10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 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, 2011

or

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______________to ______________

Commission File Number 001-08937

CHANG-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 BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the 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

Table of Contents

PART I – FINANCIAL INFORMATION		3
	Item 1. Financial Statements	3
	Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	5
	Item 3. Quantitative and Qualitative Disclosures About Market Risk	11
	Item 4. Controls and Procedures	11
PART II – OTHER INFORMATION		12
	Item 1. Legal Proceedings	12
	Item 2. Unregistered Sales of Equity Securities	12
	Item 3. Defaults Upon Senior Securities	12
	Item 4. (Removed and Reserved)	12
	Item 5. Other Information	12
	Item 6. Exhibits	13
SIGNATURES		14

2

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

CHANG-ON INTERNATIONAL, INC.
(A Development Stage Company )
FINANCIAL STATEMENTS

MARCH 31, 2011

4

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

CHANG-ON INTERNATIONAL, INC.

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

		For the Three Months Ended						For the Period
								November 26,
								2004
								(inception) to
		March 31,						March 31,
		2011			2010			2011
Net sales	$	-		$	-		$	93,776
Cost of sales		-			-			(60,324	)
Gross profit		-			-			33,452
Expenses
Salaries		3,648			3,515			140,171
Transportation		-			-			13,354
Office equipment		-			-			6,879
Water, electricity and gas		-			7,323			136,385
Other expenses		87			190			35,736
Advertisement		-			-			556
Rent expense		-			-			3,811
Depreciation		548			8,645			201,325
R & D expense		-			-			22,578
Repairs and maintenance		-			-			1,043
Gain on disposal of fixed assets		-			-			(7,730	)
Stock compensation		-			50,000			2,400,000
Professional fees		3,000			3,000			79,378
Fixed assets impairment		-			-			669,813
Intangibles writedown		-			-			241,639
Inventory obsolescence		-			-			107,484
Total Expenses		7,283			72,673			4,052,422
Other income		-			-			7,195
Loss before provision for income tax		(7,283	)		(72,673	)		(4,011,775	)
Income tax provision		-			-			-
Net loss		(7,283	)		(72,673	)		(4,011,775	)
Less: Net loss attributable to the noncontrolling interest		1,635			7,634			490,982
Net loss attributable to Chang-On International, Inc common
Stockholders	$	(5,648	)		(65,039	)	$	(3,520,793	)
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							Accumulated
					Comprehensive		$0.001 Par Value				Paid-in		Accumulated			Deferred		Comprehensive			Noncontrolling
		Total			Income		Shares		Amount		Capital		Deficit			Compensation		Income (loss)			Interest
Balance December 31, 2010	$	(422,505	)				67,307,366	$	67,307	$	3,067,959	$	(3,408,779	)	$	-	$	(20,281	)	$	(128,711	)
Comprehensive loss:
Net loss		(7,283	)		(7,283	)							(5,648	)							(1,635	)
Other comprehensive loss, net of tax:
Foreign currency translation gain (loss)		(2,852	)		(2,852	)												(1,740	)		(1,112	)
Comprehensive loss		(10,135	)	$	(10,135	)
Balance March 31, 2011	$	(432,640	)				67,307,366	$	67,307	$	3,067,959	$	(3,414,427	)	$	-	$	(22,021	)	$	(131,458	)

See accompanying notes to consolidated financial statements

F-5

CHANG-ON INTERNATIONAL, INC.

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

		Three Months Ended						For the Period
								November 26, 2004
								(inception) to
		March 31,						March 31,
		2011			2010			2011
Operating Activities:
Net loss	$	(7,283	)	$	(72,673	)	$	(4,011,775	)
Adjustments to reconcile net loss to net cash used by operations
Depreciation (cost and expense)		548			8,645			210,787
Provision for obsolete inventories		-			-			107,484
Impairment loss on intangible assets		-			-			241,639
Impairment loss on fixed assets		-			-			669,813
Gain on disposal of fixed assets		-			-			(7,730	)
Stock compensation		-			50,000			2,400,000
Changes in operating assets and liabilities:
(Increase)/decrease in account receivable		-			-			-
(Increase)/decrease in prepaid and other receivables		-			-			(293	)
(Increase)/decrease in inventory		-			-			(107,151	)
Increase/(decrease) in accounts payable		-			-			695
Increase/(decrease) in accrued expenses		(19,974	)		(15,448	)		6,207
Decrease in deferred income-government grants		-			30,784			105,491
Net cash used by operating activities		(26,709	)		1,308			(384,833	)
Investing Activities
Purchase of fixed assets		-			-			(710,118	)
Loan to shareholders		-			-			(24,659	)
Repay of loan from shareholders		-			-			24,659
Net cash (used) by investing activities		-			-			(710,118	)
Financing Activities
Distribution to shareholders		-			-			(24,994	)
Capital contribution		-			-			274,103
Proceeds from shareholder loans		27,846			21,378			904,298
Repayment of loan to shareholders		-			-			(70,844	)
Net cash provided by financing activities		27,846			21,378			1,082,563
Effect of exchange rate changes on cash		(1,970	)		(13	)		15,479
Increase(decrease) in cash		(833	)		22,673			3,091
Cash at beginning of period		3,924			27,884			-
Cash at end of period	$	3,091		$	50,557		$	3,091
Supplemental Cash Flow Information:
Interest received (paid) during the year	$	-		$	-		$	260
Non-cash financing activities:
Contribution of patent for equity	$	-		$	-		$	241,639
Contribution of fixed assets for equity	$	-		$	-		$	125,497
Stock issued in exchange for consulting services	$	-		$	-		$	2,400,000
Conversion of shareholder's loan to paid in capital	$	-		$	-		$	359,357

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

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

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			2010
Net Sales	$	Nil		$	Nil
Cost of Sales	$	Nil		$	Nil
Expenses	$	7,283		$	72,673
Net Loss	$	(7,283	)	$	(72,673	)

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		2010
Salaries	$	3,648	$	3,515
Water, electricity and gas	$	Nil	$	7,323
Other expenses	$	87	$	190
Depreciation	$	548	$	8,645
Stock compensation	$	Nil	$	50,000
Professional fees	$	3,000	$	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.

8

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.

9

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:

10

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.

11

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.

12

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.

13

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)

14

EX-31.1

                                                                                                                                                                           EXHIBIT 31.1

CERTIFICATION PURSUANT TO

18 U.S.C. ss 1350, AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Bing Xiao, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Chang-On International, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 16, 2011

/s/ Bing Xiao

Bing Xiao

President, Chief Executive Officer, Chief Financial Officer and Director

(Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)

EX-32.1

                                                                                                                                                                         EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Bing Xiao, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	the Quarterly Report on Form 10-Q of Chang-On International, Inc. for the period ended March 31, 2011 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Chang-On International, Inc.

Dated: May 16, 2011

/s/ Bing Xiao

Bing Xiao

President, Chief Executive Officer, Chief Financial Officer and Director

(Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)

Chang-On International, Inc.

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Chang-On International, Inc. and will be retained by Chang-On International, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.