**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**





**FORM
      10-KSB**





**ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d)**


**OF
      THE SECURITIES EXCHANGE ACT OF 1934**


**FOR
      THE YEAR ENDING NOVEMBER 30, 2007**





**AMERICHIP
      INTERNATIONAL, INC.**


(Exact
      name of registrant as specified in its charter)





**Nevada**
            
            **000-33127**
            
            **98-0339467**(State
                or other jurisdiction of incorporation or organization)
            
            (Commission
                File Number)
            
            (I.R.S.
                Employer Identification )









**24700
                Capital Blvd, Clinton Township MI**
            
            **48036**(Address
                of principal executive offices)
            
            (Zip
                Code)




Registrant’s
      telephone number, including area code: **(586)
      783-4598**




(Former
                name or former address, if changed since last report)




Copies
      of
      all communications, including all communications sent to the agent for service,
      should be sent to:




Joseph
      I.
      Emas, Attorney at Law


1224
      Washington Avenue


Miami
      Beach, Florida 33139




Telephone:
      305.531.1174







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




Check
      if
      there is no disclosure of delinquent filers in response to Item 405 of
      Regulation S-B is not contained in this form, and no disclosure will be
      contained, to the best of registrant’s knowledge, in definitive proxy or
      information statements incorporated by reference in Part III of this Form 10-KSB
      or any amendment to this Form 10-KSB. o




State
      issuer’s revenues for its most recent fiscal
      year  $2,655,848.




State
      the
      aggregate market value of the voting and non-voting common equity held by
      non-affiliates computed by reference to the price at which the common equity
      was
      sold, or the average bid and asked price of such common equity, as of a
      specified date within the past 60 days. (See definition of affiliate in Rule
      12b-2 of the Exchange Act.) $8,886,798, based on the average bid and ask price
      as of February 27, 2008.




**(ISSUERS
      INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE
      YEARS)**




Check
      whether the issuer has filed all documents and reports required to be filed
      by
      Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities
      under a plan confirmed by a court.    Yes o    No x






State
      the
      number of shares outstanding of each of the issuer’s classes of common equity,
      as of the latest practicable date.





222,169,955
      of common stock outstanding as of February 27, 2008.






Transitional
      Small Business Disclosure Format (Check
      one):    Yes o; No x





Indicate
      by check mark whether the registrant is a shell company (as defined in rule
      12b-2 of the Exchange Act).   Yes o; No x














**AMERICHIP
      INTERNATIONAL INC.**


**FORM
      10-KSB**





Table
      of Contents




**Page****PART
                I**Item
                1.
            Description
                of
                Business
            1Item
                2.
            Description
                of
                Property
            11Item
                3.
            Legal
                Proceedings
            12Item
                4.
            Submission
                of Matters to a Vote of
                Security Holders
            12**PART
                II**Item
                5.
            Market
                for Common Equity and
                Related Stockholder Matters
            13Item
                6.
            Management’s
                Discussion and
                Analysis of Financial Condition and Results of
                Operations
            15Item
                7.
            Financial
                Statements
            F-1Item
                8.
            Changes
                In and Disagreements With
                Accountants on Accounting and Financial Disclosure
            22Item
                8A.
            Controls
                and
                Procedures
            22Item
                8B.
            Other
                Information
            22**PART
                III**Item
                9.
            Directors,
                Executive Officers,
                Promoters and Control Persons; Compliance with Section 16(a)
            23Item
                10.
            Executive
                Compensation
            26Item
                11.
            Security
                Ownership of Certain
                Beneficial Owners and Management and Related Stockholder
                Matters
            27Item
                12.
            Certain
                Relationships and Related
                Transactions
            29**PART
                IV**Item
                13.
            Exhibits
            29Item
                14:
            Principal
                Accountant Fees And
                Services
            30SIGNATURES
            
            31Exhibit
                Index




**Table
          of Contents**




**PART
      I**




**Item
      1.     Description of
      Business.**




This
      summary highlights important information about our company and business. Because
      it is a summary, it may not contain all of the information that is important
      to
      you. To understand this offering fully, you should read this entire report
      on
      Form 10-KSB and the financial statements and related notes included in this
      report on Form 10-KSB carefully. Unless the context requires otherwise,
“*we*,” “*us*,” “*our*”, “ and the “*company*” and
      similar terms refer to AmeriChip International, Inc., and our subsidiaries
      collectively, while the term “AmeriChip” refers to AmeriChip International, Inc.
      in its corporate capacity.




**The
      Company**




We
      were
      incorporated in the State of Nevada on October 17, 2000 as Southborrough
      Technology Corporation. On March 9, 2001 we changed our name to Southborrough
      Ventures, Inc. We were in the business of mineral exploration but initially
      relied upon the mineral exploration of others and never conducted any mineral
      exploration ourselves. We obtained an option to acquire a 100% interest in
      a
      mineral claim located in the Slocan Mining District Province of British
      Columbia, Canada. We referred to this mineral claim as the Cedar mineral claim.
      This option was exercisable by us completing further cash payments and share
      issuances to the option or and by completing minimum required exploration
      expenditures on the Cedar mineral claim. We allowed the option on this claim
      to
      expire on or about June 30, 2003.





Our
      objective was to conduct mineral exploration activities on the Cedar mineral
      claim in order to assess whether the claim possessed commercially exploitable
      reserves of silver, lead or zinc. We were unable to identify any commercially
      exploitable reserves. Our proposed exploration program was designed to search
      for commercially exploitable deposits.





On
      February 27, 2003, our board of directors approved the termination of our
      exploration activity and the acquisition of the AmeriChip Laser Assisted Chip
      Control (“LACC”) technology.





On
      February 27, 2003 our Board of Directors signed an Agreement and Plan of
      Reorganization with AmeriChip Ventures, Inc. (“AVI”), of Detroit, Michigan to
      acquire 100% of the outstanding common stock of AVI, in exchange for 60 million
      shares of our common stock.





On
      March
      22, 2003 the terms of the Agreement and Plan of Reorganization dated February
      27, 2003 were consummated pursuant to which we, AVI and AVI shareholders agreed
      to effect a reorganization under Section 368 (a) (1) (B) of the Internal Revenue
      Code of 1986, as amended. Pursuant to the Agreement and Plan of Reorganization,
      we acquired all of the issued and outstanding shares of AVI’s common stock with
      the result that AVI is now our wholly owned subsidiary corporation. In exchange,
      for the shares of AVI, we issued 60 million shares common stock to David Howard,
      the former Chairman of our Board of Directors, Marc Walther, our Chief Executive
      Officer, and Ed Rutkowski, a member of our Board of Directors. Each of the
      foregoing individuals received 20 million shares of common stock and were the
      sole shareholders of AVI.




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          of Contents**




On
      January
      21, 2003, Ed Rutkowski, transferred his patent, which covers the technology
      discussed below, to AVI. In consideration of the transfer of the patent, we
      are
      obligated to pay the following: Messrs Howard, Walther and Rutkowski, each
      received US $1 million payable at the rate of $10,000 on or before the first
      day
      of each calendar month beginning September 1, 2003 with interest accruing on
      any
      unpaid balance at the greater of (i) five percent (5%) and (ii) the prime rate
      plus 1% as reported in the Wall Street Journal on the first business day
      following each July and January 1, of each year until paid in full. The company
      may prepay any or all of this amount without penalty. In December 2003, we
      changed our name to AmeriChip International Inc. and we now trade on the
      Bulletin Board operated by the National Association of Securities Dealers,
      Inc.
      under the symbol (OTC-BB) under the symbol “ACII”





Our
      principal offices are located at 24700 Capital Blvd. Clinton MI 48036
      USA







**Overview**





Our
      core
      patented technology includes the use of lasers to affect a controlled breaking
      of the metal chip. Our technology focuses on increasing the machining
      efficiencies to affect faster feed rates, deeper depths of cut and less down
      time. The process is designed to work with technologies of existing machines
      and
      operations. We expect to continue to develop additional proprietary technology
      to enhance the patent and its benefits.





Our
      technology, when implemented by the customer, will eliminate dangerous
      ribbon-like steel chips that tangle around moving tool parts, automation devices
      and other components essential to the machine processing of low to medium grade
      carbon steels and non-ferrous metal parts. We believe that the result of this
      process is a superior product manufactured in a safer working environment,
      avoiding many of the health and safety issues associated with traditional metal
      processing methodologies, while offering potential cost savings. The core cost
      savings to this technology is the ability to effect faster thru put with less
      capital equipment and labor as a component of cost per piece.





We
      have
      completed the design and testing of the patented LACC technology. We are
      currently working with automakers and vendors with a view to supplying processed
      parts.








**Subsidiaries**





On
      May 5,
      2004, the Company created a wholly-owned subsidiary, AmeriChip Tool and
      Abrasives, LLC (“ATA”). The new subsidiary is responsible for providing all the
      tools necessary for metal removal in the machining process.





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          of Contents**




These
      relationships give the Company the right to make sales calls and or sell the
      products of these companies directly to ATA’s customer base. The right to
      represent is defined by “being appointed to act as a distributor on behalf of a
      specific company and given the right to represent their product line on behalf
      of the subject company.” The products are sold to ATA, which acts as a
      distributor, at a discount from market price. ATA then sells the product at
      the
      market price. The companies provide the Company with all their marketing tools,
      samples and other selling material, which assists the Company in selling their
      product line. The Company is also able to offer their products via our on-line
      marketing section of the Company’s website at www.americhiplacc.com. The
      Company derives it’s income from selling the various companies products to its’
customers. The primary motivation for having distributors is to eliminate the
      need for a sales staff. All of the companies, with which ATA has chosen to
      become associated, make products that are in the metal removal industry, which
      is consistent with our business model.





On
      August
      3, 2004, ATA announced its purchase of the Nasco Brand name of abrasive
      products. This line of abrasive products has been sold throughout the United
      States and Canada for many years. The Company believes that the acquisition
      of
      this brand and its inventory will allow its subsidiary, AmeriChip Tool and
      Abrasives, to immediately generate sales by offering a wider breadth of products
      for all its current and future customers who require abrasive products in their
      manufacturing processes. Abrasives are typically used in the process after
      machining. The purchase of this brand name is consistent with the implementation
      of the Company’s business model.




On
      August
      9, 2004, The Company incorporated a wholly owned subsidiary, AmeriChip Canada,
      Inc. a Canadian charter corporation. This entity was formed to channel Canadian
      Based opportunities to both AmeriChip International, Inc. and AmeriChip Tool
      and
      Abrasives, LLC.




On
      September 10, 2004, we established AmeriChip International Holdings, LLC, as
      a
      wholly owned subsidiary of AmeriChip International, Inc. This entity was created
      in order to acquire American Production and Machining, LLC, an unrelated entity,
      out of bankruptcy. This transaction has not occurred as of the date of this
      report





In
      February, 2005, AmeriChip Pipe Technologies, Inc. was established as a wholly
      owned subsidiary of AmeriChip International, Inc. and is a Texas corporation.
      This subsidiary was created in furtherance of the LACC process as it relates
      to
      threading internal and external threads of oil pipe and drilling pipe. We are
      currently working with two of the largest manufacturers of oil pipe and oil
      drilling pipe to establish off line lasering systems to be used in their
      facility. AmeriChip is testing this system currently in the LACC labs for
      demonstration during the first quarter of its fiscal year. Additional
      specialized laser heads and software are being developed for this
      process.




-
          3
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          of Contents**




We
      have
      also formed a Canadian wholly-owned non-operating subsidiary, AmeriChip Canada
      Inc., located in Newmarket, Ontario, in order to facilitate the transaction
      of
      business with Canadian suppliers and customers.





On
      April
      17, 2006, the Company formed AmeriChip Automotive, Inc., a wholly owned
      subsidiary, to develop opportunities related to the automotive industry. As
      of
      the date of this report, AmeriChip Automotive, Inc. is a non-operating entity
      and was incorporated in the State of Michigan.





On
      October
      19, 2006, the Company formed Excellence 3, Inc., a wholly owned subsidiary,
      incorporated in the State of Michigan. This subsidiary was established in order
      to acquire the fixed assets of KSI Machine and Engineering, Inc. (KSI) as part
      of AmeriChip International’s acquisition of the outstanding common stock of KSI.
      Upon the acquisition of KSI on February 15, 2007, Excellence 3, Inc. will lease
      the fixed assets back to AmeriChip International, Inc..





On
      September 14, 2004, the Company executed a letter of intent with KSI Machine
      and
      Engineering, Inc. (KSI) to acquire all of KSI’s outstanding common stock. This
      letter of intent was subsequently modified and executed again on November 7,
      2006. KSI is a manufacturer of automotive die and mold castings which use
      horizontal spindle 5 axis computer numerical controlled machines. During the
      year ended November 30, 2004, the Company paid a deposit of $50,000 for this
      agreement. On December 7, 2004, the Company paid an additional $100,000 and
      signed a stock purchase agreement with KSI. On June 24, 2005, the Company
      announced that it was entering into a license agreement with KSI for the use
      of
      AmeriChip’s Laser Assisted Chip Control technology. On October 26, 2005, the
      Company paid an additional deposit of $30,000 and on November 7, 2005, the
      Company paid another $20,000 deposit for a total of $200,000.





In
      September 2006, the Company was approved by Peoples Bank for a $1,600,000 loan
      to complete the purchase of KSI Machine, subject to approval of an additional
      loan in the amount of $1,280,000 to be provided by the Small Business
      Administration (SBA).




On
      February 15, 2007, AmeriChip completed the acquisition of the common stock
      of
      KSI. The acquisition price of KSI's common stock was $3,200,000, subject to
      certain adjustments related to the amount of retained earnings reflected on
      the
      closing date, the amount of accounts receivable reflected on the closing date,
      and the amount of accounts payable reflected on the closing date. The adjusted
      acquisition price of KSI was $2,988,043, subject to post closing due diligence
      by the Company’s internal accounting firm.




-
          4
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          of Contents**




The
      Company paid an additional $150,000 to the seller at closing, resulting in
      an
      obligation by the Company to the seller in the amount of $2,638,043. This
      obligation is payable in monthly installments of $50,000 over a period of 18
      months, inclusive of interest accruing at a rate of 7% per annum. After the
      expiration of the 18 month period, the unpaid balance is due to the seller.
      Additional principal payments may be required, depending upon the value of
      the
      Company’s stock price.





Excellence
      3, Inc.




In
      conjunction with the KSI acquisition, ownership of Excellence 3, Inc, a fully
      owned subsidiary of AmeriChip International, Inc., was assigned to KSI, another
      fully owned subsidiary of AmeriChip International, Inc. Immediately subsequent
      to the acquisition of KSI, Excellence 3, Inc. acquired all of the fixed assets
      of KSI in the amount of $3,200,000. $1,600,000 of the funding for this
      acquisition was provided by Peoples State Bank, a local area banking
      institution. $1,280,000 of the funding for this acquisition was provided by
      the
      United States Small Business Administration (SBA). These funds are scheduled
      to
      be provided within six months of the closing date. Peoples State Bank
      agreed to provide temporary funding for this six month period. In addition
      to
      the funding previously described, AmeriChip International, Inc. provided the
      remaining $320,000 in order to complete the acquisition of fixed
      assets.




Payment
      of
      the $1,600,000 obligation requires monthly payments in the amount of $26,298,
      over a period of 7 years, inclusive of interest accruing at a rate of $9.68%
      per
      annum. The funding for the SBA portion of the loan provided by Peoples State
      Bank requires interest only payments, accruing at a rate of 9.68% per annum
      until the funding is provided by the SBA. Payment of the permanent portion
      of
      the SBA obligation will be made over a period of 10 years. The interest rate
      and
      monthly payment amount is dependant upon the terms of a debenture to be issued
      by a local taxing authority.




The
      acquisition of KSI allowed AmeriChip International, Inc. to become an operating
      company, with Tier One status recognized by many actual and potential customers
      of AmeriChip.




AmeriChip
      International Holdings, LLC




On
      September 10, 2004, we established AmeriChip International Holdings, LLC, as
      a
      wholly owned subsidiary of AmeriChip International Inc.




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          5
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          of Contents**




**The
      Process**





The
      AmeriChip LACC process is designed to increase thru put with less capital
      equipment and labor as a component of cost per unit. By increasing depth of
      cut
      and feed rates, less capital equipment and labor are required to perform the
      same manufacturing tasks. The LACC process also sets up an additional platform
      for savings that can be utilized but is not essential to creating the
      justification for the use of this patented process. For example, traditional
      methods of handling the residue of machining metal parts has necessitated the
      manufacture of specially designed chip control inserts and or the use of
      coolants to assist in the separation and flushing of contaminated metal chips,
      a
      problem that has plagued the metal parts manufacturing industry for more than
      60
      years. The problem, however, has become even more prevalent with the development
      of highly automated machine tools during the last two decades. Automated
      machinery was developed to satisfy the demand for the increased production
      of
      machined metal components by the automotive sector as well as other industries.
      Certain operations resulted in such serious chip control problems that some
      companies were unable to effectively capitalize on the benefits of
      automation.





The
      metal
      machining industry seeks to increase production and automate the machining
      process. The automotive industry has been particularly hard pressed to effect
      lower costs both within its own internal operations as well as components
      manufactured on its behalf by outside suppliers who must remain competitive.
      Preventing the forfeiting of contracts to foreign parts providers where labor
      and other costs are considered lower than in the United States is of key
      importance. Stringy metal chips wrap around automatic gauging and interfere
      with
      robotics to cause an interruption or discontinuance of the automation to manual
      operations. The AmeriChip LACC process allows this problem to be
      eliminated.





Currently
      coolant is deployed to flush the long stringy chips out of the machine
      components and remove them from the machine base itself. If the base becomes
      clogged it can cause many hours of non-productive down time and added costs
      while the machinery is cleaned. Coolant represents a major component of the
      entire manufacturing processes, representing as much as 15% of the total
      machining production cost. Coolant also has to be disposed of in accordance
      with
      environmental regulations, adding even more cost. Additional, coolant fumes
      may
      pose potentially serious health risks and the cause of long term problems when
      inhaled. The International Union, United Automobile, Aerospace and Agricultural
      Implement Workers of America (“UAW”) has established standards for coolant
      exposure in the five (5ml) per cubic meter and has requested that even stricter
      regulations be adopted at ten times more stringent. The multiple cost factor
      associated with the use of coolant as well as related health and environmental
      factors represent a challenge for metal machining manufacturing companies to
      significantly reduce the consumption of coolant or to eliminate its use
      altogether. By eliminating the use of coolant, incidence of workman’s
      compensation claims should be dramatically reduced. Additionally, the ribbons
      of
      metal chips that remain following the machining of metal components without
      the
      contamination of bacteria laden coolant will provide an additional revenue
      source for the company as the “chips” can be salvaged and recycled.





We
      have
      targeted the automotive sector initially, but our process can be applied to
      any
      industry where the machining of metal is a major process of manufacturing of
      component parts. This includes, but is not limited to oil production and
      refining, off-road constuction,  farm implements, aerospace and
      defense contractors. .




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          of Contents**




AmeriChip
      has a flexible marketing plan that is customer driven.





1)****
            **License
                the process** to specific customers for specific parts. Under this
                scenario, the customer would pay AmeriChip a per piece price on a
                *monthly* or *quarterly* basis. This is the most desirable,
                due to the fact that AmeriChip has no capital
                outlay.





2)****
            **AmeriChip
                will process parts with the LACC process** and deliver to the
                customer location for a cost per piece price. This operation can
                be at the
                customer facility, at or close by the metal supplier to stay in the
                logistics path or at an AmeriChip facility at an agreed upon
                location.





3)****
            **AmeriChip
                manufactures a complete part** and delivers to customer for a per
                piece cost. This is the most capital intensive but gives a significant
                increase in total revenues and profit over the previously mentioned
                market
                approaches.




Our
      customers are expected to find a variety of compelling benefits. We believe
      that
      many of these benefits result in operational efficiencies and significant cost
      savings in the overall machining of metal parts. We believe that the benefits
      of
      using our process would include the following:





***
      Less Machine Down-Time**




1.
            Chip
                Clearing by operators of tools and parts2.
            Reduced
                unpredictable tool breakage resulting from wrapping of chips, re-cutting
                of chips3.
            Eliminate
                down time required for chip pullers to clear machines and under floor
                conveyers of clogged chip bundles4.
            Increased
                machine efficiency by eliminating chip bundles from tangling around
                tool
                slides, posts, holders and interfering with adjacent moving parts,
                such as
                robotics, automation, chucking and in-line process
                gauging5.
            Predictable
                tool change management program linked to consistency in tool
                life6.
            Reduced
                incidents of on-the-job injury from exposure to sharp, long continuous
                stringy chips, which requires medical down time. Jobs are handled
                more
                quickly and efficiently leading to less frustration and constant
                worry
                about dealing with dangerous chips.




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          of Contents**




***
      Reduced Costs**




1.
            Increased
                thru-put will require less time needed to create the same number
                of parts.
                Faster feed rates and deeper depth of cut.2.
            Reduction
                of direct labor - chip pullers are no longer required.3.
            Elimination
                of maintenance and outside special services to clean and repair chip
                evacuation systems, thus increasing productivity through reduced
                machine
                down time4.
            Reduction
                of overtime because of increased thru-put per machine. Less machinery
                and
                labor required to do the same number of parts.5.
            Reduced
                use of Hi-Lo driver’s time to removed containers filled quickly because of
                the chip bundles. Few containers are necessary due to chip
                compaction.6.
            Improved
                tool life due to less breakage because of chip bundles and the heat
                dissipating with the chip.7.
            Less
                machine maintenance required8.
            Reduced
                scrap9.
            Elimination
                of coolant. The LACC process does not require the use of coolant
                whatsoever. The working environment is therefore less toxic, cleaner
                and
                safer. Helps achieve the Zero Waste- Zero Landfill
                philosophy.10.
            Reduction
                in coolant filter cost11.
            Reduction
                in coolant disposal cost


12.
            Reduced
                costs of gloves and aprons as fewer are needed13.
            Better
                railcar utilization due to chip compaction14.
            Lower
                insurance rates as a result in the reduction of injuries related
                to the
                handling of long, sharp, stringy chips, cleaner and safer work area,
                which
                is less toxic15.
            Uncontaminated
                chips can now be sold for profit as compared to the cost of removal
                of
                contaminated chips.




***
      Tooling and Process Efficiencies -**




1.
            Elimination
                of the need for light/semi-finish and finish depths of cuts in low
                to
                medium carbon materials and non-ferrous metals thus allowing in many
                cases
                one pass to remove the desired amount of metal. Faster Feed rates
                and
                deeper depth of cut allow faster thru put which requires less capital
                equipment and labor.2.
            Reduced
                welding and packing of chips, which reduces the wear and tear on
                cutting
                tools and the amount of heat that is transfer to the cutting tool
                and
                part.3.
            Improved
                chip disposal and handling costs through better management of chip
                lengths4.
            Reduced
                capital equipment expenditures since high-pressure coolant systems
                and the
                filters that accompany them are no longer necessary5.
            The
                need for specially designed chip control inserts and the use of coolants
                to manage the “chip” are no longer required with the LACC
                process.





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KSI
      Machine & Engineering Inc.





On
      September 14, 2004, the Company executed a letter of intent with KSI Machine
      and
      Engineering, Inc. (hereinafter “KSI”) to acquire all of KSI’s outstanding stock.
      KSI is a manufacturer of automotive die and mold castings which use horizontal
      spindle 5 axis computer numerical controlled machines. During the year ended
      November 30,2005, the Company paid an accumulated deposit of $50,000 for this
      agreement. During the year ended November 30, 2005, the Company paid an
      additional $150,000 and signed a stock purchase agreement with KSI. This total
      deposit of $200,000 completes the deposit requirement related to the KSI
      acquisition. On June 24, 2005 the Company announced that it was entering in
      to a
      license agreement with KSI Machine and Engineering Inc. for the use of
      AmeriChip’s Laser Assisted Chip Control technology. KSI and AmeriChip are also
      negotiating a joint venture relationship, from which AmeriChip will generate
      revenues from the application of its proprietary technology in a Tier One
      environment.




The
      adjusted acquisition price of KSI was $2,988,043, subject to post closing due
      diligence by the Company’s internal accounting firm. Deposits preciously paid to
      the seller in the amount of $200,000 were applied against the purchase price
      as
      of the closing date. The Company paid an additional $150,000 to the seller
      at
      closing, resulting in an obligation by the Company to the seller in the amount
      of $2,638,043. This obligation is payable in monthly installments of $50,000
      over a period of 18 months, inclusive of interest accruing at a rate of 7%
      per
      annum. After the expiration of the 18 month period, the unpaid balance is due
      to
      the seller. Additional principal payments may be required, depending upon the
      value of the Company’s stock price.





In
      conjunction with this acquisition, ownership Excellence 3, Inc, a fully owned
      subsidiary of AmeriChip International, Inc., was assigned to KSI, another fully
      owned subsidiary of AmeriChip International, Inc. Immediately subsequent to
      the
      acquisition of KSI, Excellence 3, Inc. acquired all of the fixed assets of
      KSI
      in the amount of $3,200,000. $1,600,000 of the funding for this acquisition
      was
      provided by Peoples State Bank, a local area banking institution. $1,280,000
      of
      the funding for this acquisition was provided by the United States Small
      Business Administration (SBA).





Payment
      of
      the $1,600,000 obligation requires monthly payments in the amount of $26,298,
      over a period of 7 years, inclusive of interest accruing at a rate of $9.68%
      per
      annum.




The
      acquisition of KSI allowed AmeriChip International, Inc. to become an operating
      company, with tier one status recognized by many actual and potential customers
      of AmeriChip.  Company has also hired a full time robotic and laser
      technician to provide faster turnaround for customer parts located at the KSI
      facility.




**AmeriChip
      Pipe Technologies, Inc.**





AmeriChip
      Pipe Technologies, Inc., (a Texas Corporation), was formed in February 2005
      to facilitate the implementation of the Flexible Manufacturing System that
      the
      company designed to manufacture oil pipe in a billion dollar industry. At
      present, AmeriChip Pipe Technologies, Inc. is building equipment for lease
      to oil pipe and oil pipe coupling manufacturers.




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**Current
      Products and Services**





Our
      patented laser assisted chip control process is readily applicable to any metal
      component that requires precision finishing. We believe that our process will
      provide significant value to our customers by decreasing the costs and
      increasing the efficiency of their operations. We are targeting our service
      to
      businesses in the following markets:





*Automobiles


*Oil
      Production and Refining


*Aerospace


*Off-Road
      Construction


*Farm
      Implements Manufacturing


*Defense
      Contractors


*Wind
      Energy





**Sales
      & Marketing**





We
      have
      now become and entity that focuses on sales and marketing. To that end we
      appointed Roger Paquette, Chief Operating Officer in 2007 with a primary
      function of overseeing any production and operations, with emphasis on
      implementation of the LACC technology. The service will be the manufacturing
      of
      a finished product using equipment with the LACC technology offering a “total
      solution” for our customers.  We further anticipate that customers
      will purchase equipment using LACC technology from one of our strategic
      alliances and also pay AmeriChip a royalty for use of the LACC technology.
      We
      are approaching a diverse customer base in the automotive, aerospace, oil pipe,
      heavy truck, farm implements, defense and wind energy.




Management
      has identified what is believed to be large markets that remain untapped but
      would be logical, potentially strong candidates given an appropriate product
      and
      service offering at the right price. For example, in the automotive industry,
      management has identified particular market segments that would be likely to
      benefit from our LACC technology: axle shafts, axle tubes, torque converters,
      spindles, pinions, input/output shafts, side gears and connecting
      rods.




**Government
      Regulations**





In
      addition to regulations applicable to businesses in general, our plant
      operations will be subject to other regulations that are common in industrial
      manufacturing.




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**Competition**





We
      compete
      with other parts machining companies. We have generated some revenues
      from our wholly owned subsidiary, AmeriChip Tool and Abrasives, and are a
      minuscule participant in the parts manufacturing business.





**Intellectual
      Property**





We
      rely on
      our patents to protect our technology. We also have unpatented proprietary
      technology. We rely on nondisclosure and other contractual provisions to protect
      our proprietary technology. Currently, we have two patents granted and we intend
      to file other patent applications for enhancements to the existing patents.
      As
      part of our confidentiality procedures, we generally enter into nondisclosure
      agreements with our employees, consultants, distributors and partners and limit
      the dissemination and access to our technical documentation and other
      proprietary information. There is no assurance our patents will provide us
      with
      adequate protection. If a third party infringes on our patents, we do not have
      adequate funds available for protracted litigation and consequently may not
      be
      able to enforce our rights under applicable patent laws.





As
      of
      February 28, 2008, we had filed a total of two patent applications with the
      U.S.
      Patent and Trademark Office (PTO) covering our technology, both of which have
      been approved.




**Employees**





As
      of
      November 30, 2007, we employ 32  full-time employees and 3
      full-time consultants. We have no collective bargaining agreements with our
      employees.








**Item
      2. Description of Property**





Our
      principal executive offices are located at 24700 Capital Blvd, Clinton Township
      MI, Michigan. We relocated AmeriChip  Tool and Abrasives to our
      headquarters in Clinton, Township, MI.





As
      of
      February 15, 2007, we have established our World Headquarters at their facility.
      KSI has 50,000 sq. feet of manufacturing space.




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**Item
      3. LegalProceedings**




Cornell
      Capital filed an action against the Company in the Superior Court of New Jersey,
      Hudson County, Chancery Division, General Equity Part. In response to this
      filing, the Company (a) removed the action to the United States District Court,
      District of New Jersey; (b) answered the complaint denying its material
      allegations of liability and (c) interposed a counterclaim for damages against
      Cornell. As of February 28, 2008, we expect, at minimum that there will be
      a
      substantial reduction in the amount that Cornell claims it is owed. The
      Company may require previously issued common stock to be returned in settlement
      of these claims. Although the Company believes it will prevail under the
      circumstances, there is still a chance that the Company may have to honor
      Cornell conversion rights and payments under its agreements.





Other
      than
      the above, we are not a party to any pending material legal proceedings and
      are
      not aware of any threatened or contemplated proceeding by any governmental
      authority against the Company or its subsidiaries. Notwithstanding, from time
      to
      time, the Company may become subject to legal proceedings and claims in the
      ordinary course of business, including employment-related and trade related
      claims.







**Item
      4. Submissionof Matters to a Vote of Security
      Holders**





On
      April
      24, 2007 the Board of Directors and a majority of its stockholders voted to
      approve the following resolutions:




1)
            Four
                members were elected to the Company's Board of Directors to hold
                office
                until the Company's Annual Meeting of Stockholders in 2006 or until
                his
                successor is duly elected and qualified. At  the request of the
                Board Mr. Rossmann tendered his resignation in September 2007, there
                remains three members serving on the board;
                and





2)
            The
                appointment of Jewett, Schwartz, Wolfe & Associates as the
                Company's independent certified public accountants was ratified;
                and;





3)
            The
                Company’s 2003 Non-Qualified Incentive Stock Option Plan was ratified;
                and





4)
            The
                amendment to the Articles of Incorporation to increase the authorized
                shares of common stock to 1,000,000,000, par value $.00001
                and   establish a class of preferred shares, totaling
                1,000,000,000, par value $.00001,  was ratified;
                and;





5)
            Enacted
                a one for seven reverse stock split, to be effective as of the filing
                of
                an amendment to the Company's Articles of Incorporation with the
                Nevada
                Secretary of State.





**Item
      4.01. Changes in Registrant's Certifying Accountant.**




On
      June
      18, 2007, AmeriChip International, Inc. (the “Company”) dismissed Williams &
Webster, P.S. as its independent registered public accounting firm. Effective
      June 18, 2007, we engaged Jewett, Schwartz, Wolfe & Associates as our
      new independent registered public accounting firm. Our board of directors has
      approved the dismissal of Williams & Webster, P.S. and the appointment of
      Jewett, Schwartz, Wolfe & Associates as our new independent registered
      public accounting firm.




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**PART
      II**





**Item
      5. Market forCommon Equity and Related Stockholder
      Matters**




**Market
      Information**




Our
      common
      shares are currently quoted on the OTC Bulletin Board under the symbol ACII.OB.”
The following table sets forth the quarterly high and low bid prices for our
      common shares on the OTC Bulletin Board for the periods indicated. The prices
      set forth below represent inter-dealer quotations, without retail markup,
      markdown or commission and may not be reflective of actual transactions. Our
      shares began trading on January 10, 2003.




**Bid
                Price Per Share****High**
            
            
            **Low****2007****Quarter
                ended**May
                31, 2007
            
            $
            0.02
            
            
            $
            0.02August
                31, 2007
            
            $
            0.08
            
            
            $
            0.08November
                30, 2007
            
            $
            0.04
            
            
            $
            0.04**2006****Quarter
                ended**February
                28, 2006
            
            $
            0.05
            
            
            $
            0.04May
                31, 2006
            
            $
            0.08
            
            
            $
            0.01August
                31, 2006
            
            $
            0.06
            
            
            $
            0.05November
                30, 2006
            
            $
            0.03
            
            
            $
            0.02**2005****Quarter
                ended**February
                28, 2005
            
            $
            0.06
            
            
            $
            0.05May
                31, 2005
            
            $
            0.04
            
            
            $
            0.03August
                31, 2005
            
            $
            0.05
            
            
            $
            0.04November
                30, 2005
            
            $
            0.04
            
            
            $
            0.03





**Holders**




We
      have
      approximately 171 record holders of our common stock as of February 28,, 2008,
      according to a shareholders’ list provided by our transfer agent as of that date
      and our records relating to issuable shares.




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**Dividend
      Policy**




We
      have
      never paid any cash dividends on our common shares, and we do not anticipate
      that we will pay any dividends with respect to those securities in the
      foreseeable future. Our current business plan is to retain any future earnings
      to finance the expansion development of our business. Any future determination
      to pay cash dividends will be at the discretion of our board of directors,
      and
      will be dependent upon our financial condition, results of operations, capital
      requirements and other factors as our board may deem relevant at that
      time.




**Recent
      Sales of Unregistered Securities**




On
      January
      11, 2006, AmeriChip entered into and closed a Stock Purchase Agreement with
      Marc
      Walther and Edward Rutkowski, being officers and directors of the Company,
      whereby 24,000,000 shares of its common stock were sold at $0.085 per share
      and
      10,000,000 shares of its common stock were sold at $0.04 per share in
      satisfaction and payment of indebtedness in the amount of $1,220,000 due and
      owing to each person under the terms of that certain Licensing Agreement with
      the Company dated on or about January 21, 2003. As of January 1, 2006, the
      $1,220,000 indebtedness amount represented the accrued principal and interest
      current due and owing to each person plus the discounted present value of the
      monthly payments arising from the unpaid $650,000 principal and interest due
      under the terms of the said Licensing Agreement.




Subsequent
      to November 30, 2005, the Company issued 32,723,122 shares of common stock
      at an
      average price of $0.032 per share under the Company's 2003 Nonqualified Stock
      Option Plan.




Subsequent
      to November 30, 2005, the Company issued 21,236,887 shares of common stock
      at an
      average price of $0.039 per share for services rendered to the
      Company.




The
      shares
      of the Company’s common stock sold to Messrs. Walther and Rutkowski were issued
      pursuant to an exemption from the registration requirements of the Securities
      Act of 1933, as amended (the “Act”), afforded by Section 3(b) and/or Section
      4(2) of the Act and Rules 505 and/or 506 of Regulation D thereunder, as a
      transaction not involving a public offering. Each investor represented that
      he
      acquired the securities for investment only and not with a view of or for sale
      in connection with any distribution thereof and an appropriate investment legend
      will be affixed to the share certificate issued to each investor. Each of the
      investors is an accredited investor as defined in Rule 501 of Regulation D
      promulgated under the Act.





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**Preferred
      Series A**





In
      2007
      the Company created Preferred Series A stock. These shares are not convertible
      to common shares and are non–participating.




**Item
      6. Management’s Discussionand Analysis of Financial Condition and Results of
      Operations**




The
      following discussion should be read in conjunction with, and is qualified in
      its
      entirety by, our consolidated financial statements and the notes thereto and
      other financial information included elsewhere in this Annual Report on Form
      10-KSB. This Annual Report, including the following Management’s Discussion and
      Analysis, and other reports filed by the Registrant from time to time with
      the
      Securities and Exchange Commission (collectively the “Filings”) contain
      forward-looking statements which are intended to convey our expectations or
      predictions regarding the occurrence of possible future events or the existence
      of trends and factors that may impact our future plans and operating results.
      These forward-looking statements are derived, in part, from various assumptions
      and analyses we have made in the context of our current business plan and
      information currently available to us and in light of our experience and
      perceptions of historical trends, current conditions and expected future
      developments and other factors we believe to be appropriate in the
      circumstances. You can generally identify forward-looking statements through
      words and phrases such as “seek”, “anticipate”, “believe”, “estimate”, “expect”,
“intend”, “plan”, “budget”, “project”, “may be”, “may continue”, “may likely
      result”, and similar expressions. When reading any forward-looking statement you
      should remain mindful that all forward-looking statements are inherently
      uncertain as they are based on current expectations and assumptions concerning
      future events or future performance of our company, and are subject to risks,
      uncertainties, assumptions and other factors relating to our industry
      and results of operations, including but not limited to the following
      factors:




•
            Changes
                in existing product liability, tort or warranty laws or the introduction
                of new laws, regulations or policies that could affect our business
                practices: these laws, regulations or policies could impact our industry
                as a whole, or could impact only those portions in which we are currently
                active.




•
            Changes
                in environmental regulations: these regulations could have a negative
                impact on our earnings; for example, laws mandating greater fuel
                efficiency could increase our research and development
                costs.




•
            Changes
                in economic conditions, including changes in interest rates, financial
                market performance and our industry: these types of changes can impact
                the
                economy in general, resulting in a downward trend that impacts not
                only
                our business, but all companies with which we
                compete;




•
            Changes
                in relationships with major customers and/or suppliers: an adverse
                change
                in our relationships with major customers and/or suppliers would
                have a
                negative impact on our earnings and financial
                position.




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•
            Armed
                conflicts and other military actions: the considerable political
                and
                economic uncertainties resulting from these events, could adversely
                affect
                our order intake and sale,.




•
            Factors
                that we have discussed in previous public reports and other documents
                filed with the Securities and Exchange
                Commission.




Should
      one
      or more of these risks or uncertainties materialize, or should the underlying
      assumptions prove incorrect, actual results may differ significantly from those
      anticipated, believed, estimated, expected, intended or planned.




Each
      forward-looking statement should be read in context with, and with an
      understanding of, the various other disclosures concerning our company and
      our
      business made in our Filings. You should not place undue reliance on any
      forward-looking statement as a prediction of actual results or developments.
      We
      are not obligated to update or revise any forward-looking statement contained
      in
      this report to reflect new events or circumstances unless and to the extent
      required by applicable law.




CRITICAL
      ACCOUNTING POLICIES





Management’s
      discussion and analysis of our financial condition and results of operations
      are
      based on our consolidated financial statements, which have been prepared in
      accordance with accounting principles generally accepted in the United States.
      The preparation of these consolidated financial statements requires management
      to make estimates and judgments that affect the reported amounts of assets,
      liabilities, revenues and expenses, and related disclosure of contingent assets
      and liabilities. Our critical accounting policies are described in Note 2 of
      the
      Company’s Consolidated Financial Statements. This summary of critical accounting
      policies of the Company is presented to assist in understanding the Company’s
      financial statements. All accounting estimates are at risk to change because
      of
      internal and external factors, and when adjustments are adopted. Most of our
      estimates are based upon historically known data and have remained stable over
      time. Certain estimates are subject to market place conditions, and are
      discussed below.





On
      an
      ongoing basis, management evaluates its estimates, including those related
      to
      impairment of long-lived assets, including finite lived intangible assets,
      accrued liabilities and certain expenses. We base our estimates on historical
      experience and on various other assumptions that we believe to be reasonable
      under the circumstances, the results of which form the basis for making
      judgments about the carrying values of assets and liabilities that are not
      readily apparent from other sources. Actual results may differ materially from
      these estimates under different assumptions or conditions.




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We
      believe
      the following critical accounting estimates and policies, among others, involve
      the more significant judgments and estimates used in the preparation of our
      financial statements as of this time. These assessments may change as the
      Company completes its acquisitions.




**Accounting
      for Convertible Notes and Securities with Beneficial Conversion
      Features**




Following
      guidance by EITF 00-27, the Company allocates a portion of proceeds received
      from convertible notes to warrants (granted to note holders) and also to the
      beneficial conversion feature of the debt. The value of the warrants and the
      beneficial conversion feature are recorded on the balance sheet as a debt
      discount and as an increase to stockholders’ equity. The discounts are amortized
      over the life of the loans.





**Inventories**




Inventories
      are stated at the lower of cost to purchase and/or manufacture the inventory
      or
      the current estimated market value of the inventory. We regularly review our
      inventory quantities on hand and record a provision for excess and obsolete
      inventory based primarily on our estimated forecast of product demand and/or
      our
      ability to sell the products and production requirements. Demand for the our
      products can fluctuate significantly. Factors which could affect demand for
      our
      products include unanticipated changes in consumer preferences, general market
      conditions or other factors, which may result in cancellations of advance orders
      or a reduction in the rate of reorders placed by customers and/or continued
      weakening of economic conditions. Additionally, our estimates of future product
      demand may be inaccurate, which could result in an understated or overstated
      provision required for excess and obsolete inventory. Our estimates are based
      upon our understanding of historical relationships which can change at
      anytime.




**Revenue
      and Product Sales**





The
      Company recognizes revenue from product sales when the products are shipped
      and
      title passes to customers. The Company has not provided an allowance for sales
      returns because the revenues are new and there is no historical experience
      on
      which to base an estimate. This assessment may change as the Company develops
      the appropriate history of transactions in its operating companies and a
      provision for sales returns will be established. Returns of a product, if
      permitted by the manufacturer, are charged a 15% restock fee. Specialized
      machined products created to the customer’s blueprint specifications are also
      being produced. These product costs are market driven and the Company warrants
      the finished product to the extent they meet the specifications.





During
      the
      year ended November 30, 2007 the Company, through its business plan expanded
      its
      focus to include certain agency relationships for multiple vendors. As such,
      its
      policy for revenue recognition has been revised to recognize its status as
      an
      agent for these vendors. As an agent, the Company recognizes its commissions
      when earned. Commissions are earned by the Company when an order has been
      placed, delivery taken, and title has passed to the customer.





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**OVERVIEW**





Our
      technology, when implemented, will eliminate dangerous ribbon-like steel chips
      that tangle around moving tool parts, automation devices and other components
      essential to the machine processing of low to medium grade carbon steels and
      non-ferrous metal parts. The result of this process is a superior product
      manufactured in a safer working environment, avoiding many of the health and
      safety issues associated with traditional metal processing methodologies, while
      offering potential cost savings.





We
      have
      completed the design and testing of our patented laser assisted chip control
      technology. We are currently working with automakers and vendors with a view
      to
      supplying processed parts.


On
      September 14, 2004, the Company executed a letter of intent with KSI Machine
      and
      Engineering, Inc. (hereinafter "KSI") to acquire all of KSI's outstanding stock.
      KSI is a manufacturer of automotive die and mold castings which use horizontal
      spindle 5 axis computer numerical controlled machines. During the year ended
      November 30, the Company paid a deposit of $50,000 for this agreement. On
      December 7, 2004 the Company paid an additional $100,000 and signed a purchase
      agreement with KSI the closing of such transaction being subject to a number
      of
      factors as described below. During the year ended November 30, 2005, the Company
      paid an additional $150,000 and signed a stock purchase agreement with KSI.
      This
      total deposit of $200,000 completes the deposit requirement related to the
      KSI
      acquisition. On June 24, 2005 the Company announced that it was entering in
      to a
      license agreement with KSI Machine and Engineering Inc. for the use of
      AmeriChip’s Laser Assisted Chip Control technology. KSI and AmeriChip are also
      negotiating a joint venture relationship, from which AmeriChip will generate
      revenues from the application of its proprietary technology in a Tier One
      environment. The acquisition was completed on February 15, 2007.




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**RESULTS
      OF OPERATIONS**




FINANCIAL
      CONDITION AND RESULTS OF OPERATIONS


COMPARISON
      OF YEAR ENDED NOVEMBER 30, 2007,


TO
      YEAR
      ENDED NOVEMBER 30, 2006.




**Revenue
      Recognition.******We
      have generated revenues from our
      operations during the last two years. We recognize revenue when received of
      which there is no assurance of such recognition as described below, in
      accordance with Securities and Exchange Commission Staff Accounting Bulletin
      No.
      101 ("SAB 101"), "Revenue Recognition in Financial Statements." Revenue is
      recognized only when the price is fixed or determinable, persuasive evidence
      of
      an arrangement exists, the service is performed, and collectibility is
      reasonably assured.




**Revenues
      and Sales**.Revenues
      for the twelve
      months ended November 30, 2007 increased from $132,616 for the twelve months
      ended November 30, 2006 to $2,655,848. Gross Profit for the twelve months ended
      November 30, 2007 increased from $38,888 for the twelve months ended November
      30, 2006 to $1,822,112. This increase results from the sales of product less
      $833,736 in costs of sales during the year ending November 30, 2007. This
      increase in gross profit margin is primarily due to the acquisition of the
      KSI
      subsidiary during the year ending November 30, 2007.




**Operating
      Expenses****.**Operating
      expenses, which include
      administrative expenses, legal and accounting expenses, consulting expenses
      and
      license expense increased from $10,906,303 for the twelve months ended November
      30, 2006, to $11,755,191 for the twelve months ended November 30, 2007 an
      increase of $848,888. This increase is due to a significant increase in Director
      Fees and administrative expenses during the year ending November 30, 2007.
      These
      increases are partially offset by significant decreases in consulting expense
      and licensing expense.




**Net
      Loss****.**Net
      loss decreased from a net loss of ($10,986,583) for the twelve months ended
      November 30, 2006 to a net loss of ($10,657,898) for the twelve months ended
      November 30, 2007, primarily due to the larger gross profit margin during the
      year ending November 30, 2007, and partially offset by the larger operating
      expenses as described previously.




**PLAN
      OF OPERATION**





Since
      we
      have completed the acquisition of KSI Machine and Engineering, we are now in
      a
      position to implement our technology on an expanded basis.  We
      anticipate that the operations of KSI Machine and Engineering will bring to
      the
      consolidated balance sheet of AmeriChip annual revenues of approximately
      $5,800,000 based on revenues generated in 2007.




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The
      facilities of KSI Machine and Engineering are large enough to permit allocation
      of space for our new laser and robotic equipment which is now in operation
      at
      the KSI location. This equipment is required in the implementation of the LACC
      process and we are currently conducting pilot projects for various Tier One
      suppliers.  We have been working with the Michigan Economic
      Development Group and the Indiana Economic Development to look for and secure
      space in excess of 100,000 sq ft. to augment our 50,000 sq ft.
      plant.   We are capable of processing up to $30 million in sales
      at our current 50,000 sq ft facility. We have applied for training dollars
      from
      the State of Michigan for various job opportunities. We are also in the process
      of applying for a bond which will be used to finance additional equipment
      acquisitions necessary for our expansion.





KSI
      Machine and Engineering is a manufacturer of automotive die and mold castings
      which use horizontal spindle 5 axis computer numerical controlled
      machines.





We
      believe
      that the patented technology, Laser Assisted Chip Control process ("LACC")
      for
      companies engaged in the machining of automobile parts can produce significant
      revenues for us. While we are optimistic about our initial customer experiences,
      there can be no assurances that the savings realized will be experience by
      all
      customers or that we will achieve significant revenues.




**LIQUIDITY
      AND CAPITAL RESOURCES**





The
      accompanying financial statements have been prepared on a going concern basis,
      which contemplates the realization of assets and satisfaction of liabilities
      in
      the normal course of business. The Company has incurred material recurring
      losses from operations.  At November 30, 2007, the Company had an
      accumulated deficit of ($32,159,967.) For the twelve months ended November
      30,
      2007, the Company sustained a net loss of ($10,657,898). The financial
      statements do not include any adjustments relating to the recoverability and
      classification of recorded asset amounts or the amounts and classification
      of
      liabilities that may be necessary should the Company be unable to continue
      as a
      going concern.   The Company has recently initiated a change in
      senior management that it believes will be instrumental in opening and
      exploiting new, worldwide markets in addition to the current core automotive
      business.  The Company will continue to present to a diverse group of
      blue chip private and governmental prospects, including but not limited to
      those
      in such manufacturing industries as oil pipe drilling, aerospace, off-road
      construction, farm implement, defense and military -- worldwide.




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**Hennessey
      Capital**





We
      have
      entered into a finance program with Hennessey Capital for receivables which
      will
      assist in our cash flow as the business model develops. Even though we have
      secured adequate funding, no assurances can be provided that our business
      activities will generate sufficient revenues which may result in net profits
      for
      the Company.





Our
      auditors have raised substantial doubt as to our ability to continue as a going
      concern. The financial statements do not include any adjustments that might
      result from the outcome of the underlying uncertainties as
      discussed.







**ACCOUNTING
      POLICIES SUBJECT TO ESTIMATION AND JUDGMENT**





Management’s
      Discussion and Analysis of Financial Condition and Results of Operations are
      based upon our consolidated financial statements, which have been prepared
      in
      accordance with accounting principles generally accepted in the United States.
      When preparing our financial statements, we make estimates and judgments that
      affect the reported amounts on our balance sheets and income statements, and
      our
      related disclosure about contingent assets and liabilities. We continually
      evaluate our estimates, including those related to revenue, allowance for
      doubtful accounts, reserves for income taxes, and litigation. We base our
      estimates on historical experience and on various other assumptions, which
      we
      believe to be reasonable in order to form the basis for making judgments about
      the carrying values of assets and liabilities that are not readily ascertained
      from other sources. Actual results may deviate from these estimates if
      alternative assumptions or condition are used.




-
          21
          -
 **Table
          of Contents**




**Item
      7. FinancialStatements**




**Americhip
      International, Inc.**


**FINANCIAL
        STATEMENTS**
 
 **November
        30, 2007**
 
 **Table
        of Contents**
 
 Report
                  of Independent Registered Public Accounting Firm
              F
–
                  2Balance
                  Sheet
              F
–
                  3Statements
                  of Operations
              F
–
                  4Statements
                  of Changes in Stockholders' Equity (Deficit)
              F
–
                  5 – 6Statements
                  of Cash Flows
              F
–
                  7 – 8Notes
                  to Financial
                  Statements
              F
–
                  9 – 35
 
 **Table
            of Contents**
  **Report
        of Independent Registered Public Accounting Firm**
 To
        The
        Shareholders and Board of Directors of
 Americhip
        International,
        Inc.
 
 We
        have
        audited the accompanying balance sheet of Americhip International, Inc. (a
        Nevada corporation) as of November 30, 2007 and the related statements of
        operations, changes in stockholders’ equity (deficit) and cash flows for the
        year then ended.  These financial statements are the responsibility of
        the Company’s management.  Our responsibility is to express an opinion
        on these financial statements based on our audits.
 
 We
        conducted our audit in accordance with the standards of the Public Company
        Accounting Oversight Board (United States).  Those standards require
        that we plan and perform the audit to obtain reasonable assurance about whether
        the financial statements are free of material misstatement.  An audit
        includes examining, on a test basis, evidence supporting the amounts and
        disclosures in the financial statements.  An audit also includes
        assessing the accounting principles used and significant estimates made by
        management, as well as evaluating the overall financial statement
        presentation.  We believe that our audits provided a reasonable basis
        for our opinion.
 
 In
        our
        opinion, the financial statements referred to above present fairly, in all
        material respects, the financial position of Americhip International, Inc.
        as of
        November 30, 2007, and the results of its operations and its cash flows for
        the
        year then ended in conformity with accounting principles generally accepted
        in
        the United States.
 
 The
        accompanying financial statements have been prepared assuming that Americhip
        International, Inc. will continue as a going concern.  As discussed in
        Note 2 to the financial statements, Americhip International, Inc. has suffered
        recurring losses from operations, which raises substantial doubt about its
        ability to continue as a going concern.  Management’s plans regarding
        those matters also are described in Note 2.  The financial statements
        do not include any adjustments that might result from the outcome of this
        uncertainty.
   */s/*
        Jewett, Schwartz, Wolfe & Associates
 
 Hollywood,
        Florida
 February
        22, 2008




**Table
          of Contents**




**AMERICHIP
                    INTERNATIONAL,
                    INC.****CONSOLIDATED
                    BALANCE
                    SHEET**November
                    30,2007(audited)**ASSETS**CURRENT
                    ASSETSCash
                
                $
                131Accounts
                    receivable - trade,
                    net
                
                
                685,303Accounts
                    receivable -
                    other
                
                
                1,600Related
                    party
                    receivable
                
                
                174,010Prepaid
                    expenses
                
                
                403,849Inventory
                
                
                135,047TOTAL
                    CURRENT
                    ASSETS
                
                
                1,399,940FIXED
                    ASSETS,
                    NET
                
                
                3,586,140OTHER
                    ASSETSDeposits
                
                
                39,488Technology
                    rights and patents, net
                    of amortization
                
                
                12,095Goodwill
                
                
                2,577,673TOTAL
                    OTHER
                    ASSETS
                
                
                2,629,256**TOTAL
                    ASSETS**
                
                $
                7,615,336**LIABILITIES
                    AND STOCKHOLDERS'
                    EQUITY**CURRENT
                    LIABILITIESBank
                    overdraft
                
                $
                39,153Accounts
                    payable and accrued
                    expenses
                
                
                618,100Related
                    party
                    payable
                
                
                85,086Related
                    party notes payable,
                    current portion
                
                
                22,857Notes
                    payable - bank, current
                    portion
                
                
                257,979Notes
                    payable - other, current
                    portion
                
                
                187,527Convertible
                    debentures, net of
                    discounts
                
                
                244,579Accrued
                    interest - related
                    party
                
                
                228,573Accrued
                    interest -
                    other
                
                
                73,821Deferred
                    revenue
                
                
                22,000Deposits
                    - private
                    placements
                
                
                261,774TOTAL
                    CURRENT
                    LIABILITIES
                
                
                2,041,449LONG
                    - TERM
                    LIABILITIESRelated
                    party notes payable, net
                    of current portion
                
                
                163,174Notes
                    payable - bank, net of
                    current portion
                
                
                2,515,368Notes
                    payable - other, net of
                    current portion
                
                
                2,515,549TOTAL
                    LONG - TERM
                    LIABILITIES
                
                
                5,194,091MINORITY
                    INTEREST
                
                
                3,413COMMITMENTS
                    AND
                    CONTINGENCIES**STOCKHOLDERS'
                    EQUITY**Common
                    stock, $0.001 par value;
                    1,000,000,000 shares authorized,184,234,723
                    shares issued and
                    outstanding
                
                
                184,235Additional
                    paid-in
                    capital
                
                
                32,352,115Accumulated
                    deficit
                
                
                (32,159,967
                )TOTAL
                    STOCKHOLDERS'
                    EQUITY
                
                
                376,383**TOTAL
                    LIABILITIES
                    AND****STOCKHOLDERS'
                    EQUITY**
                
                $
                7,615,336
  The
        accompanying notes are an integral part of these
        financial statements.
  F-3
 **Table
            of Contents**
 **AMERICHIP
                    INTERNATIONAL,
                    INC.****CONSOLIDATED
                    STATEMENTS OF
                    OPERATIONS**For
                    the Year
                    Ended,November
                    30,
                
                
                November
                    30,2007
                
                
                2006(Audited)
                
                
                (Audited)REVENUES
                
                
                2,655,848
                
                
                $
                132,616COST
                    OF
                    SALES
                
                
                833,736
                
                
                
                93,728Gross
                    Profit
                
                
                1,822,112
                
                
                
                38,888EXPENSESAdministrative
                    service
                
                
                1,188,824
                
                
                
                465,526Director
                    fees
                
                
                5,850,000
                
                
                
                -Consulting
                    expense
                
                
                3,394,668
                
                
                
                8,091,109Depreciation
                    and
                    amortization
                
                
                382,356
                
                
                
                75,001Legal
                    and
                    accounting
                
                
                440,599
                
                
                
                318,946License
                    expense
                
                
                120,000
                
                
                
                1,440,000Office
                    expense
                
                
                83,192
                
                
                
                42,246Bad
                    debt
                    expense
                
                
                34,650
                
                
                
                -Wages
                    - officers and
                    directors
                
                
                140,000
                
                
                
                239,976Wages
                    -
                    other
                
                
                120,902
                
                
                
                233,499Loss
                    on disposition of fixed
                    assets
                
                
                15,832
                
                
                
                -Total
                    Expenses
                
                
                11,771,023
                
                
                
                10,906,303LOSS
                    FROM
                    OPERATIONS
                
                
                (9,948,911
                )
                
                
                (10,867,415
                )OTHER
                    INCOME
                    (EXPENSE)Forgiveness
                    of
                    debt
                
                
                -
                
                
                
                43,904Financing
                    expense
                
                
                (16,994
                )
                
                
                (71,500
                )Other
                    income
                
                
                -
                
                
                
                5,226Interest
                    expense
                
                
                (513,022
                )
                
                
                (96,798
                )Total
                    Other
                    Expense
                
                
                (530,016
                )
                
                
                (119,168
                )LOSS
                    BEFORE TAXES AND DISCONTINUED
                    OPERATIONS
                
                
                (10,478,927
                )
                
                
                (10,986,583
                )INCOME
                    TAX
                    EXPENSE
                
                
                -
                
                
                
                -NET
                    LOSS BEFORE DISCONTINUED
                    OPERATIONS
                
                $
                (10,478,927
                )
                
                $
                (10,986,583
                )LOSS
                    FROM DISCONTINUED
                    OPERATIONS,NET
                    OF INCOME
                    TAXES
                
                
                (178,971
                )
                
                
                -NET
                    LOSS
                
                $
                (10,657,898
                )
                
                $
                (10,986,583
                )WEIGHTED
                    AVERAGE NUMBER
                    OFCOMMON
                    SHARES
                    OUTSTANDING,BASIC
                    AND
                    DILUTED
                
                
                136,059,530
                
                
                
                52,526,526BASIC
                    AND DILUTED NET LOSS PER
                    SHARE
                
                $
                (0.08
                )
                
                $
                (0.21
                )
  The
        accompanying notes are an integral part of these financial
        statements.
  F-4
 **Table
            of Contents**
  **AMERICHIP
                    INTERNATIONAL
                    INC.****CONSOLIDATED
                    STATEMENTS OF CHANGES
                    OF STOCKHOLDERS' EQUITY (DEFICIT)**Additional
                
                
                
                
                
                TotalCommon
                    Stock
                
                
                Paid-in
                
                
                Accumulated
                
                
                Stockholders'Shares
                
                
                Amount
                
                
                Capital
                
                
                (Deficit)
                
                
                Equity(Deficit)Balance,
                    November 30,
                    2005
                
                
                34,575,934
                
                
                $
                34,576
                
                
                $
                8,622,514
                
                
                $
                (10,515,486
                )
                
                $
                (1,858,396
                )Common
                    stock issued in private
                    placements forcash
                    received in the current year,
                    as well as privateplacement
                    deposits recognized from
                    the priorfiscal
                    year at an average proce of
                    $0.048 per share
                
                
                4,006,656
                
                
                
                4,007
                
                
                
                1,356,212
                
                
                
                -
                
                
                
                1,360,219Common
                    stock options issued for
                    consulting andservices
                    at an average price of
                    $0.04 per share
                
                
                17,932,377
                
                
                
                17,932
                
                
                
                5,684,152
                
                
                
                -
                
                
                
                5,702,084Common
                    stock issued for consulting
                    andservices
                    at an average of $0.038
                    per share
                
                
                4,166,071
                
                
                
                4,166
                
                
                
                1,129,709
                
                
                
                -
                
                
                
                1,133,875Common
                    stock issued in payment of
                    unpaidlicense
                    expense and accrued
                    interest at anaverage
                    price of $0.085 per
                    share
                
                
                3,428,571
                
                
                
                3,429
                
                
                
                2,036,571
                
                
                
                -
                
                
                
                2,040,000Common
                    stock issued for the
                    exercise of warrantsat
                    an average price of $0.037 per
                    share
                
                
                1,428,571
                
                
                
                1,429
                
                
                
                375,119
                
                
                
                -
                
                
                
                376,548Warrants
                    issued for services at an
                    average priceof
                    $0.029 per
                    share
                
                
                -
                
                
                
                -
                
                
                
                388,838
                
                
                
                -
                
                
                
                388,838Forgiveness
                    of debt income related
                    to notespayable
                    to two
                    officers
                
                
                -
                
                
                
                -
                
                
                
                244,584
                
                
                
                -
                
                
                
                244,584Net
                    loss for the year ended
                    November 30, 2006
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (10,986,583
                )
                
                
                (10,986,583
                )Balance,
                    November 30,
                    2006
                
                
                65,538,180
                
                
                $
                65,539
                
                
                $
                19,837,699
                
                
                $
                (21,502,069
                )
                
                $
                (1,598,831
                )
  The
        accompanying notes are an integral part of these
        financial statements.
  F-5
 **Table
            of Contents**
  **AMERICHIP
                    INTERNATIONAL
                    INC.****CONSOLIDATED
                    STATEMENT OF CHANGES
                    IN STOCKHOLDERS' EQUITY (DEFICIT) -
                    CONTINUED**Additional
                
                
                
                
                
                TotalCommon
                    Stock
                
                
                Paid-in
                
                
                Accumulated
                
                
                Stockholders'Shares
                
                
                Amount
                
                
                Capital
                
                
                (Deficit)
                
                
                Equity(Deficit)Balance,
                    November 30,
                    2006
                
                
                65,538,180
                
                
                $
                65,539
                
                
                $
                19,837,699
                
                
                $
                (21,502,069
                )
                
                $
                (1,598,831
                )Common
                    stock issued in private
                    placements forcash
                    received in the current year,
                    as well as privateplacement
                    deposits recognized from
                    the priorfiscal
                    year at an average price of
                    $0.018 per share
                
                
                12,778,261
                
                
                
                12,778
                
                
                
                1,563,545
                
                
                
                -
                
                
                
                1,576,323Common
                    stock options issued and
                    exercised forfor
                    consulting and services at an
                    average price of$0.022
                    per
                    share
                
                
                19,757,833
                
                
                
                19,758
                
                
                
                3,082,584
                
                
                
                -
                
                
                
                3,102,342Common
                    stock issued for consulting
                    and servicesat
                    an average price of $0.020 per
                    share
                
                
                1,307,143
                
                
                
                1,307
                
                
                
                189,693
                
                
                
                -
                
                
                
                191,000Common
                    stock options issued and
                    exercised forprepaid
                    consulting and services at
                    an average priceof
                    $0.028 per
                    share
                
                
                2,110,286
                
                
                
                2,110
                
                
                
                398,330
                
                
                
                -
                
                
                
                400,440Common
                    stock issued for prepaid
                    consultingservices
                    at an average price of
                    $0.020 per share
                
                
                142,857
                
                
                
                143
                
                
                
                19,857
                
                
                
                -
                
                
                
                20,000Common
                    stock issued for a discount
                    onconvertible
                    debentures at $0.030
                    per share
                
                
                57,143
                
                
                
                57
                
                
                
                11,943
                
                
                
                -
                
                
                
                12,000Warrants
                    issued for services at an
                    average priceof
                    $0.026 per
                    share
                
                
                -
                
                
                
                -
                
                
                
                5,919,400
                
                
                
                -
                
                
                
                5,919,400Common
                    stock issued for warrants
                    exercised
                
                
                34,014,286
                
                
                
                34,014
                
                
                
                (34,014
                )
                
                
                -
                
                
                
                -Common
                    stock issued in payment of
                    note payableat
                    an average price of $0.025 per
                    share
                
                
                29,600,000
                
                
                
                29,600
                
                
                
                712,400
                
                
                
                -
                
                
                
                742,000Common
                    stock issued to adjust
                    fractional sharessubsequent
                    to 1 for 7 reverse
                    stock split at anaverage
                    price of $0.000 per
                    share
                
                
                12,857
                
                
                
                13
                
                
                
                (13
                )
                
                
                -
                
                
                
                -Common
                    stock issued in private
                    placements for cashreceived
                    at an average price of
                    $0.030 per share
                
                
                11,400,544
                
                
                
                11,401
                
                
                
                336,826
                
                
                
                -
                
                
                
                348,227Common
                    stock options issued and
                    exercised forfor
                    consulting and services at an
                    average price$0.090
                    per
                    share
                
                
                112,000
                
                
                
                112
                
                
                
                9,968
                
                
                
                -
                
                
                
                10,080Common
                    stock issued for consulting
                    and servicesat
                    an average price of $0.043 per
                    share
                
                
                2,570,000
                
                
                
                2,570
                
                
                
                108,730
                
                
                
                -
                
                
                
                111,300Common
                    stock issued for a deposit
                    on an operatinglease
                    at an average price of
                    $0.067 per share
                
                
                1,500,000
                
                
                
                1,500
                
                
                
                98,500
                
                
                
                -
                
                
                
                100,000Common
                    stock issued for conversion
                    of an outstandingconvertible
                    debenture at an
                    average price of$.030
                    per
                    share
                
                
                3,333,333
                
                
                
                3,333
                
                
                
                96,667
                
                
                
                -
                
                
                
                100,000Net
                    loss for the year ended
                    November 30, 2007
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (10,657,898
                )
                
                
                (10,657,898
                )Balance,
                    November 30,
                    2007
                
                
                184,234,723
                
                
                $
                184,235
                
                
                $
                32,352,115
                
                
                $
                (32,159,967
                )
                
                $
                376,383
  The
        accompanying notes are an integral part of these
        financial statements.
  F-6
 **Table
            of Contents**
  **AMERICHIP
                    INTERNATIONAL,
                    INC.****CONSOLIDATED
                    STATEMENTS OF CASH
                    FLOW****For
                    the year
                    ended,****November
                    30,
                    2007**
                
                
                **November
                    30,
                    2006****(Audited)**
                
                
                **(Audited)**Cash
                    Flows from Operating
                    Activities:Net
                    loss for the
                    period
                
                $
                (10,657,898
                )
                
                $
                (10,986,583
                )Adjustments
                    to reconcile net loss
                    to net cash used inoperating
                    activities:Forgiveness
                    of
                    debt
                
                
                -
                
                
                
                (43,904
                )Depreciation
                    and
                    amortization
                
                
                382,356
                
                
                
                75,001Amortization
                    of finance
                    charges
                
                
                12,000
                
                
                
                71,500License
                    expense
                
                
                120,000
                
                
                
                1,440,000Warrants
                    issued for
                    services
                
                
                5,919,400
                
                
                
                465,386Common
                    stock options issued for
                    consulting services
                
                
                3,112,422
                
                
                
                -Common
                    stock issued for consulting
                    services
                
                
                292,300
                
                
                
                6,835,959Common
                    stock issued for the
                    exercise of warrants
                
                
                -
                
                
                
                300,000Loss
                    on disposition of fixed
                    assets
                
                
                15,382
                
                
                
                -Changes
                    in assets and
                    liabilities:Accounts
                    receivable -
                    trade
                
                
                (275,146
                )
                
                
                4,631Accounts
                    receivable -
                    other
                
                
                (1,600
                )
                
                
                -Prepaid
                    expenses
                
                
                229,328
                
                
                
                (26,603
                )Inventories
                
                
                77,470
                
                
                
                24,530Bank
                    overdraft
                
                
                39,138
                
                
                
                (4,546
                )Accounts
                    payable and accrued
                    liabilities
                
                
                (374,454
                )
                
                
                444,132Accrued
                    interest
                    payable
                
                
                48,729
                
                
                
                85,707Deferred
                    revenue
                
                
                22,000
                
                
                
                -Net
                    cash used by operating
                    activities
                
                
                (1,038,573
                )
                
                
                (1,314,790
                )Cash
                    Flows from Investing
                    Activities:Payments
                    made on related party
                    receivable
                
                
                (12,010
                )Acquisition
                    of fixed
                    assets
                
                
                (138,756
                )
                
                
                (325,092
                )Payments
                    made for acquisition of
                    subsidiary
                
                
                (150,000
                )
                
                
                -Cash
                    received from acquisition of
                    subsidiary
                
                
                19,787
                
                
                
                -Payments
                    made for
                    deposits
                
                
                (36,288
                )
                
                
                -Net
                    cash used by investing
                    activities
                
                
                (317,267
                )
                
                
                (325,092
                )Cash
                    Flows from Financing
                    Activities:Payments
                    made to refinance
                    equipment of acquired subsidiary
                
                
                (320,000
                )
                
                
                -Payments
                    on related party
                    payable
                
                
                -
                
                
                
                (6,287
                )Payments
                    made on related party
                    notes payable
                
                
                (23,073
                )
                
                
                (17,556
                )Payments
                    made on notes payable -
                    bank
                
                
                (106,653
                )
                
                
                -Payments
                    made on notes payable -
                    other
                
                
                (127,831
                )
                
                
                -Deposits
                    - private
                    placement
                
                
                261,774
                
                
                
                388,838Proceeds
                    received on convertible
                    debentures
                
                
                100,000
                
                
                
                -Proceeds
                    from the issuance of
                    common stock
                
                
                1,535,712
                
                
                
                669,407Proceeds
                    from long term
                    borrowings
                
                
                34,326
                
                
                
                -Net
                    cash provided by financing
                    activities
                
                
                1,354,255
                
                
                
                1,034,402Net
                    increase in
                    cash
                
                
                (1,585
                )
                
                
                (605,480
                )Cash,
                    beginning of
                    period
                
                
                1,716
                
                
                
                218Cash,
                    end of
                    period
                
                $
                131
                
                
                $
                (605,262
                )Supplemental
                    Information:Interest
                    paid
                
                $
                464,293
                
                
                $
                -Taxes
                    paid
                
                $
                -
                
                
                $
                -
  The
        accompanying notes are an integral part of these
        financial statements.
  F-7
 **Table
            of Contents**
  **AMERICHIP
                    INTERNATIONAL,
                    INC.****CONSOLIDATED
                    STATEMENTS OF CASH
                    FLOW - CONTINUED****For
                    the year
                    ended,****November
                    30,
                    2007**
                
                
                **November
                    30,
                    2006****(Audited)**
                
                
                **(Audited)**Common
                    stock issued in
                    payment of note payable
                
                $
                550,000
                
                
                $
                -Common
                    stock issued for
                    consulting services
                
                $
                430,440
                
                
                $
                -Common
                    stock issued for private
                    placement deposits receivedin
                    prior
                    year
                
                $
                388,838
                
                
                $
                325,386Contribution
                    of capital -
                    related party
                
                $
                -
                
                
                $
                244,584Common
                    stock issued for
                    discount on convertible debentures
                
                $
                12,000
                
                
                $
                -Conversion
                    of accounts
                    payable to notes payable
                
                $
                158,537
                
                
                $
                -Assets
                    and liabilities
                    received for acquisition of subsidiary:Accounts
                    receivable -
                    trade
                
                $
                (383,142
                )
                
                $
                -Prepaid
                    expenses
                
                $
                (70,839
                )
                
                $
                -Fixed
                    assets
                
                $
                (3,477,136
                )
                
                $
                -Deposits
                
                $
                200,000
                
                
                $
                -Goodwill
                
                $
                (2,577,673
                )
                
                $
                -Note
                    payable -
                    bank
                
                $
                (3,204,292
                )
                
                $
                -Note
                    payable -
                    other
                
                $
                2,638,043
                
                
                $
                -Accounts
                    payable and accrued
                    expenses
                
                $
                316,859
                
                
                $
                -Accrued
                    interest -
                    other
                
                $
                19,383
                
                
                $
                -Exchange
                    of liabilities for
                    refinancing equipment of acquiredsubsidiaries:Note
                    payable -
                    bank
                
                $
                3,204,292
                
                
                $
                -Note
                    payable -
                    bank
                
                $
                2,880,000
                
                
                $
                -Accrued
                    interest -
                    other
                
                $
                4,292
                
                
                $
                -
  The
        accompanying notes are an integral part of these
        financial statements.
  F-8
 **Table
            of Contents**
  **NOTE
        1 – ORGANIZATION AND DESCRIPTION OF BUSINESS**
 
 AmeriChip
        International, Inc. (hereinafter “AmeriChip” or “the Company”) was incorporated
        in the State of Nevada on October 17, 2000 as Southborrough Technology
        Corporation for the purpose of mineral exploration. On March 9, 2001, the
        corporate name was changed to Southborrough Ventures, Inc. Although the Company
        obtained an option to acquire a mineral claim in British Columbia, Canada,
        the
        Company allowed the option on that claim to expire on or about June 30, 2003,
        as
        the Company was unable to identify any commercially exploitable
        reserves.  The Company changed its name to AmeriChip International,
        Inc. on December 1, 2003.  The Company is currently engaged in the
        development of its patented technology for use in manufacturing.
 
 On
        March
        22, 2003, the Company acquired all of the outstanding stock of AmeriChip
        Ventures, Inc., an 80% owner of the stock of AmeriChip, Inc., which holds
        the
        patents for the Laser Assisted Chip Control (“LACC”) technology.  For
        accounting purposes, the acquisition was treated as a recapitalization of
        AmeriChip, Inc. with AmeriChip International, Inc. as the acquirer in a reverse
        acquisition.
 
 On
        November 12, 2003, the Company incorporated a subsidiary, AmeriChip Tool
        and
        Abrasives, LLC (hereinafter “ATA”), whose primary focus is to the sale of
        machining products. ATA established headquarters in Plymouth, Michigan. On
        August 21, 2004, AmeriChip International, Inc., through ATA, entered into
        an
        agreement to acquire certain assets of National Abrasive Systems Co.
        (hereinafter (“NASCO”), a Michigan corporation. NASCO is considered a related
        entity because its president is also the president of AmeriChip International,
        Inc. With the acquisition of inventory, ATA became the Company’s first fully
        operating subsidiary. With the establishment of planned operations in its
        subsidiary, the Company moved from a development stage enterprise into an
        operating company in August, 2004. The Company was in the development stage
        from
        December 1, 2000 through November 30, 2003. The year 2004 is the first year
        during which it is considered an operating company.
 
 On
        September 10, 2004, the Company formed AmeriChip International Holdings,
        LLC, a
        wholly owned subsidiary, to acquire an unrelated entity out of bankruptcy.
        This
        transaction was later terminated and the LLC is currently dormant.
 
 On
        August
        9, 2004, the Company incorporated a wholly owned subsidiary, AmeriChip Canada,
        Inc., a Canadian charter corporation. This entity was formed to channel Canadian
        based opportunities to both AmeriChip International and AmeriChip Tool and
        Abrasives.
 
 In
        February 2005, a Texas Corporation, AmeriChip Pipe Technologies, Inc. was
        formed
        to facilitate the implementation of flexible manufacturing system that the
        Company had designed to manufacture oil pipe. As of November 30, 2007, this
        subsidiary has generated no sales.
 
 On
        April
        17, 2006, the Company formed AmeriChip Automotive, Inc., a wholly owned
        subsidiary, to develop sales related to the automotive industry. As of November
        30, 2007, no sales have been generated in this entity.
  F-9
 **Table
            of Contents**
  On
        October
        19, 2006, the Company formed Excellence 3, Inc., a wholly owned subsidiary.
        This
        entity was formed in order to acquire the fixed assets of KSI Machine and
        Engineering, Inc. (“KSI”) as part of AmeriChip International, Inc.’s pending
        acquisition of the outstanding common stock of KSI. Upon acquisition of this
        equipment, this subsidiary leased the fixed assets back to AmeriChip
        International, Inc.  During the year ending November 30, 2007,
        however, the operating activity of Excellence 3, Inc. is reflected in the
        consolidated financial statements, as a result of AmeriChip’s acquisition of the
        outstanding common stock of KSI Machine & Engineering, Inc.
 
 On
        February 15, 2007, the Company acquired all of the outstanding stock of KSI
        Machine & Engineering, Inc. (KSI). Upon its acquisition, KSI became a fully
        owned subsidiary of AmeriChip International, Inc. Concurrent with its
        acquisition by AmeriChip International, Inc., KSI’s status as a Subchapter S
        Corporation for Federal Income Tax purposes was terminated, effective January
        1,
        2007. In addition, the fiscal year end of KSI was changed from December 31
        to
        November 30 of each year, in order to coincide with the fiscal year of AmeriChip
        International, Inc. KSI is a Tier 1 automotive supplier, who provides CNC
        machining services to its customers (See note 3).
 
 The
        year
        end of AmeriChip International, Inc. and its affiliated subsidiaries is November
        30.
 
 **NOTE
        2 – GOING CONCERN**
 
 The
        accompanying financial statements have been prepared on a going concern basis,
        which contemplates the realization of assets and satisfaction of liabilities
        in
        the normal course of business. The Company has incurred material recurring
        losses from operations.  At November 30, 2007, the Company had an
        accumulated deficit of $32,159,967, limited cash, and negative working capital.
        For the year ended November 30, 2007, the Company sustained a net loss of
        $10,657,898. These factors, among others, indicate that the Company may be
        unable to continue as a going concern for a reasonable period of time. The
        financial statements do not include any adjustments relating to the
        recoverability and classification of recorded asset amounts or the amounts
        and
        classification of liabilities that may be necessary should the Company be
        unable
        to continue as a going concern.  The Company’s continuation as a going
        concern is contingent upon its ability to obtain additional financing and
        to
        generate revenue and cash flow to meet its obligations on a timely basis.
        Management is currently putting sales strategies in place which will, if
        successful, mitigate these factors which raise substantial doubt about the
        Company’s ability to continue as a going concern.
 
 **NOTE
        3 – ACQUISITION OF SUBSIDIARY**
 
 On
        February 15, 2007, AmeriChip International, Inc. acquired 100% of the common
        stock of KSI Machine & Engineering, Inc. (hereinafter “KSI”). The
        acquisition price of KSI’s common stock was $2,988,043, subject to a post
        closing due diligence analysis by Company management and its professional
        representatives. Deposits related to this acquisition in the amount of $200,000,
        which had been previously paid by AmeriChip and reflected as deposits on
        the
        Company’s historical balance sheet, were used to offset the purchase price. In
        addition, the
  F-10
 **Table
            of Contents**
  Company
        paid the seller $150,000 on the closing date, resulting in a net obligation
        due
        by the Company to the seller in the amount of $2,638,043 (See Note
        11).
 
 The
        following is a list of assets acquired and liabilities assumed as a result
        of
        AmeriChip’s acquisition of 100% of KSI’s common stock, along with an allocation
        of the purchase price among the assets acquired and liabilities
        assumed:
 
 Cash
              
              $
              19,787Accounts
                  receivable – trade
              
              
              383,142Prepaid
                  expenses
              
              
              70,839Fixed
                  assets
              
              
              3,477,136Goodwill
              
              
              2,577,673Note
                  payable – bank
              
              
              (3,204,292
              )Accounts
                  payable and accrued expenses
              
              
              (316,859
              )Accrued
                  interest
              
              
              (19,383
              )$
              2,988,043
  Terms
        of
        the obligation due to the seller originally required monthly payments of
        $50,000, inclusive of interest accruing at a rate of 7% per annum, over a
        period
        of 24 months. On October 30, 2007, however, the terms of this agreement were
        modified. The monthly payments were revised to $6,000 per week. All of the
        other
        terms of the promissory note remained unchanged. At the end of the 24 month
        period, any remaining unpaid balance is due to the seller. Additional principal
        payments are required over the term of the loan if the average closing price
        of
        AmeriChip’s common stock reaches certain minimum levels over a consecutive ten
        day period. If the average closing price of AmeriChip’s common stock reaches
        $0.30 per share over a consecutive ten day period, one-third of the unpaid
        balance is due within 60 days. After this first period, if the average closing
        price of AmeriChip’s common stock reaches $0.40 per share over a consecutive ten
        day period, one-half of the unpaid balance is due within 60 days. After this
        second period, if the average closing price of AmeriChip’s common stock reaches
        $0.50 per share over a consecutive 10 day period, the entire unpaid balance
        is
        due. As of the date of this report, none of the minimum closing price levels
        have been achieved.
 
 In
        addition to these terms, the Corporation was required to obtain outside
        financing for KSI’s fixed assets acquired as a result of this transaction. The
        outside financing was provided by a Detroit area bank and the United States
        Small Business Administration (hereinafter “SBA”). As a result of this
        requirement, AmeriChip established Excellence 3, Inc., a new fully owned
        subsidiary. Excellence 3, Inc. was established in order to acquire the fixed
        assets of KSI and to subsequently lease the equipment back to KSI. Immediately
        after AmeriChip acquired the common stock of KSI, it assigned its ownership
        in
        Excellence 3, Inc. to KSI. As of the balance sheet date, Excellence 3, Inc.
        is a
        fully owned subsidiary of KSI.
 
 F-11
 **Table
            of Contents**
  Immediately
        after AmeriChip completed its acquisition of KSI’s common stock, Excellence 3,
        Inc. acquired all of the fixed assets of KSI, except for the leasehold
        improvements owned by KSI. The purchase price of these fixed assets was
        $3,200,000. Outside financing representing a total of 90% of the purchase
        price
        of the fixed assets was provided by a Detroit area bank ($1,600,000) and
        the
        United States Small Business Administration ($1,280,000). The SBA portion
        of the
        financing is temporarily provided by the same Detroit area bank that provided
        the $1,600,000 portion of the financing. The remaining 10% of the purchase
        price
        ($320,000) was paid directly by Excellence 3, Inc. Loan costs in the amount
        of
        $46,612 were incurred in order to complete the outside financing of the fixed
        asset acquisition. These loan costs will be amortized over the term of the
        loan.
 
 Terms
        of
        the bank obligation amounting to $1,600,000 require monthly payments in the
        amount of $26,298, inclusive of interest accruing at a rate of 9.68% per
        annum,
        over a period of 7 years. This obligation is secured by the net assets of
        Excellence 3, Inc., the primary obligor, while being supported by the guarantees
        of AmeriChip International, Inc., KSI, the Chief Executive Officer of AmeriChip
        and the Chief Financial Officer of AmeriChip. As a result of this obligation,
        the bank has a first security interest in the assets acquired by Excellence
        3,
        Inc. (See Note 11).
 
 Terms
        of
        the short-term bank obligation amounting to $1,280,000 require interest only
        payments, accruing at a rate of 9.68% per annum, for the period of March
        15,
        2007 through July 15, 2007. This term was subsequently extended by the Detroit
        area bank which provided the temporary financing until February 1, 2008.
        During
        this period of time, the SBA is obligated to sell bonds through a local area
        taxing authority in order to provide the permanent financing related to this
        portion of the loan. The SBA portion of the financing will be provided no
        later
        than February 1, 2008. Terms of the SBA portion of the financing will require
        payments over a ten year period, with interest accruing at a rate dependent
        upon
        the rate at which the supporting bonds are sold at. In addition, upon permanent
        funding by the SBA, finance charges of approximately $37,000 will be due
        to the
        SBA. These finance charges will be added to the obligation due to the SBA,
        resulting in a total obligation due in the amount of $1,317,000 upon funding
        by
        the SBA (See Note 11).
 
 In
        addition to the terms previously described, KSI entered into a lease agreement
        with the former owner of KSI related to the building utilized by KSI. As
        a
        result of this agreement, payments in the amount of $28,000 are due on a
        monthly
        basis over a 5 year period. In conjunction with this agreement, AmeriChip
        International, Inc. entered into a sublease agreement with its KSI subsidiary
        for the portion of the building facility deemed to be used by AmeriChip
        administrative personnel. This sublease agreement requires monthly payments
        in
        the amount of $3,500 by AmeriChip International, Inc. to KSI over a five
        year
        period. The primary lease agreement requires AmeriChip International, Inc.
        to
        acquire the leased building for $3,500,000 on or before the expiration of
        the
        lease agreement.
 
 In
        conjunction with its acquisition of the fixed assets of KSI, Excellence 3,
        Inc.
        entered into a lease agreement with KSI, whereby KSI agreed to lease the
        fixed
        assets from Excellence 3, Inc. Monthly equipment lease payments in the amount
        of
        $42,000 are required to be paid by KSI to Excellence 3, Inc. beginning March
        1,
        2007.
  F-12
 **Table
            of Contents**
  Other
        than
        goodwill, no other identifiable intangible assets were acquired as a result
        of
        AmeriChip’s acquisition of 100% of KSI’s common stock. The customer list has a
        negligible value to AmeriChip due to the fact that AmeriChip has established
        relationships with all of KSI’s customers during the two year period prior to
        the closing date. A non-compete agreement between Jim Kotsonis and Americhip
        was
        not entered into. Accordingly, the excess amount of KSI’s acquisition cost over
        the fair market value of its net assets is reflected as goodwill on the
        consolidated financial statements.
 
 There
        are
        three primary reasons that AmeriChip acquired KSI. First, KSI has a tier
        one
        automotive supplier status, which AmeriChip inherits upon its acquisition
        of
        100% of KSI’s common stock. Second, KSI has a strong credit history, which KSI
        also benefits from subsequent to KSI’s acquisition. Third, KSI provides a
        platform by which AmeriChip will be able to utilize its patented Laser Assisted
        Chip Control technology. Because of all of these factors, AmeriChip acquired
        KSI
        at a price which was higher than the book value of its underlying assets.
        As a
        result, goodwill in the amount of $2,577,673 is reflected in the consolidated
        balance sheet as a result of this stock acquisition.
 
 The
        consolidated financial statements of the Company for the year ending November
        30, 2007 includes the results of operations related to KSI for the period
        of
        February 15, 2007 (date of acquisition) through November 30, 2007.
 
 The
        Company's unaudited proforma results for the twelve months ended November
        30,
        2007 and 2006 assuming the merger occurred on December 1, 2006 and 2005,
        respectively, is as follows:
 
 2007
              
              
              2006Net
                  sales
              
              $
              3,426,023
              
              
              $
              249,925Net
                  loss
              
              $
              (10,733,940
              )
              
              $
              (11,304,737
              )Basic
                  loss per share
              
              $
              (0.08
              )
              
              $
              (0.22
              )Weighted  average
                  shares
              
              
              136,059,030
              
              
              
              52,526,526
 
 These
        unaudited proforma results have been prepared for comparative purposes only
        and
        do not purport to be indicative of the results of operations that actually
        would
        have resulted had the merger been in effect December 1, 2006 or 2005, or
        the
        future results of operations.
 
 **NOTE
        4 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**
 
 This
        summary of significant accounting policies is presented to assist in
        understanding the financial statements. The financial statements and notes
        are
        representations of the Company’s management, which is responsible for their
        integrity and objectivity. These accounting policies conform to accounting
        principles generally accepted in the U.S. and have been consistently applied
        in
        the preparation of the financial statements.
 
 F-13
 **Table
            of Contents**
 
 Accounting
        Methods
 The
        Company’s financial statements are prepared using the accrual basis of
        accounting in accordance with accounting principles generally accepted in
        the
        United States of America.
 
 Accounting
        Pronouncements-Recent
 In
        December, 2007, the Financial Accounting Standards Board (FASB) issued Statement
        of Financial Accounting Standards (SFAS) No. 141 (revised 2007), “Business
        Combinations” (hereinafter “SFAS No. 141 (revised 2007)”). This statement
        establishes principles and requirements for how an acquirer a) recognizes
        and
        measures in its financial statements the identifiable assets acquired, the
        liabilities assumed and any noncontrolling interest in the acquiree, b)
        recognizes and measures the goodwill acquired in the business combination
        or a
        gain from a bargain purchase and c) determines what information to disclose
        to
        enable users of the financial statements to evaluate the nature and financial
        effects of the business combination. The scope of SFAS No. 141 (revised 2007)
        is
        broader than the scope of SFAS No. 141, which it replaces. The effective
        date of
        SFAS No. 141 (revised 2007) is for all acquisitions in which the acquisition
        date is on or after the beginning of the first annual reporting period beginning
        on or after December 15, 2008. The adoption of this statement has no immediate
        material effect on the Company’s financial condition or results of
        operations.
 
 In
        December, 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
        Consolidated Financial Statements – an amendment of ARB No. 51” (hereinafter
“SFAS No. 160”). This statement establishes accounting and reporting standards
        that require a) the ownership interests in subsidiaries held by parties other
        than the parent be clearly identified, labeled and presented in the consolidated
        statement of financial position with equity, but separate from the parent’s
        equity, b) the amount of consolidated net income attributable to the parent
        and
        to the noncontrolling interest be clearly identified and presented on the
        face
        of the consolidated statement of income, c) changes in a parent’s ownership
        interest while the parent retains its controlling financial interest in its
        subsidiary be accounted for consistently, d) when a subsidiary is
        deconsolidated, any retained noncontrolling  equity investment in the
        former subsidiary be initially measured at fair value and e) entities provide
        sufficient disclosures that clearly identify and distinguish between the
        interests of the parent and the interests of the noncontrolling owners. The
        effective date of this standard is for fiscal years and interim periods
        beginning on or after December 15, 2008. The adoption of this statement had
        no
        immediate material effect on the Company’s financial condition or results of
        operations.
 
 In
        February, 2007, the FASB issued SFAS 159, “The Fair Value Option for Financial
        Assets and Financial Liabilities – Including an amendment of FASB Statement No.
        115” (hereinafter “SFAS No. 159”). This Statement permits entities to choose to
        measure many financial instruments and certain other items at fair value.
        The
        objective of this Statement is to improve financial reporting by providing
        entities with the opportunity to mitigate volatility in reported earnings
        caused
        by measuring related assets and liabilities differently without having to
        apply
        complex hedge accounting provisions. The effective date of this standard
        is for
        fiscal years that begin after November 15, 2007. The adoption of this statement
        had no immediate material effect on the Company’s financial condition or results
        of operations.
  F-14
 **Table
            of Contents**
  In
        September, 2006, the FASB issued SFAS 158, “Employers’ Accounting for Defined
        Benefit Pension and Other Postretirement Plans – an amendment of FASB Statements
        No. 87, 88, 106, and 132(R)” (hereinafter “SFAS No. 158”). This statement
        requires an employer to recognize the overfunded or underfunded statues of
        a
        defined benefit postretirement plan (other than a multiemployer plan) as
        an
        asset or liability in its statement of financial position and to recognize
        changes in that funded status in the year in which the changes occur through
        comprehensive income of a business entity or changes in unrestricted net
        assets
        of a not for profit organization. This statement also requires an employer
        to
        measure the funded status of a plan as of the date of its year end statement
        of
        financial position, with limited exceptions. The adoption of this statement
        had
        no immediate material effect on the Company’s financial condition or results of
        operations.
 
 In
        September, 2006, the FASB issued SFAS 157, “Fair Value Measurements”
(hereinafter “SFAS No. 157”). This statement defines fair value, establishes a
        framework for measuring fair value in generally accepted accounting principles
        (GAAP), and expands disclosure about fair value measurements. This statement
        applies under other accounting pronouncements that require or permit fair
        value
        measurements. This statement does not require any new fair value measurements,
        but for some entities, the application of this statement may change current
        practice. Management has not determined the impact that the adoption of this
        statement will have on the Company’s financial condition or results of
        operations.
 
 In
        March,
        2006, the FASB issued SFAS 156, “Accounting for Services of Financial Assets –
an Amendment of FASB Statement No. 140” (hereinafter “SFAS No. 156”). This
        statement amends FASB Statement No. 140 “Accounting for Transfers and Servicing
        of Financial Assets and Extinguishments of Liabilities”, with respect to the
        accounting for separately recognized servicing assets and servicing liabilities.
        This statement requires an entity to recognize a servicing asset or servicing
        liability each time it undertakes an obligation to service a financial asset
        by
        entering into a servicing contract that results from a transfer, acquisition
        or
        assumption of financial assets or liabilities. This statement also requires
        all
        separately recognized servicing assets and servicing liabilities to be initially
        measured at fair value, if practicable. This statement permits an entity
        to
        choose among two subsequent measurement methods for each class of separately
        recognized servicing assets and servicing liabilities. This statement also
        permits at its initial adoption a one time reclassification of available
        for
        sale securities to trading securities by entities with recognized servicing
        rights. Finally, this statement requires separate presentation of servicing
        assets and servicing liabilities subsequently measured at fair value in the
        statement of financial position and additional disclosures for all separately
        recognized servicing assets and servicing liabilities. The adoption of this
        statement had no immediate material effect on the Company’s financial condition
        or results of operations.
 
 In
        February, 2006, the FASB issued SFAS 155, “Accounting for Certain Hybrid
        Financial Instruments – an Amendment of FASB Statements No. 133 and 140”
(hereinafter “SFAS No. 155”). This statement amends FASB Statements No. 133,
“Accounting for Derivative Instruments and Hedging Activities” and No. 140,
“Accounting for Transfers and Servicing of Financial Assets and Extinguishments
        of Liabilities.” This statement resolves issues addressed in Statement No. 133
        Implementation Issue No. D1, “Application of Statement 133 to Beneficial
        Interests in Securitized Financial Assets.” This statement permits fair value
        measurement for any
  F-15
 **Table
            of Contents**
  hybrid
        financial instrument that contains an embedded derivative that otherwise
        would
        require bifurcation. This statement clarifies which interest-only strips
        and
        principal-only strips are not subject to the requirement of Statement No.
        133.
        This statement establishes a requirement to evaluate interests in securitized
        financial assets to identify interests that are freestanding derivatives
        or that
        are hybrid financial instruments that contain an embedded derivative requiring
        bifurcation. This statement clarifies that concentration of credit risk in
        the
        form of subordination are not embedded derivatives. Finally, this statement
        amends Statement No. 140 to eliminate prohibition on a qualifying
        special-purpose entity from holding a derivative financial instrument that
        pertains to a beneficial interest other than another derivative financial
        instrument. The adoption of this statement had no material effect on the
        Company’s financial condition or results of operations.
 
 Accounting
        for Convertible Notes and Securities with Beneficial Conversion
        Features
 Following
        guidance by Emerging Issues Task Force (EITF) 00-27, the Company allocates
        a
        portion of proceeds received from convertible notes to warrants (granted
        to note
        holders) and also to the beneficial conversion feature of the
        debt.  The value of the warrants and the beneficial conversion feature
        are recorded on the balance sheet as a debt discount and as an increase to
        stockholders’ equity.  The discounts are amortized over the life of
        the loans.
 
 Accounts
        Receivable
 The
        Company carries its accounts receivable at net realizable value. On a periodic
        basis, the Company evaluates its accounts receivable and establishes an
        allowance for doubtful accounts, based on a history of past write-offs and
        collections and current credit conditions. For the year ended November 30,
        2007,
        the Company had estimated that no allowance for doubtful accounts was necessary,
        as all of the Company’s receivables are expected to be collected. This
        assessment may change, as the Company develops the appropriate history of
        transactions in its operating companies and a provision for doubtful accounts
        will be established. During the fiscal year ended November 30, 2007, however,
        the company reflected a bad debt expense in the amount of $34,650, related
        to
        the amount due from a specific customer which was deemed by management to
        be
        uncollectible.
 
 Cash
        and Cash Equivalents
 For
        purposes of the statements of cash flows, the Company considers all highly
        liquid investments (or short-term debt) with original maturities of three
        months
        or less to be cash equivalents.
 
 Asset
        Impairment Policy
 The
        Company recognizes an impairment loss if the carrying amount of a long-lived
        asset is not recoverable from its undiscounted cash flows. All long-lived
        assets
        are considered to be held or used until they are sold, exchanged, abandoned,
        or
        otherwise disposed of.
 
 Concentration
        of Credit Risk
 The
        Company maintains the majority of its cash in one commercial account at a
        major
        financial institution. At November 30, 2007, the Company’s cash balance did not
        exceed FDIC limits.
 
 F-16
 **Table
            of Contents**
 
 Derivative
        Instruments
 The
        FASB
        issued SFAS 133, “Accounting for Derivative Instruments and Hedging Activities”
(hereinafter “SFAS No. 133”), as amended by SFAS No. 137, “Accounting for
        Derivative Instruments and Hedging Activities – Deferral of the Effective Date
        of FASB No. 133”, and SFAS No. 138, “Accounting for Certain Derivative
        Instruments and Certain Hedging Activities”, and SFAS No. 149, “Amendment of
        Statement 133 on Derivative Instruments and Hedging Activities,” and SFAS No.
        155 “Accounting for Certain Hybrid Financial Instruments – an Amendment of FASB
        Statements No. 133 and 140”. These statements establish accounting and reporting
        standards for derivative instruments embedded in other contracts, and for
        hedging activities. They require that an entity recognize all derivatives
        as
        either assets or liabilities in the balance sheet and measure those instruments
        at fair value.
 
 If
        certain
        conditions are met, a derivative may be specifically designated as a hedge,
        the
        objective of which is to match the timing of gain or loss recognition on
        the
        hedging derivative with the recognition of (i) the changes in the fair value
        of
        the hedged asset or liability that are attributable to the hedged risk or
        (ii)
        the earnings effect of the hedged forecasted transaction. For a derivative
        not
        designated as a hedging instrument, the gain or loss is recognized in income
        in
        the period of change.
 
 Historically,
        the Company has not entered into derivatives contracts to hedge existing
        risks
        or for speculative purposes.
 
 At
        November 30, 2007, the Company has not engaged in any transactions that would
        be
        considered derivative instruments or hedging activities.
 
 Earnings
        (Losses) Per Share
 On
        January
        1, 1998, the Company adopted SFAS 128, which provides for calculation of
“basic”
and “diluted” earnings (losses) per share. Basic earnings (losses) per share
        includes no dilution and is computed by dividing net income (loss) available
        to
        common shareholders by the weighted average common shares outstanding for
        the
        period. Diluted earnings per share reflect the potential dilution of securities
        that could share in the earnings of an entity similar to diluted earnings
        per
        share. Although there were common stock equivalents outstanding at November
        30,
        2007 and 2006, they were not included in the calculation of earnings per
        share
        because they would have been considered antidilutive. These common stock
        equivalents principally include outstanding warrants of 3,625,000 as of November
        30, 2007 respectively.
 
 Fair
        Value Financial Instruments
 The
        Company’s financial instruments as defined by SFAS No. 107, “Disclosures about
        Fair Value of Financial Instruments”, include trade accounts receivable and
        payable, accrued expenses and short-term borrowings. All instruments are
        accounted for on a historical cost basis, which, due to the short maturity
        of
        these financial instruments, approximates fair value at November 30,
        2007.
 
 F-17
 **Table
            of Contents**
  Inventories
 Inventories,
        which primarily consist of items available for sale, as well as work in process,
        are recorded using the weighted average method and valued at the lower of
        cost
        or market. As of November 30, 2007, the inventory of the Company’s subsidiary
        AmeriChip Tool and Abrasives, LLC totaled $20,492, which principally consisted
        of grinding and abrasive products. As of November 30, 2007, the inventory
        of the
        Company’s subsidiary KSI Machine & Engineering, Inc. consisted of $114,555
        of work in process. Costs which are allocated to jobs in process inventory
        include direct labor, payroll taxes and benefits, perishable tools, supplies,
        depreciation on machinery and equipment, shipping costs, and other direct
        costs.
        These costs do not include materials expense, due to the fact that the
        subsidiary’s customers purchase the material directly.
 
 Principles
        of Consolidation and Minority Interest
 The
        consolidated financial statements of AmeriChip International, Inc. include
        the
        accounts of the following companies: AmeriChip International, Inc., AmeriChip
        Tool and Abrasives, LLC, AmeriChip Canada, Inc., AmeriChip Ventures, Inc.,
        AmeriChip, Inc., KSI Machine & Engineering, Inc., and Excellence 3,
        Inc.  All material intercompany transactions have been
        eliminated.
 
 During
        the
        years ended November 30, 2007 and 2006, no allocation of losses was made
        to the
        minority interest, because the Company’s 80% owned subsidiary, AmeriChip, Inc.,
        is considered dormant and is not expected to conduct business in the
        future.
 
 Property
        and Equipment
 Property
        and equipment are stated at cost. Depreciation of property and equipment
        is
        calculated using the straight-line method over the estimated useful lives
        of the
        assets, which range from three to ten years.
 
 The
        Company recognized $378,149 and $70,794 in depreciation expense for the years
        ended November 30, 2007 and November 30, 2006, respectively. The Company
        evaluates the recoverability of property and equipment when events and
        circumstances indicate that such assets might be impaired. The Company
        determines impairment by comparing the undiscounted future cash flows estimated
        to be generated by these assets to their respective carrying amounts.
        Maintenance and repairs are expensed as incurred. Replacements and betterments
        are capitalized. The cost and related reserves of assets sold or retired
        are
        removed from the accounts and any resulting gain or loss is reflected in
        results
        of operations.
  F-18
 **Table
            of Contents**
  During
        the
        year ended November 30, 2006, the Company acquired a CNC lathe machine in
        the
        amount of $257,600. The acquisition of this machine required a down payment
        of
        $15,000, with monthly payments of $5,000 required in the following two months.
        At the end of the third month after acquisition, the agreement required the
        Company to pay the remaining balance of $232,600. Subsequent to the acquisition
        date, the payment terms were renegotiated. The revised terms required continuing
        monthly payments of $5,000 per month, instead of the balance due at the end
        of
        the third month. As of November 30, 2006, the unpaid balance due on this
        machine
        was $228,368, and is included in accounts payable. At the date of acquisition,
        the Company signed a security agreement with the seller, whereby the machine
        was
        pledged as security in the event of the Company’s default on this
        obligation.
 During
        the
        year ended November 30, 2007, the company returned the CNC lathe machine
        to the
        manufacturer, in exchange for the unpaid balance due on the machine in the
        amount of $186,568, resulting in a loss on the disposition of the machine
        in the
        amount of $15,832 being reflected in the Company’s statement of
        income.
 
 Impairment
        of Long-Lived Assets
 In
        October, 2001, the FASB issued SFAS 144 “Accounting for the Impairment or
        Disposal of Long-Lived Assets” (hereinafter “SFAS No. 144”). SFAS No. 144
        replaces SFAS No. 121, “Accounting for the Impairment of Long-Lived Assets and
        for Long-Lived Assets to be Disposed of.” This standard establishes a single
        accounting model for long-lived assets to be disposed of by sale, including
        discontinued operations. SFAS No. 144 requires that these long-lived assets
        be
        measured at the lower of carrying amount or fair value less cost to sell,
        whether reported in continuing operations or discontinued operations. This
        statement is effective beginning for fiscal years after December 15,
        2001.
 
 In
        complying with this standard, the Company reviews its long-lived assets
        quarterly to determine if any events or changes in circumstances have transpired
        which indicate that the carrying value of its assets may not be recoverable.
        The
        Company determines impairment by comparing the present value of future cash
        flows estimated to be generated by its assets to their respective carrying
        amounts. As of November 30, 2007, no impairment was deemed
        necessary.
 
 Provision
        for Taxes
 Income
        taxes are provided based upon the liability method of accounting pursuant
        to
        SFAS No. 109 (hereinafter “SFAS No. 109”), “Accounting for Income
        Taxes.”  Under this approach, deferred income taxes are recorded to
        reflect the tax consequences in future years of differences between the tax
        basis of assets and liabilities and their financial reporting amounts at
        each
        year-end.  A valuation allowance is recorded against deferred tax
        assets if management does not believe the Company has met the “more likely than
        not” standard imposed by SFAS No. 109 to allow recognition of such an
        asset.
 
 At
        November 30, 2007, the Company had deferred tax assets of approximately
        $10,900,000, principally arising from net operating loss carryforwards for
        income tax purposes multiplied by an expected tax rate of 34%. As management
        of
        the Company cannot determine that it is more likely than not that the Company
        will realize its benefit of the deferred tax assets, a valuation allowance
        equal
        to the deferred tax assets was present at November 30, 2007.
 
 The
        significant components of the deferred tax assets at November 30, 2007 and
        2006
        were as follows:
 November
                  30,
                2007Net
                  operating loss carryforward
              
              $
              32,160,000Warrants
                  issued:
              
              $
              88,838Deferred
                  tax asset
              
              $
              10,900,000Deferred
                  tax asset valuation allowance
              
              $
              (10,900,000
              )
  F-19
 **Table
            of Contents**
  At
        November 30, 2007, the Company has net operating loss carryforwards of
        approximately $32,160,000, respectively, which expire in the years 2021 through
        2027. The Company recognized $88,838 of losses from issuance of warrants
        for
        services during the fiscal years ended November 30, 2007, respectively, which
        are not deductible for tax purposes and are not included in the above
        calculation of deferred tax assets.  The change in the allowance
        account from November 30, 2006 to 2007 was $3,700,000.
 
 The
        Tax
        Reform Act of 1986 substantially changed the rules relative to the use of
        net
        operating losses and general business credit carryforwards in the event of
        an
“ownership change” of a corporation.  The Company’s issuances of
        common stock may have resulted in restrictions on the future use of net
        operating losses and tax credit carryforwards generated before an ownership
        change. The effect of such change has not been determined.
 
 During
        the
        year ended November 30, 2007, the corporation incurred a net loss related
        to the
        sale of a significant amount of inventory at a substantially discounted sales
        price. Management determined that the sale of this inventory constituted
        a
        discontinued operation, which is reflected in the Company’s statement of income
        in an amount approximating $179,000 (See note 12). The loss from this
        discontinued operation is reflected net of its income tax effect. Of the
        $10,900,000 deferred tax asset reflected as of November 30, 2007, $61,000
        is
        allocated to the loss from discontinued operations, while the remaining
        $10,839,000 is allocated to continuing operations. Because management cannot
        determine that it is more likely than not that the Company will realize its
        benefit of the deferred tax assets, the deferred tax asset of $61,000 which
        was
        allocated to discontinued operations is offset by a valuation allowance in
        the
        same amount as the deferred tax asset.
 
 Revenue
        and Cost Recognition Policies
 The
        Company recognizes revenue in accordance with Staff Accounting Bulletin (SAB)
        No. 104 “Revenue Recognition in Financial Statements”, which states that revenue
        is recognized when persuasive evidence of an agreement exists, delivery has
        occurred, the price is fixed and determinable and collectability is reasonably
        assured.  For sales generated by the KSI subsidiary, the Company
        recognizes revenue from product sales when products are shipped.  For
        sales generated by other subsidiaries, revenue is recognized upon delivery
        and
        acceptance. The Company has not provided an allowance for sales returns because
        the Company’s historical sales experience indicates that a very immaterial
        amount of sales are subsequently returned.  Returns of a product, if
        permitted by the manufacturer, are charged a 15% restock fee. Specialized
        machined products created to the customer’s blueprint specifications are also
        being produced. These product costs are market driven and the Company warrants
        the finished product to the extent they meet the specifications.
 
 As
        an
        agent for vendors, the Company recognizes its commissions when the earnings
        process is completed (delivery taken and title passed to the customer) and
        collection is probable.
 
 Cost
        of
        sales consists of the purchase price of products sold, inbound and outbound
        shipping charges, depreciation expense and packaging supplies.
 
 F-20
 **Table
            of Contents**
 
 Use
        of
        Estimates
 The
        process of preparing financial statements in conformity with accounting
        principles generally accepted in the United States of America requires the
        use
        of estimates and assumptions regarding certain types of assets, liabilities,
        revenues, and expenses. Such estimates primarily relate to unsettled
        transactions and events as of the date of the financial statements. Accordingly,
        upon settlement, actual results may differ from estimated amounts.
 
 Goodwill
 As
        of
        November 30, 2007, goodwill in the amount of $2,577,673 is reflected on the
        Company’s balance sheet related to the acquisition of 100% of the common stock
        of KSI Machine & Engineering, Inc. In accordance with SFAS No. 141 (revised
        2007), the acquisition of the common stock of KSI is reflected utilizing
        the
        purchase method of accounting for business combinations. Goodwill represents
        the
        excess of the acquisition cost of KSI’s common stock over the book value of the
        net assets included in KSI. In accordance with SFAS No. 142, goodwill has
        an
        indefinite useful life and, accordingly, is not amortizable. SFAS No. 142
        requires that goodwill be tested at least annually in order to determine
        the
        impairment of the value of the goodwill. The first step is a screening process
        to determine if impairment of goodwill has occurred. The second step is to
        measure the amount of any impairment that has occurred. If goodwill is found
        to
        be impaired as a result of this testing process, the carrying value of goodwill
        would be reduced by the amount of this impairment.
 
 As
        a
        result of applying the first step in this testing process, management has
        determined that no impairment of goodwill exists as of November 30, 2007.
        As a
        result, goodwill is reflected in the Company’s balance sheet at its acquired
        cost as determined at the date of acquisition. The intangible benefits of
        the
        acquisition of KSI’s common stock include the Company’s Tier 1 status for
        automotive customers, a strong credit history for KSI, and a platform by
        which
        AmeriChip may begin to implement the use of its patented Laser Assisted Chip
        Control technology. These benefits still exist as of November 30, 2007.
        Impairment will again be evaluated at the end of the Company’s following fiscal
        year.
 
 **NOTE
        5 – STOCK OPTIONS AND WARRANTS**
 
 SFAS
        No.
        123, “Accounting for Stock-Based Compensation,”**defines a fair
        value-based method of accounting for stock options and other equity
        instruments.  The Company has adopted this method, which measures
        compensation costs based on the estimated fair value of the award and recognizes
        that cost over the service period.
 
 In
        December, 2004, the FASB issued SFAS 123 (R) (revised 2004), “Share-Based
        Payments” (hereinafter “SFAS No. 123 (R)”). This statement replaces FASB
        Statement No. 123, “Accounting for Stock-Based Compensation”, and supersedes APB
        Statement Opinion No. 25, “Accounting for Stock Issued to Employees”. SFAS No.
        123 (R) establishes standards for the accounting of share-based payment
        transactions in which an entity exchanges its equity instruments for goods
        or
        services. It also addresses transactions in which an entity incurs liabilities
        in exchange for goods or services that are based on the fair value of the
        entity’s equity instruments or that may be settled by the issuance of those
        equity instruments. This statement
  F-21
 **Table
            of Contents**
  covers
        a
        wide range of share-based compensation arrangements including share options,
        restricted share plans, performance-based award, share appreciation rights
        and
        employee share purchase plans. SFAS 123 (R) requires a public entity to measure
        the cost of employee services received in exchange for an award of equity
        instruments based on the fair value of the award on the grant date (with
        limited
        exceptions). That cost will be recognized in the entity’s financial statements
        over the period during which the employee is required to provide services
        in
        exchange for the award. The Company was previously reporting in compliance
        with
        SFAS No. 123.
 
 Stock
        Options
 On
        October
        22, 2003, the Company’s board of directors approved the AmeriChip International
        Inc. 2003 Non-Qualified Incentive Stock Option Plan (hereinafter “the Plan”),
        which as amended through November 30, 2005, allowed the Company to issue
        up to
        88,000,000 shares of the Company’s common stock to officers, directors,
        employees and consultants. All 88,000,000 shares issuable in accordance with
        the
        Plan have been registered with the Securities and Exchange Commission on
        Form
        S-8.
 
 During
        the
        year ended November 30, 2006, the Company registered an additional 150,000,000
        shares of common stock under this plan. During the same fiscal year, 125,526,640
        options were exercised under this plan at an average price of $0.04 per share
        for $5,702,084 of consulting and advisory services. These options were valued
        at
        the market price on the date of grant. All options were exercised immediately
        upon grant, and therefore the Company has deemed that no additional value
        should
        be assigned to the options. As of November 30, 2006, there were 33,223,360
        options available to be issued under this plan.
 
 During
        the
        year ended November 30, 2007, the Company registered an additional 120,000,000
        shares of common stock under this plan. During the same fiscal year, 153,188,832
        options were exercised under this plan at an average price of $0.023 per
        share
        for $3,522,862 of consulting and advisory services. These options were valued
        at
        the market price on the date of grant. All options were exercised immediately
        upon grant, and therefore, the Company has deemed that no additional value
        should be assigned to the options. As of November 30 2007, there were 34,528
        options available to be issued under this plan.
 
 The
        following is a summary of stock option plan activity:
 
 Number
                  of Shares Outstanding Under the Option Plan
              
              
              Weighted
                  Average Exercise PriceOutstanding
                  December 1, 2005
              
              
              -
              
              
              
              -Granted
              
              
              125,526,640
              
              
              $
              0.04Exercised
              
              
              (125,526,640
              )
              
              
              (0.04
              )Outstanding
                  November 30, 2006
              
              
              -
              
              
              $
              -Weighted
                  average fair value ofoptions
                  granted during theyear
                  ended November 30, 2006
              
              
              
              
              
              $
              -Outstanding
                  December 1, 2006
              
              
              -
              
              
              $
              -Granted
              
              
              153,188,832
              
              
              
              0.023Exercised
              
              
              (153,188,832
              )
              
              
              (0.023
              )Outstanding
                  November 30, 2007
              
              
              -
              
              
              $
              -Weighted
                  average fair value of
                options
                  granted during the
                year
                  ended November 30, 2007
              
              $
              -
              
              
              $
              -
  F-22
 **Table
            of Contents**
  Warrants
 As
        of
        November 30, 2007, an outstanding warrant to acquire 1,000,000 shares of
        the
        Company’s common stock at an exercise price of $0.080 per share was reflected in
        the balance sheet at a fair market value of $24,300. Additionally, an
        outstanding warrant to acquire 1,250,000 shares of the Company’s common stock at
        an exercise price of $0.12 per share was reflected in the balance sheet as
        of
        November 30, 2007 at a fair market value of $27,000. In addition, an outstanding
        warrant to acquire 1,375,000 shares of the Company’s common stock at an exercise
        price of $0.05 per share was reflected in the balance sheet as of November
        30,
        2007, at a fair market value of $37,538. As a result, warrants with a fair
        value
        of $88,838 were outstanding as of November 30, 2007.
 
 The
        fair
        value of common stock and warrants issued in the year ending November 30,
        2007
        was estimated on the grant date using the Black-Scholes Option Price Calculation
        with the following assumptions: risk-free interest rate is 4%, volatility
        is
        148%, expected life is .5 to 3 years, and there is no dividend
        yield.
 
 During
        the
        year ended November 30, 2007, warrants were issued pursuant to an agreement
        with
        a key employee to acquire 1,600,000 shares of common stock at no exercise
        price.
        The minimum holding period for 500,000 shares is six months from the grant
        date,
        the minimum holding period of another 500,000 shares is one year from the
        grant
        date, and the minimum holding period of the final 600,000 shares is one and
        one-half years from the grant date. The maturity of these warrants is five
        years
        from the grant date. Due to the lack of a specific exercise price, the
        Black-Scholes Option Price Calculation could not be used in order to determine
        the fair value of the warrants on the date of grant. Accordingly, the fair
        value
        of these warrants was estimated to be the average fair market value for the
        15
        day period prior to the grant date of the corresponding stock of $0.026 per
        share. As a result, the fair value of these warrants on the date of grant
        was
        determined to be $36,400. During the year ended November 30, 2007, these
        warrants were exercised at a price of $0.02 per share, for a total exercise
        price of $32,000.
 
 During
        the
        year ended November 30, 2007, warrants were issued pursuant to an agreement
        with
        an officer and director to acquire 100,000,000 shares of common stock at
        no
        exercise price. The maturity of these warrants is 5 years from the grant
        date.
        Due to the lack of a specific exercise price, the Black-Scholes Option Price
        Calculation could not be used in order to determine the fair value of the
        warrants on the date of grant. Accordingly, the fair value of these warrants
        was
        estimated to be the average fair market value for the 15 day period prior
        to the
        grant date of the
  F-23
 **Table
            of Contents**
  corresponding
        stock of $0.026 per share. As a result, the fair value of these warrants
        on the
        date of grant was determined to be $2,600,000. During the year ended November
        30, 2007, these warrants were exercised at a price of $0.02 per share, for
        a
        total exercise price of $2,000,000.
 
 During
        the
        year ended November 30, 2007, warrants were issued pursuant to an agreement
        with
        another officer and director to acquire 100,000,000 shares of common stock
        at no
        exercise price. The maturity of these warrants is 5 years from the grant
        date.
        Due to the lack of a specific exercise price, the Black-Scholes Option Price
        Calculation could not be used in order to determine the fair value of the
        warrants on the date of grant. Accordingly, the fair value of these warrants
        was
        estimated to be the average fair market value for the 15 day period prior
        to the
        grant date of the corresponding stock of $0.026 per share. As a result, the
        fair
        value of these warrants on the date of grant was determined to be $2,600,000.
        During the year ended November 30, 2007, these warrants were exercised at
        a
        price of $0.02 per share, for a total exercise price of $2,000,000.
 
 During
        the
        year ended November 30, 2007 warrants were issued pursuant to an agreement
        with
        another officer and director to acquire 20,000,000 shares of common stock
        at no
        exercise price. The maturity of these warrants is 5 years from the grant
        date.
        Due to the lack of a specific exercise price, the Black-Scholes Option Price
        Calculation could not be used in order to determine the fair value of the
        warrants on the date of grant. Accordingly, the fair value of these warrants
        was
        estimated to be the average fair market value for the 15 day period prior
        to the
        grant date of the corresponding stock of $0.026 per share. As a result, the
        fair
        value of these warrants on the date of grant was determined to be $520,000.
        During the year ended November 30, 2007, these warrants were exercised at
        a
        price of $0.02 per share, for a total exercise price of $400,000. In addition
        to
        exercising the aforementioned warrants, this same officer and director also
        exercised warrants for 10,000,000 shares of common stock which were issued
        during the fiscal year ended November 30, 2007. These warrants were exercised
        at
        a price of $0.02 per share, for a total exercise price of $200,000.
 
 During
        the
        year ended November 30, 2007, warrants were issued pursuant to an agreement
        with
        another officer and director to acquire 5,000,000 shares of common stock
        at no
        exercise price. The maturity of these warrants is 5 years from the grant
        date.
        Due to the lack of a specific exercise price, the Black-Scholes Option Price
        Calculation could not be used in order to determine the fair value of the
        warrants on the date of grant. Accordingly, the fair value of these warrants
        was
        estimated to be the average fair market value for the 15 day period prior
        to the
        grant date of the corresponding stock of $0.026 per share. As a result, the
        fair
        value of these warrants on the date of grant was determined to be $130,000.
        These warrants were exercised at a price of $0.02 per share, for a total
        exercise price of $100,000.
 
 During
        the
        year ended November 30, 2007, warrants were issued pursuant to an agreement
        with
        a key employee to acquire 500,000 shares of common stock at no exercise price.
        The maturity of these warrants is 5 years from the grant date. Due to the
        lack
        of a specific exercise price, the Black-Scholes Option Price Calculation
        could
        not be used in order to determine the fair value of the warrants on the date
        of
        grant. Accordingly, the fair value of these warrants was estimated to be
        the
        average fair market value for the 15 day period prior to the grant date of
        the
        corresponding stock of $0.026 per share. As a result, the fair value of these
        warrants on the date of grant was
  F-24
 **Table
            of Contents**
  determined
        to be $13,000. These warrants were exercised at a price of $0.02 per share,
        for
        a total exercise price of $10,000.
 
 During
        the
        year ended November 30, 2007, warrants were issued pursuant to an agreement
        with
        a key employee to acquire 1,000,000 shares of common stock at no exercise
        price.
        The maturity of these warrants is 5 years from the grant date. Due to the
        lack
        of a specific exercise price, the Black-Scholes Option Price Calculation
        could
        not be used in order to determine the fair value of the warrants on the date
        of
        grant. Accordingly, the fair value of these warrants was estimated to be
        the
        average fair market value for the 15 day period prior to the grant date of
        the
        corresponding stock of $0.02 per share. As a result, the fair value of these
        warrants on the date of grant was determined to be $20,000. These warrants
        were
        exercised at a price of $0.02 per share, for a total exercise price of
        $20,000.
 
 The
        fair
        value of common stock and warrants issued in the fiscal years ending November
        30, 2006 was estimated on the grant date using the Black-Scholes Option Price
        Calculation with the following assumptions: risk-free interest rate is 4%,
        volatility is 148%, expected life is .5 to 3 years, and there is no dividend
        yield.
 
 During
        the
        year ended November 30, 2006, warrants were issued pursuant to a consulting
        agreement to acquire 1,000,000 shares of common stock at an exercise price
        of
        $0.08. The fair value of the warrants, which was determined on the date of
        grant, was $24,300. Also, during the year ended November 30, 2006, warrants
        were
        issued pursuant a consulting agreement to acquire 1,250,000 shares of common
        stock at an exercise price of $0.12. The fair value of the warrants, which
        was
        determined on the date of grant, was $27,000. Additionally, during the year
        ended November 30, 2006, warrants were issued pursuant a consulting agreement
        to
        acquire 1,375,000 shares of common stock at an exercise price of $0.05. The
        fair
        value of the warrants, which was determined on the date of grant, was
        $37,538.
 
 During
        the
        year ended November 30, 2006, warrants were issued pursuant to an agreement
        with
        an officer and director to acquire 10,000,000 shares of common stock at no
        exercise price. The maturity of these warrants was six months from the grant
        date. Due to the lack of a specific exercise price, the Black-Scholes Option
        Price Calculation could not be used in order to determine the fair value
        of the
        warrants on the date of grant. Accordingly, the fair value of these warrants
        was
        estimated to be the fair market value of the corresponding stock as of the
        grant
        date of $0.03 per share. As a result, the fair value of these warrants on
        the
        date of grant was determined to be $300,000.
 
 Additionally,
        during the year ended November 30, 2006, these warrants expired before being
        exercised by the holder. In accordance with SFAS 123(R), this modification
        of
        the terms of the warrant was treated as an exchange of the original warrant
        for
        a new warrant. This exchange resulted in additional consulting expense in
        the
        amount of $76,548, based upon the weighted average fair market value of the
        stock between the maturity date of the expired warrants and the exercise
        date of
        the new warrants that resulted from this exchange. Due to fact that these
        warrants expired before they were exercised, they were reflected as cancelled
        warrants, replaced by new warrants deemed to be exchanged for these expired
        warrants.
  F-25
 **Table
            of Contents**
  During
        the
        year ended November 30, 2006, these warrants were exercised by the warrant
        holder. As a result, 10,000,000 shares of the Company’s common stock were issued
        to the warrant holder for no cash in full exercise of these warrants. The
        fair
        market value of the common stock issued for the exercise of these warrants
        was
        $0.03 per share, for a cumulative value of $300,000 related to the shares
        issued. The excess value of the warrants over their exercise price in the
        amount
        of $76,548 was included in additional paid in capital.
 
 During
        the
        year ended November 30, 2006, a second set of warrants was issued pursuant
        an
        agreement with the same officer and director that exercised the aforementioned
        warrants to acquire 10,000,000 shares of the Company’s common stock. These
        warrants were issued with no exercise price. The maturity of these warrants
        is
        six months from the grant date. Due to the lack of a specific exercise price,
        the Black-Scholes Option Price Calculation could not be used in order to
        determine the fair value of the warrants on the date of grant. Accordingly,
        the
        fair value of these warrants was estimated to be the fair market value of
        the
        corresponding stock as of the grant date of $0.03 per share. As a result,
        the
        value of these warrants on the grant date was determined to be $300,000.
        These
        warrants were exercised during the year ended November 30, 2007.
 
 Accordingly,
        the fair value of all warrants issued by the Company during the year ended
        November 30, 2006 was $765,386, while the fair value of all warrants exercised
        during the year was $376,548. As a result, warrants with a fair value of
        $388,838 were outstanding as of November 30, 2006.
 
 The
        following is the summarized information about stock warrants outstanding
        and
        exercisable at the fiscal years ended November 30, 2007 and 2006:
  Number
                        of Warrants Outstanding
                    
                    
                    Weighted
                        Average Remaining Life
                    
                    
                    Average
                        Exercise PriceDuring
                        the year ended November 30, 2006:Issued
                    
                    
                    33,625,000
                    
                    
                    
                    0.69
                    
                    
                    $
                    0.034Cancelled
                    
                    
                    (10,000,000
                    )
                    
                    
                    -
                    
                    
                    
                    -Exercised
                    
                    
                    (10,000,000
                    )
                    
                    
                    0.50
                    
                    
                    
                    0.030Total
                        warrants outstanding at      November
                        30,  2006
                    
                    
                    13,625,000
                    
                    
                    
                    0.60
                    
                    
                    $
                    0.037Total
                        unexercised warrants at November 30, 2006
                    
                    
                    13,625,000
                    
                    
                    
                    0.60
                    
                    
                    $
                    0.037During
                        the year ended November 30, 2007:Issued
                    
                    
                    227,900,000
                    
                    
                    
                    4.99
                    
                    
                    $
                    0.026Cancelled
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -Exercised
                    
                    
                    (237,900,000
                    )
                    
                    
                    4.42
                    
                    
                    
                    0.026Total
                        warrants outstanding at      November
                        30,  2007
                    
                    
                    3,625,000
                    
                    
                    
                    0.15
                    
                    
                    $
                    0.080Total
                        unexercised warrants at November 30, 2007
                    
                    
                    3,625,000
                    
                    
                    
                    0.15
                    
                    
                    $
                    0.080
 
 F-26
 **Table
            of Contents**
 
 **NOTE
        6 – COMMON STOCK**
 
 In
        May
        2004, the Company’s board of directors elected to increase the authorized
        capital of the Company from 100,000,000 shares of common stock to 500,000,000
        shares of $0.001 par value common stock, and again on December 8, 2006, the
        board elected to increase the authorized capital from 500,000,000 shares
        to
        900,000,000 shares. On April 25, 2007, the Company’s Board of Directors again
        elected to increase the authorized capital of the Company from 900,000,000
        shares to 1,000,000,000 shares. All shares have equal voting rights, are
        non-assessable and have one vote per share. Voting rights are not cumulative
        and, therefore, the holders of more than 50% of the common stock could, if
        they
        choose to do so, elect all of the directors of the Company.
 
 During
        the
        year ended November 30, 2007, the Company filed Form DEF 14C with the Securities
        and Exchange Commission, whereby the Board of Directors authorized a 1 for
        7
        reverse stock split. As a result of this reverse stock split, the Company
        issued
        1 share of the Company’s common stock to each of the shareholders of record in
        exchange for 7 shares of common stock held by each shareholder. The net result
        of this reverse stock split was to reduce the number of common shares
        outstanding to one – seventh of their previous amounts. On August 13, 2007, the
        Corporation enacted its 1 for 7 reverse stock split.
 
 During
        the
        year ended November 30, 2007, 89,447,828 shares of common stock were issued
        at
        an average price of $0.018 per share in a private placement for $1,576,323
        in
        cash; 50,000 shares of common stock were issued to one of the Company’s officers
        and directors for consulting services at an average price of $0.04 per share
        for
        $2,000; 400,000 shares of common stock were issued for discount fees related
        to
        a convertible debenture at an average price of $0.03 per share for $12,000;
        153,076,832 shares of common stock were issued for stock options at an average
        price of  $0.023 per share for  consulting services with a
        fair value of $3,512,782 and 10,100,000 shares of common stock were issued
        at an
        average price of $0.020 per share for consulting services with a fair value
        of
        $199,000. All of these shares and options were issued prior to the reverse
        stock
        split which was enacted on August 13, 2007.
 
 During
        the
        year ended November 30, 2007, contributed capital was recorded in the amount
        of
        $5,919,400, which resulted from warrants issued pursuant various consulting
        agreements and for director fees. These warrants were issued prior to the
        reverse stock split enacted on August 13, 2007.
 
 During
        the
        year ended November 30, 2007, and subsequent to enactment of the 1 for 7
        reverse
        stock split, 29,600,000 shares of common stock were issued at an average
        price
        of $.025 per share in exchange for the amount due on a related party payable
        to
        the recipient of the stock in the amount of $742,000; 11,400,544 shares of
        common stock were issued at an average price of $0.030 per share in a private
        placement for $348,227; 112,000 shares of common stock were issued for stock
        options at an average price of $0.090 per share for consulting services with
        a
        fair value of $10,080; 2,570,000 shares of common stock were issued at an
        average price of $.043
  F-27
 **Table
            of Contents**
  per
        share
        for consulting services with a fair value of $111,300; 1,500,000 shares of
        common stock were issued at an average price of $0.067 per share for a deposit
        on an operating lease in the amount of $100,000; 3,333,333 share of common
        stock
        were issued at an average price of $0.030 per share for the payment of a
        convertible debenture in the amount of $100,000 and 12,572 shares of common
        stock were issued at an average price of $0.00 per share to adjust for
        fractional shares held by shareholders as a result of the reverse stock
        split.
 
 During
        the
        year ended November 30, 2006, 28,046,590 shares of common stock were issued
        at
        an average price of $0.048 per share in private placements for $1,360,219
        in
        cash and expenses paid by investors on behalf of the Company; 24,000,000
        shares
        of common stock were issued to two of the Company’s officers and directors in
        exchange for unpaid license fees and interest at an average price of $0.085
        per
        share with a fair value of $2,040,000; 23,762,500 shares of common stock
        were
        issued to four of the Company’s officers and directors for consulting services
        at an average price of $0.039 per share with a fair value of $917,875;
        125,526,640 shares of common stock options were exercised at an average price
        of  $0.04 per share for consulting services with a fair value
        of  $5,702,084; 10,000,000 shares of common stock were issued to an
        officer and director at an average price of $0.03 per share for the exercise
        of
        warrants held by the officer and director with a fair value of $300,000;
        and
        5,400,000 shares of common stock were issued at an average price of $0.04
        per
        share for consulting and services with a fair value of $216,000.
 
 During
        the
        year ended November 30, 2006, contributed capital was recorded in the amount
        of
        $244,584, which resulted from the conversion of unpaid license fees due to
        two
        shareholders into 24,000,000 shares of the Company’s restricted common stock.
        This debt was converted to common stock at a price of $0.085 per share, for
        a
        total conversion price of $2,040,000, while the total amount due to these
        shareholders for the unpaid license fees was $2,284,584, resulting in
        contributed capital from these shareholders in the amount of
        $244,584.
 
 During
        the
        year ended November 30, 2006, contributed capital was recorded in the amount
        of
        $88,838, which resulted from warrants issued pursuant various consulting
        agreements. During the year ended November 30, 2006, contributed capital
        was
        also recorded in the amount of $676,548, which resulted from warrants issued
        to
        an officer and director of the Company. During the year ended November 30,
        2006,
        contributed capital was reduced in the amount of $300,000, which resulted
        from
        the exercise of previously outstanding warrants by an officer and director
        of
        the Company (See Note 5).
 
 **NOTE
        7 – CONTRACTS AND AGREEMENTS**
 
 Kar
        Enterprises, Inc.
 During
        the
        year ended November 30, 2006, the Company acquired a CNC lathe machine in
        the
        amount of $257,600 from Kar Enterprises, Inc. (See Note 4).  The
        acquisition of this machine required a down payment of $15,000, with monthly
        payments of $5,000 required the following two months. At the end of the third
        month after acquisition, the agreement required the Company to pay the remaining
        balance of $232,600. Subsequent to the acquisition date, the payment terms
        were
        renegotiated. The revised terms required continuing monthly payments of $5,000
        per month, instead of the balance due at the end of the third month. As of
        November 30, 2006, the
  F-28
 **Table
            of Contents**
  unpaid
        balance due on this machine was $228,368, and is included in accounts payable.
        At the date of acquisition, the Company signed a security agreement with
        the
        seller, whereby the machine was pledged as security in the event of the
        Company’s default on this obligation.
 
 During
        the
        year ended November 30, 2007, the Company returned the CNC lathe machine
        to the
        manufacturer in exchange for the amount due on the Company’s obligation to Kar
        Enterprises, Inc. in the amount of $183,568.04. This sale resulted in a loss
        on
        the disposition of the fixed asset in the amount of $15,832, which is reflected
        in the Company’s statement of income.
 
 
 **NOTE
        8 – COMMITMENTS AND CONTINGENCIES**
 
 The
        Company entered into a standby equity distribution agreement and various
        security and debenture agreements with Cornell Capital (See Note 11). The
        Company agreed to reserve 81,119,403 shares of common shares under these
        agreements and to pursue a registration of these shares with Securities and
        Exchange Commission. As of November 30, 2007, 31,429,368 common shares have
        been
        distributed to Cornell Capital in accordance with these agreements. As of
        November 30, 2007, the Company is in a lawsuit with Cornell Capital regarding
        Cornell’s claim of shares issued under Section 144 of restricted stock. This
        legal dispute has not been resolved.  Cornell has made demands for the
        conversion of 1,288,401 shares of the Company’s common stock which have not been
        delivered.  Management has decided to fully resolve its legal dispute
        with Cornell prior to any further issuance of common stock under the conversion
        clauses of their agreements. Management expects that the outcome of this
        lawsuit
        will be that the Company will be obligated to Cornell for a maximum amount
        of
        $244,579 which has been reflected as a liability by the Company, and that
        Cornell will be required to provide a complete accounting of its stock
        conversions, as well as return any shares converted in excess of the number
        of
        shares escrowed. Accordingly, an obligation in the amount of $244,579 is
        reflected in the Company’s balance sheet. As of November 30, 2007, this
        obligation is in default. Payment of this obligation is being withheld pending
        the outcome of the lawsuit with Cornell.
 
 During
        the
        year ended November 30, 2007, the Company took delivery of and installed
        a
        coordinate measuring machine in order to complement the lasers and robotic
        equipment that the Company currently owns for performing production runs.
        This
        equipment was financed through a capital lease agreement, whereby the Company
        is
        obligated for monthly lease payments in the amount of $953 through June 30,
        2010. At the expiration of the lease, the Company has the option of acquiring
        the equipment for a price of $1 (SEE note 4).
 
 Licensing
        Agreement
 In
        January
        2003, the Company entered into a cancelable licensing agreement for patented
        technology with three shareholders which required aggregate payments of
        $1,000,000 to each of the three shareholders, payable in monthly installments
        of
        $10,000 to each shareholder. Interest on the unpaid principal is accrued
        at
        prime plus 1% or 5%, whichever is greater.
 
 During
        the
        year ended November 30, 2006, the Company entered into a stock purchase
        agreement with two of these shareholders, whereby the Company issued 24,000,000
        shares of common stock to the shareholders at a price of $0.085 per share,
        for a
        total price of $2,040,000,
  F-29
 **Table
            of Contents**
  in
        full
        payment of principal and interest payments related to two of the three license
        agreements. The issue price of these shares was less than the principal and
        interest due to these two shareholders in the aggregate amount of $2,284,584
        under the licensing agreements, resulting in income from forgiveness of debt
        in
        the amount of $244,584 being recognized during the year ended November 30,
        2006
        as an increase in additional paid-in capital.
 
 As
        a
        result of the stock purchase agreement previously identified, the total of
        the
        previously unrecognized license expense related to the two shareholders included
        in the stock purchase agreement was immediately recognized as an expense
        during
        the year ended November 30, 2006. Accordingly, the Company recognized $1,440,000
        of expenses for the year ended November 30, 2006 under the licensing agreement
        as licensing expense. The one unpaid shareholder has agreed to a suspension
        of
        payments until the Company begins to generate substantial revenues from
        operations. The amounts owed to this shareholder will continue to accrue
        monthly.
 
 During
        the
        year ended November 30, 2006, the remaining shareholder assigned his interest
        in
        the obligation owed to him by the Company to an outside entity. AmeriChip
        was
        not a party in this assignment agreement. On August 21, 2007, the Company
        issued
        20,000,000 shares of its common stock to the assignee of this obligation,
        in
        exchange for the accrued license fee balance owed to the assignee in the
        amount
        of $550,000 (see note 5). In addition, on October 17, 2007, the Company issued
        an additional 9,600,000 shares of common stock to this same assignee in the
        amount of $192,000, in exchange for the amount due for an additional three
        months of licensing fees due to the assignee in the amount of $30,000 and
        for a
        prepayment of future license fees obligations in the amount of $162,000 (See
        note 6).
 
 As
        of
        November 30, 2007, the principal amount due to the shareholders under the
        licensing agreement was $0.  The accrued interest on the principal is
        $228,573 and is included in accrued interest. As a result of the prepayment
        of
        license fees paid to the assignee of the remaining license fee obligation,
        the
        assignee is obligated to the Company in the amount of $162,000 as of November
        30, 2007, and is included in the related party receivable.
 
 Operating
        Lease
 During
        the
        year ended November 30, 2007, the Company entered into a 39 month operating
        lease for a vehicle, with lease payments of approximately $595 due on a monthly
        basis. The remaining approximate lease payments for the contract are as
        follows:
  Years
                Ending November 30;2008
              
              $
              7,1402009
              
              $
              7,1402010
              
              $
              7,1402011
              
              
              595
  During
        the
        year ended November 30, 2007, the Company entered into a 60 month operating
        lease for certain equipment, with a deposit in the amount of $145,000 being
        paid
        by the Company at the inception of the lease. This deposit represents prepaid
        rent expense, which is being amortized over the term of the lease. In addition,
        lease payments in the amount of $3,525
  F-30
 **Table
            of Contents**
  are
        due on
        a monthly basis over a period of 59 months. The remaining approximate lease
        payments for the contract are as follows:
 
 2008
              
              $
              42,3002009
              
              $
              42,3002010
              
              $
              42,3002011
              
              $
              42,3002012
              
              $
              38,775
 
 Rental
        Agreement
 During
        the
        year ended November 30, 2004, the company signed a lease agreement and made
        a
        deposit of $2,000 for the rental of office space in Plymouth, Michigan. The
        lease term is for five years and payments of $2,000 per month were required
        on a
        gradually increasing scale. During the year ended November 30, 2007, the
        Company
        moved their operations, which were formerly located in the Plymouth facility,
        to
        its main facility in Clinton Township, Michigan. As a result, the lease
        agreement for the Plymouth facility was cancelled.
 
 On
        February 15, 2007, the Company signed a lease agreement with the former sole
        shareholder of KSI for the rental of the Company’s primary operating facility in
        Clinton Township, MI. The lease term is for five years and monthly lease
        payments in the amount of $28,000 are required. The remaining approximate
        lease
        payments for the contract are as follows:
 
 2008
              
              $
              336,0002009
              
              $
              336,0002010
              
              $
              336,0002011
              
              $
              336,0002012
              
              $
              228,000
 
 **NOTE
        9 – TECHNOLOGY RIGHTS AND PATENTS**
 
 In
        the
        year ended November 30, 2003, the Company acquired rights to patents held
        by
        AmeriChip Ventures, Inc., a wholly owned subsidiary of AmeriChip International
        Inc. These patents are for a process known as Laser Assisted Chip Control
        technology (“LACC”) which can be used in manufacturing.
 
 Technology
        licenses and patents are stated at cost.  Amortization is provided
        using the straight-line method over the remaining estimated useful lives
        of the
        assets, which is ten years.
 
 The
        following is a summary of technology licenses and patents and accumulated
        amortization:
  November
                  30,
                2007Technology
                  licenses and patents
              
              $
              42,069Less
                  accumulated amortization
              
              
              (29,974
              )$
              12,095
 
 Amortization
        expense was $4,207 in each of the years ended November 30, 2007 and
        2006.
  F-31
 **Table
            of Contents**
  **NOTE
        10 – RELATED PARTY TRANSACTIONS**
 
 The
        Company has a related party payable attributable to shareholder advances
        totaling $85,086 as of November 30, 2007. These advances are not interest
        bearing and are payable upon demand.
 
 In
        addition, as of November 30, 2006, the Company entered into a licensing
        agreement described in Note 8. During the year ended November 30, 2006, the
        Company entered into a stock purchase agreement with two of the shareholders,
        whereby the Company issued common stock in full payment of the Company’s
        obligations to these shareholders. See note 8 regarding the assignment of
        the
        Company’s obligation to the third shareholder to an outside entity.
 In
        addition, during the year ended November 30, 2007, the Company issued 20,000
        shares of its common stock in full payment of the accrued amount due to the
        assignee of the remaining licensing obligation in the amount of $550,000.
        Additionally, during the year ended November 30, 2007, the Company issued
        9,600,000 shares of its common stock to the same assignee in payment of the
        additional license fees accrued for $30,000 and for a prepayment of future
        license accruals in the amount of $162,000. As of November 30, 2007, the
        amount
        due to the Company from the assignee as a result of this prepayment was
        $162,000.
 
 During
        the
        year ended November 30, 2007, the Company paid $12,010 to an officer of the
        Company as a loan to that officer. As of November 30, 2007, this entire loan
        amount was due from the officer and is reflected as a related party receivable.
        As a result, the total amount due to the company as a related party receivable
        at November 30, 2007 is $174,010.
 
 See
        Note 5
        regarding warrants issued to an officer and director, Note 6 regarding common
        stock issued to officers and directors, Note 8 regarding a licensing agreement
        with shareholders, and Note 11 regarding long-term debt to a related
        party.
 
 **NOTE
        11 - LONG-TERM DEBT**
 
 Related
        Party Note Payable
 In
        August
        2004, the Company signed a ten-year promissory note with a related party,
        secured by the equipment and inventory acquired as a result of this obligation.
        The note includes terms of 3.5% interest per annum, interest only payments
        of
        $729 per month for the first six months and monthly payments thereafter of
        $2,417.
 
 Payments
        of principal and interest are due on this note as follows for the next five
        years:
  2008
              
              $
              29,0042009
              
              $
              29,0042010
              
              $
              29,0042011
              
              $
              29,0042012
              
              $
              29,004
  F-32
 **Table
            of Contents**
  The
        balance of the Company’s notes payable at November 30, 2007 was as
        follows:
 
 Related
                  party note
              
              $
              186,031Less:
                  Current portion
              
              
              (22,857
              )Long-term
                  portion
              
              $
              163,174
 
 Notes
        Payable - Bank
 On
        February 15, 2007, Excellence 3, Inc., a subsidiary of KSI Machine &
Engineering, Inc. acquired a majority of the fixed assets of KSI, subsequent
        to
        the acquisition of KSI’s common stock by AmeriChip (See Note 3). In order to
        finance this equipment acquisition, the Corporation is obligated to two local
        area banks as of November 30, 2007.
 
 Terms
        of
        one 7 year promissory note in the amount of $1,600,000 includes a 9.68% interest
        rate per annum, with payments in the amount of $26,298 being made on a monthly
        basis, inclusive of interest, beginning March 15, 2007.   Terms
        of a 5 month promissory note in the amount of $1,280,000 includes a 9.68%
        interest rate per annum, with interest only payments being made on a monthly
        basis, beginning March 15, 2007. The length of this agreement was subsequently
        extended until June 1, 2008.
 
 The
        balance of the note at November 30, 2007 was as follows:
 
 Note
                  payable – other
              
              $
              2,773,347Less:
                  Current portion
              
              
              (
                  257,979
              )Long-term
                  portion
              
              $
              2,515,368
 
 Payments
        of principal and interest are due on this note as follows for the next five
        years:
  2008
              
              $
              439,4482009
              
              $
              438,4482010
              
              $
              439,4482011
              
              $
              439,4482012
              
              $
              439,448
 
 Note
        Payable - Other
 On
        February 15, 2007, the Corporation acquired 100% of the outstanding common
        stock
        of KSI Machine & Engineering, Inc.
 Pursuant
        the terms of the stock purchase agreement, the Corporation is obligated to
        the
        former sole shareholder of KSI in the amount of $2,638,043, subject to certain
        adjustments based upon a post closing due diligence review conducted by Company
        management.
 
 Terms
        of
        the 2 year promissory note includes a 7% interest rate per annum, with minimum
        payments of $50,000 being required on a monthly basis, inclusive of interest,
        beginning March 15, 2007. The minimum required payments were subsequently
        revised to $6,000 per week, effective October 30, 2007 (see note
        3).
  F-33
 **Table
            of Contents**
  During
        the year ended November 30, 2007,
        the Company took delivery of and installed a coordinate measuring machine
        in
        order to complement the lasers and robotic equipment that the Company currently
        owns for performing production runs. This equipment was financed through
        a
        capital lease agreement, whereby the Company is obligated for monthly lease
        payments through June 30, 2010. Terms of this obligation include payments
        to be
        made by the Company in the amount of $953 per month from December 1, 2007
        through June 30, 2010. Interest on this capital lease obligation is calculated
        at 10% per annum.
 
 As
        of November 30, 2007, the Company was
        obligated in the amount of $118,260 to several vendors, related to the
        conversion of its account payable balance to a note payable. Terms of these
        obligations require various monthly payments, with no interest accruing on
        this
        obligation.
 
 As
        of November 30, 2007, the Company was
        obligated in the amount of $13,750 to an unrelated company for the acquisition
        of fixed assets. Terms of this obligation require monthly payments in the
        amount
        of $1,250, with no interest accruing on this obligation.
 
 The
        balance of the notes at November 30, 2007 were as follows:
 
 Note
                  payable - other
              
              $
              2,703,076Less:
                  Current portion
              
              
              (187,527
              )Long-term
                  portion
              
              $
              2,515,549
 
 Payments
        of principal and interest are due on these notes as follows for the next
        five
        years:
  2008
              
              $
              414,9972009
              
              
              2,510,3022010
              
              
              6,454Total
              
              $
              2,931,753
 
 Convertible
        Debenture
 During
        the
        year ended November 30, 2007, the Corporation entered into a convertible
        debenture agreement with an unrelated investor in the amount of $100,000.
        This
        obligation was due December 7, 2007. The principal amount due to the holder
        of
        this obligation is convertible into shares of the Company’s common stock at a
        conversion rate of $0.10 per share. The debenture was convertible, at the
        holder’s option, any time prior to the maturity date of this obligation. At the
        inception of this obligation, the Corporation issued 400,000 shares of its
        common stock as a loan discount fee related to the obligation. This common
        stock
        was issued at a fair market value of $0.03 per share, resulting in a loan
        discount fee in the amount of $12,000. This discount is being amortized over
        the
        1 year term of this obligation. During the year ended November 30, 2007,
        amortization in the amount of $12,000 was reflected as an expense on the
        Company’s financial statements.
 
 Terms
        of
        the 1 year promissory note in the amount of $100,000 includes an 18% interest
        rate per annum, with interest only payments being made on a monthly basis,
        beginning January 7, 2007.
  F-34
 **Table
            of Contents**
  During
        the
        year ended November 30, 2007, the holder exercised his option to convert
        this
        debenture into shares of the Company’s common stock. Accordingly, the Company
        issued 3,333,333 shares of its common stock to the holder at an average price
        of
        $0.03 per share for an amount of $100,000 in full payment of this debenture
        (See
        note 6).
 
 As
        of
        November 30, 2007, the company was obligated under its standby equity agreement
        with Cornell Capital Partners, LLC (see note 8). The principal amount of
        the
        obligation is shown net of the unamortized portion of the loan discount fee.
        As
        a result, the Company’s balance sheet reflects $240,579 due on this obligation.
        This obligation is the subject of an ongoing lawsuit between Cornell Capital
        Partners, LLC and the Company.
 
 **NOTE
        12 – LOSS ON DISCONTINUED OPERATIONS**
 During
        the
        year ended November 30, 2007, the corporation sold a majority of the inventory
        acquired from which it had acquired from a related party in August, 2004.
        This
        inventory was sold for $4,500 in cash and a vendor credit in the amount of
        $960.
        As a result of this transaction, the Corporation incurred a loss in the amount
        of $178,971 related to this transaction. The inventory sold in this transaction
        was deemed to constitute a product line of AmeriChip Tool and Abrasives,
        a
        subsidiary of AmeriChip International, Inc. This product line is being
        discontinued by the Company. Accordingly, the loss on this transaction in
        the
        amount of $178,971 is reflected as a loss from discontinued operations in
        the
        Company’s statement of income.
 
 F-35
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            of Contents**




**ITEM
        8. CHANGES INAND DISAGREEMENTS WITH ACCOUNTANTS ON
        ACCOUNTING AND FINANCIAL DISCLOSURE.**
  We
        have
        had no disagreements on any matter of accounting principles or practices,
        financial statement disclosure, or auditing scope or procedures with any
        of our
        accountants for the year endedNovember30,
        2007.
  We
        have
        not had any other changes in nor have we had any disagreements, whether or
        not
        resolved, with our accountants on accounting and financial disclosures during
        our two recent fiscal years or any later interim period except that on June 18, 2007, AmeriChip
        International, Inc. (the “Company”) dismissed Williams & Webster, P.S. as
        its independent registered public accounting firm. Effective June 18, 2007,
        we
        engaged Jewett, Schwartz, Wolfe & Associates as our new independent
        registered public accounting firm.
 
 **ITEM
        8A. CONTROLSAND
        PROCEDURES**
 
 **Evaluation
        of Disclosure Controls and Procedures**
 
 Disclosure
        controls and procedures are designed with an objective of ensuring that
        information required to be disclosed in our periodic reports filed with the
        Securities and Exchange Commission, such as this Annual Report on Form 10-KSB,
        is recorded, processed, summarized and reported within the time periods
        specified by the Securities and Exchange Commission. Disclosure controls
        are
        also designed with an objective of ensuring that such information is accumulated
        and communicated to our management, including our chief executive officer,
        in
        order to allow timely consideration regarding required disclosures.
  The
        evaluation of our disclosure controls by our principal executive officer
        included a review of the controls’ objectives and design, the operation of the
        controls, and the effect of the controls on the information presented in
        this
        Annual Report. Our management, including our chief executive officer, does
        not
        expect that disclosure controls can or will prevent or detect all errors
        and all
        fraud, if any. A control system, no matter how well designed and operated,
        can
        provide only reasonable, not absolute, assurance that the objectives of the
        control system are met. Also, projections of any evaluation of the disclosure
        controls and procedures to future periods are subject to the risk that the
        disclosure controls and procedures may become inadequate because of changes
        in
        conditions, or that the degree of compliance with the policies or procedures
        may
        deteriorate.
  As
        of the
        end of the period covered by this report, we carried out an evaluation, under
        the supervision and with the participation of our management, including our
        Chief Executive Officer and Principle Financial Officer, of the effectiveness
        of
        our disclosure controls and procedures, as defined in Rules 13a-15(e) and
        15d-15(e) of the Securities Exchange Act of 1934 as of the end of the period
        covered by this report. Based on that evaluation, our Chief Executive
        Officer and Principle Financial Officer have concluded that our disclosure
        controls and procedures as of November 30, 2007 were effective to ensure
        that
        information required to be disclosed by us in reports that we file or submit
        under the Securities Exchange Act of 1934 is recorded, processed, summarized
        and
        reported within the time periods specified in the Securities and Exchange
        Commission’s rules and forms.  There have been no material changes in
        our internal controls over financial reporting or in other factors that could
        materially affect, or are reasonably likely to affect, our internal controls
        over financial reporting during the year ended November 30, 2007. There have
        not
        been any significant changes in the Company’s critical accounting policies
        identified since the Company filed its Form 10-KSB as of November 30,
        2007.




**ITEM
      8B. OTHER INFORMATION**





All
      requisite reports on Form 8-K were filed in the forth quarter ended November
      30,
      2007.




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PART
      III




**ITEM
      9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROLPERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE
      ACT**




EXECUTIVE
      OFFICERS AND DIRECTORS





The
      directors and executive officer as of November 30, 2007 are as
      follows:




**Name**
            **Age**
            **Position**Marc
                Walther
            51
            Chief
                Executive Officer and DirectorThomas
                Schwanitz
            56
            Chief
                Financial Officer, DirectorEdward
                Rutkowski
            42
            Director,
                Vice President Research &
Development




The
      following is a brief description of the background of our directors and
      executive officers.





**Background
      Information**




***Marc
      Walther***.Mr.
      Walther is our Chief Executive Officer and a Director since May, 2003. Since
      May
      2003, Mr. Walther has served our Company in several capacities, most recently
      as
      its Chief Executive Officer and a director. Prior to joining our Company, Mr.
      Walther was an original founder in AmeriChip Ventures, Inc. and AmeriChip,
      Inc.
      Since 1999 Mr. Walther has also been the owner and President of National
      Abrasive Systems Company) a manufacturer and distributor of various abrasive
      products throughout the north-eastern United States. Mr. Walther is still
      affiliated with that company, which he acquired in 1999.





***Edward
      Rutkowski***.Mr.
      Rutkowski is a member of our Board of Directors and has been serving in that
      capacity since May 2003. Mr. Rutkowski has also served the Company in a variety
      of capacities since May 2003, as Vice President, Research, Research &
Development and is our Chief Technology Officer. Prior to joining the Company,
      Mr. Rutkowski founded AmeriChip, Inc. and AmeriChip Ventures in January 2001.
      Between 1993 and January 2001, Mr. Rutkowski had been employed in various
      capacities involving product engineering, technical support, distribution and
      marketing of products within the automotive industry, most recently as a
      distribution account specialist for Komet of America and prior to working with
      Komet, Mr. Rutkowski worked as a Supplier Product Engineer for EWIE Company
      of
      Romeo, MI. In 1993, Mr. Rutkowski developed and was issued the patent for the
      AmeriChip laser chip control process which is currently held by
      AmeriChip.




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          of Contents**




***Thomas
      Schwanitz***.Mr.
      Schwanitz is Managing Partner of Schwanitz, Hayden & Associates, P.L.C. of
      Detroit, Michigan, and has a Bachelor of Science - Accounting from Northern
      Michigan University. His professional affiliations include member of American
      Institute of Certified Public Accountants, Michigan Association of Certified
      Public Accountants, Consultant to the Association of Macomb County Life
      Underwriters and Financial & Estate Planning Councils of Detroit and Macomb
      County. Mr. Schwanitz is also a member of the Board of Directors for and is
      the
      Treasurer of the Mount Clemens General Hospital and on the Board of Trustees
      for
      Baker College, Mount Clemens.





Advisory
      Committee




In
      2007,
      we created a compensation committee and made changes to our Audit and Advisory
      Committees.  Mr. John Aguero, Mr. Alvin Snaper, Ms. Windsor and Mr.
      John Rehfeld were all appointed to the Board of Advisors.




Compensation
      Committee




John
      Rehfeld heads up the Compensation committee and is currently reviewing payroll,
      benefit and bonus structures. In February 2008, Mr. Ken W. Mann, was appointed
      President of AmeriChip Canada Inc and was appointed to the compensation
      comitttee.




AmeriChip
      Canada Inc.




In
      February 2008, Mr. Kenneth W Mann was appointed President and Director of
      AmeriChip Canada Inc. replacing Ms. R Windsor.




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COMPLIANCE
      WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934





Section
      16(a) of the Securities Exchange Act of 1934, as amended, requires that the
      Company directors and executive officers, and persons who own more than ten
      percent (10%) of the Company's outstanding common stock, file with the
      Securities and Exchange Commission (the "Commission") initial reports of
      ownership and reports of changes in ownership of Common Stock. Such persons
      are
      required by the Commission to furnish the Company with copies of all such
      reports they file. The Company's knowledge, based solely on a review of the
      copies of such reports furnished to the Company and written representation,
      as
      of November 30, 2007, all of the Section 16(a) filing requirements applicable
      to
      its officers, directors and greater than 10% beneficial owners have been
      satisfied.




Audit
      Committee





The
      principal functions of the Audit Committee is to recommend the annual
      appointment of the Company’s auditors concerning the scope of the audit and the
      results of their examination, to review and approve any the Company’s internal
      control procedures. Our audit committee consists Peter Wanner, Rhonda Windsor
      and Martin Scott.   The Board of Directors believes that the
      Audit Committee, is capable of concluding that the Company’s disclosure controls
      and procedures were effective for purposes of the Securities Exchange Act of
      1934 filings with the Securities and Exchange Commission. The full audit
      committee is currently being constituted and will have two outside directors,
      one of which will be the chairman.




Family
      Relationships





There
      are
      no family relationships between any two or more of our directors or executive
      officers. There is no arrangement or understanding between any of our directors
      or executive officers and any other person pursuant to which any director or
      officer was or is to be selected as a director or officer, and there is no
      arrangement, plan or understanding as to whether non-management shareholders
      will exercise their voting rights to continue to elect the current board of
      directors. There are also no arrangements, agreements or understandings to
      our
      knowledge between non-management shareholders that may directly or indirectly
      participate in or influence the management of our affairs.




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Involvement
      in Certain Legal Proceedings





To
      the
      best of our knowledge, during the past five years, none of the following
      occurred with respect to a present or former director or executive officer
      of
      the Company: (1) any bankruptcy petition filed by or against any business of
      which such person was a general partner or executive officer either at the
      time
      of the bankruptcy or within two years prior to that time; (2) any conviction
      in
      a criminal proceeding or being subject to a pending criminal proceeding
      (excluding traffic violations and other minor offenses); (3) being subject
      to
      any order, judgment or decree, not subsequently reversed, suspended or vacated,
      of any court of any competent jurisdiction, permanently or temporarily
      enjoining, barring, suspending or otherwise limiting his involvement in any
      type
      of business, securities or banking activities; and (4) being found by a court
      of
      competent jurisdiction (in a civil action), the Securities and Exchange
      Commission or the commodities futures trading commission to have violated a
      federal or state securities or commodities law, and the judgment has not been
      reversed, suspended or vacated.




**ITEM
      10. EXECUTIVECOMPENSATION**





Summary
      Compensation Table. The following table sets forth the annual and long-term
      compensation for services in all capacities for the fiscal years ended November
      30, 2007, 2006 and 2005, paid to our most highly compensated executive
      officers.




**Summary
        Compensation Table**




**Annual
                Compensation**
              
              
              **Long
                  Term Compensation****Awards****Name
                  and Principal Position**
              **Year**
              
              **Salary**
              
              
              **Bonus**
              
              
              **Restricted**
                **Stock**
                **Award(s)**
              
              
              **Securities**
                **Underlying**
                **Options**
              
              
              **All
                  Other**
                **Compensation**David
                  Howard(1)
              2007
              
              $
              0
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —Former
                  Chairman of the Board of
              2006
              
              $
              0
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —Directors
                  and former Officer
              2002
              
              $
              0
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —Marc
                  Walther
              2007
              
              $
              70,000
              
              
              
              —
              
              
              $
              2,000,000
              
              
              
              —
              
              
              
              —Chief
                  Executive Officer, President and
              2006
              
              $
              0
              
              
              
              —
              
              
              $
              200,000
              
              
              
              —
              
              
              
              —member
                  of the Board of Directors
              2005
              
              $
              116,975
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —Thomas
                  Schwantiz
              2007
              
              $
              0
              
              
              
              
              
              
              $
              102,000Chief
                  Financial Officer
              20062005
              
              
              
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —Ed
                  Rutkowski
              2007
              
              
              
              
              
              
              —
              
              
              $
              2,000,000
              
              
              
              —
              
              
              
              —Director,
                  Vice President of Research and
              2006
              
              $
              70,000
              
              
              
              —
              
              
              $
              200,000
              
              
              
              —
              
              
              
              —Development,
                  Chief Operating Officer
              2005
              
              $
              123,001
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —Richard
                  Rossmann
              2007
              
              $
              0
              
              
              
              —
              
              
              $
              600,000
              
              
              
              —
              
              
              
              —Director,
                  President
              2006
              
              
              
              
              
              
              —
              
              
              $
              720,000
              
              
              
              —
              
              
              
              —2005
              
              
              
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —
 ________________________


(1)  On
      February 5, 2008 the
      Board of Directors resolved to issue a total of 115,000 preferred Series A
      shares to each of Directors, Walther and Rutkowski and 25,000
      preferred Series A shares to Director Schwanitz as compensation for
      providing personal guarantees on behalf of the Corporation.  These
      shares are not convertible to common shares and are
      non–participating.




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**Aggregated
      Option Exercises in Last Fiscal Year And Fiscal**


**Year-End
      Option Values**




The
      Company has not issued any stock options to any of the executive officers listed
      in the Summary Compensation Table above.





Compensation
      of Directors




We
      have no
      standard arrangement pursuant to which our Directors are compensated for
      services provided as a Director.





**Employment
      Agreements**







**Change
      in Control**





There
      are
      no arrangements which would result in payments to any officers or directors
      in
      the event of a change-in-control of AmeriChip.





**Indemnification**




Our
      Articles of Incorporation and Bylaws provide that we may indemnify an officer
      or
      director who is made a party to any proceeding, including a lawsuit, because
      of
      his position, if he acted in good faith and in a manner he reasonably believed
      to be in our best interest. In certain cases, we may advance expenses incurred
      in defending any such proceeding. To the extent that the officer or director
      is
      successful on the merits in any such proceeding as to which such person is
      to be
      indemnified, we must indemnify him against all expenses incurred, including
      attorney’s fees. With respect to a derivative action, indemnity may be made only
      for expenses actually and reasonably incurred in defending the proceeding,
      and
      if the officer or director is judged liable, only by a court order. The
      indemnification is intended to be to the fullest extent permitted by the laws
      of
      the State of Nevada.





Insofar
      as
      indemnification for liabilities arising under the Securities Act of 1933 (the
      “Act”) may be permitted to our directors, officers and controlling persons
      pursuant to the foregoing provisions, or otherwise, we have been advised that
      in
      the opinion of the Securities and Exchange Commission
      such indemnification is against public policy as expressed in the Act and
      is, therefore, unenforceable.




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**ITEM
      11. SECURITY OWNERSHIPOF CERTAIN BENEFICIAL OWNERS AND
      MANAGEMENT**




The
      following table shows the amount of our capital stock beneficially owned by
      our
      directors, the executive officers named in the Summary Compensation Table above
      and by all directors and executive officers as a group as of November 30, 2007.
      Unless otherwise indicated, beneficial ownership is direct and the person
      indicated has sole voting and investment power. As of November 30, 2007, we
      had
      184,236,733 shares of common stock outstanding.




**Name
                and Address**
            **Title
                of Class**
            **Shares**
              **Beneficially**
              **Owned
                (1)**
            **Percent**
              **of
                Class(1)**Marc
                A Walther
              24700
                Capital
              Clinton
                Township MI 48036(Director)
            Common
            19,571,429
            10.62%Edward
                Rutkowski
              24700
                Capital
              Clinton
                Township MI 48036
              (Director)
            Common
            19,571,429
            10.62%Thomas
                P Schwanitz (2)
              24700
                Capital
              Clinton
                Township MI 48036
              (Director)
            Common
            1,095,179
            *Richard
                H Rossmann (3)
              24700
                Capital
              Clinton
                Township, MI
              48036
                (Director)
            Common
            7,214,286Officers
                and Directors as a Group
              (4Persons)
            Common
            47,452,323
            25.76


______________________


*
            Less
                than 1%.




(1)
            Applicable
                percentage of ownership is based on 184,236,723 shares of common
                stock
                outstanding as of November 30, 2007, together with applicable options
                for
                each shareholder. Beneficial ownership is determined in accordance
                with
                the rules of the Securities and Exchange Commission and generally
                includes
                voting or investment power with respect to securities. Shares of
                common
                stock subject to options that are currently exercisable or exercisable
                within sixty days of November 30, 2007 are deemed to be beneficially
                owned
                by the person holding such options for the purpose of computing the
                percentage of ownership of such person, but are not treated as outstanding
                for the purpose of computing the percentage ownership of any other
                person.




(2)
            On
                January 11,2006 . Thomas Schwanitz  was appointed our Chief
                Financial Officer.




(3)
            On
                April 18, 2006 Mr. Richard H
                Rossmann was appointed a director of the Company as well as President
                of
                AmeriChip Automotive Inc.and
                Mr.
                Rossmann  resigned in September
                2007.




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**ITEM
      12. CERTAIN RELATIONSHIPSAND RELATED
      TRANSACTIONS**





On
      March
      22, 2003 the terms of the Agreement and Plan of Reorganization dated February
      27, 2003, were consummated pursuant to which we, AVI and AVI shareholders agreed
      to effect a reorganization under Section 368 (a) (1) (B) of the Internal Revenue
      Code of 1986, as amended. Pursuant to the Agreement and Plan of Reorganization,
      we acquired all of the issued and outstanding shares of AVI’s common stock with
      the result that AVI is now our wholly owned subsidiary corporation. In exchange,
      for the shares of AVI, we issued 60 million shares common stock to David Howard,
      the former Chairman of the Board of Directors, Marc Walther, our President
      and
      Chief Executive Officer, and Ed Rutkowski, one of our directors. Each of the
      foregoing individuals received 20 million shares of common stock and were the
      sole shareholders of AVI.




**ITEM
      13. EXHIBITS**




3.1
            Company's
                Amended and Restated Articles of Incorporation (1)3.2
            Company's
                Revised Amended and Restated Bylaws (1)14.1
            Code
                of Business Conduct (2)10.1
            Patent
                Licensing Agreement, dated January 21, 2003, by and between AmerChip,
                Inc.
                and AmeriChip Ventures (2)10.2
            Shareholder
                Agreement, dated February 24, 2003, by and among David Howard, Edward
                Rutkowski and Marc Walther. (2)10.5
            Purchase
                and Sale of Business Assets Agreement, dated August 1, 2004, between
                National Abrasive Systems, Co. and AmerChip Tool and Abrasives, LLC
                (2)10.6
            Promissory
                Note issued on August 1, 2004 by AmerChip Tool and Abrasives, LLC
                to
                National Abrasive Systems, Co. (2)


10.7
            Security
                Agreement, dated on August 1, 2004 between AmerChip Tool and Abrasives,
                LLC to National Abrasive Systems, Co. (2)10.8
            Promissory
                Note issued on August 2, 2004 by AmeriChip International, Inc. to
                Cornell
                Capital (2)10.9
            Promissory
                Note issued on September 30, 2004 by AmeriChip International, Inc.
                to
                Cornell Capital (2)




10.10
            Promissory
                Note issued on January 10, 2004 by AmeriChip International, Inc.
                to
                Cornell Capital (2)31.1
            Certification
                of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley
                Act. (3)31.2
            Certification
                of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley
                Act. (3)32.1
            Certification
                of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley
                Act. (3)32.2
            Certification
                of Chief Financial Officer Pursuant to Section 906 of the
                Sarbanes-Oxley Act. (3)




(1)
      Incorporated by reference to the Registrant’s Registration Statement on Form
      SB-2 filed on December 4, 2001.


(2)
      Incorporated by reference to the Registrant’s Annual Report on Form 10-KSB filed
      on March 15, 2005.


(3)
      Filed
      herewith.





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**ITEM
      14: PRINCIPALACCOUNTANT FEES AND
      SERVICES**





AUDIT
      FEES




Jewett,
      Schwartz, Wolfe & Associates ("Jewett, Schwartz")  billed us in
      the aggregate amount of $50,400 for professional  services  rendered
      for their  audit  of our  annual  financial 
statements  and  their  reviews  of the financial 
statements  included in our Forms 10-QSB for the year ended  November
      30, 2007 and Williams Webster (“Williams”)  billed us an aggregate
      amount of   $80,000 for professional  services 
rendered for their  audit  of our  annual  financial 
statements  and  their  reviews  of the financial 
statements  included in our Forms 10-QSB for the year ended  November
      30, 2006.




AUDIT-RELATED
      FEES





Jewett,
      Schwartz did not bill us for, nor perform professional  services rendered
      for  assurance  and  related  services  that 
were  reasonably  related  to  the performance  of
      audit or review of the Company's  financial  statements  for the
      fiscal years ended November 30, 2007 and November 30, 2006,
      respectively.





TAX
      FEES





Jewett,
      Schwartzdid
      not bill us for, nor were perform
      professional services rendered for tax related services for the fiscal years
      ended November 30, 2007 and November 30, 2006, respectively





ALL
      OTHER
      FEES




Jewett,
      Schwartzdid not bill us
      for, nor were perform professional services rendered during the last two fiscal
      years, other than as reported  above.




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**SIGNATURES**





Pursuant
      to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
      1934 the registrant has duly caused this report to be signed on its behalf
      by
      the undersigned, thereunto duly authorized.




**AmeriChip
                International, Inc.**By:
            /s/ Marc
                WaltherChief
                Executive Officer, Chairman of the Board of Directors
              February
                27, 2008




**AmeriChip
                International, Inc.**By:
            /s/ Thomas
                SchwanitzChief
                Financial Officer, Director
              February
                27, 2008




Pursuant
      to the requirements of the Securities Exchange Act of 1934, this report has
      been
      signed by the following persons in the capacities indicated and on the dates
      indicated.




/s/
                Marc WaltherMarc
                WaltherChief
                Executive Officer, Chairman of the Board of DirectorsFebruary
                27, 2008/s/
                Edward RutkowskiEdward
                RutkowskiDirectorFebruary
                27, 2008






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