the exchange rate in
effect on the date of the transactions. Exchange gains or losses on transactions
are included in earnings.

F-10

---

|CHANG-ON INTERNATIONAL, INC.              
|------------------------------------------
|(A Development Stage Company)             
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|(UNAUDITED)                               

The consolidated financial statements of the Company are
translated into U.S. dollars in accordance with the standard, Foreign Currency
Translation, codified with ASC 830, using year-end rates of exchange for assets
and liabilities, and average rates of exchange for the period for revenues,
costs, and expenses and historical rates for equity. Translation adjustments
resulting from the process of translating the local currency consolidated
financial statements into U.S. dollars are included in determining comprehensive
income. At March 31, 2011 and December 31, 2010, the cumulative translation
adjustments of ($22,021) and ($20,281), respectively, were classified as items
of accumulated other comprehensive income (loss) in the stockholders equity
section of the balance sheet. For the three months ended March 31, 2010 and
2009, other comprehensive income (loss) was ($2,852) and $14, respectively.

The exchange rates used to translate amounts in RMB into U.S.
dollars for the purposes of preparing the consolidated financial statements were
as follows: As of March 31, 2011 and December 31, 2010, the Company used the
period-end rates of exchange for assets and liabilities of $1 to RMB6.5486 and
$1 to RMB6.6023, respectively. For the three months ended March 31, 2011 and
2010, the Company used the periods average rate of exchange to convert
revenues, costs, and expenses of $1 to RMB6.5788 and $1 to RMB6.8275,
respectively. The Company used historical rates for equity.

 Earnings Per Share

Basic loss per share is computed by dividing net loss by the
weighted average number of shares of common stock outstanding during each
period. Diluted earnings per share is computed by dividing net income by the
weighted average number of shares of common stock, common stock equivalents and
potentially dilutive securities outstanding during each period. At March 31,
2011, the Company had no common stock equivalents that could potentially dilute
future earnings per share; however, if present, a separate computation of
diluted loss per share would not have been presented, as these common stock
equivalents would have been anti-dilutive due to the Companys net loss.

 Commitments and Contingencies

Liabilities for loss contingencies arising from claims,
assessments, litigation, fines and penalties and other sources are recorded when
it is probable that a liability has been incurred and the amount of the
assessment can be reasonably estimated.

 New Accounting Pronouncements

In October 2009, the FASB issued ASU No. 2009-13,
Multiple-Deliverable Revenue Arrangementsa consensus of the FASB Emerging
Issues Task Force, that provides amendments to the criteria for separating
consideration in multiple-deliverable arrangements. As a result of these
amendments, multiple-deliverable revenue arrangements will be separated in more
circumstances than under existing U.S. GAAP. The ASU does this by establishing a
selling price hierarchy for determining the selling price of a deliverable. The
selling price used for each deliverable will be based on vendor-specific
objective evidence if available, third-party evidence if vendor-specific
objective evidence is not available, or estimated selling price if neither
vendor-specific objective evidence nor third-party evidence is available. A
vendor will be required to determine its best estimate of selling price in a
manner that is consistent with that used to determine the price to sell the
deliverable on a standalone basis. This ASU also eliminates the residual method
of allocation and will require that arrangement consideration be allocated at
the inception of the arrangement to all deliverables using the relative selling
price method, which allocates any discount in the overall arrangement
proportionally to each deliverable based on its relative selling price. Expanded
disclosures of qualitative and quantitative information regarding the
application of the multiple-deliverable revenue arrangement guidance are also
required under the ASU. The ASU does not apply to arrangements for which
industry specific allocation and measurement guidance exists, such as long-term
construction contracts and software transactions. For the Company, ASU No.
2009-13 is effective beginning January 1, 2011. The Company elected to adopt the
provisions of this standard prospectively to new or materially modified
arrangements beginning on the effective date. The adoption of this standard did
not have a material impact on the Companys consolidated results of operations
or financial condition.

F-11

---

|CHANG-ON INTERNATIONAL, INC.              
|------------------------------------------
|(A Development Stage Company)             
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|(UNAUDITED)                               

In October 2009, the FASB issued ASU No. 2009-14, Certain
Revenue Arrangements That Include Software Elementsa consensus of the FASB
Emerging Issues Task Force, that reduces the types of transactions that fall
within the current scope of software revenue recognition guidance. Existing
software revenue recognition guidance requires that its provisions be applied to
an entire arrangement when the sale of any products or services containing or
utilizing software is considered more than incidental to the product or service.
As a result of the amendments included in ASU No. 2009-14, many tangible
products and services that rely on software will be accounted for under the
multiple-element arrangements revenue recognition guidance rather than under the
software revenue recognition guidance. Under the ASU, the following components
would be excluded from the scope of software revenue recognition guidance: the
tangible element of the product, software products bundled with tangible
products where the software components and non-software components function
together to deliver the products essential functionality, and undelivered
components that relate to software that is essential to the tangible products
functionality. The ASU also provides guidance on how to allocate transaction
consideration when an arrangement contains both deliverables within the scope of
software revenue guidance (software deliverables) and deliverables not within
the scope of that guidance (non-software deliverables). For the Company, ASU No.
2009-14 is effective beginning January 1, 2011. The Company elected to adopt the
provisions of this standard prospectively to new or materially modified
arrangements beginning on the effective date. The adoption of this standard did
not have a material impact on the Companys consolidated results of operations
or financial condition.

In January 2010, the FASB issued ASU No. 2010-6, Improving
Disclosures About Fair Value Measurements, that amends existing disclosure
requirements under ASC 820 by adding required disclosures about items
transferring into and out of Levels 1 and 2 in the fair value hierarchy; adding
separate disclosures about purchases, sales, issuances, and settlements relative
to Level 3 measurements; and clarifying, among other things, the existing fair
value disclosures about the level of disaggregation. For the Company, this ASU
is effective for the first quarter of 2010, except for the requirement to
provide Level 3 activity of purchases, sales, issuances, and settlements on a
gross basis, which is effective beginning the first quarter of 2011. Since this
standard impacts disclosure requirements only, its adoption will not have a
material impact on the Companys consolidated results of operations or financial
condition.

In April 2010, the FASB issued ASU No. 2010-17, Milestone
Method of Revenue Recognition a consensus of the FASB Emerging Issues Task
Force that recognizes the milestone method as an acceptable revenue recognition
method for substantive milestones in research or development arrangements. This
standard would require its provisions be met in order for an entity to recognize
consideration that is contingent upon achievement of a substantive milestone as
revenue in its entirety in the period in which the milestone is achieved. In
addition, this ASU would require disclosure of certain information with respect
to arrangements that contain milestones. For the Company, this standard would be
required prospectively beginning January 1, 2011. The adoption of this standard
did not have a material impact on the Companys consolidated results of
operations or financial condition.

F-12

---

|CHANG-ON INTERNATIONAL, INC.              
|------------------------------------------
|(A Development Stage Company)             
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|(UNAUDITED)                               

Note 4 - PROPERTY, PLANT AND EQUIPMENT

Property, Plant and Equipment consist of the following:

|                               |   | March 31, |   |   | December 31, |  
|------------------------------ | - | --------- | - | - | ------------ | -
|                               |   | 2010      |   |   | 2010         |  
|                               |   |           |   |   |              |  
|Machinery and Equipment        | $ | -         |   | $ | -            |  
|Office Equipment               |   | 7,997     |   |   | 7,932        |  
|Vehicle                        |   | 7,177     |   |   | 7,119        |  
|Construction in Progress       |   | -         |   |   | -            |  
|                               |   | 15,174    |   |   | 15,051       |  
|Less: Accumulated Depreciation |   | (9,918    | ) |   | (9,292       | )
|                               | $ | 5,256     |   | $ | 5,759        |  

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%


The depreciation was $548 and $8,645, including cost and
operating expense, for the three months ended March 31, 2011 and 2010,
respectively.

Note 5 - GOVERNMENT GRANTS

Receipts of government grants to encourage research and
development activities which are non-refundable are credited to deferred income
upon receipt. The Company recognizes government grants income when the
government completes inspection on the regulated use of the grants by issuing
the certificate. There was no government grants income recognized for the three
months ended March 31, 2011 or 2010. As of March 31 2011, government grants of
$113,477 were recorded as deferred income.

Note 6 - DUE TO SHAREHOLDERS

Due to shareholders consists of the following:

|             |   | March 31, |  |   | December 31, | 
|------------ | - | --------- |  | - | ------------ | 
|             |   | 2011      |  |   | 2010         | 
|Yukun Li     | $ | 23,257    |  | $ | 23,068       | 
|Guomin Li    |   | 266,703   |  |   | 262,046      | 
|Qingwei Zhou |   | 1,923     |  |   | 1,923        | 
|Bing Xiao    |   | 29,000    |  |   | 6,000        | 
|             | $ | 320,883   |  | $ | 293,037      | 

F-13

---

|CHANG-ON INTERNATIONAL, INC.              
|------------------------------------------
|(A Development Stage Company)             
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|(UNAUDITED)                               

Guomin Li has been a shareholder of Hongbo since November 2006.
Guomin Li was also the Companys President, Chief Executive Officer, Chief
Financial Officer, Principal Accounting Officer and Director before February 22,
2010. Qingwei Zhou has been a shareholder of Chang-On since September 2006.
Under the Agreement for the Share Exchange on December 29, 2006, Guomin Li and
Qingwei Zhou acquired 17,400,000 and 36,600,000 shares of Gold Standard, Inc.
respectively.

On February 22, 2010, Guomin Li sold 10,000,000 shares of the
Company to Bing Xiao who also took over Guomin Lis positions as the Companys
President, Chief Executive Officer, Chief Financial Officer, Principal
Accounting Officer and Director.

Note 7 - COMMON STOCK

Under the Share Exchange Agreement, the Company issued to the
shareholders of Chang-On 60,000,000 shares of common stock. The Company had
1,307, 366 shares of common stock issued and outstanding before the closing of
the share exchange. On March 23, 2007, the Company filed an S-8 to register
6,000,000 shares of common stock for stock based compensation (Note 8). The
Company had a total of 67,307,366 shares issued and outstanding as of March 31,
2011.

Note 8 -STOCK BASED COMPENSATION

On January 19, 2007, the Company entered into an agreement with
Yaru Li for legal services in the PRC for a term of two years, pursuant to which
the Company issued 900,000 shares of common stock in April 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, a British Virgin Islands company, 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 April 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 April 2007. The
fair market value amounted to $600,000, which is being amortized over the term
of the agreement.

On March 30, 2007, the Company entered into an agreement with I
&V Limited, a British Virgin Islands company, for advisory services on the
sales and distribution channels of certain environmentally 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 April 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, a British Virgin Islands company,
for advisory services on the sales and distribution channels of certain
environmentally 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 April 2007. The fair market value amounted to $280,000, which is
being amortized over the term of the agreement.

F-14

---

|CHANG-ON INTERNATIONAL, INC.              
|------------------------------------------
|(A Development Stage Company)             
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|(UNAUDITED)                               

On March 30, 2007, the Company entered into an agreement with
Prospect Bright Holdings Limited, a British Virgin Islands company, for advisory
services on the sales and distribution channels of certain environmentally
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
April 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, 2011 and 2010, $0 and
$50,000 of the above stock compensation were charged to operating expenses,
respectively. $0 was recorded as deferred compensation as of March 31, 2011.

Note 10 - OPERATING RISK

Concentrations of Credit RiskFinancial 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.

A significant percentage of the Companys business is generated
from a small number of customers. However, due to the immaterial amount of
revenue generated, the Company does not believe they are exposed to significant
concentration of credit risk in this area.

Source of SupplyThe Company purchases components for
its products from a number of suppliers. However, on occasion, a customers
specifications may require it to purchase components from a specific supplier.
The Company does not have any long term contracts with any of its suppliers, and
the Company believes that alternative suppliers are available. Although the
Company has not been subject to shortages for any of its components, since it
does not have long-term contracts, the Company may be subject to cutbacks and
price increases which it may not be able to pass on to its customers in the
event that the demand for components generally exceeds the capacity of its
suppliers.

Country RiskThe 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.

NOTE 11 - 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, 2011 and 2010.

F-15

---

|CHANG-ON INTERNATIONAL, INC.              
|------------------------------------------
|(A Development Stage Company)             
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|(UNAUDITED)                               

NOTE 12 - 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 profits
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 profits after tax since commencement of operations.

F-16

---

Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations

Forward Looking Statements

This quarterly report contains forward-looking statements.
These statements relate to future events or our future financial performance. In
some cases, you can identify forward-looking statements by terminology such as
"could", "may", "will", "should", "expect", "plan", "anticipate", "believe",
"estimate", "predict", "potential" or the negative of these terms or other
comparable terminology. These statements are only predictions and involve known
and unknown risks, uncertainties and other factors that may cause our or our
industry's actual results, levels of activity, performance or achievements to be
materially different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements.

Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity, performance or achievements. Except as required by
applicable laws, including the securities laws of the United States, we do not
intend to update any of the forward-looking statements so as to conform these
statements to actual results.

Our unaudited financial statements are stated in U.S. dollars
and are prepared in accordance with generally accepted accounting principles in
the United States. The following discussion should be read in conjunction with
our financial statements and the related notes that appear elsewhere in this
quarterly report.

As used in this current report and unless otherwise indicated,
the terms "we", "us", "our" and "our company" mean Chang-On International, Inc.,
a Utah corporation, and our subsidiary Chang-On International Limited, a limited
liability company incorporated under the laws of Hong Kong, unless otherwise
indicated.

General 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
(PRC) through our wholly owned subsidiary, Chang-On International Limited, a
limited liability company incorporated under the laws of Hong Kong on September
8, 2006 (Chang-On HK).

Chang-On HK was incorporated as a Hong Kong limited liability
company on September 8, 2006 to facilitate a merger between a U.S. company and a
PRC business entity. On December 29, 2006, under the terms of a Share Exchange
Agreement, our company agreed to acquire all the outstanding capital stock of
Chang-On in return for the issuance of 60,000,000 shares of common stock.

Chang-On HK is a holding company with one asset: 61% of the
share capital of Harbin Hongbo Environment Protection Material, Inc. (Hongbo),
a company incorporated under the laws of China. The remaining 39% of the share
capital of Hongbo is owned by Guomin Li (29%), our former president, chief
executive officer, chief financial officer, principal accounting officer and
director, and Su Yu (10%), our former director. Hongbo was incorporated in
November 2004, and until September 2006 it was entirely engaged in developing
its technology and manufacturing facility. From September 2006 to December 2006
it completed its first sales, realizing $43,023 in revenue. For the year ended
December 31, 2009 it generated net sales of $1,990. Because Hongbo has not yet
produced significant revenues, it is still a development stage company for
financial reporting purposes.

Our principal offices are located at 514 No. 18 Building, High
New Technology Development, Harbin, Heilongjiang Province, China. Our fiscal
year end is December 31. Our common stock is quoted on the OTC Bulletin Board
under the symbol CAON.

5

---

Our Current Business

We are the majority owner of Hongbo through our wholly owned
subsidiary, Chang-On HK. Hongbo manufactures construction materials from waste
products (SF material) and has filed 11 Chinese patents to protect its
proprietary products and production techniques. Its innovation in the
construction materials industry has been recognized by both the Chinese
government, which awarded Su Yu, our former director, the Gold Medal for
Industrial Innovation Contribution, and by the industry itself, as demonstrated
by the Gold Medal awarded to Hongbo at the Hong Kong International New
Technology and Product Exposition.

Hongbos business is the development and production of products
utilizing SF material, which is a composite of waste plastic and coal ash.
Hongbo currently obtains the waste plastic from six recycling facilities in
Harbin and obtains the coal ash from the Harbin Power Station. It removes these
two burdens from the environment and transforms them into a highly variable
construction material, producing no pollution in the process, which means that
it does not incur significant expenses relating to environmental regulation
compliance. Since Hongbos inception it has not experienced any shortage in the
availability of these waste products and we do not anticipate that it will
experience any shortages for the foreseeable future.

Intellectual Property

Hongbos accumulation of patents should provide it with a
significant competitive advantage in the future. Currently, it holds 11 separate
Chinese patents for proprietary products and manufacturing processes, including
patents for:

- solidified SF board;
- temperature controlling board;
- SF material well cover and base;
- pressing and injection method for the manufacture of SF material; and
- method of calculation while manufacturing combined materials.

To drive Hongbos technological advantage, it has implemented a
program of providing advanced education for its employees that enables them to
maintain the technological lead Hongbo has developed. To date, the company has
financed advanced technological education for several of its employees in
Chinese universities. If and when we generate sufficient working capital, our
plan is to send Hongbos employees abroad to obtain usable knowledge from the
worldwide community.

Employees

We currently have 48 employees, all of whom are employed with
Hongbo on a full time basis.

Legislation and Government Regulation

The national, provincial and local governments in the China are
highly bureaucratized. The day-to-day operations of Hongbos business require us
to interact frequently with representatives of Chinese government institutions.
The effort to obtain the registrations, licenses and permits necessary to carry
out our business activities can be daunting. Significant delays can result from
the need to obtain governmental approvals, which can have an adverse effect on
the profitability of our operations. In addition, compliance with regulatory
requirements applicable to the handling and processing of waste materials may
increase the cost of our operations, which could adversely affect our
profitability. So far, the Chinese government has been very supportive of our
technology and has provided us with a $100,000 grant as well as a five year
exemption from income tax.

6

---

Results of Operations

Revenues

The following summary of our results of operations should be
read in conjunction with our unaudited interim financial statements for the
three months ended March 31, 2011 and 2010.

Our operating results for the three months ended March 31, 2011
and 2010 are summarized as follows:

| |               |   | Three Months Ended |  
| | ------------- | - | ------------------ | -
| |               |   | March 31,          |  
| |               |   | 2011               |  
| | Net Sales     | $ | Nil                |  
| | Cost of Sales | $ | Nil                |  
| | Expenses      | $ | 7,283              |  
| | Net Loss      | $ | (7,283             | )

Expenses

Our total expenses for the three months ended March 31, 2011
and 2010 are outlined in the table below:

| |                            |   | Three Months Ended | 
| | -------------------------- | - | ------------------ | 
| |                            |   | March 31,          | 
| |                            |   | 2011               | 
| | Salaries                   | $ | 3,648              | 
| | Water, electricity and gas | $ | Nil                | 
| | Other expenses             | $ | 87                 | 
| | Depreciation               | $ | 548                | 
| | Stock compensation         | $ | Nil                | 
| | Professional fees          | $ | 3,000              | 

Expenses for the three month period ended March 31, 2011,
decreased by 89.98% as compared to the comparative period in 2010 primarily as a
result of a decrease in depreciation and stock compensation.

Revenue

We have earned revenues of $Nil for the three month period
ended March 31, 2011 and $Nil for the three month period ended March 31, 2010.
Our sales have remained unchanged for the three month periods ended March 31,
2011 and March 31, 2010.

Liquidity and Capital Resources

Working Capital

|                          |   | At        |   |   | At           |   |   |           |  
|------------------------- | - | --------- | - | - | ------------ | - | - | --------- | -
|                          |   | March 31, |   |   | December 31, |   |   | Increase/ |  
|                          |   | 2011      |   |   | 2010         |   |   | Decrease  |  
|Current Assets            | $ | 3,396     |   | $ | 4,227        |   | $ | (19.66%   | )
|Current Liabilities       | $ | 441,292   |   | $ | 432,491      |   | $ | 2.03%     |  
|Working Capital (deficit) | $ | (437,896  | ) | $ | (428,264     | ) | $ | 2.25%     |  

7

---

Cash Flows

| |                                                           |   | Three     |   |   | Three     | 
| | --------------------------------------------------------- | - | --------- | - | - | --------- | 
| |                                                           |   | Months    |   |   | Months    | 
| |                                                           |   | Ended     |   |   | Ended     | 
| |                                                           |   | March 31, |   |   | March 31, | 
| |                                                           |   | 2011      |   |   | 2010      | 
| | Net Cash Provided by (Used) in Operating
      Activities | $ | (26,709   | ) | $ | 1,308     | 
| | Net Cash Provided by Investing Activities                 | $ | Nil       |   | $ | Nil       | 
| | Net Cash Provided by Financing Activities                 | $ | 27,846    |   | $ | 21,378    | 
| | Net Increase (Decrease) in Cash During the Period         | $ | (833      | ) | $ | 22,673    | 

As of March 31, 2011, we had $3,091 in cash, $3,396 in total
current assets, $441,292 in total current liabilities and a working capital
deficit of $437,896. As of December 31, 2010, we had a working capital deficit
of $428,264.

We are dependent on funds raised through equity financing and
proceeds from shareholder loans. Our net loss of $4,011,775 from our inception
on November 26, 2004 to March 31, 2011 was funded primarily by such financing
and loans, as well as other capital contributions.

From our inception on November 26, 2004 to March 31, 2011 we
spent $384,833 on operating activities. During the three months ended March 31,
2011 we spent $26,709 on operating activities, whereas we received $1,308 from
operating activities during the same period in fiscal 2010. The increase in our
expenditures on operating activities during the three months ended March 31,
2011 was primarily due to a receipt of government fund for the three months
ended March 31, 2010.

From our inception on November 26, 2004 to March 31, 2011 we
spent $710,118 on investing activities, all of which was in the form of the
purchase of fixed assets. We did not spend any money on investing activities
during the three months ended March 31, 2011 or 2010.

From our inception on November 26, 2004 to March 31, 2011 we
received $1,082,563 from financing activities, which consisted of $274,103 in
capital contribution and $904,298 in net proceeds from shareholder loans, less
$24,994 in distributions to shareholders and 70,844 for repayment of a loan to a
shareholder. During the three months ended March 31, 2011 we received $27,846
from financing activities, all of which was in the form of proceeds from
shareholder loans, whereas we received $21,378 from financing activities during
the same period in fiscal 2010, all of which was also in the form of proceeds
from shareholder loans.

From our inception on November 26, 2004 to March 31, 2011 we
also experienced a gain of $15,479 in connection with foreign exchange
translation. During the three months ended March 31, 2011 we lost $1,970 due to
the effect of exchange rates, whereas we lost $13 due to the same effect during
the same period in fiscal 2010.

During the three months ended March 31, 2011 we experienced a
decrease in cash of $833 due to a combination of our operating and financing
activities, and in particular, the proceeds we received from shareholder loans.

We will require additional funds to fund our budgeted expenses
over the next 12 months. These funds may be raised through, equity financing,
debt financing, or other sources, which may result in further dilution in the
equity ownership of our shares.

We anticipate that our expenses over the next 12 months
(beginning April 2011) will be approximately $900,000 as described in the table
below. These estimates may change significantly depending on the nature of our
business activities and our ability to raise capital from our shareholders or
other sources.

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|Description                                                                           |  | Potential  |  |  | Estimated | 
|------------------------------------------------------------------------------------- |  | ---------- |  |  | --------- | 
|                                                                                      |  | Completion |  |  | Expenses  | 
|                                                                                      |  | Date       |  |  | ($)       | 
|                                                                                      |  |            |  |  |           | 
|Research and development costs for further
      products and manufacturing processes |  | 12 months  |  |  | 250,000   | 
|Salaries                                                                              |  | 12 months  |  |  | 25,000    | 
|Utility expenses                                                                      |  | 12 months  |  |  | 25,000    | 
|Investor relations costs                                                              |  | 12 months  |  |  | 80,000    | 
|Marketing expenses                                                                    |  | 12 months  |  |  | 400,000   | 
|Professional fees                                                                     |  | 12 months  |  |  | 60,000    | 
|Other administrative expenses                                                         |  | 12 months  |  |  | 60,000    | 
|Total                                                                                 |  |            |  |  | 900,000   | 

Our other administrative expenses for the year will consist
primarily of transfer agent fees, bank and interest charges and general office
expenses. The professional fees are related to our regulatory filings throughout
the year and include legal, accounting and auditing fees.

Based on our planned expenditures, we will require
approximately $896,909 (a total of $900,000 less our approximately $3,091 in
cash as of March 31, 2011) to proceed with our business plan over the next 12
months. If we secure less than the full amount of financing that we require, we
will not be able to carry out our complete business plan and we will be forced
to proceed with a scaled back business plan based on our available financial
resources.

We intend to raise the balance of our cash requirements for the
next 12 months from private placements, shareholder loans or possibly a
registered public offering (either self-underwritten or through a
broker-dealer). If we are unsuccessful in raising enough money through such
efforts, we may review other financing possibilities such as bank loans. At this
time we do not have a commitment from any broker-dealer to provide us with
financing. There is no assurance that any financing will be available to us or
if available, on terms that will be acceptable to us.

Even though we plan to raise capital through equity or debt
financing, we believe that the latter may not be a viable alternative for
funding our operations as we do not have sufficient tangible assets to secure
any such financing. We anticipate that any additional funding will be in the
form of equity financing from the sale of our common stock. However, we do not
have any financing arranged and we cannot provide any assurance that we will be
able to raise sufficient funds from the sale of our common stock to finance our
operations. In the absence of such financing, we may be forced to abandon our
business plan.

Going Concern

Our financial statements for the three months ended March 31,
2011 have been prepared on a going concern basis and contain an additional
explanatory paragraph which identifies issues that raise substantial doubt about
our ability to continue as a going concern. Our financial statements do not
include any adjustments that might result from the outcome of this uncertainty.

We have generated limited revenues, have achieved losses since
our inception, and rely upon the sale of our common stock and proceeds from
shareholder loans to fund our operations. If we are unable to raise equity or
secure alternative financing, we may not be able to continue our operations and
our business plan may fail.

If our operations and cash flow improve, management believes
that we can continue to operate. However, no assurance can be given that
management's actions will result in profitable operations or an improvement in
our liquidity situation. The threat of our ability to continue as a going
concern will cease to exist only when our revenues have reached a level able to
sustain our business operations.

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Off-Balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have
or are reasonably likely to have a current or future effect on our financial
condition, revenues or expenses, results of operations, liquidity, capital
expenditures or capital resources that are material to stockholders.

Critical Accounting Policies

Basis of Presentation

The consolidated financial statements, included herein, have
been prepared in accordance with generally accepted accounting principles in the
United States of America (U.S. GAAP) and are presented in U.S. dollars.

The consolidated financial statements have been prepared in
accordance with U.S. GAAP for interim financial information and the instructions
to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include
all of the information and footnotes required by U.S. GAAP for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation of
the financial position, results of operations and cash flows for the interim
periods have been included. The consolidated financial statements should be read
in conjunction with the consolidated financial statements of our company for the
year ended December 31, 2010 and notes thereto contained in the Annual Report on
Form 10-K of our company filed with the United States Securities and Exchange
Commission (the SEC) on March 31, 2011. Interim results are not necessarily
indicative of the results for the full year.

Principles of Consolidation

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

Use of Estimates

In preparing the consolidated 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. Our company regularly
evaluates estimates and assumptions related to obsolete inventory, useful life
and recoverability of long lived assets, and goodwill. Our company bases its
estimates and assumptions on current facts, historical experience and various
other factors that it believes to be reasonable under the circumstances, the
results of which form the basis for making judgments about the carrying values
of assets and liabilities and the accrual of costs and expenses that are not
readily apparent from other sources. The actual results experienced by our
company may differ materially and adversely from our companys estimates. To the
extent there are material differences between the estimates and the actual
results, future results of operations will be affected.

Fair Value of Financial Instruments

We adopted the standard Fair Value Measurements, codified
with ASC 820 and effective January 1, 2008. The provisions of ASC 820 are to be
applied prospectively.

ASC 820 clarifies that fair value is an estimate of the exit
price, representing the amount that would be received to sell an asset or paid
to transfer a liability in an orderly transaction between market participants
(i.e. the exit price at the measurement date). Under ASC 820, fair value
measurements are not adjusted for transaction cost. ASC 820 provides for use of
a fair value hierarchy that prioritizes inputs to valuation techniques used to
measure fair value into three levels:

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|Level 1: | Unadjusted quoted prices in active markets for
      identical assets or liabilities.                                                                                                                                                                                                                                                         
|-------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|         |                                                                                                                                                                                                                                                                                                                                               
|Level 2: | Input other than quoted market prices that are
      observable, either directly or indirectly, and reasonably available.
      Observable inputs reflect the assumptions market participants would use in
      pricing the asset or liability and are developed based on market data
      obtained from sources independent of our company.
|         |                                                                                                                                                                                                                                                                                                                                               
|Level 3: | Unobservable inputs. Unobservable inputs
      reflect the assumptions that our company develops based on available
      information about what market participants would use in valuing the asset
      or liability.                                                                                                                       

An asset or liabilitys level within the fair value hierarchy
is based on the lowest level of any input that is significant to the fair value
measurement. Availability of observable inputs can vary and is affected by a
variety of factors. Our company uses judgment in determining fair value of
assets and liabilities and Level 3 assets and liabilities involve greater
judgment than Level 1 and Level 2 assets or liabilities.

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, demand deposits
with banks and liquid investments with an original maturity of three months or
less. Cash deposits with banks are held in financial institutions in China,
which has no federally insured deposit protection. Accordingly, our company has
a concentration of credit risk related to these uninsured deposits.

Earnings Per Share

Basic loss per share is computed by dividing net loss by the
weighted average number of shares of common stock outstanding during each
period. Diluted earnings per share is computed by dividing net income by the
weighted average number of shares of common stock, common stock equivalents and
potentially dilutive securities outstanding during each period. At March 31,
2011, we had no common stock equivalents that could potentially dilute future
earnings per share; however, if present, a separate computation of diluted loss
per share would not have been presented, as these common stock equivalents would
have been anti-dilutive due to our companys net loss.

Item 3. Quantitative and Qualitative Disclosures About
Market Risk

As a smaller reporting company, we are not required to provide
the information required by this Item.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are
designed to ensure that information required to be disclosed in our reports
filed under the Securities Exchange Act of 1934, as amended, is recorded,
processed, summarized and reported within the time periods specified in the
Securities and Exchange Commission's rules and forms, and that such information
is accumulated and communicated to our management, including our chief executive
officer and chief financial officer (our principal executive officer, principal
financial officer and principle accounting officer) to allow for timely
decisions regarding required disclosure.

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As of the end of our quarter covered by this report, we carried
out an evaluation, under the supervision and with the participation of our chief
executive officer and chief financial officer (our principal executive officer,
principal financial officer and principle accounting officer), of the
effectiveness of the design and operation of our disclosure controls and
procedures. Based on the foregoing, our chief executive officer and chief
financial officer (our principal executive officer, principal financial officer
and principle accounting officer) concluded that our disclosure controls and
procedures were effective as of the end of the period covered by this quarterly
report.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal controls over
financial reporting that occurred during our quarter ended March 31, 2011 that
have materially or are reasonably likely to materially affect, our internal
controls over financial reporting.

PART II  OTHER INFORMATION

Item 1. Legal Proceedings

We know of no material, existing or pending legal proceedings
against our company, nor are we involved as a plaintiff in any material
proceeding or pending litigation. There are no proceedings in which any of our
directors, officers or affiliates, or any registered beneficial shareholder, is
an adverse party or has a material interest adverse to our interest.

Item 2. Unregistered Sales of Equity Securities

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. (Removed and Reserved)

Item 5. Other Information

None.

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Item 6. Exhibits

|Exhibit | Description                                                                                                                                                                                                                                                              
|------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  |                                                                                                                                                                                                                                                                          
|(3)     | (i) Articles of
      Incorporation; (ii) By-laws                                                                                                                                                                                                                        
|3.1     | Amendment to By-Laws (incorporated by reference
      our Current Report on Form 8-K filed on July 10, 2006).                                                                                                                                                            
|3.2     | Amendment to By-Laws
      (incorporated by reference our Current Report on Form 8-K filed on April
      9, 2007).                                                                                                                                                      
|3.3     | Certificate of Amendment of Certificate of
      Incorporation filed on April 18, 2007 (incorporated by reference our
      Current Report on Form 8-K filed on April 23, 2007).                                                                                         
|(10)    | Material Contracts                                                                                                                                                                                                                                                       
|10.1    | Share Exchange Agreement dated December 18,
      2006 between our company and the shareholders of Chang-On International
      Limited (incorporated by reference to our Current Report on Form 8-K filed
      on December 19, 2006).                                  
|10.2    | Indemnity Agreement dated
      December 29, 2006 among Gold Standard, Inc., the shareholders of Chang-On
      International Limited, Scott L. Smith and Leonard Burningham (incorporated
    by reference to our Current Report on Form 8-K filed on January 10, 2007).
|(21)    | Subsidiaries of the Registrant                                                                                                                                                                                                                                           
|        | Chang-On International Limited,
  a limited liability company incorporated under the laws of Hong Kong                                                                                                                                                                   
|(31)    | Rule 13a-14(a)/15d-14(a) Certifications                                                                                                                                                                                                                                  
|31.1    | Section 302 Certification under
      the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                     
|(32)    | Section 1350 Certifications                                                                                                                                                                                                                                              
|32.1    | Section 906 Certification under
      the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                     

* Filed herewith.

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SIGNATURES

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

|Date: May 16, 2011 | Chang-On International, Inc.                                   
|------------------ | ---------------------------------------------------------------
|                   |                                                                
|                   | /s/ Bing Xiao                                                  
|                   | Bing Xiao                                                      
|                   | President, Chief Executive Officer, Chief
      Financial      
|                   | Officer and Director                                           
|                   | (Principal Executive Officer, Principal
      Financial Officer
|                   | and Principal Accounting Officer)                              

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