UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K/A

AMENDMENT NO. 1

þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934:  For the fiscal year ended March 31, 2011

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

Commission file number: 000–14273

INTEGRATED FREIGHT CORPORATION

(Exact name of registrant as specified in its charter)

FLORIDA	84–0868815
State or other jurisdiction of incorporation or organization	I.R.S. Employer Identification No.

Suite 200 6371 Business Boulevard Sarasota, Florida	34240
(Address of principal executive offices)	(Zip code)

Issuer’s telephone number: (941) 907-8372

Securities registered under Section 12(b) of the Exchange Act: None

Securities registered under Section 12(g) of the Exchange Act:

Title of each class:	Name of Exchange on which registered:
Common Stock, $0.001 par value per share	(None)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No þ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not 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-K or any amendment to this Form 10-K. þ

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

Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	þ

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

The aggregate market value* of the voting and non-voting common equity held by non-affiliates was:  $3,939,496

The number of shares of the registrant’s common stock outstanding at June 30, 2011 was:  37,632,082 shares

Table of Contents

		Page
	Part I
Item 1.	Business	5
Item 1A.	Risk Factors	12
Item 1B.	Unresolved Staff Comments	18
Item 2.	Properties	19
Item 3.	Legal Proceedings	20
Item 4.	Submission of Matters to a Vote of Security Holders	20
	Part II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	21
Item 6.	Selected Financial Data	22
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	30
Item 8.	Financial Statements and Supplementary Data	30
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	30
Item 9A.	Controls and Procedures	30
Item 9B.	Other Information	31
	Part III
Item 10.	Directors, Executive Officers and Corporate Governance	30
Item 11.	Executive Compensation	34
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	36
Item 13.	Certain Relationships and Related Transactions, and Director Independence	37
Item 14.	Principal Accounting Fees and Services	37
	Part IV
Item 15.	Exhibits, Financial Statement Schedules	39
	Signatures	40

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DOCUMENTS INCORPORATED BY REFERENCE

We have not incorporated any documents by reference.

SUMMARIES OF REFERENCED DOCUMENTS

This amendment No. 1 to this annual report on Form 10-K/A contains references to, summaries of and selected information from agreements and other documents. These agreements and documents are not incorporated by reference; but, they are filed as exhibits to this annual report or to other reports we have filed with the U.S. Securities and Exchange Commission.Whenever we make reference in this annual report to any of our agreements and other documents, the references are not necessarily complete.  The summaries of and selected information from those agreements and other documents are qualified in their entirety.You may obtain the full text of the agreements and documents from the Public Reference Section of or online from the Commission. See “Where You Can Find Agreements And Other Documents Referred To In This Annual Report” for instructions as to how to access and obtain this information.

WHERE YOU CAN FIND AGREEMENTS AND OTHER DOCUMENTS REFERRED TO IN THIS ANNUAL REPORT

We file reports with the U.S. Securities and Exchange Commission pursuant to Section 13 of the Securities Exchange Act of 1934. You may read and copy any reports and other materials we have filed with the Commission at the Commission’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330. The Commission maintains an Internet site at which you may obtain all reports, proxy and information statements, and other information that we file with the Commission. The address of the Commission’s web site is http://www.sec.gov.  Under “Forms and Filings”, select “Search for Company Filings”.

FORWARD-LOOKING STATEMENTS

This annual report on Form 10–K and the information incorporated by reference, if any, includes “forward–looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended. We intend the forward–looking statements to be covered by the safe harbor provisions for forward–looking statements in these sections.

This annual report on Form 10–K contains forward-looking statements that involve risks and uncertainties. We use words such as “project,” “believe,” “anticipate,” “plan,” “expect,” “estimate,” “intend,” “should,” “would,” “could,” “will,” or “may,” or other such words, verbs in the future tense and words and phrases that convey similar meaning and uncertainty of future events or outcomes to identify these forward-looking statements. There are a number of important factors beyond our control that could cause actual results to differ materially from the results anticipated by these forward-looking statements. While we make these forward–looking statements based on various factors and derived using numerous assumptions, we have no assurance the factors and assumptions will prove to be materially accurate when the events they anticipate actually occur in the future.

These important factors include those that we discuss in this annual report under the caption “Risk Factors”, as well as elsewhere in this annual report. You should read these factors and the other cautionary statements made in this annual report as being applicable to all related forward-looking statements wherever they appear in this annual report. If one or more of these factors materialize, or if any underlying assumptions prove incorrect, our actual results, performance or achievements may vary materially from any future results, performance or achievements expressed or implied by these forward-looking statements. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

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PART I

ITEM 1. BUSINESS.

Our corporate and business history.

“We”, “our” and “us", as used in this annual report, refer to Integrated Freight Corporation and our predecessor, PlanGraphics, Inc., and includes the following wholly owned subsidiaries, during the periods indicated:

·PlanGraphics, Inc., a Maryland corporation, (“PGI-MD”) our only subsidiary prior to December 27, 2009, when we sold it.

·Integrated Freight Corporation, a Florida corporation, (“Original IFC”) between December 3, 2009, when we acquired a controlling interest, and December 23, 2009, when we merged Original IFC into us.

·Morris Transportation, Inc., an Arkansas corporation, beginning December 23, 2009, when we acquired a controlling interest in Original IFC.  Original IFC purchased all of Morris Transportation’s common stock as of September 1, 2008.

·Smith Systems Transportation, Inc., a Nebraska corporation, beginning December 23, 2009, when we acquired a controlling interest in Original IFC.  Original IFC purchased all of Smith System’s common stock as of September 1, 2008.

·Triple C Transport, Inc., a Nebraska corporation, beginning as of May 5, 2010, when we purchase all of its common stock.  We have filed an action to rescind this acquisition.  See Item 3.  Legal Proceedings, below.

·Cross Creek Trucking, Inc., an Oregon corporation, beginning April 1, 2011, when we purchased all of its common stock.  Financial information for Cross Creek Trucking is not include in our financial statements at and for the year ended March 31, 2011.

The address of our principal executive offices is Suite 200, 6371 Business Boulevard, Sarasota, FL 34240, and our telephone number at that address is (941) 907-8372.  The address of our web site is www.integrated-freight.com.

We were incorporated as Douglas County Industries, Inc. in Colorado in 1981. We underwent several name changes prior to 1997, our name at that time being DCX, Inc.  In 1997, we acquired all of the outstanding shares of what is now PGI–MD.  In 1998, we changed our name to Integrated Spatial Information Solutions, Inc. from DCX, Inc.  In 2002, we changed our name to PlanGraphics, Inc. from Integrated Spatial Information Solutions, Inc.  On August 18, 2010, we changed our name to Integrated Freight Corporation when we changed our corporate domicile to Florida from Colorado.

Original IFC was incorporated as Integrated Freight Systems, Inc. in Florida on May 13, 2008 by Paul A. Henley, its founder.  Original IFC changed its name to Integrated Freight Corporation on July 27, 2009. Mr. Henley is currently one of our directors and our chief executive officer.  Mr. Henley founded Original IFC for the purpose of acquiring and consolidating operating motor freight companies. Original IFC acquired the following companies:

Company Name	Year Established		Acquisition Date
Morris Transportation, Inc.		1998	As of September 1, 2008
Smith Systems Transportation, Inc.		1992	As of September 1, 2008

In 2010, we acquired a third motor freight carrier:

Company Name	Year Established		Acquisition Date
Triple C Transport, Inc.		2006	As of May 5, 2010

     We have filed an action to rescind this acquisition, based on fraud and breach of representations and warrants by the sellers.  See Item 3. Legal Proceedings, below.  This company discontinued  operationsafter the end of our fiscal year.

In 2011, after our fiscal year 2011 end, we acquired a fourth motor freight carrier:

Company Name	Year Established		Acquisition Date
Cross Creek Trucking, Inc.		1986	As of April 1, 2011

Although we have begun to consolidate some operational functions of these subsidiaries, such as insurance , fuel and tire purchasing, we are operating these subsidiaries as independent companies under the management of their founders and stockholders from whom we purchased them, with the exception of Cross Creek Trucking in which the founder and stockholder is no longer involved. We expect this management arrangement to continue until we are able to obtain sufficient debt or equity funding to cover the cost of combining and consolidating other functions of their operations that are duplicative.  We estimate that this consolidating activity will cost approximately $1,000,000.

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In February 2011, we incorporated Integrated Freight Services, Inc. to operate as a freight brokerage company.

Overview of Our Truck Transportation Business

We are, beginning December 27, 2009, the date of our acquisition of Original IFC, a holding company exclusively of three operating  motor freight carriers, providing truck load service throughout the forty-eight contiguous United States and one freight broker. We do not specialize in any specific types of freight or commodities. We carry dry freight, refrigerated freight and hazmat and certain hazardous materials  including hazardous waste.  We provide long-haul, regional and local service to our customers.  The following description of our business includes information about Cross Creek Trucking, a fourth motor freight carrier, which we purchased after the end of our most recent fiscal year.  Triple C Transport discontinued  operationsafter the end of our most recent fiscal year.  Accordingly, we have not included any information, other than financial information, related to the operations of Triple C Transport during our 2011 fiscal year.  All data in this Item 1 reflects our business at the date we have filed this annual report.

Our Strategy

Truck transportation in general has suffered during the recent economic recession. According to the American Trucking Association, freight transportation tonnage and revenue retracted 19 and 18 percent, respectively, from peak to trough during the so-called “Great Recession" (Transport Topics The American Trucking Association, May 31, 2011).  Although the economy has staged a slow recovery since that time, carriers are presently dealing with both extraordinarily high fuel prices and a growing shortage of qualified drivers.  We believe the trucking companies that have survived in the recent economic recession, whether presently profitable or marginally unprofitable, represent good future value at the prices for which we believe many of them can be acquired. Our management believes that many of them will require debt and equity funding and cost reductions which they may be unlikely to obtain or achieve  individually. We believe that the demand for truck transportation services is returning to pre-recession levels, with an inadequate supply of trucks to meet demand. The American Trucking Association Tonnage Index reported a 3.5 percent increase in tonnage of freight shipped in the first two months of 2010. (Transport Topics, March 29, 2011).  According to the ATA tonnage has improved another 5.9% for the same period in 2011 (ATA’s Monthly Truck Tonnage Report, March 31, 2011).  We believe our strategy will position us to fill part of the demand for over-the-road freight services.

We intend to continue acquiring well established trucking companies when we can do so at prices which we deem to be advantageous. In the alternative, we may acquire assets. We also plan to expand beyond our truckload service through acquisitions into logistics, less-than-truckload (LTL) and expedited/just-in-time services, as opportunities are presented to us..  Our strategy is highly dependent on our ability to obtain financing for acquisitions, including more favorable refinancing of revenue producing assets and accounts receivables, when we cannot make acquisitions for stock and with extended cash payment terms.  We have experienced difficulty obtaining such financing.  You have no assurance we will be able to obtain financing for additional acquisitions which require immediate payment of cash consideration.

We believe that we can achieve savings in operating costs by centralizing certain common functions of our subsidiaries, such as administration, insurance, fuel and tire purchasing, billing and collections, dispatching, maintenance scheduling and other functions. While some of these cost-saving actions can be taken without significant cost, others will require us to obtain additional funding, as noted above.  We have begun our consolidating activities in insurance and fuel and tire purchasing.  We believe that with a larger service territory and customer base than any one subsidiary would have working alone, we will be able to achieve greater efficiencies in route and equipment utilization.

Our Markets

Historically our subsidiary companies have operated in well-established geographic traffic lanes or routes. These lanes are defined by our customers’ distribution patterns. Because there is some overlap within the most heavily traveled lanes, especially between points in the upper Midwest and Texas, we believe we will realize increased cost and productivity improvements.

Our market is concentrated in the western half of the U.S., ranging from the Ohio Valley and North Central moving through the Mid & Southwest and more recently in the Pacific Northwest. We have light coverage in the Northeast.  Our dry van and hazardous materials subsidiaries operate in regional areas, and thus have length of hauls typical of a day to two days of travel. Our refrigerated operations cover a larger geographic area with longer lengths of haul. Our brokerage services enable us to expand our customer service offerings by providing the non-asset-based capability of arranging with other carriers to haul our customers' freight when the shipments do not fit our asset-based model.

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*A drop yard is a temporary or semi permanent location we rent to store trailers when not in use between pick-ups and deliveries. Typically, we rent drop yards in terminal facilities of other motor freight carriers, which provide security.

Our Customers and Marketing

We serve approximately 250 customers on a regular basis.  Although we do not have contracts with any of these customers, we have long-standing relationships with most of them.

The following table presents information regarding the percentage-of-revenue concentration of the business with our customers.

Four customers	Up to 43%
All other customers	57% or more

The following table presents information regarding the average length of our trips.

Longest haul (overnight)	1,950 miles
Shortest haul	175 miles
Average haul	850 miles

All of the freight we hauled in fiscal year  2011 is dry van and/or refrigerated  freight. The following table presents information regarding the approximate percentage makeup of the freight we haul.

Forest and paper products	50%
Hazmat and hazwaste	20%
All other freight (freight of all kinds, particularly food and refrigerated goods)	30%

Marketing

Our sales and marketing force currently consists of seven individuals. We have no formal marketing plan at the present time. We attend relevant trade shows and trade association meetings, and seek to maintain good relations with our existing customers. As we grow our carrier base, of which you have  no assurance, we plan to establish a central national account sales and marketing group that will support the operations and customer service efforts of each subsidiary.

Our People

We believe our employees are our most important asset. The table on the following page  presents information about our employees, other than drivers.

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Platform and warehouse	18
Fleet technicians	17
Dispatch	30
Sales	7
Office	11
Administrative and Executive	9

    None of our employees are represented by a collective bargaining unit. We consider relations with our employees to be good. We offer basic health insurance coverage to employees.

Our Drivers

The following table presents information about our drivers.

Drivers – company	289
Drivers – independent contract	40

We believe that maintaining a safe and productive professional driver group is essential to providing excellent customer service and achieving profitability. All of our drivers must have three years of verifiable driving experience, a hazmat endorsement (if hauling hazmat), no major violations in the previous thirty-six months, and must comply with all requirements of employment by federal Department of Transportation and applicable state laws.

We select drivers, including independent contractors, using our specific guidelines for safety records, driving experience, and personal evaluations. We maintain stringent screening, training, and testing procedures for our drivers to reduce the potential for accidents and the corresponding costs of insurance and claims. We train new drivers in all phases of our policies and operations, as well as in safety techniques and fuel-efficient operation of the equipment. All new drivers also must pass DOT required tests prior to assignment to a vehicle.

We primarily pay company-employed drivers a fixed rate per mile. The rate increases based on length of service. Drivers also are eligible for bonuses based upon safe, efficient driving. We pay independent contractors on a fixed rate per mile. Independent contractors pay for their own fuel, insurance, maintenance, and repairs.

Competition in the trucking industry for qualified drivers is normally intense. Our operations have been impacted, and from time-to-time we have experienced under-utilization and increased expense, as a result of a shortage of qualified drivers. We place a high priority on the recruitment and retention of an adequate supply of qualified drivers. Our average annual turn-over rate is less than fifteem percent, compared to an industry average of fifty percent as published in Transport Topics, June 23, 2011.

Our Operations

We currently conduct all of our freight transportation operations, including dispatch and accounting functions, from the headquarters facilities of our operating subsidiaries. During fiscal year  2011 we continued using the legacy information management systems and personnel that were employed when our operating subsidiaries were acquired. These arrangements produce many overlaps and duplications in facilities, office systems and personnel. We believe that these operating arrangements provide less than optimal results and controls. We have begun to centralize many of these functions, as noted above. Centralization is subject to obtaining adequate internal or external financing, of which there is no assurance.

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Our Revenue Equipment

The following table presents information regarding the mix of our revenue producing equipment.

Power units (tractors) – sleeper		173
Power units (tractors) – day cab		2
Trailers
	Flatbed	2
	Dry van	270
	Refrigerated	202
	Other specialized	9
	Tanker	9

The average age of our power units is approximately 4.82 years. All of our power units are GPS equipped. The majority of our power units are Freightliner and Peterbuilt vehicles. This uniformity allows for reduced inventory of parts required by our maintenance departments. In addition, the training required for our technicians is focused on limited equipment lines. We replace our power units at approximately four years of age. The average age of our trailers is approximately 8.2 years.  We maintain all of our revenue producing equipment in good order and repair.

We believe we have an optimal tractor to trailer ratio based upon our current and anticipated customer activity.

Diesel Fuel Availability and Cost

Our operations are heavily dependent upon the use of diesel fuel. The price and availability of diesel fuel can vary and are subject to political, economic, and market factors that are beyond our control.  Fuel prices have fluctuated dramatically and quickly at various times during the last three years. They remain high based on historical standards and can be expected to increase with increased demand for truck transportation in a recovering economy.  We actively manage our fuel costs with volume purchasing arrangements with national fuel centers that allow our drivers to purchase fuel at a discount while in transit.  During fiscal 2011, over eighty-five percent of our fuel purchases were made at contracted locations.

In addition to measures we have adopted over the years such as auxiliary power units in our tractors, we have also added more aerodynamically designed  equipment, and have had additional driver training regarding fuel mileage.

Our cost-cutting measures include utilizing technology such as Peoplenet and Carrierweb to monitor travel speed/idling/rpm/high overspeed operations. In addition, governing the top speed of our power units helps reduce our fuel costs. We are installing the newly designed roll resistant, and thus more fuel efficient, tires as replacements as needed.

The Federal fuel surcharge program cushions our exposure to increased fuel prices. The fuel surcharge program has enabled us  historically to pass through most long-term increases in fuel prices and related taxes to customers in the form of fuel surcharges.  These fuel surcharges, which adjust weekly with the cost of fuel, enable us to recover a substantial portion of the higher cost of fuel as prices increase, except for non-revenue miles, out-of-route miles or fuel used while the tractor is idling. All fuel surcharges are based onnational averages.  As of March 31, 2011, we had no derivative financial instruments to reduce our exposure to fuel price fluctuations.

Among the greatest challenges presented by high and relatively unstable diesel fuel prices is monitoring and maintaining our  fuel costs and insuring that the  fuel surcharge levels are adequate to recapture incremental costs.  The Company monitors the weekly Department of Energy regional and national diesel fuel pricing information and regulatethe  fuel surcharge levels accordingly.  In addition, customer service representatives and operations personnel have been trained to take into account the cost of fuel (to include all empty miles) during the process of accepting and booking all shipments.

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Our Competition and Industry

Trucks provide transportation services to virtually every industry operating in the United States and generally offer higher levels of reliability and faster transit times than other surface transportation options. Trucks hauled 68.8 percent of all freight, with estimated total revenues from this industry sector are $563 billion in 2010, according to American Trucking Association. Trucks provide transportation services to virtually every industry operating in the United States and generally offer higher levels of reliability and faster transit times than other surface transportation options. The transportation industry is highly competitive on the basis of both price and service. The trucking industry is comprised principally of two types of motor carriers: truckload and less-than-a-load, generally identified as LTL. Truckload carriers generally provide an entire trailer to one customer from origin to destination. LTL carriers pick up multiple shipments from multiple customers on a single truck and then route those shipments through service centers, where freight may be transferred to other trucks with similar delivery destinations. All of our service is truckload service.

The surface freight transportation market in which we operate is frequently referred to as highly fragmented and competitive. There are an estimated 172,000 transportaiton and warehousing companies in the US, according to the National Cooperative Freight ResearchProgram’s 2011 report. Even the largest motor freight companies haul a small percentage of the total freight. The following table presents information regarding the estimated percentage of freight hauled by the largest trucking companies compared to all other trucking companies.  [Information obtained from the American Transportation Research Institute.]  According to the American Trucking Association’s June 2011 issue of ‘Trucklines’, “Trucking serves as a barometer of the U.S. economy, representing 67.2% of tonnage carried by all modes of domestic freight transportation, including manufactured and retail goods. Trucks hauled 9 billion tons of freight in 2010.  Motor carriers collected $563.4 billion, or 81.2% of total revenue earned by all transport modes.”

Ten largest trucking companies	10.7%
All other trucking companies	89.3%
*Transport Topics 2011 Top 100 Survey

Competition in the motor freight industry is based primarily on service (including on-time pickup and delivery), price, equipment availability and business relationships. We believe that we are able to compete effectively in our markets by providing high-quality and timely service at competitive prices. We believe our relationships with our customers are good. We compete with smaller and several larger transportation service providers. Our larger competitors, who include JB Hunt Transport Services, Inc., C.R. England, Inc. and Knight Transportation, Inc., may have more equipment, a broader coverage network and a wider range of services than we have. They  also have greater financial resources and, in general, the ability to reduce prices to gain business, especially during times of reduced growth rates in the economy. This could potentially limit our ability to maintain or increase prices, and could also limit our growth in shipments and tonnage.

We believe that we do not compete with transportation by train, barge or ship, which we believe are not options for our existing customers.

Regulation

Our operations as a for-hire motor freight carrier are subject to regulation by the U.S. Department of Transportation (USDOT) and its agency, the Federal Motor Carrier Safety Administration (FMCSA), and certain business is also subject to state rules and regulations.  These agencies exercise broad powers over our business, generally governing such activities as authorization to engage in motor carrier operations, safety and insurance requirements. The FMCSA periodically conducts reviews and audits to ensure our compliance with all federal safety requirements, and we report certain accident and other information to the FMCSA.

Our company drivers and independent contract drivers also must comply with the safety and fitness regulations promulgated by the FMCSA, including those relating to drug and alcohol testing and hours-of-service.  Drivers may drive up to eleven hours within a fourteen-hour non-extendable window from the start of the workday, following at least ten consecutive hours off duty.  Motor freight carriers and drivers may restart calculations of weekly on-duty limits after the driver has at least thirty-four consecutive hours off duty. 

We are also subject to various environmental laws and regulations dealing with the handling of hazardous materials, air emissions from our vehicles and facilities, engine idling, and discharge and retention of storm water.  These regulations have not had a significant impact on our operations or financial results and we do not expect a negative impact in the future.

Terms of Our Acquisitions

We acquired Morris Transportation and Smith Systems Transportation in the merger with Original IFC.  We acquired Triple C Transport after our merger with Original IFC.  We have filed an action to rescind the Triple C Transport transaction.  See Item 3.  Legal Proceedings, below.   We acquired Cross Creek Trucking after our most recent fiscal year end.  Prior to negotiations for these acquisitions, there were no prior or existing relationships between our management and the owners/management of the acquired companies.  The final terms of each acquisition, which may differ from the original terms, are as follows:

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Name of subsidiary	Stock issued		Cash payment		Promissory note		Warrants
Morris Transportation	3,000,000		none		$1,000,000(2)		none
Smith Systems Transportation		825,000	none		$	250,000	none
Triple C Transport (1)		2,000,000	$	100,000	$	150,000	none
Cross Creek Trucking (3)		2,500,000		none	$	4,000,000	1,500,000(3)

____________________

(1)  We have filed suit to rescind this acquisition.  See Item 3.  Legal Proceedings, below.

(2)   $1,000,000 principal amount of notes, plus accrued and unpaid interest, which was converted for 2,281,458 shares issued to T. Mark Morris, one of our directors, in full satisfaction of the balance of our note for acquisition of Morris Transportation, Inc. plus interest on all note obligations IFC owed to Mr. Morris.  3

(3)  Subject to termination as the election of the seller in the event we do not list our common stock on a national securities exchange within nine months, extendable to eighteen months upon payment of $250,000 to the seller, or the payment of $12,500,000 to the seller against surrender of our common stock and warrants for cancellation.

Morris Transportation –An entity which is owned by Mr. Morris owns the real estate used by Morris Transportation.  We have been paying the mortgage on this real estate to an unrelated lender, as rental for our use of the real estate without a formal lease.  We intend to purchase the real estate or the owning entity at fair market value, to be determined by appraisal, which may require us to refinance the mortgage.  Our agreement for the acquisition of Morris Transportation provides that Mr. Morris will serve as one of our directors, will be employed as the general manager of Morris Transportation for three years and serve with Mr. Henley on its board of directors.

Terms of our sale of PGI-MD

The agreement to sell PGI-MD to Mr. Antenucci was made in an arm’s length transaction in connection with Original IFC’s purchase of our preferred stock in connection with the original structure of our business combination transaction in which we would have merged into the Original IFC. The agreement included the following provisions, as modified due to delays in completing the original combination transaction and the revised combination transaction, which were satisfied in the completion of the sale on December 27, 2009:

• We transferred all of our assets to PGI-MD with a depreciated book value of nil, excluding the stock we owned in PGI and the assets we acquired by merger with Integrated Freight.

• PGI-MD assumed all of our operating debts and obligations as of May 1, 2009, totaling $88,340, excluding $28,000 in accrued auditing fees and our operating costs incurred subsequent to May 1, 2009.

• We issued a promissory note to PGI-MD for $22,345 of our operating costs incurred subsequent to May 1, 2009 which PGI-MD had paid.

• We are subject, as a result of the merger, to Original Integrated Freight’s obligation to issue 177,170 shares of common stock and 177,170 common stock purchase warrants good for two years at a price of $0.50 per share in consideration for PGI-MD’s release of us from our obligation to repay inter-company loans totaling $684,311.

We accepted Mr. Antenucci’s termination of his employment agreement as our chief executive officer, which included an obligation for us to pay him approximately $335,000 in severance, as full payment for his purchase of PGI-MD.

As a result of the merger, we are subject to Original Integrated Freight’s obligation to issue to Mr. Antenucci 59,327 shares of common stock and 59,327 common stock purchase warrants good for two years at a price of $0.50 per share in consideration for Mr. Antenucci’s release from payment of his deferred compensation and expense reimbursement in the amount of $88,954.

As a result of the merger, we are subject also to Original Integrated Freight’s obligation to issue to Frederick G. Beisser, our former senior vice president - finance, 75,525 shares of common stock and 75,525 common stock purchase warrants good for two years at a price of $0.50 per share in consideration for Mr. Beisser’s release of us from payment of his deferred compensation in the amount of $112,830 (but not including unpaid wages, automobile allowance and reimbursable expenses totaling $24,126 owed to him at November 9, 2009).

We are also required to maintain directors and officers’ tail coverage for three years for the benefit of Messrs. Antenucci and Beisser.

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We had no interest in maintaining, managing and funding the business of PGI-MD as a subsidiary company after our acquisition of Original IFC. The transactions outlined above resulted in our relief from liabilities in an aggregate amount of $1,309,435, in consideration for common stock which Original IFC valued at the time of negotiations at $0.10 per share (the price at which it was selling its common stock at that time in private placements), for an aggregate value of $31,175, before valuing the warrants. Furthermore, the sale of PGI-MD removed approximately $3,281,679 in liabilities from our consolidated balance sheet that were liabilities of PGI-MD and relieve us of all the operational and business difficulties centered in PGI-MD. We did not obtain an independent appraisal of PGI-MD. Nor, did we seek other buyers for PGI-MD or its business and technologies. We believe that our management composed of Mr. Antenucci during our negotiations with Original IFC would have been less interested or uninterested in entering into the transactions with Original IFC, as compared to declaring bankruptcy or terminating our reporting status under the Securities Exchange Act if the transactions had not involved our sale of PGI-MD to Mr. Antenucci. Notwithstanding the foregoing, at May 1, 2009, our management, the management of Original IFC and Mr. Antenucci believed that these related transactions were fair and acceptable to all parties. We believe the negotiations for our sale of PGI-MD were conducted at arms’ length, because fundamentally Mr. Antenucci was not negotiating against us, when he was our sole director and chief executive officer, but was negotiating against Original IFC.

ITEM 1A. RISK FACTORS.  

In addition to the forward-looking statements described previously in this annual report and other comments regarding risks and uncertainties included in the description of our business, the following risk factors should be carefully considered when evaluating our business. Our business, financial condition or financial results could be materially and adversely affected by any of these risks.

Recent improvements in the motor freight industry may hinder or prevent our acquisition of additional trucking companies.

The motor freight industry, as a whole, has experienced an increased demand for truck and an improvement in revenues, as our general economy seems to be emerging from the recent recessionary period.  (Heavy Duty Trucking, May 2010)  For April and May 2011 the truck tonnage increases were 4.8% and 2.7% above the same times last year according to the American Trucking Associations’ monthly tonnage report.  Although not as robust an economic recovery as many have hoped for, the economy seems to be slowly recovering. We cannot predict, as of the date of filing this amended annual report on Form 10-K, what impact a failure to raise the U.S. government debt limit in the next several weeks may have on the U.S.  and worldwide economy as a whole.   If  these improvements continue  to improve the financial viability of motor freight carriers who have survived the recession may decrease their interest in being acquired.  Our acquisition and growth strategy has been based in part on depressed values for motor freight carriers and a desire to sell based on poorer than historical financial performance.  Without these incentives, we may find it more difficult to locate trucking companies with an interest in being acquire, or if they have such an interest, being acquired for consideration that fits our financial model.

We may experience difficulty in combining and consolidating the management and operations of our acquired companies which could have a material adverse impact on our operations and financial performance.

We have purchased our operating subsidiaries and expect any additional subsidiaries we purchase to be made from the founders and management of the acquired companies, all of whom have been responsible for their own businesses and methods of operations as independent business owners. While these individuals will continue to be responsible to a degree for the continuing operations of our operating subsidiaries, with the exception of Cross Creek Trucking,  we intend to centralize and standardize many areas of operations. Notwithstanding that many of these individuals from whom we have and plan to acquire our operating subsidiaries will serve on our board of directors, we may be unable to develop a cohesive corporate culture in which these individuals will be willing to forego their former independence, as we have experienced with Triple C Transport. Our inability to successfully combine and consolidate the policies, procedures and operations of our subsidiaries can be expected to have a material adverse effect on our business and prospects, financial and otherwise.

Our information management systems are diverse, may prove inadequate and may be difficult to integrate or replace.

We depend upon our information management systems for many aspects of our business. Each operating subsidiary and each company we acquire will have its own information management system with which its employees are acquainted. None of these systems are adequate to our consolidated operations and may not be compatible with our centralized information management system. We expect to require additional software to initially integrate existing systems or to ultimately replace these diverse systems. Switching to new information management systems is often difficult, resulting in disruption, delays and lost productivity, which could impact our dispatching, collections and other operations. Our business will be materially and adversely affected if our information management systems are disrupted or if we are unable to improve, upgrade, integrate, expand or replace our systems as we continue to execute our growth strategy.  We anticipate the cost of consolidating our management systems and duplicative operations of our acquired subsidiaries will be approximately $1 million.

Our management information systemsare subject to certain risks that we cannot control.

Our management information systems, including dispatching and accounting systems, are dependent upon third-party software, global communications providers, telephone systems and other aspects of technology and Internet infrastructure that are susceptible to failure. Our management information systems is susceptible to outages, computer viruses, break-ins and similar disruptions that may inhibit our ability to provide services to our customers and the ability of our customers to access our systems. This may result in the loss of customers or a reduction in demand for our services.

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If we are unable to successfully execute our growth strategy, our business and future results of operations may suffer.

Our growth strategy includes the acquisition of additional motor freight companies to increase revenues, to selectively expand our geographic footprint and to broaden the scope of our service offerings. If we are unable to acquire additional motor freight companies at prices that meet our financial model, our growth will be limited to expanding sales and reducing expenses in our existing subsidiaries. In connection with our growth strategy, we may purchase additional equipment, expand and upgrade service centers, hire additional personnel and increase our sales and marketing efforts.

Our growth strategy exposes us to a number of risks, including the following:

• geographic expansion and acquisitions require start-up costs that could expose us to temporary losses;

• growth and geographic expansion is dependent on the availability of freight and customer needs. Shortages of suitable real estate that accommodates both customers and carriers’ needs  may limit our geographic expansion and might cause congestion in our service center network, which could result in increased operating expenses;

• growth may strain our management, capital resources, information systems and customer service;

• hiring new employees may increase training costs and may result in temporary inefficiencies until those employees become proficient in their jobs;

• expanding our service offerings may require us to enter into new markets and encounter new competitive challenges; and

• growth through acquisition could require us to temporarily match existing freight rates of the acquiree’s markets, which may be lower than the rates that we would typically charge for our services;

• we may be unable to obtain financing of the cash portion of an acquisition price or to provide a working capital infusion for an acquisition.

We have no assurance we will overcome the risks associated with our growth. If we fail to overcome these risks, we may not be able to make additional acquisitions,  realize additional revenue or profits from our efforts, we may incur additional expenses and therefore our financial position and results of operations could be materially and adversely affected.

We are significantly dependent on the continued services of Paul A. Henley to realize our growth strategy.

We are dependent upon the vision and efforts of Mr. Henley, our founder and principal stockholder, for the realization of our growth strategy. In the event Mr. Henley’s services were to be unavailable to us, our continued activity to expand our business operations through acquisition could be substantially impaired or be abandoned..  Mr. Henley has pledged a significant portion of our common stock which he owns to guarantee certain of our borrowings.  In the event Mr. Henley loses this common stock in foreclosure, his interest in us may be reduced.

Our management owns a majority of our outstanding common stock and outside stockholders will be unable to influence management decisions or elect their nominees to our board of directors, if they should so desire.

Our management controls  approximately fifty percent of our common stock. All corporate actions involving amendment of our articles of incorporation (such as name change and increase in authorized shares), election of directors and other extraordinary actions and transactions such as certain mergers, consolidations and recapitalizations and sales of all or substantially all of our assets, require the approval of only a majority of the issued and outstanding shares of our common stock. Accordingly, our management will be able to approve any such actions and transactions and elect all directors even if all of the outside stockholders oppose such transactions, or in the case of directors, nominate other persons for election. Our minority stockholders will be unable to effect changes in our management or in our business.

We have significant ongoing cash requirements and expect to incur additional cash requirements that could limit our growth and adversely affect our profitability if we are unable to obtain sufficient financing.

We anticipate that we may need to spend as much as $5,000,000 or more in new equipment in fiscal year 2011. In addition, we have issued promissory notes to cover part of the costs of our acquisitions of Cross Creek Trucking and expect to continue issuing promissory notes for part of the cost of future acquisitions. Due to the existing uncertainty in the capital and credit markets, capital and loans may not be available on terms acceptable to us. If we are unable in the future to generate sufficient cash flow from operations or borrow the necessary capital to fund our operations and acquisitions, we will be forced to operate our equipment for longer periods of time and to limit our growth, which could have a material adverse effect on our operating results. In addition, our business has significant operating cash requirements. If our cash requirements are high or our cash flow from operations is low during particular periods, we may need to seek additional financing, which may be costly or difficult to obtain.We have experienced difficulty in obtaining debt and equity funding, which could have a material and adverse impact on our financial condition , working capital, capital expenditures, acquisitions and other corporate purposes.

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Recent instability of the credit markets and the resulting effects on the economy could have a material adverse  impact on our  replacement of revenue producing equipment and ability to meet our financial obligations.

Recently, there has been widespread concern over the instability of the credit markets and the current credit market effects on the economy.  In the event the federal debt ceiling is not raise or a raise is delayed, we would expect to experience an increase in our costs of borrowing. If the economy and credit markets do not recover quickly, or even weaken further for any reason, our business, financial results, and results of operations could be materially and adversely affected, especially if consumer confidence declines and domestic spending decreases.  We are highly dependent on borrowing and leasing to fund the cost of new and replacement revenue producing equipment and to fund our cash-flow shortfalls.  An increase in general interest rates can be expected to increase our cost of borrowing, potentially delaying our ability to replace tractors and trailers and to expand our fleet to meet increased demand, if any, to pay our operating expenses, including litigation expenses, and to meet our obligations arising from our acquisition of Cross Creek Trucking. Additionally, the stresses in the credit market have caused uncertainty in the equity markets, which may result in volatility of the market price for our securities.

We have experienced difficulty in obtaining debt and equity funding for operations, acquisitions and the costs associated with acquisitions, which can be expected to have an adverse impact on our growth and cause us to issue more common stock at lower values.

     We have experienced difficulty in obtaining debt and equity funding for operations and acquisitions.  As a result of this difficulty, we were unable to complete one acquisition under contract and do not expect to be able to complete acquisitions of larger companies which may be available to us if we were able to make larger cash payments as part of the acquisition price.  This difficulty may also be reflected in our stock price, causing it to be lower than it might otherwise be.

We derive forty-three percent of our revenue from four customers, the loss of one or more of which could have a material adverse effect on our business.

For the year ended March 31, 2011, our top four customers, based on revenue, accounted for approximately forty-three percent of our revenue. A reduction in or termination of our services by one or more of our major customers could have a material adverse effect on our business and operating results. A default in payments of invoices by one or more of these customers could have a material adverse effect on our financial condition. See “Our Business – Our customers and marketing”.

We operate in a highly competitive and fragmented industry, and our business will suffer if we are unable to adequately address potential downward pricing pressures and other factors that may adversely affect our operations and profitability.

We compete with many other truckload carriers of varying size that provide dry-van and temperature-sensitive service of varying sizes and, to a lesser extent, with less-than-truckload carriers, air freight, railroads and other transportation companies, many of which have more equipment, a wider range of services and greater capital resources than we do or have other competitive advantages. We expect to experience difficulty in competing with larger companies. Numerous other competitive factors could impair our ability to maintain our revenues and achieve profitability. These factors include, but are not limited to, the following:

• we compete with many other transportation service providers of varying sizes, some of which may have more equipment, a broader coverage network, a wider range of services, greater capital resources or have other competitive advantages;

• some of our competitors periodically reduce their prices to gain business, especially during times of reduced growth rates in the economy, which may limit our ability to maintain or increase prices or maintain revenue growth;

• many customers reduce the number of carriers they use by selecting “core carriers,” as approved transportation service providers, and in some instances we may not be selected;

• many customers periodically accept bids from multiple carriers for their shipping needs, and this process may depress prices or result in the loss of some business to competitors;

• the trend towards consolidation in the ground transportation industry may create other large carriers with greater financial resources and other competitive advantages relating to their size;

• advances in technology require increased investments to remain competitive, and our customers may not be willing to accept higher prices to cover the cost of these investments; and

• competition from non-asset-based logistics and freight brokerage companies may adversely affect our customer relationships and pricing policies.

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If our employees were to unionize, our operating costs would increase and our ability to compete would be impaired.

None of our employees are currently represented under a collective bargaining agreement. From time to time there may be efforts to organize our employees. There is no assurance that our employees will not unionize in the future, particularly if legislation is passed that facilitates unionization, such as the Employee Free Choice Act. The unionization of our employees could have a material adverse effect on our business, financial condition and results of operations because:

• some shippers have indicated that they intend to limit their use of unionized trucking companies because of the threat of strikes and other work stoppages;

• restrictive work rules could hamper our efforts to improve and sustain operating efficiency;

• restrictive work rules could impair our service reputation and limit our ability to provide next-day services;

• a strike or work stoppage would negatively impact our profitability and could damage customer and employee relationships; and

• an election and bargaining process could divert management’s time and attention from our overall objectives and impose significant expenses.

Insurance and claims expenses could significantly reduce our profitability.

We are exposed to claims related to cargo loss and damage, property damage, personal injury, workers’ compensation, long-term disability and group health. We have insurance coverage with third-party insurance carriers, but retain or self-insure a portion of the risk associated with these claims. If the number or severity of claims increases, or we are required to accrue or pay additional amounts because the claims prove to be more severe than our original assessment, our operating results would be adversely affected. Insurance companies may require us to obtain letters of credit to collateralize our self-insured retention. If these requirements increase, our borrowing capacity could be adversely affected. Our future insurance and claims expense might exceed historical levels, which could reduce our earnings. We expect our growth strategy to require a periodic reassessment or our insurance strategy, including self-insurance of a greater portion of our claims exposure resulting from workers’ compensation, auto liability, general liability, cargo and property damage claims, as well as employees’ health insurance under pending federal legislation, which we are unable to predict. We may also become responsible for our legal expenses relating to such claims. With growth, we will be required to periodically evaluate and adjust our claims reserves to reflect our experience. However, ultimate results may differ from our estimates, which could result in losses over our reserved amounts. We maintain insurance above the amounts for which we self-insure with licensed insurance carriers. Although we believe the aggregate insurance limits should be sufficient to cover reasonably expected claims, it is possible that one or more claims could exceed our aggregate coverage limits. Insurance carriers have raised premiums for many businesses, including trucking companies. As a result, our insurance and claims expense could increase, or we could raise our self-insured retention when our policies are renewed. If these expenses increase, or if we experience a claim in excess of our coverage limits, or we experience a claim for which coverage is not provided, results of our operations and financial condition could be materially and adversely affected.

Our customers and suppliers’ business may be slow to recover from the recent downturn in the worldwide economy and disruption of financial markets.  We cannot predict the impact on the national and worldwide economy of a failure or delay to increase the U.S. debt limit.

Our business is dependent on a number of general economic and business factors that may have a materially adverse effect on our results of operations, many of which are beyond our control.  table terms, because of the disruptions to the capital and credit markets. These customers represent a greater potential for bad debt losses, which may require us to increase our reserve for bad debt. Economic conditions resulting in bankruptcies of one or more of our large customers could have a significant impact on our financial position, results of operations or liquidity in a particular year or quarter. Our supplier’s business levels have also been and may continue to be adversely affected by current economic conditions or financial constraints, which could lead to disruptions in the supply and availability of equipment, parts and services critical to our operations. A significant interruption in our normal supply chain could disrupt our operations, increase our costs and negatively impact our ability to serve our customers.

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We may be adversely impacted by fluctuations in the price and availability of diesel fuel.

We require large amounts of diesel fuel to operate our tractors and to power the temperature-control units on our trailers. Fuel is one of our largest operating expenses. Fuel prices tend to fluctuate, and prices and availability of all petroleum products are subject to political, economic and market factors that are beyond our control. We do not hedge against the risk of diesel fuel price increases. We depend primarily on fuel surcharges, auxiliary power units for our tractors, volume purchasing arrangements with truck stop chains and bulk purchases of fuel at our terminals to control and recover our fuel expenses. We have no assurance that we will be able to collect fuel surcharges or enter into volume purchase agreements in the future. An increase in diesel  fuel prices or diesel fuel taxes, or any change in federal or state regulations that results in such an increase, could have a material adverse effect on our operating results, unless the increase is offset by increases in freight rates or fuel surcharges charged to our customers. Historically, we have been able to offset significant increases in diesel fuel prices through fuel surcharges to our customers, and we were able to minimize the negative impact on our profitability in fiscal 2010 that resulted from the rapid and significant increase to the cost of diesel fuel. Depending on the base rate and fuel surcharge levels agreed upon by individual shippers, a rapid and significant decline in the cost of diesel fuel could also have a material adverse effect on our operating results. We continuously monitor the components of our pricing, including base freight rates and fuel surcharges, and address individual account profitability issues with our customers when necessary. While we have historically been able to adjust our pricing to offset changes to the cost of diesel fuel, through changes to base rates and/or fuel surcharges, we cannot be certain that we will be able to do so in the future. The absence of meaningful fuel price protection through these measures, fluctuations in fuel prices, or a shortage of diesel fuel, could materially and adversely affect our results of operations.

Our operations are subject to various environmental laws and regulations, the violation of which could result in substantial fines or penalties.

We are subject to various federal, state and local environmental laws and regulations dealing with the handling and transportation of hazardous materials ("hazmat") and waste ("hazwaste") (which accounts for approximately twenty percent of our current business). We operate in industrial areas, where truck terminals and other industrial activities are located, and where groundwater or other forms of environmental contamination have occurred. Our operations involve the risks of fuel spillage or seepage, environmental damage and hazardous waste disposal, among others. If a spill or other accident involving fuel, oil or hazardous substances occurs, or if we are found to be in violation of applicable laws or regulations, it could have a material adverse effect on our business and operating results. One of our subsidiaries specializes in transport of hazardous materials and waste. If we should fail to comply with applicable environmental laws and regulations, we could be subject to substantial fines or penalties, to civil and criminal liability and to loss of our licenses to transport the hazardous materials and waste. Under certain environmental laws, we could also be held responsible for any costs relating to contamination at our past facilities and at third-party waste disposal sites. Any of these consequences from violation of such laws and regulations could be expected to have a material adverse effect on our business and prospects, financial and otherwise.

Increased prices, reduced productivity, and restricted availability of new revenue equipment could cause our financial condition, results of operations and cash flows to suffer.

Prices for new tractors have increased over the past few years, primarily as a result of higher commodity prices, better pricing power among equipment manufacturers, and government regulations applicable to newly manufactured tractors and diesel engines.  We expect to continue to pay increased prices for revenue equipment and incur additional expenses and related financing costs for the foreseeable future.  Our business could be harmed if we are unable to continue to obtain an adequate supply of new tractors and trailers or if we have to pay increased prices for new revenue equipment. We face increasing prices for new power units.

Seasonality and the impact of weather can adversely affect our profitability.

Our tractor productivity generally decreases during the winter season because inclement weather impedes operations and some shippers reduce their shipments. At the same time, operating expenses generally increase, with harsh weather creating higher accident frequency, increased claims and more equipment repairs. We can also suffer short-term impacts from weather-related events such as hurricanes, blizzards, ice-storms, and floods that could harm our results or make our results more volatile.

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Increases in driver compensation, difficulty in attracting drivers and driver turn-over could affect our profitability and ability to grow.

We periodically experience difficulties in attracting and retaining qualified drivers, including independent contract drivers. With increased competition for drivers, we could experience greater difficulty in attracting sufficient numbers of qualified drivers. Our competitors may offer better compensation plans, and thus increase the driver turnover we experience.  Due to current economic conditions and regulatory changes which have recently increased the demand for drivers and the cost of fuel and insurance, the available pool of independent contractor drivers is smaller than it was during 2008 through 2010. Accordingly, we may and periodically do face difficulty in attracting and retaining drivers for all of our current tractors and for those we may add. We may face difficulty in increasing the number of our independent contractor drivers. In addition, our industry suffers from high turnover rates of drivers. Our turnover rate requires us to recruit a substantial number of drivers. Moreover, our turnover rate could increase. If we are unable to continue to attract drivers and contract with independent contractors, we could be required to continue adjusting our driver compensation package beyond the norm or let equipment sit idle. An increase in our expenses or in the number of power units without drivers could materially and adversely affect our growth and profitability. Our operations may be affected in other ways by a shortage of qualified drivers in the future, such as temporary under-utilization of our fleet, difficulty in meeting shipper demands and increases in compensation levels for our drivers. When we encounter difficulty in attracting or retaining qualified drivers, our ability to service our customers and increase our revenue could be adversely affected. A shortage of qualified drivers in the future could cause us to temporarily under-utilize our fleet, face difficulty in meeting shipper demands and increase our compensation levels for drivers.

Shrinkage in the pool of eligible drivers could affect our profitability and ability to grow.

The ongoing Comprehensive Safety Analysis, often referred to as CSA 2010, is projected to reduce the driver pool.  Every driver receives a score based upon his or her individual performance in six categories, which are then combined into a single score, and this score is compared to the scores of  all other drivers to determine how “safe” the driver is. (BigRigDriving.com, January 19, 2010)  Drivers with lower scores are less hirable or not hirable.(Transport Topics, June 14, 2010)  A shortage of qualified drivers from time to time could cause us to temporarily under-utilize our fleet, face difficulty in meeting shipper demands and increase our compensation levels for drivers.

We operate in a highly regulated industry and increased costs of compliance with, or liability for violation of, existing or future regulations could have a materially adverse effect on our business.

The USDOT and various state and local agencies exercise broad powers over our business, generally governing such activities as authorization to engage in motor carrier operations, safety and insurance requirements. Our company drivers and independent contractors also must comply with the safety and fitness regulations promulgated by the USDOT, including those relating to drug and alcohol testing and hours-of-service.  We also may become subject to new or more restrictive regulations relating to fuel emissions, drivers’ hours-of-service, ergonomics, or other matters affecting safety or operating methods. Other agencies, such as the EPA and the Department of Homeland Security, or DHS, also regulate our equipment, operations, and drivers.  Future laws and regulations may be more stringent and require changes in our operating practices, influence the demand for transportation services, or require us to incur significant additional costs. Higher costs incurred by us or by our suppliers who pass the costs onto us through higher prices could adversely affect our results of operations.

In the aftermath of the September 11, 2001 terrorist attacks, federal, state, and municipal authorities have implemented and continue to implement various security measures, including checkpoints and travel restrictions on large trucks. As a result, it is possible we may fail to meet the needs of our customers or may incur increased expenses to do so. These security measures could negatively impact our operating results.

     Some states and municipalities have begun to restrict the locations and amount of time where diesel-powered tractors, such as ours, may idle, in order to reduce exhaust emissions. 

From time to time, various federal, state, or local taxes are increased, including taxes on fuels.  We cannot predict whether, or in what form, any such increase applicable to us will be enacted, but such an increase could adversely affect our profitability.

Higher interest rates on borrowed funds would adversely impact our results of operations.

We rely on borrowings to finance our revenue equipment and receivables. We are subject to interest rate risk to the extent our borrowings. Even though we attempt to manage our interest rate risk by managing the amount of debt we carry, our debt levels are not entirely within our control in the short term. An increase in the rates of interest we incur on borrowings and financing we cannot decrease in the short term without adversely impacting our level of service to our customers and expansion of our business will adversely affect our results of operations. We cannot predict what impact a failure to implement a higher debt ceiling for the U.S. government will have on interest rates, or the national or international economy in general.  We believe that without a debt ceiling increase, the U.S. government could default on its obligations, triggering increased interest rates and a decline in gross domestic product, which would involve a reduction in freight shipments.  If the U.S. debt ceiling is not raised in time to avoid default on U.S. government obligations, we believe we will experience higher interest rates and lease payment levels, increased difficulty in obtaining financing for both equipment and acquisitions and a decline in demand for freight transportation.

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"Penny stock” rules may make buying and selling our common stock difficult.

Trading in our common stock is subject to the "penny stock" rules of the Securities and Exchange Commission. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock to deliver a standardized risk disclosure document that provides information about penny stocks and the risks in the penny stock market. The broker-dealer must also provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer’s account. In addition, the penny stock rules generally require that prior to a transaction in a penny stock the broker-dealer make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for a stock that becomes subject to the penny stock rules. Our securities are subject to the penny stock rules, and investors may find it more difficult to sell their securities.

We do not have controls and procedures in place as required by Section 404 of the Sarbanes-Oxley Act of 2002.

As noted above, the operational and financial control of our subsidiaries has remained under the management of the founders of and stockholder from we acquired the respective companies.  We do not have controls and procedures in place from a parent company level or the subsidiary level to satisfy Section 404 of the Sarbanes-Oxley Act of 2002.  While we expect to put controls and procedures in place for these purpose in the process of consolidating and centralizing overlapping and duplicative elements of these companies, doing so will require debt or equity funding you have no assurance we will be able to obtain.  Until we are able to put these controls and procedures in place, we expect to devote additional management time to confirming the accuracy and timeliness of our reports.

We will incur significant expense in complying with Section 404 of the Sarbanes-Oxley Act of 2002 on a timely basis.

The SEC, as directed by Section 404 of the Sarbanes-Oxley Act, adopted rules generally requiring each public company to include a report of management on the company's internal controls over financial reporting in its annual report on Form 10-K that contains an assessment by management of the effectiveness of the company's internal controls over financial reporting. Under current rules, commencing with our annual report for the fiscal year ending September 30, 2011, our independent registered accounting firm must attest to and report on management's assessment of the effectiveness of our internal controls over financial reporting.

We expect that we may need to hire and/or engage additional personnel and incur incremental costs in order to complete the work as required by Section 404. We have initially concluded that our internal controls are not effective; in the event that in the future we conclude that our internal controls are effective, our independent accountants may disagree with our assessment and may issue a report that is qualified. Any failure to implement required new or improved controls, or difficulties encountered in their implementation, could harm our operating results or cause us to fail to meet our reporting obligations.

ITEM 1B. UNRESOLVED STAFF COMMENTS.

We are not an accelerated filer or a large accelerated filer, as defined in Rule 12b-2 of the Exchange Act (§240.12b-2 of this chapter), or a well-known seasoned issuer as defined in Rule 405 of the Securities Act (§230.405 of this chapter); and, we are not subject to this item.  Nevertheless, we do not have any unresolved comments from the SEC staff.

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ITEM 2. PROPERTIES.

We lease our corporate headquarters office is located in Sarasota, Florida. Our lease expires in January 2012. We currently pay $1,545 per month subject to annual adjustments related to renewal of lease. We lease 1,000 square feet of general office space at this location. We believe this facility will be adequate for our needs for six to nine months. 

The headquarters of our operating subsidiaries are located in Hamburg, Arkansas; Scotts Bluff, Nebraska and Central Point, Oregon.  The headquarters of our discontinued subsidiary is Doniphan, Nebraska. The following table presents information regarding these facilities.

Location	Acres	Under Roof*	Office*	Warehouse*	Service*	Trucks Accommodated
Central Point (Cross Creek Trucking)	31	58,000	10,000	36,000	12,000	450 trucks
Hamburg facility (Morris)	10	15,000	3,000	none	12,000	170 trucks
Scotts Bluff facility (Smith)	10	36,500	3,000	30,000	3,500	400 trucks

_____________

*Number indicates square feet.

We own the Scotts Bluff facility. We lease the other facilities under terms described in the following table.

Location	Lessor		Lease ends	Monthly rental		Annual adjustment
Central Point facility (Cross Creek Trucking)		Mike DeSimone	3/31/2016		$20,000		none
Hamburg facility (Morris)		Mark Morris	(1)		(1)		none

_____________

(1)   We have been paying the mortgage payments to an unrelated lender on behalf of Mr. Morris as rent without a formal lease and intend to purchase the property at fair market value, as determined by appraisal, which may require us to refinance the mortgage.

     We rented a facility for our Triple C Transport operation in Doniphan, Nebraska from an entity controlled Craig White, Triple C Trucking’s former owner, with whom we are in litigation with (see Item 3 below) to resceind the transaction. In the event the Triple C acquisition is not rescinded,  we will have an additional 4 acre facility with 16,000 feet under roof that accommodates 50 trucks and an obligation to pay rent, including back rent, on the facility.

We also have terminals in Arcadia, California, Grand Island, Nebraska and Clackamus, Oregon. We rent drop yards on a short term basis as the seasonal and operational needs of our customers require. These drop yards are routinely located in Pine Bluff and Eldorado, Arkansas, Sacramento, Arcadia, Montebello and Modesto, California, Chicago, Illinois, Hebron, Ohio, Ponca City, Oklahoma, Clackamus, Oregon, and Houston, Texas. Drop yards are a specific number of truck parking places we rent on an as-needed basis in terminal facilities of other trucking companies.

We believe all of these facilities are adequate for our operations for the foreseeable future. We expect to acquire additional facilities for operations when we make future acquisitions, of which there is no assurance.

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ITEM 3. LEGAL PROCEEDINGS.

The following table provides information about the litigation in which we are now engaged.  This litigation has arisen from our acquisition of Triple C Tranport.

				Basis of Claim
Plaintiff Name	Defendant Name	Case No.	Court	and Amount
People's United Equipment Finance Corp.	Triple C Transport, Inc.	4:11-cv-00264	U.S. District Court Southern District of Texas	Triple C’s guaranty of its lessor’s equipment financing $3,603,716
Craig Carrier Corp., LLC and	Triple C Transport* and Integrated Freight Corporation	10-43798-TJM	U.S. Bankruptcy Court District of Nebraska	Unpaid and future rents under Master Lease and our guarantee of Master lease$9,309,476
White Farms Trucking, Inc.	Triple C Transport* and Integrated Freight Corporation	10-43797-TJM	U.S. Bankruptcy Court District of Nebraska	Unpaid and future rents under Master Lease and our guarantee of Master lease $9,309,476
Hilda L. Solis, Secretary of Labor	Triple C Transport*, et al.	A11-4049-TJM	U.S. Bankruptcy Court District of Nebraska	Claim for unpaid wages $39,201
Integrated Freight Corporation	Craig White and Vonnie White	11-248	District Court Douglas, Nebraska	Rescission of Stock Exchange Agreement and unspecified damages.
C&V LLC	Triple C Transport, Inc.	11-316	District Court Douglas, Nebraska	Real estate lease payments $178,972
Weiss, as receiver for the Nutmeg/Fortuna Fund	Integrated Freight Corporation	11-CV-03130	U.S. District Court Northern District of Illinois	Collection $167,000
Steven E. Lusty	Plangraphics - Integrated Freight Corporation	2011-002523-NC	12th Circuit Sarasota County, Florida	Breach of contract and unspecified damages

________________

*Defense of Triple C Transport has been tendered to Craig White and Vonnie White.

     All of the litigation identified above includes claims for interest and attorney’s fees.

     Craig Carrier, White Farms Trucking and C&V are entities owned and controlled by Mr. and Mrs. White, from whom we acquired Triple C Transport.  The operations of Triple C Transport have been discontinued and it has no assets.  One or more judgments against Triple C Transport would be booked as a liability on our consolidated balance sheet even though we would have no liability to pay any such judgment.  We have exposure to direct liability only in the above listed cases in which we are a named defendant.  If we are successful in our action for rescission of the Stock Exchange Agreement, of which we have no assurance, pursuant to which we acquired Triple C Transport from Mr. and Mrs. White, then we would not expect to book any liability for Triple C Transport’s litigation losses, to incur any direct liability with respect to our guaranty of Triple C Transport’s leases to the entities owned and controlled by Mr. and Mrs. White or to incur liability for alleged damages in unspecified amounts.  We intend to aggressively pursue our case for rescission of our acquisition of Triple C Transport and for damages against Mr. and Mrs. White, based on fraud, breach of material representations and warranties and gross and intentional mismanagement of Triple C Transport.

     The suite by Nutmeg/Fortuna Fund is for collection on a promissory note that Original Integrated Freight issued in purchase of our preferred stock from the plaintiff in a transaction in which Original Integrated Freight acquired control of us.  We will endeavor to negotiate a settlement of this litigation or the purchase of the note from the plaintiff by another party who will restructure the note.

     Our ability to aggressively defend and to prosecute the litigation described in the preceding table will depend significantly on our ability to fund legal fees and related costs of litigation.

We expect to be engaged in litigation from time to time in the normal course of our business as a motor freight carrier. Claims for worker’s compensation, auto accident, general liability and cargo and property damage are routine occurrences in the motor transportation industry. We have programs and policies which are designed to minimize the events that result in such claims. We maintain insurance against workers’ compensation, auto liability, general liability, cargo and property damage claims. We are responsible for deductible amounts up to $3,000 per accident. We periodically evaluate and adjust our insurance and claims reserves to reflect our experience. Our workers’ compensation claims are entirely covered by our insurance. Insurance carriers have raised premiums for many businesses, including truck transportation companies. As a result, our insurance and claims expense could increase, or we could raise our deductible when our policies are renewed. We believe that our policy of self-insuring up to set limits, together with our safety and loss prevention programs, are effective means of managing insurable costs.

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

We did not submit any matters to our stockholders for action or approval during the last quarter of our fiscal year.

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PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

Market information.Our common stock trades on OTC Bulletin Board under the symbol, PGRA. The following quotations reflect inter–dealer prices without retail markup, markdown, or commission, and may not necessarily represent actual transactions. The quarterly ranges of high and low sales prices per share for the past two fiscal years have been as follows:

	Sales Price
Quarters Ended	High		Low
June 30, 2009	$	1.20	$	.12
September 30, 2009		.49		.12
December 31, 2009		.66		.12
March 31, 2010		1.71		.12
June 30, 2010		1.20		.49
September 30, 2010		1.01		.51
December 31, 2010		.90		.36
March 31, 2011	$	.85	$	.41

On July 13, 2011, the last reported sales price of our common stock was $.23.As part of the merger, the Company executed a reverse split of 244.8598 for 1. All share prices have been presented on a post –split basis.

Holders. Based on information provided by our transfer agent, at July 13, 2011, we had 2,733 record owners of our common stock. 

      Dividends. We have never declared or paid any dividends on our common stock. Because we currently intend to retain any future earnings to finance operations and growth, we do not anticipate paying any cash dividends in the foreseeable.

     Transfer Agent.  Our transfer agent is Island Stock Transfer, Suite 705S, 100 Second Avenue South, St. Petersburg, Florida 33701. The telephone number of our transfer agent is 727-289-0010.

DTCC Eligibility.  Our stock is eligible for deposit by securities broker-dealers into Cede & Co, for “street name” stockholders.

Recent Sales of Unregistered Securities. All sales of equity securities during our 2011 fiscal year have been reported on Form 8-K and Form 10-Q.

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ITEM 6. SELECTED FINANCIAL DATA

As a Smaller Reporting Company, we are not required to include the disclosure under this Item 6 Selected Financial Data.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

You should read the following information in conjunction with our financial statements and related notes contained elsewhere in this report. You should consider the risks and difficulties frequently encountered by early-stage companies, particularly those engaged in new and rapidly evolving markets and technologies. Our limited operating history provides only a limited historical basis to assess the impact that critical accounting policies may have on our business and our financial performance.

Overview

The main factors that affect our results of operations are the number of tractors we operate, our revenue per tractor (which includes primarily our revenue per total mile and our number of miles per tractor), and our ability to control our costs. The results of our brokerage activities, which we initiated in February 2011, were relatively insignificant for the fiscal year 2011 and, therefore, a detailed discussion of the financial results of these operations will not be separately presented.

Fuel surcharges tended to be a volatile source of revenue; therefore, measured freight revenue is calculated with the removal of such surcharges, providing a more consistent basis for comparing results of operations from period to period.   

Operating Results

The following table presents and compares the results of our operations for the fiscal years ended March 31, 2011 and 2010.

	Fiscal year Ended			Fiscal year Ended			$			%
	March 31,			March 31,			change			change
	2011			2010
Revenue	$	18,827,367		$	17,330,079		$	1,497,288			8.640	%
Operating Expenses
Rents and transportation		4,301,170			4,900,107			(598,347	)		-12.211	%
Wages, salaries and benefits		5,591,171			5,364,224			226,947			4.231	%
Fuel and fuel taxes		5,526,923			4,310,349			1,216,574			28.224	%
Depreciation and amortization		2,179,827			2,234,234			(54,407	)		-2.435	%
Insurance and claims		725,995			745,308			(19,313	)		-2.591	%
Operating taxes and licenses		198,853			142,786			56,067			39.266	%
General and administrative		4,020,941			1,913,765			2,107,176			110.106	%
Total Operating Expenses		22,882,331			19,610,773			3,271,558			16.682	%
Loss from Continuing Operations		(4,054,964	)		(2,280,694	)		(1,774,270	)		77.373	%
Loss from Discontinued Operations		(1,529,034	)		-0-			(1,529,034	)		n/a
Other Expenses
Interest		1,536,646			941,992			594,654			63.127	%
Interest - related parties		351,031			110,438			240,593			217.853	%
Other income		(216,585	)		(224,877	)		(8,292	)		-3.687	%
Derivative loss		513,471			-0-			513,471			n/a
Total Other Expenses		2,184,563			827,553			1,357,010			163.979	%
Net loss before noncontrolling interest		(7,768,561	)		(3,108,247	)		(4,660,314	)		149.934	%
Net loss	$	(7,761,200	)	$	(3,140,423	)		(4,620,777	)		147.139	%

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Our large expenses, for example truck lease and financing costs, tend to be fixed.  These expenses represent a significant use of cash flow.  Our driver payroll fluctuates with the freight shipped; however, we do have fixed payroll expenses for the office, management and the shop that do not decline in correlation to the reduction on freight income.  We attempted to reduce operating expenses during fiscal 2011, but significant expenses related to noncash compensation resulted in increased overall expenses and operating losses.  We believe a reduction in these noncash expenses and the results of the results of cost reduction efforts will be reflected in the future.

Seasonality

Typically, revenue generally decreases as customers reduce shipments during the winter holiday season and as inclement weather impedes operations.  At the same time, operating expenses generally increase, with fuel efficiency declining because of engine idling and weather, creating more equipment repairs. For the reasons stated, our fiscal fourth quarter results have historically has been lower than results in each of the other three quarters of the fiscal year excluding charges.  Our equipment utilization typically improves substantially fiscal first and second quarters of each fiscal year because of the trucking industry's seasonal shortage of equipment on traffic related to produce and because of general increases in shipping demand during those months.

 Revenues

For the fiscal year ended March 31, 2011, we reported revenues of $18,827,367 as compared to revenues of $17,330,079 for the fiscal year ended March 31, 2010 an increase of $ 1,497,288 or 8.64%.  The increase is due to the increase in freight revenue in correlation to the U. S. economy.

Operating Expenses

Our total operating expenses increased16.682% to $22,682,191 for the fiscal year ended March 31, 2011, as compared to $19,602,773 for the fiscal year ended March 31, 2010.  These changes include:

Rents and Transportation. For the fiscal year ended March 31, 2011, rents and transportation costs were $4,301,170 as compared to $4,900,107 for the fiscal year ended March 31, 2010, a decrease of $598,347 or 12.211%.  The decrease was primarily due to increased brokerage of trucks and trailers to supplement our existing fleet.

Wages, salaries and benefits.  For the fiscal year ended March 31, 2011, wages, salaries and benefits costs were $5,591,171 as compared to $5,364,224 for the fiscal year ended March 30, 2010, an increase of $226,947 or 4.231%.  The increase was due primarily to the increased miles driven.

Fuel and fuel taxes. For the fiscal year ended March 31, 2011, the cost of fuel and fuel taxes were $5,526,923 as compared to $4,310,349 for the fiscal year ended March 31, 2010, an increase of $1,216,574 or 28.244%. The increase was due primarily to fuel price instability.

Depreciation and amortization.  For the fiscal year ended March 31, 2011, depreciation and amortization costs were $2,179,827 as compared to $2,234,234 for the fiscal year ended March 31, 2010, a decrease of $54,407 or 2.435%.  We have removed older vehicles from our fleet which is offset by an increase in rents and transportation expense.

Insurance and claims .For the fiscal year ended March 31, 2011, insurance and claims costs were $725,995 as compared to $745,308 for the fiscal year ended March 31, 2010, a decrease of $19,313 or 2.591%, which we believe is the result of ongoing safety efforts we have made..  

Operating taxes and licenses For the fiscal year ended  March 31, 2011, operating taxes and licenses costs were $198,853 as compared to $142,786 for the fiscal year ended March 30, 2010, an increase of $56,067 or 39.266%.  We believe this is, in part  related to the increase in mileage described above.

General and administrative expenses. General and administrative expenses are the expenses of operating the business on a daily basis that are not related directly to cost of services and include managerial salaries, legal fees and rent and utilities. For the fiscal year ended March 31, 2011, general and administrative expenses costs were $4,020,941 as compared to $1,913,765 for the fiscal year ended March 31, 2010, an increase of $2,107,176 or 110.106%. This increase resulted primarily from increased noncash compensation and noncash professional services expenses.

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Loss from Continuing Operations

We reported a loss from continuing operations of $4,054,,964 for the fiscal year ended March 31, 2010 as compared to a loss from operations of $2,280,694 the fiscal year ended March 31, 2010, a decrease of $1,774,270 or 77.373%.  The increased loss  was a result of increased sales and lower  non-general and administrativeoperating expenses (as a percentage of sales) offset by the increased noncash expenses in general and administrative discussed above.

Discontinued Operations - Triple C Transport

As more fully discussed in Note 2 to our financial statements, we shut down Triple C Transport’s operations due to the loss of the tractor and trailer fleet it was leasing from the former owners.  As was our practice with previous acquisitions, the former owners continued to manage the day to day operations of Triple C Transport and it was leasing approximately ninety-one power units and ninety-nine trailers from companies owned by the former owners for payments equal to the payment those companies were making on their financing agreements for that equipment, which was approximately $300,000 a month. During the latter part of October 2010, the former owners of Triple C Transport notified us in writing that entities controlled by them and receiving lease payments from Triple C Transport were having difficulty servicing the debt of the related entities.  Two of those entities White Farms Trucking, Inc. (“WFT”) and Craig Carrier Corporation, LLC (“CCC”) ultimately filed Chapter 11 bankruptcy in the United States Bankruptcy Court for the District of Nebraska, on December 21, 2010 whichhave been assigned case numbers 10-43797 and 10-43798.

On May 2, 2011, we filed a complaint against Craig White and Vonnie White in the District Court for Douglas County, Nebraska and served notice on the defendants pursuant to the Stock Purchase Agreement under which we acquired Triple C Transport from the defendants on or about May 14, 2010.  In the complaint, we ask the court to rescind the Stock Purchase Agreement, alleging multiple, material breaches of representations and warranties which individually and in the aggregate constitute fraud upon us.  We are also seeking damages in unspecified amounts.  We intend to pursue this litigation aggressively.  Because of actions taken by the defendants subsequent to closing of our acquisition, undisclosed liabilities of Triple C Transport, breaches of the defendants’ representations and warranties, and the bankruptcies of entities they control and which were Triple C Transport’s equipment lessors, we believe that rescission will not have a materially negative impact on our financial performance going forward; even though we will not enjoy the benefits of the acquisition which we expected at the time of the transaction but which do not seem now available in fiscal year 2012 in view of the fact that Triple C Transport has lost its licenses to operate based on actions by Mr. and Mrs. White and other entities they control both before and after the closing of the transaction.

We incurred a loss of $1,529,034 associated with this transaction and have reserved $1,765,313 to cover any liabilities incurred in relation to it.

Other Income (Expenses)

We reported total other expense of $2,184,563 for the fiscal year ended March 31, 2011 as compared to total other expenses of  $827,553 for the fiscal year ended March 31, 2010, an increase  of  $1,357,010 or 163.979%.  While interest expense continues to increase due to a greater debt level, other income from disposition of revenue equipment also decreased during the period.  Other income and expense reflects interests costs (net of interest income), including derivatives, as discussed below.

Interest expense for the fiscal year ended March 31, 2011 was $1,536,646 compared to $941,992 for the fiscal year ended March 31, 2010, an increase of 594,654 or 63.127%. Interest expense to related parties for the fiscal year ended March 31, 2011 rose to $351,031 from $110,438 for the fiscal year ended March 31, 2010, an increase of $240,593 or 217.853%.  This was due to greater debt levels and expenses incurred to renegotiate and extend existing debt.

We had interest expense and derivative expense of $513,471on the sale of convertible notes for the fiscal year ended March 31, 2011 compared to $-0- for the fiscal year ended March 31, 2010, when we sold no significant such  convertible notes.

Net Loss

We reported a net loss of $7,761,200 for the fiscal year ended March 31, 2011 as compared to a net loss of $3,140,423 for the fiscal year ended March 31, 2010, an increase of $4,620,777. The increase was a result of increased sales and lower operating expenses as a percentage of sales offset by increased corporate level general and administrative expenses and increased interest and derivative expense associated with raising capital. The derivative losses resulted from our sale of convertible debentures, as explained in Notes 1 and 6 of the financial statements.

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Segments

Morris Transportation

For the fiscal year ended March 31, 2011, Morris Transportation had revenues of $11,135,967 compared with revenues of 10,537,602 for the fiscal year ended March 31, 2010, an increase of $598,365 or 5.67%.  This increase is primarily due to a general improvement in the trucking industry.

For the fiscal year ended March 31, 2011, Morris Transportation had net income of $297,047 compared with net income of $12,403 for the fiscal year ended March 31, 2010, an increase of $284,644.  This increase is primarily due to increased sales combined with contained expenses.

Total assets at March 31, 2011, were $3,621,863, as compared to total assets of $4,329,888 at of March 31, 2010, a decrease of $708,021.  This decrease is primarily due to the sale of several tractors and continued depreciation of other existing equipment.

Smith Systems Transportation

For the fiscal year ended March 31, 2011, Smith Systems Transportation had revenues of $7,691,400 compared with revenues of $6,792,477 for the fiscal year ended March 31, 2010, an increase of $898,923 or 13.23%.  This increase is primarily due to a general improvement in the trucking industry.

For the fiscal year ended March 31, 2011, Smith Systems Transportation had net income of $338,000 compared with a net income of $516,807 for the fiscal year ended March 31, 2010, an improvement of $321,193.  This increase is primarily due to a general sales increase and successful cost reduction programs.

Total assets at March 31, 2010, totaled $2,681,427, as compared to total assets of $2,853,776  at March 31, 2010, a decrease of $172,349, due to equipment disposals.

Liquidity and Capital Resources

Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations and otherwise operate on an ongoing basis. The following table provides an overview of certain selected balance sheet comparisons related to continuing operations between March 31, 2011 and March 31, 2010.

	March 31, 2011			March 31, 2010			$ change			% change
Working Capital	$	(4,099,229	)	$	(5,073,077	)	$	973,848			-19.2	%
Cash		54,158			48,101			6,057			12.59	%
Accounts receivables, net		2,564,352			2,306,738			257,614			11.17	%
Prepaid expenses and other assets		545,930			336,127			209,803			62.41	%
Property and equipment, net		4,141,067			5,679,610			(1,538,543	)		-27.088	%
Intangible assets, net		268,785			913,868			(645,083	)		-70.59	%
Total Assets		7,810,572			9,284,444			(1,473,872	)		15.87	%
Bank overdraft		214,303			166,966			47,337			28.35	%
Accounts payable		1,151,337			447,752			(703,585	)		-157.1	%
Accrued and other liabilities		1,112,778			885,613			227,165			25.65	%
Warrant liabilities		513,471			-			513,471			100.00	%
Line of credit		895,153			755,044			140,109			18.56	%
Notes payable		8,245,340			10,214,960			(1,969,620	)		19.28	%
Total Liabilities		13,897,695			12,470,335			(1,427,360	)		11.44	%
Common stock		31,575			21,089			10,486			49,72	%
Additional paid-in capital		6,013,911			1,171,790			4,842,121			413.22	%
Accumulated deficit		(12,475,539	)		(4,714,339	)		(7,761,200	)		164.63	%
Non-controlling interest		342,930			335,569			7,361			2.54	%
Total Liabilities and Stockholders’ Deficit	$	7,810,572		$	9,284,444		$	(1,473,872	)		15.87	%

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Cash Flows and Working Capital

Our cash flow from operations is insufficient to meet current obligations. In fiscal year 2011 and 2010, we relied upon additional investment through sales of common stock and debentures in order to fund its operations. We anticipate the need to raise significant amounts of capital in order to fund its operations in the next fiscal year.

As a result of losses we have incurred to date, we have financed our operations primarily through equity and debentures. At March 31, 2011, we had $54,158 in cash and cash equivalents. We had receivables, net of allowances, of $2,564,352 and our current liabilities were $7,263,669.

Our sales cycle can be several weeks or longer, followed by a period of time in which to collect our receivables, with some costs incurred immediately, making our business working-capital intensive. We do not anticipate a profitability level that would resolve its cash flow issues in the foreseeable future and expects to rely upon acquisitions and capital contributed by investors to fund its operations.

We have significant capital expenditures, although leasing can reduce our equipment cost when justified by the level of sales.

We raised $855,000 from the sale of common stock to investors for the fiscal year ended March 31, 2011.

Operating Activities

Net cash used in operating activities for the fiscal year ended March 31, 2011 totaled $296,195. as compared to $694,386 for the fiscal year ended March 31, 2010, an improvement of $398,191. This change resulted primarily from the greater level of commercial activity in 2011, which resulted in the much greater net loss for the year ended March 31, 2011offset by the larger noncash expenses in the same period. For the fiscal year ended March 31, 2011, we had a net loss of $7,561,200, along with non-cash items such as depreciation and amortization expense of $1,979,827, stock issued for services of $746,346, warrants issued for services of $318,750, stock based compensation of $177,000, stock issued for interest of $873,519, and debt discount amortization expense of $258,682,.  During the fiscal year ended March 31, 2010, we experienced a net loss of $3,140,423; along with non-cash items such as depreciation and amortization expense $2,234,234.

Investing Activities

Net cash used in investing for the fiscal year ended March 31, 2011 was $168,311 as compared to no net cash used in investing activities of $-0- for the fiscal year ended March 31, 2011. During the fiscal year ended March 31, 2011, we used cash of $100,000 for the purchase of Triple C Transport. We also purchased equipment for $68,311.

Financing Activities

Net cash provided by financing activities for the fiscal year ended March 31, 2011, was $470,563 as compared to net cash provided of $584,045 for the fiscal year ended March 31, 2010.  For the fiscal year ended March 31, 2011, net cash provided by financing activities related to proceeds received from notes payable of $906,240 which were funds received from various lenders, proceeds from sale of common stock of $855,000, offset by repayments on notes payable of $1,478,123 which were to pay down the balances on various notes related to the trucks and trailers.  In the prior period there were proceeds from notes payable of $1,042,180 and repayment of notes payable of $582,987.

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Cash Requirements

At July 13, 2011, we had a nominal balance in cash and cash equivalents. As discussed below, this amount and our current accounts receivable collections may be adequate to maintain our current level of operations  for 30 to 60 days, after which we would need additional capital or face a significant curtailment of operations.

Outlook

We believe that we are in a recovering truckload freight market as the operating environment grew increasingly positive during the last fiscal year.  This is reflected in an increased fiscal year over fiscal year average miles per tractor.  We expect the upward trend to continue in future quarters.

Even though management is optimistic about the economic recovery, the transportation industry is generally cash lean with over-leveraged balance sheets. We intend to invest more heavily as demand for truckload services improves. We believe we are well-positioned to grow our business as the recovery continues to develop.

We believe that our level of profitability, fleet renewal strategy, and use of independent contractors will enable us to internally finance attractive levels of fleet growth when demand conditions are right. Based on our growing network and anticipated access to substantial capital resources, we believe we have the competitive position and ability to perpetuate our model based on leading growth and profitability.

Notwithstanding our operating losses in the comparative years covered by this annual report on Form 10-K, we have experienced positive cash flows and improvements in our net income, working capital positions at the subsidiary level during the year ended March 31, 2011 compared to fiscal 2010.  As we begin to consolidate the duplicated functions among our subsidiaries, we expect to achieve further savings which will be reflected in improved cash flows and working capital positions, and profitable operations of which there is no assurance.  The expenses associated with maintaining our reporting under the Securities Exchange Act at the parent level have significantly contributed to our consolidated negative cash flow and working capital positions.  In particular, the legal and accounting expenses associated with acquisitions and first-time audits of acquisition candidates and litigation from the Triple C Transport discontinued operation have resulted in greater cash outflows and expenses in these categories than we expect to experience when our acquisition program matures in the future.  We do not expect a positive change in these factors until we complete additional acquisitions, if any, which will enable us to spread the parent’s expenses, associated with being a publicly traded and reporting company and costs of future acquisition over a larger revenue and cash flow base.

We believe that we are in a recovering truckload freight market and that the loss of capacity in the market due to the recent recession creates growth operations for us. Likewise, the recession has weakened many companies in the industry, which we believe creates opportunities for us to acquire good companies at prices we believe are fair.

Even though our management is optimistic about the economic recovery, the transportation industry is generally cash lean with over-leveraged balance sheets. We intend to invest more heavily as demand for truckload services improves. We believe we are well-positioned to grow our business as the recovery continues to develop.

We believe that our level of profitability, fleet renewal strategy, and use of independent contractors will enable us to internally finance attractive levels of fleet growth in the future. Based on our growing network, a history of low cost operations and anticipated access to substantial capital resources, we believe we have the competitive position and ability to perpetuate our model based on leading growth and profitability.

Critical Accounting Policies and Estimates

The preparation of financial statements in accordance with United States Generally Accepted Accounting Principles ("GAAP") requires that management make a number of assumptions and estimates that affect the reported amounts of assets, liabilities, revenue, and expenses in our consolidated financial statements and accompanying notes. Our management evaluates these estimates and assumptions on an ongoing basis, utilizing historical experience, consulting with experts, and using other methods considered reasonable in the particular circumstances. Nevertheless, actual results may differ significantly from our estimates and assumptions, and it is possible that materially different amounts would be reported using differing estimates or assumptions.  We consider our critical accounting policies to be those that are both important to the portrayal of our financial condition and results of operations and that require significant judgment or use of complex estimates.  A summary of the significant accounting policies followed in preparation of the financial statements is contained in Note 1 to our consolidated financial statements.

27

Property and Equipment

Property and equipment are entered at acquisition cost and depreciated on a straight-line basis over their anticipated life.  We estimate the salvage value of our equipment to be fifteen to twenty percent for tractors and trailers, if the equipment is kept in service for its entire useful life. This life expectancy is based upon our management’s past experience of operations. The useful life of a typical tractor is seven fiscal years and a typical trailer is nine fiscal years. Our structures are forty fiscal years and leasehold improvements are the lesser of the economic life of the leasehold improvements or the remaining life of the lease.

The freight environment negatively impacted every subsidiary's freight revenues during our fiscal year ended March 2010 but began a turnaround for the year ended March 31, 2011.  Fuel surcharges tended to be a volatile source of revenue; therefore, measured freight revenue is calculated with the removal of such surcharges, providing a more consistent basis for comparing results of operations from period to period.  In anticipation of lower freight volumes, we reduced our average tractor fleet.  With the assistance of the fleet reduction, we did experience an increase in average miles per tractor.  

Going Concern

We have suffered recurring losses from operations and are dependent on additional capital to execute our business plan.

With our present cash and cash equivalents, management expects to be able to continue some of our operations for at least the next twelve months. However, we have suffered losses from operations.  Our continuation is dependent upon attaining and maintaining profitable operations and raising additional capital as needed. In this regard, we have raised additional capital through the debt and equity offerings noted above. We  do, however, require additional cash due to changing business conditions or other future developments, including any investments or acquisitions we may decide to pursue. We plan to sell additional equity securities, debt securities or borrow from lending institutions. We cannot assure you that financing will be available in the amounts we need or on terms acceptable to us, if at all. The issuance of additional equity securities, including convertible debt securities, by us could result in a significant dilution in the equity interests of our current stockholders. The incurrence of debt would divert cash for working capital and capital expenditures to service debt obligations and could result in operating and financial covenants that restrict our operations and our ability to pay dividends to our shareholders. If we are unable to obtain additional equity or debt financing as required, our business operations and prospects may suffer. In such event, we will be forced to scale down or perhaps even cease our operations.

We have undertaken steps as part of a plan to improve operating results with the goal of sustaining our operations for the next twelve months and beyond. These steps include (a) raising additional capital and/or obtaining financing; (b) increasing our revenues and gross profits; and (c) reducing expenses. Additionally, we are implementing a four part strategy to bring us to financial stability, which is as follows:

·   A significant portion of our short term debt is in the hands of our subsidiary managers who, under the right circumstances,  we believe may be willing to rework terms and to lengthen the maturity dates, as they have in the past, if that becomes necessary, lessening the short term debt on our balance sheet. 

·   A significant amount of short term debt on our balance sheet is convertible into common shares and we are optimistic a meaningful amount of this debt will ultimately be converted, thus eliminating a meaningful amount of debt from our balance sheet. 

·   We expect to continue to grow through acquisitions involving stock payments in lieu of cash.  We expect this larger business base will give us an ever larger “platform” in order to more easily offset the corporate overhead and costs of being public. 

·   We are beginning the integration of the subsidiaries, allowing for increased buying power (lower costs) and elimination of redundant tasks (saving the company significant money). This integration is expected also to help our subsidiaries become more efficient than they are now, acting as independent companies.

You have no assurance that we will successfully accomplish these steps and it is uncertain whether we will achieve a profitable level of operations and/or obtain additional financing. You have no assurance that any additional financings will be available to us on satisfactory terms and conditions, if at all.

Our consolidated financial statements do not give effect to any adjustments which would be necessary should  we be unable to continue as a going concern and therefore be required to realize our assets and discharge our liabilities in other than the normal course of business and at amounts different from those reflected in the accompanying consolidated financial statements.

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Recent Accounting Pronouncements

See Consolidated Financial Statements beginning on page F-1.

Off-Balance Sheet Arrangements

We do not currently have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our stockholders.

We have not entered into any transaction, agreement or other contractual arrangement with an entity unconsolidated with us under which we have:

· An obligation under a guaranty contract, although we do have obligations under certain sales arrangements including purchase obligations to vendors,

· A retained or contingent interest in assets transferred to the unconsolidated entity or similar arrangement that serves as credit, liquidity or market risk support to such entity for such assets,

· Any obligation, including a contingent obligation, under a contract that would be accounted for as a derivative instrument or,

· Any obligation, including a contingent obligation, arising out of a variable interest in an unconsolidated entity that is held by us and material to us where such entity provides financing, liquidity, market risk or credit risk support to, or engages in leasing, hedging or research and development services with us.

Effect of Changes in Prices

Changes in prices in the past few fiscal years have not been a significant factor in the trucking industry. Prices to the end customer do vary with fuel prices, which are affected by means of a fuel surcharge that is set by the U S. Department of Energy and is common to all companies in the industry. The surcharge may affect the industry and the economy as a whole but does not differentiate between companies.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We are not required to provide information under this item.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The financial statements required by this item, including an index to the financial statements, begin on page F–1 of this annual report.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

We have not had any change in or disagreement with our accountants during the past two fiscal years or the subsequent interim period.

ITEM 9A. CONTROLS AND PROCEDURES.

ITEM 9A(T).

307 – Disclosure controls and procedures: As of March 31, 2011, our principal executive and our acting principal financial officer, the same person, evaluated the effectiveness of our disclosure controls and procedures, and determined that we do not have any effective disclosure controls and procedures. Disclosure controls and procedures are defined in Exchange Act Rule 15d–15(e) as “controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Act (15 U.S.C. 78a et seq.) is recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms [and] include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.”

308(a)(1) – Management’s responsibility: Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reportingis defined in Exchange Act Rule 15d–15(f) “as a process designed by, or under the supervision of, the issuer's principal executive and principal financial officers, or persons performing similar functions, and effected by the issuer's board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that: (1) Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the issuer; (2) Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the issuer are being made only in accordance with authorizations of management and directors of the issuer; and (3) Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the issuer's assets that could have a material effect on the financial statements.” Because of inherent limitations, internal control over financial reporting is not intended to provide absolute assurance that a misstatement of our financial statements would be prevented or detected.

308(a)(2) – Framework to be used for evaluation: In its evaluation of our internal control over financial reporting, our management is required to use the Internal Control - Integrated Framework (1992) and Internal Control Over Financial Reporting Guidance for Smaller Public Companies (2006), issued by the Committee of Sponsoring Organizations of the Treadway Commission.

308(a)(3) – Evaluation of our internal control over financial reporting: Pursuant to Rule 15d–15 of the Exchange Act, our management conducted an evaluation of the effectiveness of our internal control over financial reporting as of March 31, 2010. Based on this evaluation, our management, with the participation of our principal executive and acting principal financial officer, who is the same person, concluded that our internal control over financial reporting was not effective. Management has identified the following material weakness in our internal control over financial reporting:

— Until we can consolidate our accounting and banking functions, our ability to implement internal controls over financial reporting will be limited.

— We do not have adequate software systems, personnel and other resources to assure that significant transactions are timely analyzed and reviewed.

— We do not have adequate personnel and financial resources available to plan, develop, and implement disclosure and procedure controls and other procedures that are designed to ensure that information required to be disclosed in our periodic reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms.

— Our limited financial resources restrict our employment of adequate personnel needed and desirable to separate the various receiving, recording, reviewing and oversight functions for the exercise of effective control over financial reporting.

— Our limited resources restrict our ability to ensure that information required to be disclosed in our periodic reports filed under the Exchange Act is accumulated and communicated to management to allow timely decisions regarding required disclosure.

308T(a)(4) – Absence of auditor’s attestation: This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act of 2002. Our management's report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management's report in this annual report.

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308(b) – Changes in internal control over financial reporting: Based upon an evaluation by our management of our internal control over financial reporting, with the participation of our principal executive and acting principal financial officer, who is the same person, we did not make any changes in our internal control over financial reporting during the quarter ended March 31, 2011 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

Limitations on the Effectiveness of Internal Control: Our management does not expect that our disclosure controls and procedures or our internal control over financial reporting, when implemented, will necessarily prevent all fraud and material errors. An internal control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations on all internal control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, and/or by management override of the control. The design of any system of internal control is also based in part upon certain assumptions about risks and the likelihood of future events, and there is no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in circumstances and the degree of compliance with the policies and procedures may deteriorate. Because of the inherent limitations in a cost-effective internal control system, financial reporting misstatements due to error or fraud may occur and not be detected on a timely basis.

ITEM 9B. OTHER INFORMATION.

We believe we have filed reports on Form 8-K during the fourth fiscal year providing all information required to be reported on Form 8-K which occurred during that period.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

The following table and biographical information following the table provide information about our directors and executive officers. 

NAME	AGE		POSITION	DIRECTOR SINCE*
John E. Bagalay		75	Director	2009
Kimberly K. Bors		50	Director	April 1, 2011
Paul A. Henley		50	Director, Chief Executive Officer, Chief Financial and Accounting Officer	2008
Henry P. Hoffman		58	Director, President and Chief Operating Officer	2008
Jackson L. Morris		65	Corporation Secretary	n/a
T. Mark Morris		43	Director and General Manager of Subsidiary	2008
Robert Papiri		49	Director	March 18, 2011
Monte W. Smith		55	Director and General Manager of Subsidiary	2008

*Reflects beginning date with Original Integrated Freight

Our stockholders elect our directors. Our directors serve terms of one year and are generally elected at each annual stockholders meeting; provided, that there is no assurance we will hold a stockholders’ meeting annually. We have identified our independent directors using the definition of independence contained in the NASDAQ listing rules. Our executive officers are elected by the board of directors and their terms of office are at the discretion of the board of directors, subject to terms and conditions of their respective employment agreements which we expect to enter into after the registration of which this prospectus is a part is effective. We have the authority under Florida law and our bylaws to indemnify our directors and officers against certain liabilities. We have been informed by the U.S. Securities and Exchange Commission that indemnification against violations of federal securities law is against public policy and therefore unenforceable.

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Biographical Information About Our Directors And Executive Officers

John E. Bagalay is one of our independent directors.

● 2005 to present– Mr. Bagalay is executive-in-residence at EuroUS Ventures LLC, a venture capital firm located in Newton, Massachusetts that invests exclusively in European based technology companies that wish to establish a US market. Our investment is committed to facilitate that expansion.

● 2003 to 2005 – He was Director of Special Projects in the Life Sciences at the Boston University Technology Commercialization Institute

● 2003 to present – Mr. Bagalay has been a director and Chairman of Wave Systems Corp, a publicly traded company. Wave develops, produces and markets products for hardware-based digital security, including security applications and services that are complementary to and work with the specifications of the Trusted Computing Group.

● 1989 to 2003 – Mr. Bagalay was Senior Advisor to the Chancellor of Boston University from January 1998 to November 2003.

● 1989 to 1998 – He Managing Director of BU Ventures, a university venture capital company.

Mr. Bagalay is an independent director of the following publicly traded, registered companies: Wave Systems Corp. and Cytogen Corp. He serves on various committees of the boards of directors of these corporations. Mr. Bagalay earned a B.A. degree in philosophy, history and economics (1954) from Baylor University, a J.D. degree (1964) from the University of Texas at Austin and a Ph.D. degree (1957) from Yale University.

     Kimberly K. Bors, became an independent director beginning April 1, 2011.  From October 2009 to the present, Ms. Bors has been employed by Johnson Controls, a New York Stock Exchange listed company, for the most recent part of this period in the position of Vice President for Global Human Resources - Building Efficiency.  From 2003 to October 2009, she was employed by IDEX Corporation, a New York Stock Exchange listed company, sequentially in the positions of Vice President for Global Human Resources & Corporate Communications, Vice President for China Shared Operations and President, Fluid Management/Dispensing (Americas Division) and Global Chief Marketing Officer (IDEX Dispensing).  Beginning in 1985 and ending in 2003, Ms. Bors held executive management positions with Brunswick Corporation, Browning Ferris Industries, Outdoor Marine Corporation and Pennzoil Company.  Ms. Bors earned a B.B.A. degree (1985) and a M.B.A. degree (1989) from the University of Houston, Houston, Texas.

Paul A. Henleyis the chairman of our board, chief executive officer, chief financial and accounting officer.

● May 2008 to present – Mr. Henley is the founder of Integrated Freight Corporation and has served as its chairman of the board and chief executive officer since its inception. He now also serves as its chief financial and accounting officer.

● June 2002 to June 2006 - He was President of Henley Capital Group, a consulting company that worked with private companies and early stage public companies in the area of business development. He assisted companies in the following areas; writing of business plans, the preparing of budgets, corporate communications (public relations/investor relations), corporate presentations at various types of events, assisting in the development of board of directors, hiring of market makers, attorneys and auditors, merger and acquisition consulting and the planning and implementation of capital programs.

● October 2006 to May 2007 - Mr. Henley was engaged in a joint venture with Friedland Capital doing business under the name of Friedland-Henley Advisers which was engaged in developing a venture capital fund for early stage companies. Mr. Henley terminated his relationship before the fund began to raise capital.

● June 2006 to 2007 - He was a consultant to Friedland Capital of Denver, Colorado in the areas of product development and investment seminars.

● June 2006 - 2008 - Mr. Henley was engaged on a part time basis in planning a business to acquire trucking companies, efforts to obtain funding and efforts to identify potential acquisition targets. This activity culminated in his founding of High Point Transport, Inc. in 2006, which filed a registration statement on Form 10 in August 2007. High Point Transport acquired Cannon Freight Systems, Inc., located in Harrison Township, Michigan, in November 2007 that continued to be operated on a daily basis by its founder and president. Due to operating losses and breach of financial covenants by Cannon Freight, unforeseen and unexpected by High Point Transport at the time of acquisition, Cannon Freight was forced to cease operations in or about February 2008. This circumstance prevented High Point Transport from satisfying its covenants with Cannon Freight’s founder and selling stockholder, who as a consequence became the controlling stockholder of High Point Transport. Management of Integrated Freight believes, under the new controlling stockholder, High Point Transport also terminated its business activities in or about February 2008.

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● May 2008 to present – He is the founder of Integrated Freight Corporation and has served as its chairman of the board and chief executive officer since its inception. He now also serves as its chief financial and accounting officer.

Mr. Henley earned a B.A. degree in business management and marketing (1981) from Florida State University.

Henry P. (“Hank”) Hoffman is director, our president and chief operating officer.

• February 2000 to May 2006 - Mr. Hoffman was founder, President & CEO, and chairman of the board of SiriCOMM, Inc. an applications service provider and wireless networking business serving the U.S. truckload industry. The company installed its VSAT-based network technology in the major truck stop chain facilities throughout the U.S. to support its applications and those of third party partners.

• June 2006 to May 2007 – He served as chairman of the board of SiriCOMM. Upon his departure in May 2007, the company subsequently changed its business model to a pure Internet service provider. The company filed for bankruptcy in 2008.

• June 2007 to February 2011– Mr. Hoffman was President & CEO and a director of SeaBridge Freight, Inc., a tug and barge transportation company that provided short sea service between Port Manatee, FL and Brownsville, TX and has ceased operations.

Mr. Hoffman earned his BS degree (1973) from the United States Military Academy and a MBA degree (1985) from the University of Wisconsin.

Jackson L. Morris fills the statutory position of corporation secretary as a courtesy and incidental to his services as our independent corporate and securities counsel. He has served in these capacities with Integrated Freight since inception. Mr. Morris has been engaged in the private practice of law since 1982, maintaining his own practice in the Tampa Bay area since 1993. Mr. Morris focuses his practice in corporate, securities and business transaction law. Mr. Morris earned a B.A. degree in economics from Emory University in 1966, a J.D. degree from Emory University Law School in 1969 and an L.L.M. from Georgetown Law School in 1974.

T. Mark Morris is one of our directors and is the general manager of one of Integrated Freight’s subsidiaries, Morris Transportation, Inc., which he founded in 1998 and has been its chief executive officer from inception to the present. Mr. Morris earned a BA degree in business administration (1988) from Ouachita Baptist University in Arkadelphia, Arizona.

     Robert W. Papiri, is an independent director.  He is a founder in 2006 and a managing member of Tangiers Capital, LLC, a Southern California based asset manager that raises, invests, and manages the Tangiers Investors, LP investment fund. Tangiers Investors makes direct investments into foreign and domestic private and public companies through the acquisition of stock, convertible debt, warrants, and other instruments.  Mr. Papiri is a managing partner, beginning in 2005, of Acer Capital Group, LLC, a business consulting firm providing a full suite of financing, management consulting, and operational assistance to public and private companies.  Acer has structured and advised on over $375 million of real estate financing.  Mr. Papiri has been a general partner in seven separate real estate development projects totaling over 225 acres in California and Washington State, with specific emphasis on carrying the project through entitlements and rezoning and the creation of an appropriate exit strategy.  Mr. Papiri attended the Regents College in Albany, New York.

Monte W. Smith is one of our directors and is the general manager of one of Integrated Freight’s subsidiaries, Smith Systems Transportation, Inc., which he founded in 1992 and has been its chief executive officer from inception to the present. Mr. Smith attended the University of Nebraska at Kearney, studying finance.

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Audit Committee/Audit Committee Financial Expert

Our audit committee is composed of John E. Bagalay and Kimberly B. Bors, our two independent directors.

Section 16(a) Beneficial Ownership Reporting Compliance

Based solely upon a review of Forms 3, 4 and 5 filed with the SEC, and other information known to the us, during and with respect to the fiscal year ended March 31, 2010, we believe that none of our directors, officers and beneficial owners of more than ten percent of our common stock have filed any reports required by Section 16(a) of the Exchange Act.

Code of Ethics

Although our former board of directors approved a code of ethics for senior financial officers on October 7, 2002, as filed it with our September 30, 2002 report on Form 10–KSB as Exhibit 99.3, our current board of directors has neither rescinded nor confirmed that code of ethics.

ITEM 11. EXECUTIVE COMPENSATION.

Summary Compensation Table

The following table presents information about cash compensation we paid to our chief executive officer and each of our highest paid executive officers who have compensation exceeding $100,000 per year, and lists all capacities in which cash compensation was paid. The amounts in the table include compensation paid by PGI-MD, Integrated Freight and each of our subsidiaries we acquired in the merger with Integrated Freight, both before and after the respective acquisitions, as the case may be.

Name and principal position	Year	Base	Bonus	Total
Paul A. Henley, Chief Executive Officer (1)	2011	$        235,950	none	$        235,950
	2010	$        214,500	$ 50,000	$        214,500
Henry P. Hoffman, President and Chief Operating Officer (2)	2011	$          11,681	none	$          11,681
Steven E. Lusty, Executive Vice President (3)	2011	$        123,750	none	$        123,750
	2010	$        165,000	none	$        165,000
T. Mark Morris, General Manager of Morris Transportation (1)	2011	$        110,000	none	$        110,000
	2010	$        110,000	none	$        110,000
Monte W. Smith, General Manager of Smith Transportation (1)	2011	$        110,000	none	$        110,000
	2010	$        110,000	none	$        110,000
Craig White, Former General Manager of Triple C Transport (1)(4)	2010	$        110,000	none	$        110,000

___________________

(1) Includes annual salary, prior to the respective date of our acquisitions, but excludes distributed and undistributed S-corporation earnings.

(2) Mr. Hoffman was employed beginning February 2011.

(3) Mr. Lusty resigned in December 2010.

(4) The Triple C Transport Acqusition has been discontinued and is in litigation.  See Item 3.

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Neither our chief executive officer nor our other highest paid executives received any form of compensation other than cash salary and bonus during the periods indicated, except (i) Mr. Henley who received a bonus of $50,000 provided in his employment agreement as a result of Integrated Freight achieving a public market for its common stock as a result of its merger into us and (ii) Mr. Lusty whose employment agreement provided that he would  receive 25,000 shares of our common stock for every month in which we have been unable to pay his salary in cash – an aggregate of 200,000 shares at March 31, 2010. The salaries of Messrs. Morris, Smith, and White were paid by their respective, employing subsidiary companies.

The following table sets forth certain information at March 31, 2011 with respect to outstanding equity awards granted to the named executive officers:

Outstanding Equity Awards at Fiscal Year End

	Option awards
Name	Number of securities underlying unexercised options exercisable		Number of securities underlying unexercised options unexercisable		Equity incentive plan awards: Number of securities underlying unexercised unearned options		Option exercise price ($)		Option expiration date
John C. Antenucci		972,144		-		-		0.0120	Apr 30, 2011
		1,750,000		-		-		0.0140	May 16, 2012

Employment Agreements

We have employment agreements with the named executive officers identified in the following table.

Name	Began	Ends (1)	Annual Cash Salary		Annual Increase			Bonus			Other
Paul A. Henley	May 30, 2008	May 29, 2011	$	195,000		10	%		–	(2)(3)	–
Henry P. Hoffman	February, 2011	February, 2014	$	170,000		10	%		–		–
T. Mark Morris	September 1, 2008	August 31, 2011	$	110,000		–		$	25,000	(2)	–
Monte W. Smith	September 1, 2008	August 31, 2011	$	110,000		–				(2)	–

________________

(1) Subject to subsequent automatic annual renewals.

(2) Eligible for discretionary bonuses, upon board review and approval.

(3) Achievement of a public market for our shares –bonus equal to one-tenth of one percent (.0015) of the revenue from operations generated by acquired company.

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Each employment agreement provides for payment of benefits provided to other employees, an automobile allowance, and an opportunity to earn a performance bonus.

Director Compensation

Directors who are not our employees will receive 25,000 shares of our common stock each quarter.

Compensation Committee

We do not have a compensation committee. These functions are provided by our  full board of directors. As a privately owned company with Mr. Henley as the sole director, a compensation committee was neither possible nor necessary as he has approved his own compensation. The compensation of executive officers other than Mr. Henley was approved by the full board of directors, except the compensation of the general managers of our operating subsidiaries has been negotiated in the acquisition from the respective director/officers/controlling stockholders of those companies. We plan to have a compensation committee when we elect additional independent persons to our board of directors.

ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

Beneficial Ownership of  Common Stock of Principal Stockholders, Directors and Management

NAME AND ADDRESS OF BENEFICIAL OWNER	TITLE OF CLASS	NUMBER OF SHARES OWNED (1)	PERCENTAGE OF CLASS (2)
John E. Bagalay*	Common Stock	175,000	*	%
Kimberly K. Bors	Common Stock	25,000	*	%
Michael S. DeSimone (4)	Common Stock	5,000,000	12.85	%
Paul A. Henley**	Common Stock	6,400,000	17.01	%
Henry P.Hoffman**	Common Stock	175,000	*	%
Jackson L. Morris (1)	Common Stock	1,495,823	1.32	%
T. Mark. Morris	Common Stock	5,431,458	14.43	%
Robert W. Papiri (2)	Common Stock	4,807,597	12.3	%
Seaside 88 LP	Common Stock	2,400,000	6.17	%
Monte  W. Smith	Common Stock	930,000	2.47	%
All Officers and Directors As a Group (8  persons) (3)	Common Stock(3)(4)	19,439,878	50.02	%

______________

* Less than 1%.

**Each director who is not also an executive officer is to receive 25,000 shares per quarter of service.

(1)  Includes 995,823 common stock purchase warrants issued to Mr. Morris as compensation for services.  Mr. Morris’ percentage of ownership has been adjusted to reflect the warrant shares as if issued on July 8, 2011.

(2)  Includes 340,000  common stock purchase warrants issued to Mr. Papiri in connection with debt funding provided to us before he became a director.  Mr. Papiri’s percentage ownership has been adjusted to reflect the warrant shares as if issued on July 8, 2011.  Mr. Papiri’s shares and percentage ownership does not include shares and warrants held by Tangiers Investors, LP, of which Mr. Papiri is one of two general partners.  The shares owned by Tangiers Investors, LP are set forth in the preceding table following the shares owned by directors and officers.

 (3)  Does not include common stock purchase warrants included in “shares owned” by certain directors and officers.

(4)  Includes 340,000  common stock purchase warrants in connection with the acquisition of Cross Creek Trucking, Inc.

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

During the 2011 fiscal year, we did not enter into any transactions with our directors, executive officers and persons who own more than five percent of our common stock, or with their relatives and entities they control.

We do not anticipate entering into any future transactions with our directors, officers and affiliates apart from normal employment transactions.

Jackson L. Morris and T. Mark Morris are not related.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.

Aggregate fees billed by our principal independent registered public accounting firm for audits of the financial statements for the fiscal years indicated:

		2011	2010
Audit Fees	$	82,000	$	70,000
Audit–Related Fees(1)		70,000		–
Tax Fees		–		–
All Other Fees		–		–
Total	$	152,000	$	70,000

Percentage of hours on audit engagement performed by non–full time employees:less than 50% of total time

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PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

38

CONSOLIDATED FINANCIAL STATEMENTS OF

INTEGRATED FREIGHT CORPORATION

	Page
Report of Sherb & Co. LLP, Independent Registered Public Accounting Firm		F-2
Consolidated Balance Sheets as of March 31, 2011and 2010		F-3
Consolidated Statements of Operations For the Years Ended March 31, 2011 and  2010		F-4
Consolidated  Statements of Changes in Stockholders’ Deficit For the Years Ended March 31, 2011 and  2010		F-5
Consolidated Statements of Cash Flows for the Years Ended March 31, 2011and  2010		F-6
Notes to Consolidated Financial Statements		F-8

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors

Integrated Freight Corporation

We have audited the accompanying consolidated balance sheets of Integrated Freight Corporation and Subsidiaries as of March 31, 2011 and 2010 and the related consolidated statements of operations, changes in stockholders’ deficit and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audit in accordance with the auditing 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 consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal controls over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purposes of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. 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 provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Integrated Freight Corporation and Subsidiaries, as of  March 31, 2011 and 2010 and the consolidated results of their operations and their cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company has suffered recurring losses and has a negative working capital position and a stockholders’ deficit. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans with regard to these matters are described in Note 14. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Sherb & Co., LLP

Certified Public Accountants

Boca Raton, Florida

July 13, 2011

F-2

INTEGRATED FREIGHT CORPORATION

Consolidated Balance Sheets

	March 31, 2011			March 31, 2010
Assets
Current assets:
Cash	$	54,158		$	48,101
Accounts receivables, net of allowance for doubtful accounts of $50,000		2,564,352			2,306,738
Prepaid expenses and other assets		545,930			336,127
Total current assets		3,164,440			2,690,966
Property and equipment, net of accumulated depreciation		4,141,068			5,679,610
Intangible assets, net of accumulated amortization		268,785			913,868
Assets of discontinued operations		236,279			-
Total assets	$	7,810,572		$	9,284,444
Liabilities and Stockholders’ Deficit
Current liabilities:
Bank overdraft	$	214,303		$	166,966
Accounts payable		1,151,337			447,752
Accrued expenses and other liabilities		1,112,778			885,613
Line of credit		895,153			755,044
Notes payable - related parties		1,180,987			1,441,740
Current portion of notes payable		2,709,111			4,066,928
Total current liabilities		7,263,669			7,764,043
Derivative liability		513,471			-
Notes payable - related parties		120,000			210,000
Notes payable, net of current portion and debt discount		4,235,242			4,496,292
Total liabilities of discontinued operations		1,765,313			-
Total long-term liabilities		6,634,026			4,706,292
Total liabilities		13,897,695			12,470,335
Stockholders’ deficit:
Common stock, $0.001 par value, 2,000,000,000 shares authorized,
31,574,883 and 21,089,333 shares issued and outstanding		31,575			21,089
Additional paid-in capital		6,013,911			1,171,790
Accumulated deficit		(12,475,539	)		(4,714,339	)
Total Integrated Freight Corporation stockholders’ deficit		(6,430,053	)		(3,521,460	)
Non controlling interest		342,930			335,569
Total stockholders’ deficit		(6,087,123	)		(3,185,891	)
Total liabilities and stockholders’ deficit	$	7,810,572		$	9,284,444

See notes to consolidated financial statements

F-3

INTEGRATED FREIGHT CORPORATION

Consolidated Statements of Operations

		Year Ended
		March 31,
		2011			2010
Revenue		$	18,827,367		$	17,330,079
Operating Expenses
	Rents and transportation		4,301,760			4,900,107
	Wages, salaries and benefits		5,591,171			5,364,224
	Fuel and fuel taxes		5,526,923			4,310,349
	Depreciation and amortization		2,179,827			2,234,234
	Impairment of intangible asset		336,861			-
	Insurance and claims		725,995			745,308
	Operating taxes and licenses		198,853			142,786
	General and administrative		4,020,941			1,913,765
Total Operating Expenses			22,882,331			19,610,773
Loss from continuing operations			(4,054,964	)		(2,280,694	)
Loss from discontinued operations			(1,529,034	)		-
Other Income (Expense)
	Gain/(loss) on change of fair value of derivative liability		(513,471	)		-
	Interest		(1,536,646	)		(941,992	)
	Interest - related parties		(351,031	)		(110,438	)
	Other income (expense)		216,585			224,877
Total Other Income (Expense)			(2,184,563	)		(827,553	)
Net loss before noncontrolling interest			(7,768,561	)		(3,108,247	)
Noncontrolling interest share of subsidiary net income (loss)			7,361			(32,176	)
Net loss		$	(7,761,200	)	$	(3,140,423	)
Net loss per share - basic and diluted
	Loss from continuing operations	$	(0.25	)	$	(0.15	)
	Loss from discontinued operations		(0.06	)		-
	Net loss per common share-basic and diluted	$	(0.31	)	$	(0.15	)
Weighted average common shares outstanding - basic and diluted			24,662,809			21,089,333

See notes to consolidated financial statements

F-4

INTEGRATED FREIGHT CORPORATION

Consolidated Statement of Changes in Stockholders’ Deficit

For the Year Ended March 31, 2010 and 2011

					Additional
	Common Stock				Paid-in		Accumulated			Noncontrolling
	Shares		Amount		Capital		Deficit			Interest		Total
Balance at March 31, 2009		404,961	$	405	$	1,058,669	$	(1,573,916	)	$	303,393		(211,449	)
Effects of recapitalization due to merger		20,539,623		20,540		70,766		—			—		91,306
Issue of common stock upon conversion of debentures		144,749		145		42,355		—			—		42,500
Noncontrolling interest share of subsidiary's net income		—		—		—		—			32,176		32,176
Net loss		—		—		—		(3,140,423	)		—		(3,140,423	)