S-4

As Filed with the Securities and Exchange Commission on June 3, 2009

Registration Statement No.333-_______

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-4

REGISTRATION STATEMENT

UNDER THE SECURITIES ACT OF 1933

INTEGRATED FREIGHT SYSTEMS, INC.

(Exact name of registrant as specified in its charter)

FLORIDA

(State or other jurisdiction of incorporation or organization)

4213

(Primary Standard Industrial Classification Code Number)

26-2669164

(I.R.S. Employer Identification Number)

6371 Business Boulevard,

Suite 200

Sarasota, Florida 34240

1-888-623-4378

(Address, including zip code, and telephone number, including area code,
of registrant’s principal executive offices)

Paul A. Henley, President

Integrated Freight Systems, Inc.

6371 Business Boulevard

Suite 200

Sarasota, Florida 34240

1-888-623-4378

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copy to:

Jackson L. Morris

3116 W. North A Street

Tampa, Florida 33609-1544

Phone: 813-874-8854

Fax: 800-310-1695

E-mail: jackson.morris@rule144solution.com

Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable after the effective date of this registration statement.

If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box o

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

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

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

o Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer)

o Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer)

CALCULATION OF REGISTRATION FEE

Title of each class of securities to be registered	Amount to be registered (4)	Proposed maximum offering price per unit (5)		Proposed maximum aggregate offering price		Amount of registration fee
Common stock, $0.001 par value per share (1)	404,961	$	0.57	$	0.0014	$	23.00
Common stock purchase warrants (2)	404,961	$	0	$	0.00	$
Common stock, $0.001 par value per share (3)	404,961	$	0.50	$	202,481	$	12.00
					TOTAL	$	35.00

(1)   Shares issuable in automatic replacement of shares of PlanGraphics, Inc. upon consummation of merger of PlanGraphics into the registrant. Includes a sufficient number of a additional shares to round up fractional shares or the next whole share.

(2)   Warrants issuable with shares issuable in automatic replacement of shares of PlanGraphics, Inc. upon consummation of merger of PlanGraphics into the registrant.

(3)   Shares issuable upon exercise of the warrants.

(4)   Subject to increase for rounding up of fractional shares and common stock purchase warrants related thereto.

(5)   The proposes maximum offering price per unit has been calculated in accordance with Rule 457(c) using the average of the high and low prices reported in the OTC Bulletin Board on May 28, 2009, or $0.12, multiplied by the reverse split ratio of 244.8598 to arrive at an equivalent post-reverse-split price per share.

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

PRELIMINARY INFORMATION STATEMENT/PROSPECTUS SUBJECT TO

COMPLETION - DATED JUNE 3, 2009

Integrated Freight Systems, Inc.

Suite 200

6371 Business Boulevard

Sarasota, Florida 34240

Notice of Action by Written Consent to be taken June ____, 2009

TO: The Stockholders of PlanGraphics, Inc.

We Are Not Asking You For A Proxy.

You Are Requested Not To Send Us A Proxy.

A meeting will not be held. The actions described generally below will be approved by Integrated Freight Systems, Inc., as the majority stockholder of PlanGraphics, Inc.

Integrated Freight Systems, Inc., a Florida corporation, the majority stockholder of PlanGraphics, Inc., plans to approve the following proposals by written consent twenty days following the mailing of this information statement/prospectus to stockholders of PlanGraphics, Inc.

Proposal No. 1. A reverse split of PlanGraphics’ issued and outstanding common stock in a ratio of one to 244.8598, which will result in 404,961 shares issued and outstanding held by persons other Integrated Freight Systems.

Proposal No. 2. The sale of PlanGraphics’ operating subsidiary, PlanGraphics, Inc., a Maryland corporation, to John C. Antenucci, PlanGraphics’ current sole director and chief executive officer. In order to distinguish the two companies with the same name, the parent company is referred to as PlanGraphics and the subsidiary company is referred to as PGI.

Proposal No. 3. PlanGraphics’ merger into Integrated Freight Systems, which will result in the conversion of the 404,961 share of PlanGraphics’ common stock held by persons other than Integrated Freight Systems into 404,961 shares of Integrated Freight Systems common stock accompanied by the issue of 404,961 common stock purchase warrants to the persons holding the 404,961 shares.

This document is both (1) an information statement pursuant to Regulation 14C under the Securities Exchange Act of 1934 containing information about the three proposed actions set forth above which are to be approved by written consent of PlanGraphics’ majority stockholder and (2) a prospectus of Integrated Freight Systems with respect to its 404,961 shares of common stock into which the common stock of PlanGraphics will be automatically converted in the merger of PlanGraphics into Integrated Freight Systems, 404,961 common stock purchase warrants to accompany the converted common stock and the 404,961 shares of common stock issuable upon exercise of the common stock purchase warrants.

PlanGraphics’ common stock is quoted on the OTC Bulletin Board under the symbols PGRA. There is no public market for Integrated Freight Systems common stock. As a result of the planned merger of PlanGraphics into Integrated Freight Systems, in which Integrated Freight Systems will succeed to PlanGraphics’ registration pursuant to Section 12(g) of the Securities Exchange Act of 1934, it is expected that PlanGraphics trading symbol will be change to reflect its change of name to Integrated Freight Systems in the planned merger.

YOU SHOULD CAREFULLY CONSIDER THE RISK FACTORS BEGINNING ON PAGE 16.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON

THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION

TO THE CONTRARY IS A CRIMINAL OFFENSE.

This information statement/prospectus is dated June __, 2009 and is first being mailed to PlanGraphics’ stockholders on or about that date.

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HOW TO OBTAIN A COPY OF INFORMATION INCORPORATED FROM OTHER SOURCES

This information statement/prospectus incorporates important business and financial information about PlanGraphics that is not included in or delivered with this information statement/prospectus. This information is available without charge to security holders upon written or oral request. Please contact Frederick G. Beisser, Chief Financial Officer, PlanGraphics, Inc., 112 East Main Street, Frankfort, KY 40601, telephone (502) 223-1501, to receive a copy of this information. Requests for this information will be honored for twenty days after the date of this information statement/prospectus. This information is also available on the Internet at www.plangraphics.com. See also, “Where You Can Find Additional Information About PlanGraphics”.

TABLE OF CONTENTS

	Page
Parties to the Transactions	5
Roadmap to the Transactions	5
Dissenter’s Rights	6
Persons Who Have an Interest in the Matters to be Acted Upon	6
PlanGraphics’ Voting Securities and Principal Stockholders	6
Integrated Freight Systems’ Recent Purchase of Control of PlanGraphics	7
Events Leading Up to Integrated Freight Systems Purchase of Control of PlanGraphics	8
Explanation of Proposals to be Approved by Integrated Freight Systems	9
No Merger Agreement	11
Accounting and Tax Matters	11
Comparison of Stockholder Rights	12
Documents Incorporated by Reference and Where You can Find Them	13
Information about Integrated Freight Systems	13
Summaries of Referenced Documents	13
Forward–Looking Statements	14
Integrated Freight Systems Discussion and Analysis of Results of Operations and Financial Condition	14
Risk Factors	16
Our Corporate History and Organization	20
Our Business	20
Our Management	27
Biographical Information about Our Directors and Officers	28
Compensation of Our Executive Officers	30
Related Party Transactions	31
Who Owns Our Common Stock	31
Warrants We Have and Will Have Outstanding	32
Lockup – Leak-out Agreements	32
Description of Our Common Stock	32
Legal Matters	33
Experts	33
Where You Can Obtain Additional Information and Exhibits	33
Index to Financial Statements	34

HOW TO OBTAIN MORE COPIES OF THIS INFORMATION STATEMENT/PROXY

Only one copy of this information statement/prospectus is being delivered to two or more stockholders who share the same address, unless we have previously received a request from a stockholder sharing the same address with another stockholder to deliver a copy for each stockholder. If you have not already made this request, we will upon your oral or written request promptly deliver another copy of this information statement/prospectus to you at the shared address, if you so desire. To receive your separate copy of the information statement/prospectus, you may call 941-545-7800 or you may send a request to Integrated Freight Systems, Inc., 200, 6371 Business Boulevard, Sarasota, Florida 34240, attn: Paul A. Henley, President. If you are already receiving multiple copies of PlanGraphics’ annual report, proxy statements and information statements at the shared address and would like to receive only one copy in the future, please either call (502) 223-1501 or you may send a request to PlanGraphics, Inc., 112 East Main Street, Frankfort, KY 40601, attn: Frederick G. Beisser, Chief Financial Officer.

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PARTIES TO THE TRANSACTIONS

The two parties to the merger transaction described in this information statement/prospectus are:

•Integrated Freight Systems, Inc., a Florida corporation, with its principal executive offices located at Suite 200, 6371 Business Boulevard, Sarasota, Florida 34240. Its telephone number at that address is 941-545-7800. Integrated Freight Systems does not have a web site. Integrated Freight Systems is a holding company engaged in the motor freight industry.

•         PlanGraphics, Inc., a Colorado corporation, with its principal executive offices located at 112 East Main Street, Frankfort, KY 40601. Its telephone number at that address is (502) 223-1501. Its web site address is www.plangraphics.com. PlanGraphics is a holding company engaged in full life-cycle systems integration and implementation providing a broad range of services in the design and implementation of information technology related to spatial information management in the public and commercial sectors.

ROADMAP TO THE TRANSACTIONS

The following is an explanation of all the transactions related to and of which the proposals described in this information statement/prospectus are a part:

•         Integrated Freight Systems has acquired 401,559,467 shares, or 80.2 percent, of PlanGraphics issued and outstanding common stock.

•         Integrated Freight Systems will approve a reverse stock split in a ratio of one share for each 244.8598 shares outstanding, with the result that PlanGraphics stockholders other than Integrated Freight Systems will own 404,961 shares and Integrated Freight Systems will own 1,639,716 shares.

•         PlanGraphics will transfer all of its assets to PGI, its wholly owned subsidiary, which will assume essentially all of PlanGraphics liabilities, and Integrated Freight Systems will issue 177,170 shares of its common stock to PGI. Integrated Freight Systems will issue 134,852 shares of its common stock in payment of other liabilities of PlanGraphics that are owed principally to John C. Antenucci and Frederick G. Beisser for accrued compensation. The shares Integrated Freight Systems issues to PGI, Mr. Antenucci and Mr. Beisser will be accompanied by an equal number of common stock purchase warrants exercisable at a price of $0.50 for two years.

 •      Integrated Freight Systems will approve the sale of PGI to Mr. Antenucci.

 •         Integrated Freight Systems will approve the plan of merger described below pursuant to which PlanGraphics will be merged into Integrated Freight Systems, and cease to exist as a separate corporation.

•         In the merger, the 404,961 issued and outstanding shares of PlanGraphics owned by stockholders other than Integrated Freight Systems will be converted automatically into 404,961 shares of Integrated Freight Systems and the issued and outstanding shares of PlanGraphics owned by Integrated Freight Systems will become treasury shares and be cancelled. In addition, Integrated Freight Systems will issue 404,961 non-transferable common stock purchase warrants to the former stockholders of PlanGraphics, excluding itself. The warrants will exercisable at a price of $0.50 per share for two years.

•         Integrated Freight Systems will succeed to PlanGraphics' registration under Section 12(g) of the Securities Exchange Act of 1934.

In furtherance of the transactions outlined above, and to comply with the requirements of the Colorado Business Corporation Act, Integrated Freight Systems, as the majority stockholder of PlanGraphics, plans to approve by written consent the proposals set forth in the Notice to PlanGraphics Stockholder on the cover page. This approval will occur twenty days following the mailing of this information statement/prospectus to PlanGraphics stockholders.

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Integrated Freight Systems believes that the transactions described above are in the best interest of PlanGraphics stockholders and its own stockholders. Integrated Freight Systems believes these transactions are essential to the achievement of greater market value per share than would be possible if PlanGraphics were to continue in its current business. PlanGraphics has advised that payment of cash for redemption of the preferred stock, as described below, would not have been possible, and the failure to redeem upon request would have caused PlanGraphics to be in default on this senior security and would have forced PlanGraphics to seek reorganization or liquidation in bankruptcy. Revenues from PlanGraphics continuing operations have been insufficient to sustain both the costs of its operations and the costs associated with being a registered and publicly traded company.

DISSENTER'S RIGHTS

PlanGraphics is incorporated in Colorado. PlanGraphics’ stockholders do not have dissenter’s rights arising from PlanGraphics’ planned merger into Integrated Freight Systems, under §7-113-102 of the Colorado Business Corporation Act because PlanGraphics has more than two thousand stockholders of record now and is expected to have at least two thousand stockholders of record on the date the action by written consent is to be taken by Integrated Freight Systems.

PERSONS WHO HAVE AN INTEREST IN THE MATTERS TO BE ACTED UPON

John C. Antenucci is now PlanGraphics’ sole director and its chief executive officer, but as a result of the merger he will hold no positions with the surviving company – Integrated Freight Systems. Mr. Antenucci has an interest in approval of the sale of PGI to him, as a result of which he will be the sole stockholder of PGI. As a result of this sale, PlanGraphics will cease to be in its current business. In satisfaction of deferred compensation due from PlanGraphics, Mr. Antenucci will also receive 59,327 shares of common stock and 59,327 common stock purchase warrants from Integrated Freight Systems in a transaction related to his purchase of PGI. The common stock purchase warrants will be exercisable for a two year period at a price of $0.50 per share. Mr. Antenucci’s vote as a director and as a stockholder is not required for approval of the sale of PGI to him, however, his approval is indicated by his agreement to purchase PGI and to enter into the other transactions described in this information statement/prospectus.

PLANGRAPHICS' VOTING SECURITIES AND PRINCIPAL STOCKHOLDERS

PlanGraphics’ issued and outstanding common stock is the only security it has that is entitled to vote or give consents on the proposals made by Integrated Freight Systems. PlanGraphics has 500,718,173 shares issued and outstanding on the date of this information statement/prospectus. Integrated Freight Systems believes that PlanGraphics does not intend to issue any additional shares prior to the date the action by written consent is to be taken by Integrated Freight Systems.

A vote in favor of or consent to the actions described in this information statement by a majority of the issued and outstanding shares of common stock is required for approval of these actions. Integrated Freight Systems owns 401,599,467 shares, or 80.2 percent, of PlanGraphics issued and outstanding common stock. Integrated Freight Systems is able and intends to approve the actions described in this information statement/prospectus without the vote or consent of any other holder of common stock. Integrated Freight Systems has proposed these actions and will give its consent in approval of them.

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The following table identifies PlanGraphics’ principal stockholders, who include:

- each of PlanGraphics’ directors and executive officers,

- PlanGraphics’ directors and executive officers as a group, and

- others who own more than five percent of PlanGraphics’ common stock.

We believe each of these persons has sole voting and investment power over the shares they own, except as noted. The address of PlanGraphics’ directors and executive officers is PlanGraphics’ address.

	Number of Shares
Name	Before Reverse Split	After Reverse Split		Percent
John C. Antenucci, PlanGraphics’ sole director and chief executive officer	12,655,025	51,683	(1)	2.53	%
Frederick G. Beisser, PlanGraphics’ chief financial officer	1,479,900	6,044	(2)	*	%
Directors & executive officers as a group (2 persons)	14,134,925	57,727		2.82	%
Integrated Freight Systems, Inc.	401,599,467	1,640,120		80.20	%
Suite 200, 6271 Business Boulevard, Sarasota, FL 34240

* Less than one percent.

(1)   The pre and post-split number of shares includes 6,610,790 shares of common stock issuable pursuant to the exercise of options and 205,000 shares of common stock owned by Mr. Antenucci's spouse and minor child, for which he is deemed to be a beneficial owner. This table does not include shares of Integrated Freight Systems to be issued to Mr. Antenucci in transactions described in this information statement/prospectus.

(2)   The pre and post-split number of shares includes 1,000,000 shares of common stock issuable pursuant to the exercise of options. This table does not include shares of Integrated Freight Systems to be issued to Mr. Beisser in transactions described in this information statement/prospectus.

PlanGraphics board of directors is not taking a position on any of the transactions that will be approved solely by Integrated Freight Systems acting as PlanGraphics controlling stockholder. Mr. Antenucci, in his capacity of the sole director of PlanGraphics, is not a disinterested party with respect to the sale of PGI to him.

INTEGRATED FREIGHT SYSTEMS' RECENT PURCHASE OF CONTROL OF PLANGRAPHICS

Integrated Freight Systems effectively acquired 401,599,467 shares of PlanGraphics’ common stock which now owns on May 18, 2009 by purchase and redemption of 500 shares of PlanGraphics’ preferred stock. PlanGraphics sold the preferred stock to Nutmeg/Fortuna Fund LLLP as described below. Integrated Freight Systems paid Nutmeg/Fortuna $167,000 in the form of its one-year promissory note and 1,307,822 shares of its common stock. As issued, PlanGraphics’ preferred stock, which was non-voting, was redeemable only for cash and not redeemable for common stock. Nutmeg/Fortuna made a request for redemption of the preferred stock, which PlanGraphics was obligated to honor by payment of cash for the principal amount of $500,000 plus accrued and unpaid dividends of $162,573.12 within sixty days following receipt of the request. Nutmeg/Fortuna Fund offered to accept shares of PlanGraphics common stock in lieu of cash, provided that the redemption could be made only by its transferee, which was to be Integrated Freight Systems. PlanGraphics issued its common stock in redemption of the preferred stock on June 2, 2009, resulting in Integrated Freight Systems acquiring control of PlanGraphics. Integrated Freight Systems has made the proposals described in the Notice to PlanGraphics Stockholders to complete several conditions subsequent to Integrated Freight Systems’ purchase and redemption of PlanGraphics’ preferred stock.

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EVENTS LEADING TO INTEGRATED FREIGHT SYSTEMS’ PURCHASE OF CONTROL OF PLANGRAPHICS

PlanGraphics, its clients and primary market were detrimentally impacted by the attacks of September 11, 2001. Though work with a major customer continued during the response to the 9/11 attack and the ensuing recovery operations, the customer fell seriously behind in its payments to PlanGraphics, peaking in excess of at $2.5 million; the payments in arrears not being satisfied until December, 2003. The relatively limited working capital remaining after a previous rights offering was insufficient to sustain PlanGraphics while awaiting payment for the overdue amounts. As a consequence PlanGraphics was seriously stressed financially. The stress caused significant delays in meeting payroll and subcontractor payments, caused attrition among the professional and technical staff, required reduction of previous significant levels of sales and marketing activities and generated concerns in the market regarding PlanGraphics ability to service customers. PlanGraphics has not been able to recover from the stress point that caused constrained cash flows, delays in payroll and expense reimbursements.

As disclosed in its SEC filings, PlanGraphics retained the assistance of third party consultants and investment bankers beginning in 2001 and through 2007, seeking ways to create value for its stockholders through strategic initiatives or the sale to or merger of all or part of its organization with a third party. Discussions and negotiation with multiple firms were held during the intervening time period without success. To obtain relief from constrained cash flow exacerbated by increased cost of regulatory compliance, PlanGraphics sold 500 shares of mandatory redeemable preferred stock with a twelve percent cumulative dividend and a warrant exercisable for eighty percent of PlanGraphics’ common shares, among other terms, to the Nutmeg Group and its managed funds of Northbridge, Illinois for $500,000 on August 21, 2006. Nutmeg failed to exercise its control warrant before its expiration.

Even though PlanGraphics was unable to repay the preferred stock by February 17, 2007, Nutmeg did not request redemption as it was permitted to do. With the onset of the economic downturn and its impact on PlanGraphics' primary customer base of state and local governments, it became increasingly difficult to generate sufficient cash flow to meet the costs of PlanGraphics associated with its obligations to file reports with the SEC. In January 2009, PlanGraphics borrowed $30,000 from Nutmeg Group’s associated fund on a convertible debenture note for the purpose of paying its outside auditor for previous work and to initiate the review of its first quarter report on Form 10-Q. The debenture is convertible by the lender into common shares of PlanGraphics. PlanGraphics has been unable to pay the debenture according to its terms. PGI will assume the debenture in the transactions involving Integrated Freight Systems described in this information statement/prospectus.

In February 2009, Nutmeg Group introduced PlanGraphics to Integrated Freight Systems with the objective of creating a transaction that would both benefit Integrated Freight Systems and achieve greater value for the Nutmeg Group’s associated fund’s investment, together with all stockholders, in PlanGraphics. Negotiations among the parties has culminated in agreements for the transactions described in this information statement/prospectus. Nutmeg Group’s associated fund holding the preferred stock submitted a redemption request on May 15, 2009 for the cash redemption of the $500,000 principal of, plus accrued and unpaid dividends on, the preferred stock. The redemption request included an offer for redemption of the preferred stock and accrued and unpaid dividends by the issuance of PlanGraphics’ common stock, the number of shares to be determined by dividing the redemption amount by $0.0016, which represented the per share volume weighted average of the highest and lowest closing prices for the PlanGraphics’ common stock published by OTC Bulletin Board for the period of February 15 to April 15, 2009. This offer was preconditioned on the sale of the preferred stock to Integrated Freight Systems. Being unable to redeem the preferred stock for cash now or in the foreseeable future, if ever, PlanGraphics accepted the offer to redeem the preferred stock through the issuance of 401,599,467 shares of common stock to Integrated Freight Systems, subsequent to the Nutmeg Group’s associated fund’s sale of the preferred stock to Integrated Freight Systems.

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EXPLANATION OF PROPOSALS TO BE APPROVED BY INTEGRATED FREIGHT SYSTEMS

PROPOSAL NO. 1.

A reverse split of PlanGraphics’ issued and outstanding common stock in a ratio of one to 244.8598.

The resolution to be approved by Integrated Freight Systems will cause a reduction in the 500,781,173 issued and outstanding shares of PlanGraphics to 2,044,918, subject to rounding up of each fractional share held by any stockholder to the next whole share. Holders of PlanGraphics common stock other than Integrated Freight Systems will hold 404,961 shares, subject to rounding up. The par value of the common stock and the total number of authorized shares will not be changed. All holders of common stock will be treated equally, nor will articles of amendment be required.

As noted above, Integrated Freight Systems believes the transactions described in this information statement/prospectus will increase stockholder value. Prior to the acquisition of PlanGraphics common stock by Integrated Freight Systems, all of PlanGraphics’ 99,158,706 shares of common stock had the following aggregate public market value:

$0.0024	High price within the sixty day period prior to redemption	$237,981
$0.0017	Weighted average price within the sixty day period prior to redemption		$168,570
$0.0012	Price at May 29, 2009	$118,990

The post split value of the 404,961 shares held by PlanGraphics stockholders other than Integrated Freight Systems will have a post split equivalent market price of $0.57 per share. Following the merger described below, these stockholders will own two percent of Integrated Freight Systems and hold warrants entitling them to purchase 404,961 shares of Integrated Freight Systems’ common stock at a price of $0.50 per share for two years. Integrated Freight Systems believes that its operating performance will be better than PlanGraphics has achieved and could be expected to achieve in the foreseeable future. The reverse split is essential to completion of Integrated Freight Systems’ plan to become a registered, publicly traded company and provide greater value to all of its stockholders. There is, however, no assurance that the public market price for Integrated Freight Systems’ common stock will equal or exceed $0.57 per share.

Integrated Freight Systems has considered certain negative factors often associated with a reverse stock split. These factors included the negative perception of reverse stock splits held by some investors, analysts and other stock market participants; the fact that the stock price of some companies that have effected reverse stock splits has subsequently declined back to pre-reverse stock split levels; the adverse effect on liquidity that might be caused by a reduced number of shares outstanding and in the public float; and costs that may be associated with implementing a reverse stock split. Integrated Freight Systems believes that replacement of PlanGraphics’ business with the entirely new business of Integrated Freights Systems will partially or fully overcome these negative perceptions.

The effective date of the reverse split will be the date of approval by Integrated Freight Systems. At the effective date of the reverse split, the holders of record of PlanGraphics’ common stock would normally be able to exchange their old share certificates for share certificates representing the new number of shares resulting from the reverse split. New stock certificates for PlanGraphics will not be printed, however, and the exchange will be deferred until after the merger of PlanGraphics into Integrated Freight Systems, described in Proposal No. 3, below.

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PROPOSAL NO. 2.

The sale of PlanGraphics’ operating subsidiary, PlanGraphics, Inc., a Maryland corporation, (PGI) to John C. Antenucci, PlanGraphics’ director and chief executive officer.

The resolution to be approved by Integrated Freight Systems will authorize the sale of PGI to Mr. Antenucci. PlanGraphics conducts all of its operations in PGI, which is also named PlanGraphics, Inc. The following are elements of the transfer of assets and sale of PGI to Mr. Antenucci.

• PlanGraphics will transfer all of its assets to PGI, excluding the stock PlanGraphics owns in PGI.

• PGI will assume all of PlanGraphics’ debts and obligations, excluding $28,000 in auditing fees.

• PlanGraphics will sell the stock of PGI to Mr. Antenucci.

• Mr. Antenucci will pay for the stock of PGI by (1) relieving PlanGraphics from its obligation to make severance payments and forego any claim associated with the obligation pursuant to Mr. Antenucci’s Executive Employment Agreement, and (2) voluntarily terminating his Executive Employment Agreement.

Transactions related to the sale of PGI to Mr. Antenucci are as follows:

• PGI will release PlanGraphics from all inter company loans and obligations in exchange for 177,170 shares of Integrated Freight Systems common stock and an equal number of common stock purchase warrants, exercisable for two years at a price of $0.50 per share.

• Mr. Antenucci will release PlanGraphics from its obligation to pay deferred amounts and reimbursements and forego any claims associated therewith in exchange for 59,327 shares of Integrated Freight Systems common stock, an equal number of common stock purchase warrants, exercisable for two years at a price of $0.50 per share, and PGI maintaining tail coverage for three years under its directors and officers liability insurance.

• Mr. Beisser will release PlanGraphics from all severance payments pursuant to his Executive Employment Agreement in exchange for 75,525 shares of Integrated Freight Systems common stock, an equal number of common stock purchase warrants, exercisable for two years at a price of $0.50 per share, and PGI maintaining tail coverage for three years under its directors and officers liability insurance.

• PGI, Mr. Antenucci and Mr. Beisser will each enter into lockup and leak-out agreement with Integrated Freight Systems limiting the resale of its common stock into the public securities market. See “Description of Our Common Stock – Lockup – Leak-out Agreements”.

The sale of PGI is an integral part of Integrated Freight Systems' plan to utilize PlanGraphics’ registration under Section 12(g) the Securities Exchange Act of 1934 as its vehicle to achieve its own registration under that act by succession to PlanGraphics’ registration and to obtain a public stockholder base with an existing public market. Integrated Freight Systems is engaged in the acquisition and operation of motor freight companies. Integrated Freight Systems does not want to be engaged in the business currently conducted by PlanGraphics. That current business has demonstrated, in the view of Integrated Freight Systems and PlanGraphics’ management, that it is not a suitable business, as it has been and will be conducted, for a registered, publicly traded company. Integrated Freight Systems believes the sale of PGI is in the best interest of PlanGraphics’ existing stockholders and its own stockholders because the sale, among other things described in this information statement/prospectus, eliminates PlanGraphics liabilities and obligations under executive employment agreements and essentially all other liabilities.

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PROPOSAL NO. 3.

PlanGraphics’ merger into Integrated Freight Systems.

The resolution to be approved by Integrated Freight Systems will authorize the merger of PlanGraphics into Integrated Freight Systems, with the following outcome:

• The 404,961 shares of PlanGraphics common stock held by stockholders other than Integrated Freight Systems will be automatically converted into 404,961 shares, or two percent, of Integrated Freight Systems common stock subject to round up of fractional shares.

• Integrated Freight Systems will simultaneous issue 404,961 non transferable common stock purchase warrants, one warrant for each share, to the former stockholders of PlanGraphics other than Integrated Freight Systems, each warrant exercisable for the purchase of one share of Integrated Freight Systems’ common stock at a price of $0.50 within two years.

• The 401,559,467 shares of PlanGraphics owned by Integrated Freight Systems will become treasury stock and be cancelled.

• Integrated Freight Systems will be the surviving corporation in the merger.

• PlanGraphics will be the disappearing corporation in the merger.

• The rights of PlanGraphics stockholders and the obligations and duties to them of the corporation in which they own stock following the merger will be governed by the Florida Business Corporations Act and not the Colorado Business Corporations Act.

• Value of the shares the PlanGraphics stockholders continue to hold as converted into Integrated Freight Systems will depend on the operating performance of and other factors related to its business in motor freight transportation and not PlanGraphics’ current business.

• Integrated Freight Systems will apply to FINRA for a new trading symbol, which will be publicly announced immediately following issuance.

• Integrated Freight Systems will commence filing reports pursuant to §13 of the Securities Exchange Act of 1934, as the successor to PlanGraphics’ registration.

The effective date of the merger will be the date on which articles of merger are filed in Colorado by PlanGraphics and in Florida by Integrated Freight Systems which is expected to occur simultaneously following the approval of the merger by written consent of Integrated Freight Systems. Immediately following the effective date of the merger, at a date to be announced, the holders of record of PlanGraphics’ common stock will be able to exchange their old PlanGraphics share certificates for Integrated Freight Systems share certificates representing the new number of shares ensuing from the reverse split and the merger.

NO MERGER AGREEMENT

No parties have entered into an agreement for the merger of PlanGraphics into Integrated Freight Systems. The merger will be a statutory merger under Colorado and Florida corporation law which Integrated Freight Systems will undertake by virtue of its controlling interest in PlanGraphics. A vote of Integrated Freight Systems’ stockholders under the Florida Business Corporation Act is not required because Integrated Freight Systems owns more than eighty percent of the voting securities of PlanGraphics. However, a vote or approval of PlanGraphics’ stockholders is required by the Colorado Business Corporation Act because Integrated Freight owns less than ninety percent of PlanGraphics voting securities.

ACCOUNTING AND TAX MATTERS

The merger of PlanGraphics into Integrated Freight will be treated under generally accepted accounting principles as a purchase of PlanGraphics by Integrated Freight Systems. The existing operations of PlanGraphics will be accounted for as discontinued operations.

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Reverse Stock Split

The reverse split is intended to qualify as a tax free reorganization under §354 as described in §368(a)(1)(E), a “recapitalization”, of the Internal Revenue Code of 1986. The receipt of the new common stock ensuing from the reverse split, solely in exchange for the old common stock held prior to the reverse split is not expected to result in recognition of gain or loss to the stockholders. The aggregate tax basis of the post-split shares received in the reverse split (including any fraction of a new share deemed to have been received) will be the same as the stockholder’s aggregate tax basis in the pre-split shares. The holding period of the shares of common stock to be received in the reverse split will generally include the holding period of the pre-split shares.

Merger of PlanGraphics into Integrated Freight Systems

The merger is intended to qualify as a tax free reorganization pursuant to §354 as described in §368(a)(1)(A), a “statutory merger”, of the Internal Revenue Code of 1986. Neither Integrated Freight Systems nor PlanGraphics is expected to recognize any gain or loss in connection with the merger. The receipt of the new common stock of Integrated Freight Systems ensuing from the merger by PlanGraphics stockholders, solely in exchange for the old common stock of PlanGraphics held prior to the merger is not expected to result in recognition of gain or loss to the stockholders. The aggregate tax basis of the post-merger shares received in the merger will be the same as the stockholder’s aggregate tax basis in the pre-merger shares. The holding period of the shares of common stock to be received in the merger will generally include the holding period of the pre-merger shares.

The IRS may not agree with this tax treatment

No party has obtained a legal opinion regarding the federal income tax treatment of either the reverse stock split or the merger, nor has a ruling by the Internal Revenue Service been obtained. These views regarding the tax consequences of the reverse split and the merger are not binding upon the Internal Revenue Service or the courts, and there is no assurance that the Internal Revenue Service or the courts would accept the positions expressed above. The state and local tax consequences of the reverse split and the merger may vary significantly as to each stockholder, depending on the state in which such stockholder resides. Each PlanGraphics stockholder is encouraged to seek his or her own tax advice.

COMPARISON OF STOCKHOLDER RIGHTS

The rights of stockholders under the Colorado Business Corporation Act and under the Florida Business Corporation Act are equivalent.

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DOCUMENTS INCORPORATED BY REFERENCE AND WHERE YOU CAN FIND THEM

PlanGraphics files reports with the U.S. Securities and Exchange Commission pursuant to Section 13 of the Securities Exchange Act of 1934. PlanGraphics’ annual report on Form 10-KSB for the year ended September 30, 2008, quarterly report on Form 10-Q for the six month period ended March 31, 2009, reports on Form 8-K filed on May 18, 2009 and on June 1, 2009 and all reports files subsequently thereto are incorporated herein by reference.

You may read and copy any reports and other materials filed by PlanGraphics with the SEC at the SEC’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 SEC at 1-800-SEC-0330. The SEC maintains an Internet site at which you may obtain all reports, proxy and information statements, and other information regarding PlanGraphics that it files with the SEC. The address of that web site is http://www.sec.gov. The above information is also available at www.plangaphics.com.

PlanGraphics’ existing operations will be discontinued as a result of the transfer of all of PlanGraphics' assets to PGI and the sale of PGI to Mr. Antenucci as described in “Roadmap to the Transactions” and elsewhere in this information statement/prospectus. Therefore information regarding those operations to be discontinued is deemed to be not material to the operations of  Integrated Freight Systems following the merger of PlanGraphics into it and to the investment decision regarding the proposed merger, which Integrated Freight System has made.

INFORMATION ABOUT INTEGRATED FREIGHT SYSTEMS

In the remainder of this information statement/prospectus, “we”, “our” and “us" refer to Integrated Freight Systems and includes our wholly owned subsidiaries, Morris Transportation and Smith Systems Transportation.

SUMMARIES OF REFERENCED DOCUMENTS

This information statement/prospectus contains references to, summaries of and selected information from agreements and other documents. These agreements and documents are filed as exhibits to the registration statement of which this information statement/prospectus is a part. The summaries of and selected information from those agreements and other documents are qualified in their entirely by the full text of the agreements and documents, which you may obtain from the Public Reference Section of or online from the U.S. Securities and Exchange Commission. See “Where You Can Find Additional Information About Us And Exhibits” for instructions as to how to access and obtain this information. Whenever we make reference in this information statement/prospectus to any of our contracts, agreements or other documents, the references are not necessarily complete and you should refer to the exhibits attached to the registration statement of which this information statement/prospectus is a part for copies of the actual contract, agreement or other document.

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FORWARD-LOOKING STATEMENTS

This information statement/prospectus contains forward-looking statements that involve risks and uncertainties. We may, in some cases, use words such as “project,” “believe,” “anticipate,” “plan,” “expect,” “estimate,” “intend,” “should,” “would,” “could,” “will,” or “may,” or other such words and use verbs in the future tense that convey 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. These important factors include those that we discuss in this information statement/prospectus under the caption “Risk Factors”, as well as elsewhere in this information statement/prospectus. You should read these factors and the other cautionary statements made in this information statement/prospectus as being applicable to all related forward-looking statements wherever they appear in this information statement/prospectus. 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.

INTEGRATED FREIGHT SYSTEMS DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION

Results of Operations and four month period ended December 31, 2008

                For the four month period ended December 31, 2008, our pro forma consolidated results of operations reflect the inception period from the date of acquisition of our operating subsidiaries beginning on September 1 through December 31, 2008.

• Revenues were $6,586,581  

• Net loss was $(619,574)

• Net loss per diluted share was $(0.05)

                Our industry has been facing significant challenges due to weak demand for transportation and pricing competition.

                 During this period, price competition has remained intense during the quarter, and we have experienced a high level of bid activity in the quarter.  This activity has now tapered off to a more normal pace.   While we do not underestimate the pricing challenges ahead of us, we believe our model provides us with the flexibility to respond appropriately in this environment.

Results of Operations for four month period ended December 31, 2008

Revenues	$      6,586,581
Operating Expenses	6,986,729
Income before other operating expenses	(400,148)
Interest and other (expenses)/income net	(213,830)
Minority interest in subsidiary	(5,596)
Net loss to shareholders net of minority interest in subsidiary	(619,574)
Weighted average shares outstanding	11,673,176
Net loss per fully diluted share	$            (0.05)

Liquidity and Capital Resources

                 The growth of our business will continue to require, a significant investment in new revenue equipment.  Our primary source of liquidity in the near term will be funds provided by investment and limited internally generated cash flow.

                  We generated significant cash flow from operations during the first quarter of 2008.  Net cash provided by operating activities was $513,845. Depreciation and amortization accounted for $748,794 of non cash expenses. Net cash provided by investment activities was $673,028.

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                    Net cash used in financing activities was approximately $1.14 million for the four months ended December 31, 2008.  The decrease in cash used in financing activities is primarily due to repayment of long term debt.

                     Shareholder equity for the consolidated companies was $683,417.  

                      We will continue to have significant capital requirements over the long-term, which may require us to incur debt or seek additional equity capital.  The availability of additional capital will depend upon prevailing market conditions, the market price of our common stock, and several other factors over which we have limited control, as well as our financial condition and results of operations.  Nevertheless, based on our recent operating results, current cash position, anticipated future cash flows, and sources of financing that we expect will be available to us, we do not expect that we will experience any significant liquidity constraints in the foreseeable future.

Critical Accounting Policies and Estimates

                    The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America 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.  Management bases its estimates on historical experience and various other assumptions believed to be reasonable.  Although these estimates are based on management's best knowledge of current events and actions that may impact us in the future, actual results may differ from these estimates and assumptions.  Our critical accounting policies are those that affect, or could affect our financial statements materially and involve a significant level of judgment by management.  The accounting policies we deem most critical to us include, revenue recognition, depreciation, claims accrual, accounting for income taxes and share based payments.  There have been no significant changes to our critical accounting policies and estimates during the four months ended December 31, 2008.

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Controls and Procedures 

Regulation S-K - Item 4T CONTROLS AND PROCEDURES

307 – Disclosure controls and procedures: As of the quarter ended December 31, 2008, we did not carry out an evaluation of the effectiveness of our disclosure controls and procedures, with the participation of our principal executive and principal financial officers, because we were not a registered company at that time. 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.” If we had undertaken such evaluation, our president/chief executive officer would have concluded that, as of December 31, 2009, such disclosure controls and procedures were not effective. We did not have a chief financial officer at that date.

308T(b) – Changes in internal control over financial reporting: We did not have any nor did we adopt or make any changes to internal control over financial reporting during the quarter ended December 31, 2009.

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 adopted, 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.

RISK FACTORS

In addition to the forward-looking statements outlined previously in this information statement/prospectus 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. The following risk factors do not include factors or risks which apply to or may be experienced by motor freight companies in general or which arise or result from general economic conditions.

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The terms of our amended secured acquisition notes enable the stockholders of the acquired companies to recover their companies if we default on our obligations.

The amended promissory notes we have given to the purchase both of our subsidiary companies we have acquired are secured by a pledge of the stock in the acquired companies. In the event of our breach of the promissory notes, the persons from whom we acquired the companies may realize on the collateral and recover their ownership of our subsidiary companies. Our breach of the promissory notes and the resulting loss of our operating subsidiaries would have a material adverse effect on our business. If this were to occur, we would have either a material reduction in our business or we would not have any business. Events of default include:

• Failure to make timely payments on the amended notes and other amounts;

• Failure to refinance certain equipment loans such that personal guaranties are eliminated; and

• Failure to achieve a public market for our common stock; and

• Performance of other obligations.

The time period after which each of the foregoing events of default become defaults are subject to extension by mutual agreement between the persons from whom we have acquired the companies and us. There is no assurance we will be able to prevent one or more of these events of default from occurring. See “Our Business – Terms of Our Acquisitions”.

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, 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. 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.

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.

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.

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Our management owns more than 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 will control 62.05 percent and 58.19 percent, respectively before and after the merger and including the issue of 600,000 shares to one of our directors and officers in the event of conversion of a secured promissory note, of our issued and outstanding common stock following the completion of the merger with PlanGraphics described in this information statement/prospectus. 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. Outside, 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.

Our business is capital intensive, involving the frequent purchase of new power units and trailers. In addition, we have issued and expect to continue issuing promissory notes for the cost of 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. If any of the financial institutions that have extended credit commitments to us are or continue to be adversely affected by current economic conditions and disruption to the capital and credit markets, they may become unable to fund borrowings under their credit commitments or otherwise fulfill their obligations to us, which could have a material and adverse impact on our financial condition and our ability to borrow additional funds, if needed, for working capital, capital expenditures, acquisitions and other corporate purposes.

We derive twenty-five 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 period ended December 31, 2008, our top four customers, based on revenue, accounted for approximately twenty-five 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”.

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 is a material portion of our existing 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.

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The Environmental Protection Agency has issued regulations that require progressive reductions in exhaust emissions from diesel engines through 2010. These regulations are expected to result in higher prices for power units and increased fuel and maintenance costs, and there is no assurance that continued increases in pricing or costs will not have an adverse effect on our business and operations.

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 company we acquire will have its own information management system with which its employees are acquainted. None of these systems may be adequate to our consolidated operations and may not be compatible with a 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.

Increases in driver compensation or difficulty in attracting drivers could affect our profitability and ability to grow.

In recent years, the transportation industry has experienced substantial difficulty 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. In addition, due in part to current economic conditions, including the cost of fuel and insurance, the available pool of independent contractor drivers is smaller than it has been historically. 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-utilize our fleet and difficulty in meeting shipper demands. If we encounter difficulty in attracting or retaining qualified drivers, our ability to service our customers and increase our revenue could be adversely affected.

Interest Rate Risk

We are subject to interest rare risk to the extent we borrow against our line of credit or incur debt in the acquisition of revenue equipment or otherwise. We attempt to manage our interest rate risk by managing the amount of debt we carry. We did not have any debt outstanding at March 31, 2009, and therefore had no market risk related to debt.

Commodity Price Risk

We also are subject to commodity price risk with respect to purchases of fuel. The price and availability of diesel fuel can fluctuate due to market factors that are beyond our control. We believe fuel surcharges are effective at mitigating most, but not all, of the risk of high fuel prices because we do not recover the full amount of fuel price increases. As of December 31, 2008, we did not have any derivative financial instruments to reduce our exposure to fuel price fluctuations.

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

Trading in our securities is expected to be subject, at least initially, to the "penny stock" rules. The SEC has adopted regulations that generally define a penny stock to be any equity security that has a market price of less than $4.00 per share, subject to certain exceptions, none of which apply to our common stock. These rules require that a broker-dealer who recommends our common stock to persons other than its existing customers and accredited investors, must, prior to the sale:

• Make a suitability determination prior to selling a penny stock to the purchaser;

• Receive the purchaser's written consent to the transaction;

• Provide certain written disclosures to the purchaser;

• Deliver a disclosure schedule explaining the penny stock market and the risks associated with trading in the penny stock market;

• Disclose commissions payable to both the broker-dealer and the registered representative; and

• Disclose current quotations for the common stock.

The additional burdens imposed upon broker-dealers by these requirements may discourage broker-dealers from effecting transactions in our common stock, which could severely limit the market price and liquidity of our common stock. These requirements may restrict the ability of broker-dealers to sell our common stock and may affect your ability to resell our common stock.

OUR CORPORATE HISTORY AND ORGANIZATION

We were incorporated in Florida on May 13, 2008 by Paul A. Henley, our founder, a director and our chief executive officer. We intend to change our name to Integrated Freight Corporation before the completion of the merger with PlanGraphics, described above.

Mr. Henley founded us for the purpose of acquiring one or more operating motor freight companies. We acquired our existing business in the fall of 2008 by purchase of two, well established motor freight carriers. The following table presents information about these acquisitions.

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

               We are operating these subsidiaries as independent companies under the management of their founders and stockholders from whom we purchased them. We expect this management arrangement to continue while we gradually combine and consolidate the elements of their operations that are duplicative.

The address of our executive offices is Suite 200, 6371 Business Boulevard, Sarasota, Florida 34240 and our telephone number at that address is 941-545-7800. We do not have a web site.

OUR BUSINESS

Overview

We are a small motor freight company providing truck load service primarily in two markets in the mid-West United States. We do not specialize in any specific types of freight or commodities. We carry dry freight, refrigerated freight and hazmat and hazwaste (hazardous materials and waste). We provide long-haul, regional and local service to our customers.

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Our Strategy

Truck transportation in general has suffered during the current economic recession. Over 3,000 trucking companies are believed to have ceased operations in 2008. We believe the trucking companies that have survived in the current 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. Many of them will not survive longer without debt and equity funding and cost reductions which they are unlikely to obtain individually. When our economy recovers, we believe that the demand for truck transportation services will return to pre recession levels, with an initially inadequate supply of trucks to meet demand. When the economic recovery occurs, which we cannot predict, we believe we will be well positioned 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 our service offerings through acquisitions into logistics, brokering, less than a load and expedite/just-in-time services, as opportunities are presented to us.

We believe that we can achieve savings in operating costs by centralizing certain common functions of our subsidiaries, such as fuel and tire purchasing, billing and collections, dispatching, maintenance scheduling and other functions. 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. 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, management believes that it will continue to realize increased cost and productivity improvements.

The following map displays information about our most traveled lanes.

Our Customers and Marketing

We serve approximately 175 customers on a regular basis. The following table presents information regarding our relationship with our customers. 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 25%
All other customers	75% 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

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Ninety-eight percent of the freight we haul is dry van freight. The following table presents information regarding the approximate percentage makeup of the freight we haul.

Forest and paper products 38%

Hazmat and hazwaste	39%
All other freight (freight of all kinds – FAK)	23%

Marketing

Mr. Morris, Mr. Smith and one sales person specializing in hazmat and hazwaste constitute our sales and marketing force. 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 there is no assurance, we plan to establish a central marketing group that will support the sales and customer service efforts of each subsidiary.

Our People

We believe our employees are our most important asset. The following table presents information about our employees.

Drivers - company	75
Drivers – independent contract*	48
Platform and warehouse	2
Fleet technicians	6
Dispatch	6
Sales	1
Office	3
Administrative and Executive	5

*This is an average number. The number of our contract drivers, who typically own or lease from third parties the tractors they drive, varies depending on our needs. The maximum number of contract drivers we employed during 2008 was a medium of forty-six, with a variance of plus or minus three.

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 all employees.

Our Drivers

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 violation in the previous thirty-six months and comply with all requirements of employment by federal Department of Transportation and applicable state laws.

As of December 31, 2008, seven of our drivers have driven more than one million miles two of our drivers have driven more than two million miles for us without a preventable accident.

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.

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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 thirty percent, compared to an industry average of sixty percent.

Our Operations

We currently conduct all of our freight transportation operations, including dispatch and accounting functions, from the headquarters facilities of our operating subsidiaries, using different information management systems and personnel that were employed when acquired our operating subsidiaries. These arrangements produce many overlaps and duplications in facilities, office systems and personnel. We believe that these operating arrangements provide less than optimal results. We intend 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.

Our Revenue Equipment

The following table presents information regarding our revenue producing equipment.

Power units (tractors) – sleeper		86
Power units (tractors) – day cab		2
Trailers
	Flatbed	6
	Dry van	329
	Refrigerated	30
	Other specialized	9
	Tanker	9

The average age of our power units is approximately 3.2 years. All of our power units are GPS equipped. The majority of our power units are Freightliner vehicles. This uniformity allows for reduced inventory of parts required by our maintenance departments. In addition, the training required for our technicians is greater focused on a primary product line. We replace our power units at approximately four years of age. The average age of our trailers is approximately 3.3 years for general freight and twelve years (as needed) for hazmat and hazwaste which may sit idle for extended periods of time. 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 anticipate 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 2008, over eighty-five percent of our fuel purchases were made at contracted locations. 

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To help further reduce fuel consumption, we began installing auxiliary power units in our tractors during 2007.  These units reduce fuel consumption by providing quiet climate control and electrical power for our drivers without idling the tractor engine.  We anticipate having these units installed in approximately ninety-six percent of our company-owned fleet by December 31, 2009.

Our cost-cutting measures include utilizing technology such as Peoplenet and carrierweb to monitor travel speed/idling/rpms/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 are needed.

We further manage our exposure to changes in fuel prices through fuel surcharge programs with our customers and other measures that we have implemented.  We have historically been able 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 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. As of December 31, 2008, we had no derivative financial instruments to reduce our exposure to fuel price fluctuations.

Our Support Properties

Our corporate headquarters office is located in Sarasota, Florida. This is a single office within a larger office suite in which we have access to reception, conference room and other services as needed. We pay $600 per month in rent on an annual lease contract expiring within three months. We believe this facility will not be adequate for our needs within six months.

The headquarters of our operating subsidiaries are located in Hamburg, Arkansas and Scotts Bluff, Nebraska. The following table presents information regarding these facilities.

Location	Acres	Under Roof	Office	Warehouse	Service	Trucks Accommodated
Hamburg facility (Morris)	10	15,000 sq.ft.	3,000 sq.ft.	none	12,000 sq.ft.	170 trucks
Scotts Bluff facility (Smith)	10	36,500 sq.ft.	3,000 sq.ft.	30,000 sq.ft.*	3,500 sq.ft.	400 trucks

We also have terminals in Pine Bluff, Arkansas, Arcadia, California, Kimble, Nebraska and Ponca City, Oklahoma. 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 Eldorado, Arkansas, Sacramento, California, Chicago, Illinois, Iowa City, Iowa, Denton and Houston, Texas and Dell, Utah. Drop yards are a specific number of truck parking places we rent on a 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.

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. The estimated total revenues from this industry sector are $255.5 billion annually. 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 destinations for delivery. All of our service is truckload service.

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The surface freight transportation market in which we operate is frequently referred to as highly fragmented and competitive. There are an estimated 360,000 motor freight companies in the United States, with ninety-six percent operating twenty-eight or fewer trucks. 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.

Ten largest trucking companies	16.4%
All other trucking companies	83.6%

Competition 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 may have more equipment, a broader coverage network and a wider range of services than we have. They may 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 (DOT) and 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 DOT periodically conducts reviews and audits to ensure our compliance with all federal safety requirements, and we report certain accident and other information to the DOT.

Our company drivers and independent contract drivers also must comply with the safety and fitness regulations promulgated by the DOT, including those relating to drug and alcohol testing and hours-of-service. In November 2008, the FMCSA adopted final provisions of the Agency’s December 17, 2007, interim final rule concerning hours of service for commercial vehicle drivers.  This final rule allows drivers to continue to 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.  The rule also allows motor freight carriers and drivers to continue to restart calculations of weekly on-duty limits after the driver has at least thirty-four consecutive hours off duty.  The rule was effective January 19, 2009.  We believe these regulations will not have a significant negative impact on our operations or financial results in 2009.

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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.

Litigation, Insurance and Claims

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.

The following table presents information regarding our claims experience during 2008.

Category of Claim	Total Claims*		Our portion
Auto Accident	$	43,000	$	0
General Liability	$	0	$	0
Cargo Damage	$	0	$	0
Property Damage	$	93,000	$	9,000

*Includes estimated amounts of pending claims, which are expected to settle in 2009.

We intend to require our contract drivers to carry their own occupational accidental insurance, which is similar to workers’ compensation insurance.

During calendar year 2008, our drivers drove an aggregate of 13,821,880 miles subject to the International Fuel Tax Association.

The following table presents our accident experience during this period.

Type	Fatal	Injury	Tow	Total
Crashes	0	8	9	17

Terms of Our Acquisitions

We have acquired Morris Transportation and Smith Systems Transportation. The following table describes the material terms of the acquisitions set forth in the amended agreements and now embodied in the respective amended promissory notes.

	Morris Transportation	Smith Systems Transportation
Shares of our stock	3,000,000 shares	825,000 shares
Note amounts and due dates	$600,000 due October 31, 2009 (1)(2)	$250,000 due October 31, 2009 (6)(7)
Cash payment - basic	$150,000 due October 31, 2009	none
Cash payment - additional	$250,000 due October 31, 2009 )	none
Refinancing of equipment	Required by March 31, 2010 (4)	Required by March 31, 2010 (8)
Working capital infusion	$100,000	none
Achieve market for common	Required by August 31, 2009 (5)	Required by August 31, 2009 _(9)

(1) The interest rate on the note is eight percent per annum.

(2) Secured by a pledge of Morris Transportation stock. The note is convertible at the election of the holder into our common stock at $1 per share.

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(3) The principal amount of the cash payment will reduced dollar for dollar (i) for any decline in net profits in the twelve months ended August 31, 2009 compared to the same period in 2008 and (ii) for any capital infusion required to sustain the company’s operations.

(4) For the purpose of eliminating personal guaranties. In the alternative, we may make an additional capital infusion of $100,000 to Morris Transportation and pay Mr. Morris $50,000.

(5) We are required to achieve a public trading market for our common stock not later than the date indicated. The transactions with PlanGraphics described in this information statement/prospectus are expected to satisfy this requirement.

(6) Mr. & Ms. Smith each hold a promissory note for one-half the amount shown, with interest at eight percent per annum. The notes are secured by a pledge of Smith Systems Transportation stock.

(7) The principal amount of the notes will reduced by one half of any decline in net profits in the twelve months ended August 31, 2009 compared to the same period in 2008.

(8) For the purpose of eliminating personal guaranties.

(9) We are required to achieve a public trading market for our common stock not later than the date indicated. The transactions with PlanGraphics described in this information statement/prospectus are expected to satisfy this requirement.

If we are not able to pay principal and interest when due and satisfy the other obligations described in the table and set forth in the foot notes, which are set forth in the respective amended promissory notes as events of default, Mr. Morris and Mr. & Ms. Smith may exercise their respective security interests in the stock of our subsidiaries. In the event we pay the promissory notes in full, the other obligations will continue, subject to the respective security interests, to the dates set forth for performance. In the event either Mr. Morris or Mr. & Ms. Smith, or both exercise their security interests, we would receive a return of our common stock and, with respect to Mr. Morris repayment of amounts that we have paid to him, but not capital infusions to Morris Transportation.

OUR MANAGEMENT

The following table identifies our directors and executive officers and provides their ages, the positions they hold and date each first became a director.

NAME	AGE	POSITION	DIRECTOR SINCE
Paul A. Henley	48	Director and Chief Executive Officer	Inception
Henry P. Hoffman	58	Director	2008
J. Richard Iler	57	Chief Financial Officer	N/A
Steven E. Lusty	48	Chief Operating Officer	N/A
Jackson L. Morris	65	Corporate Secretary	N/A
T. Mark Morris	43	Director and Chief Operating Officer of Subsidiary	2008
Monte W. Smith	55	Director and Chief Operating Officer of Subsidiary	2008

Our stockholders elect our directors. Our directors serve terms of one year and are generally elected at each annual stockholders meeting. Our directors who are also executive officers do not receive additional compensation for serving as directors. Mr. Hoffman is our only independent director. He is receiving $500 for each meeting, plus travel expenses, and for each action by written consent. 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.

We have the authority to indemnify our directors and officers against certain liabilities and we maintain directors and officers liability insurance for that purpose. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to our directors, officers or persons controlling us, we have been informed that in the opinion of the U.S. Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is therefore unenforceable.

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We have not established a separate audit committee or nominating committee at the date of this information statement/prospectus. These functions are provided by the full board of directors. We have not adopted a “code of conduct”.

BIOGRAPHICAL INFORMATION ABOUT OUR DIRECTORS AND OFFICERS

Paul A. Henley is our founder and has been our director, president and chief executive officer since inception.

- June 2002 to June 2006 - Mr. Henley 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 - Mr. Henley 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. We believe, under the new controlling stockholder, High Point Transport also terminated its business activities in or about February 2008.

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

Henry P. (“Hank”) Hoffman has been our independent director beginning 2008.

-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 truckstop chain facilities throughout the U.S. to support its applications and those of third party partners.

-June 2006 to May 2007 – Mr. Hoffman 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 present – Mr. Hoffman is President & CEO and a director of SeaBridge Freight, Inc., a tug and barge transportation company that provides short sea service between Port Manatee, FL and Brownsville, TX.

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

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J. Richard Iler is our chief financial officer.

-2006 to 2009 – Mr. Iler served as chief financial officer and director of bioMETRX, Inc., a small, emerging growth, publicly-held company engaged in design development, and commercialization of consumer-centric biometric products. His responsibilities included regulatory filings with Securities and Exchange Commission including the company’s first registration statement. He was also responsible for establishing internal controls required by the Sarbanes-Oxley Act.

-2003 to 2006 – Mr. Iler served as a director, the chief financial officer and corporate

secretary of SiriCOMM, Inc. a broadband wireless applications service provider to the transportation industry. His was responsible for oversight of financial statement preparation and all regulatory filings, for structuring, sourcing and closing over $12 million in equity placements, debt-to-equity conversions and internal controls required by the Sarbanes-Oxley Act.

Mr. Iler earned a BS degree (1976) in political economics from Grand Valley State University in Allendale, Michigan and attended South Texas College of Law.

Steven E. Lusty is our chief operating officer.

-2006 to present – Mr. Lusty owns and operates Valleytown Ventures, LLC which specializes in providing interim executive officer/turnaround consulting services in the transportation/logistics industry.  He performs implementation and integration of financial, information technology, operations enhancements, cost models, pricing standards, route utilization, driver relations, policy and procedures, regulatory and compliance, and safety.  In his consulting capacity, he provided services to High Point Transport, Inc. in 2007, subsequently in 2008 serving as the interim chief executive officer of its operating subsidiary, Cannon Freight Systems, Inc. for purposes of orderly liquidated assets, collected debts, and settled collections.  See Mr. Henley’s biographical information for more information about High Point Transport, Inc. Mr. Lusty has provided operations analysis for a restructuring firm and has analyzed numerous trucking firms’ financials and operations for acquisitions by investment firms and holding companies.

-1998 to 2007 – Mr. Lusty founded and operated Chromos, Inc. This company originally provided transportation brokerage, later establishing a trucking operation and making three acquisitions.  The company operated in varied freight sectors.   Chromos established six field agents in the Southeast for brokerage. In 2006, signed an agreement with XRG, Inc., a publicly traded holding company operating in the interstate trucking sector. Under the agreement, XRG was to provide back office, accounting and disbursement as an agent of Chromos.  Chromos paid XRG amounts needed for disbursement in payment of Chromos’ payables, but XRG failed to disburse those funds in payment of Chromos’ obligations, including long term debt.  Without remaining funds to pay these obligations, Chromos was forced to file for liquidation in bankruptcy. Mr. Lusty was also forced to file for bankruptcy as a result of loans he had guaranteed for Chromos.

Mr. Lusty earned a BA degree in civil engineering (1985) from Mississippi State University.

Jackson L. Morris fills the statutory position of corporate secretary since inception as a courtesy and incidental to his services as our independent corporate and securities counsel. 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 LL.M. from Georgetown Law School in 1974.

T. Mark Morris, a director and chief operating officer of one of our subsidiaries is the founder of Morris Transportation, Inc. 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.

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Monte W. Smith, a director and chief operating officer of one of our subsidiaries and is the founder of Smith Systems Transportation, Inc. 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.

COMPENSATION OF OUR EXECUTIVE OFFICERS

The following table presents information about compensation of our chief executive officer and each of our highest paid executive officers who have compensation exceeding $100,000 per year. We paid only cash compensation to these persons.

Name and principal position	Year		Salary
Paul A. Henley, Chief Executive Officer		2008	$	57,500
T. Mark Morris, Chief Executive Officer of Morris Transportation*		2006	$	102,500
		2007	$	78,000
		2008	$	105,000
Monte W. Smith, Chief Executive Officer of Smith Systems Transportation*		2006	$	110,000
		2007	$	110,000
		2008	$	110,000

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

Neither our chief executive officer nor our other highest paid executives received any form of compensation other than cash salary during the periods indicated. The salaries of Mr. Morris and of Mr. Smith were paid by their employing companies.

Compensation Committee

We have not established a compensation committee at the date of this information statement/prospectus. 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 our executive officers other than Mr. Henley has been approved by our full board of directors, except the compensation of the chief operating officers of our operating subsidiaries has been negotiated in the acquisition from the respective director/officers/controlling stockholders of those companies by Mr. Henley as the sole director at the time of such negotiations. We plan to have a compensation committee when we elect additional independent persons to our board of directors.

Employment Agreements

We have entered into the employment agreements described 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)
Steven E. Lusty	January 1, 2009	December 31, 2011	$	150,000			(2)	(4)
T. Mark Morris	September 1, 2008	August 31, 2011	$	110,000		$	25,000(2)(5)
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 of $50,000. Closing acquisitions – bonus equal to1/10 of 1% (.001) of the revenue from operations generated by acquired company.

(4) 150,000 shares of our common stock, plus 25,000 shares of our common stock per month for every month in which salary is not paid beginning August 1, 2009.

(5) A contractual  bonus of $25,000 which is in arrears.

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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.

RELATED PARTY TRANSACTIONS

From inception to date, we have not entered into any transactions with our directors and executive officers, outside of normal employment transactions, or with their relatives and entities they control; except the following:

• We issued 6.5 million shares of our common stock to Mr. Henley for his founding of our incorporation, organizational and start up expenses in the amount of approximately $1,786. Mr. Henley is our founder and was our sole director at the date the issue of stock was approved.

• We issued 500,000 shares to Mr. J. Morris for his services in performed in our organization and start up.

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

WHO OWNS OUR COMMON STOCK

Our principal stockholders are set forth in the following table. These principal stockholders include:

• each of our directors and executive officers,

• our directors and executive officers as a group, and

•    others we know who own more than five percent of our issued and outstanding common stock.

We believe each of these persons has sole voting and investment power over the shares they own. The address of our directors and executive officers is our address.

		Percentage (4)(6)
Name	Number of Shares	Before Merger	After Merger
Paul A. Henley	6,500,000	35.67%	32.38%
Henry P. Hoffman	25,000	*	*
J. Richard Iler (1)	none	none	none
Steven E. Lusty	150,000	*	*
Jackson L. Morris	500,000	2.74%	2.49%
T. Mark Morris (2)(6)	3,600,000	19.76%	17.42%
Monte W. Smith (3)	930,000	5.10%	4.63%
All directors and officers as a group - 7 persons (4)	10,930,000	62.05%	58.19%
Nutmeg/Fortuna Fund LLLP	1,307,822	7.19%	6.52%
Suite 10, 155 Revere Drive, Northbrook, IL 60062
Edgar E. Rentaria	1,500,000	8.23%	7.47%
Suite B, 4923 W. Cypress Street, Tampa, FL 33607
Tangiers Investors, L.P. (5)(6)	2,003,250	24.46%	22.53%

Suite 400, 1446 Front St., San Diego, CA 92101

* Less than one percent.

(1) We have agreed to issue Mr. Iler 150,000 shares of common stock.

(2) Includes 600,000 shares issuable to Mr. Morris on conversion of our secured promissory note in the principal amount of $600,000.

(3) Includes 412,500 shares owned by Mr. Smith’s wife.

(4) Percentages reflect adjustment of issued and outstanding number of shares to include 600,000 shares issuable but not yet issued to Mr. Morris, 600,000 on note conversion.

(5) Includes 3,250,000 shares issuable upon exercise of common stock purchase warrants at a price of $0.10 per share.

(6) Percentages reflect adjustment of issued and outstanding number of shares to include shares issuable but not yet issued, in the case of Mr. Morris, 600,000 issuable on note conversion and in the case of Tangiers, 3,250,000 shares issuable on exercise of warrants.

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WARRANTS WE HAVE AND WILL HAVE OUTSTANDING

The following table presents information about common stock purchase warrants we have outstanding and will have outstanding following the merger with PlanGraphics.

Now Outstanding
Tangiers Investors, L.P.	3,250,000	$0.10	Expires 2010
The VentureBank, Inc.	275,000	$0.01	Expires 2014
Broad Street Ventures LLC	275,000	$0.01	Expires 2014
To Be Issued In PlanGraphics Transactions
PlanGraphics former stockholders (1)	404,961	$0.50	Expires 2011
PGI	177,170	$0.50	Expires 2011
John C. Antenucci	59,327	$0.50	Expires 2011
Frederick G. Beisser	75,252	$0.50	Expires 2011

(1) Subject to rounding of fractional shares.

LOCKUP – LEAK-OUT AGREEMENTS

We expect to enter into a Lockup – Leak-out Agreement with thirteen stockholders covering an aggregate of 14,999,571 shares of our common stock issued and outstanding following the merger. These stockholders include all of our management, two investors, PGI, Mr. Antenucci, Mr. Beisser and Nutmeg/Fortuna Fund. The essential provisions of these agreements are:

•         During the period of 180 days beginning the date we obtain a new trading symbol, the subject stockholders will make no sales of our common stock into the public securities markets.

•         During the next following 180-day period, the subject stockholders will limit their sales into the public securities market on any day to not exceed five percent of the previous day’s trading volume.

•         All restrictions and limitations under the agreement expire at the end of the second 180-day period.

DESCRIPTION OF OUR COMMON STOCK

The following description of our common stock is qualified in its entirety by our Articles of Incorporation, as amended, our bylaws and the corporation law of Florida. We are authorized to issue fifty million shares of common stock, $0.001 par value per share. At the date of this information, we have 18,223,250 shares issued and outstanding. At the completion of the merger with PlanGraphics described at the beginning of this information statement/prospectus, we will have 20,248,056 shares issued and outstanding.

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Holders of our common stock:

• have one vote per share on election of each director and other matters submitted to a vote of stockholders;

• have equal rights with all holders of issued and outstanding common stock to receive dividends from funds legally available therefore, if any, as may be declared from time to time by the board of directors;

• are entitled to share equally with all holders of issued and outstanding common stock in all of our assets remaining after payment of liabilities, upon liquidation, dissolution or winding up of our affairs;

• do not have preemptive, subscription or conversion rights;

• do have redemption or sinking fund provisions applicable thereto; and

• do not have cumulative voting rights.

All shares of common stock outstanding are, and the common stock we issue in the merger with PlanGraphics and upon exercise of the common stock purchase warrants pursuant to this information statement prospectus, when issued and, in the case of the warrant stock, delivered against payment therefore, will be, duly authorized, legally issued, fully paid and non-assessable.

LEGAL MATTERS

Certain legal matters with respect to the validity of the shares of common stock offered hereby will be passed upon for us by Jackson L. Morris, Attorney at Law, Tampa, Florida. Mr. Morris owns 500,000 shares of our common stock which he received as partial payment of fees.

EXPERTS

The financial statements of Morris Transportation, Inc. and Smith Systems Transportation, Inc. at and for the two year period ended March 31, 2008 included herein and elsewhere in the registration statement have been audited by Cordovano and Honeck LLP, independent certified public accountants, to the extent set forth in their reports appearing herein and elsewhere in the registration statement. Such financial statements have been so included in reliance upon the report of such firm given upon their authority as experts in auditing and accounting.

The consolidated financial statements of PlanGraphics, Inc., incorporated herein by reference at and, for the two year period ended September 30, 2008 and 2007 have been incorporated by reference in this information statement/prospectus in reliance on the report of Sherb & Co., LLP, an independent registered certified public accounting firm, given on the authority of such firm as experts in auditing and accounting.

WHERE YOU CAN FIND ADDITIONAL INFORMATION ABOUT US AND EXHIBITS

We have filed a registration statement on Form S-4 with the SEC for the common stock and common stock purchase warrants to be received by the stockholders of PlanGraphics and for the common stock issuable on exercise of the warrants. This information statement/prospectus is a part of that registration statement. It does not include all of the information contained in the registration statement, which includes exhibits which are referred to and incorporated by reference herein. You should refer to the registration statement and its exhibits for additional information.

You may read and copy any reports and other materials filed by PlanGraphics and Integrated Freight Systems with the SEC, including the exhibits thereto which are referred to and incorporated herein by reference in this information statement/proxy, at the SEC’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 SEC at 1-800-SEC-0330. The SEC maintains an Internet site that at which you may obtain all reports, proxy and information statements, and other information regarding PlanGraphics and Integrated Freight Systems. The address of that site is http://www.sec.gov.

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INDEX TO FINANCIAL STATEMENTS

	Page
Index to Financial Statements of Integrated Freight Systems, Inc.	F-1
Index to Financial Statements of Smith Systems Transportation Inc.	F-20
Index to Financial Statements of Morris Transportation Inc.	F-34
Index to Proforma Unaudited Financial Statements of Integrated Freight Systems, Inc.	F-46

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FINANCIAL STATEMENT OF INTEGRATED FREIGHT SYSTEMS, INC.

		Page
Consolidated Balance Sheet at December 31, 2008 (Unaudited)		F-2
Consolidated Statement of Operations for the period from May 13, 2008
	(inception) through December 31, 2008 (Unaudited)	F-3
Consolidated Statement of Changes in Stockholders' Equity for the period
	from May 13, 2008 (inception) through December 31, 2008 (Unaudited)	F-4
Consolidated Statement of Cash Flows for the period from May 13, 2008
	(inception) through December 31, 2008 (Unaudited)	F-5
Notes to Unaudited Consolidated Financial Statements		F-6

F-1

INTEGRATED FREIGHT SYSTEMS, INC.
Consolidated Balance Sheet at December 31, 2008 (Unaudited)

December 31, 2008
Assets
Current assets:
	Cash		$	72,704
	Trade receivables, net			3,016,979
	Other receivables			4,314
	Prepaid expenses			478,919
	Other current assets			262,767
		Total current assets		3,835,683
Property and equipment, net of accumulated depreciation of $6,630,175 (Note 3)				7,341,357
Intangible assets, net (Note 4)				1,300,408
		Total assets	$	12,477,448
Liabilities and Stockholders' Equity
Current liabilities:
	Bank overdraft		$	792,836
	Accounts payable			367,174
	Note payable, less unmortized discount of $15,169 (Note 6)			32,831
	Current portion of notes payable (Note 6)			5,071,131
	Current portion of capital lease obligations (Note 9)			8,886
	Line of credit (Note 5)			635,913
	Other current liabilities			278,667
		Total current liabilities		7,154,607
Long term debt:
	Earned escrow			214,306
	Note payable, less current portion (Note 6)			4,096,780
		Total liabilities		11,465,693
Commitments and contingencies (Note 9)				—
Minority interest				328,338
Stockholders' equity (Note 8):
	Common stock, $.001 par value; 50,000,000 shares authorized,14,125,000 shares issued and outstanding			14,125
	Additional paid-in capital			1,401,374
	Retained earnings			(732,082)
		Total stockholders' equity		683,417
		Total liabilities and stockholders' equity	$	12,477,448

F-2

INTEGRATED FREIGHT SYSTEMS, INC.
Consolidated Statement of Operations for the period from May 13, 2008

(inception) through December 31, 2008 (Unaudited)

For the Period From May 13, 2008 (Inception) Through December 31, 2008
Operating revenues, including fuel surcharges and rentals			$	6,586,581
Operating expenses:
	Rents and purchased transportation			1,490,599
	Salaries, wages and employee benefit			2,300,906
	Fuel and fuel taxes			1,242,822
	Depreciation and amortization			748,794
	Insurance and claims			209,955
	Operating taxes and licenses			55,353
	General and administrative expenses			938,300
		Total operating expenses		6,986,729
		Operating income		(400,148)
Other income/(expense):
	Interest expense			(274,095)
	Gain on disposition of equipment			28,142
	Other income			32,123
		Total other income/(expense)		(213,830)
		Income before income taxes and minority interest		(613,978)
Provision for income taxes				—
Minority interest				(5,596)
		Net loss	$	(619,574)
Net income per share – Basic			$	(0.05)
Net income per share - Diluted			$	(0.05)
Weighted average common shares outstanding – Basic				11,673,176
Weighted average common shares outstanding - Diluted				11,673,176

F-3

INTEGRATED FREIGHT SYSTEMS, INC.
Consolidated Statement of Changes in Stockholders' Equity for the period

from May 13, 2008 (inception) through December 31, 2008 (Unaudited)

						Additional
		Common Stock				Paid-in		Retained
		Shares		Par Value		Capital		Earnings		Total
Balance at May 13, 2008 (inception)		—	$	—	$	—	$	—	$	—
Common stock issued to officers in exchange
	for organizational services (Note 2)	7,000,000		7,000				—		7,000
Common stock issued to consultants in exchange
	for services (Note 8)	2,550,000		2,550		252,450		—		255,000
Common stock issued to acquire Smith Systems
	Transportation, Inc. (Note 10)	825,000		825		205,425				206,250
Common stock issued to acquire Morris
	Transportation, Inc. (Note 10)	3,000,000		3,000		747,000		—		750,000
Sale of common stock (Note 8)		100,000		100		9,900		—		10,000
Shareholder distributions (Note 8)		—		—		—		(112,508)		(112,508)
Common stock issued for Deferred Finance Costs		650,000		650		161,850				162,500
Issuance of common stock warrants (Note 8)		—		—		24,749		—		24,749
Net income		—		—		—		(619,574)		(619,574)
Balance at December 31, 2008		14,125,000	$	14,125	$	1,401,374	$	(732,082)	$	683,417

F-4

INTEGRATED FREIGHT SYSTEMS, INC.
Consolidated Statement of Cash Flows for the period from May 13, 2008

(inception) through December 31, 2008 (Unaudited)

For the Period From May 13, 2008 (Inception) Through December 31, 2008
Cash flows from operating activities:
	Net loss					$	(619,574)
	Adjustments to reconcile net income to net cash
		used by operating activities:
			Depreciation and amortization				748,794
			Debt Discount amortization				9,580
			Deferred Finance Cost Amortization				62,903
			Gain on asset dispositions				(28,142)
			Minority interest in earnings of subsidiary				5,596
			Stock Issued for Stock Based Compensation				262,000
			Changes in operating assets and liabilities:
				(Increase)/decrease in accounts receivable			92,720
				(Increase)/decrease in prepaid expenses			(223,373)
				(Increase)/decrease in other current assets			(84,922)
				Increase/(decrease) in bank overdraft			173,818
				Increase/(decrease) in accounts payable			(60,914)
				Increase/(decrease) in other current liabilities			143,383
				Increase/(decrease) in earned escrow			31,976
					Net cash provided by (used in) operating activities		513,845
Cash flows from investing activities:
	Proceeds from asset dispositions						304,233
	Cash proceeds from acquisitions of subsidiaries						276,804
	Proceeds from collection of officers' receivables						91,991
					Net cash provided by (used in) investing activities		673,028
Cash flows from financing activities:
	Repayments of Long Term Debt, Note Payable, and
		Capital Lease Obligations					(1,046,161)
	Proceeds of long Term Debt						48,000
	Proceeds from sale of common stock						10,000
	Distributions paid to common shareholders						(112,508)
	Distributions paid to minority interest						(13,500)
					Net cash provided by (used in) financing activities		(1,114,169)
					Net change in cash		72,704
Cash, beginning of period							—
Cash, end of period						$	72,704
Supplemental disclosure of cash flow information:
	Cash paid during the period for:
		Income taxes				$	—
		Interest				$	178,228
Schedule of noncash investing and financing transactions:
Common Stock issued for Acquisition of Subsidiaries							$ 956,250
Common Stock issued for Stock Based Compensation							$ 262,000
Common Stock issued for Deferred Finance Costs							$ 162,500
Issuance of common stock warrants							$ 24,749

F-5

INTEGRATED FREIGHT SYSTEMS, INC.
Notes to Unaudited Consolidated Financial Statements

Note 1. Nature of Operations and Summary of Significant Accounting Policies

Nature of Business

Integrated Freight Corporation (a Florida corporation) and subsidiaries (the “Company”) is a short to medium-haul truckload carrier of general commodities headquartered in Sarasota, Florida. The Company also has service centers located throughout the United States.  The Company provides dry van, hazardous materials, and temperature controlled truckload carriers and intends to open brokerage services.  The Company is subject to regulation by the Department of Transportation and various state regulatory authorities.

Principles of Consolidation

The consolidated financial statements include the financial statements of Integrated Freight Corporation, and its wholly owned subsidiaries, Morris Transportation, Inc. (“Morris”) and Smith Systems Transportation, Inc. (“Smith”). Smith holds a 60% ownership interest in SST Financial Group, LLC (“SSTFG”). All significant intercompany balances and transactions within the Company have been eliminated upon consolidation.

Use of Estimates

The financial statements contained in this report have been prepared in conformity with accounting principles generally accepted in the United States of America.  The preparation of these statements requires the Company to make estimates and assumptions that directly affect the amounts reported in such statements and accompanying notes.  The Company evaluates these estimates on an ongoing basis utilizing historical experience, consulting with experts and using other methods the Company considers reasonable in the particular circumstances.  Nevertheless, the Company's actual results may differ significantly from the Company's estimates.

The Company believes that certain accounting policies and estimates are of more significance in the Company's financial statement preparation process than others.  The Company believes the most critical accounting policies and estimates include the economic useful lives and salvage values of the Company's assets, provisions for uncollectible accounts receivable, and estimates of exposures under the Company's insurance and claims plans.  To the extent that actual, final outcomes are different than the Company's estimates, or additional facts and circumstances cause the Company's to revise the Company's estimates, the Company's earnings during that accounting period will be affected.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. The Company had no cash equivalents at December 31, 2008.

Accounts Receivable Allowance

The Company's trade accounts receivable includes accounts receivable from brokers and the various clients for whom the Company offer the Company's for-hire transportation services. The Company has experienced minimal losses from the Company's inability to collect bad debts and accordingly the Company has not made any allowances for uncollectible accounts and revenue adjustments as of December 31, 2008.

F-6

INTEGRATED FREIGHT SYSTEMS, INC.
Notes to Unaudited Consolidated Financial Statements

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation. Depreciation of property and equipment is calculated on the straight-line method over the following estimated useful lives:

	Years
Land improvements	7- 10
Buildings / improvements	20 - 30
Furniture and fixtures	3 – 5
Shop and service equipment	2 – 5
Revenue equipment	3-5
Leasehold improvements	1 – 5

The Company expenses repairs and maintenance as incurred. The Company periodically reviews the reasonableness of its estimates regarding useful lives and salvage values for revenue equipment and other long-lived assets based upon, among other things, the Company's experience with similar assets, conditions in the used revenue equipment market, and prevailing industry practice. Salvage values are typically 4% to 6% for tractors and trailing equipment and consider any agreements with tractor suppliers for residual or trade-in values for certain new equipment.  The Company capitalizes tires placed in service on new revenue equipment as a part of the equipment cost.  Replacement tires and costs for recapping tires are expensed at the time the tires are placed in service.  Gains and losses on the sale or other disposition of equipment are recognized at the time of the disposition.

Intangible Assets

The Company accounts for business combinations in accordance with SFAS No. 141, Business Combinations, which requires that the purchase method of accounting be used for all business combinations. SFAS 141 requires intangible assets acquired in a business combination to be recognized and reported separately from goodwill.

Goodwill represents the cost of the acquired businesses in excess of the fair value of identifiable tangible and intangible net assets purchased. The Company assigns all the assets and liabilities of the acquired business, including goodwill, to reporting units in accordance with SFAS No. 142, Goodwill and Other Intangible Assets. The Company's business combinations did not result in any goodwill as of December 31, 2008.

The Company evaluates intangible assets for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted net cash flows expected to be generated by the asset. If these assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying value of the assets exceeds the fair value of the assets.

Furthermore, SFAS No. 142 requires purchased intangible assets other than goodwill to be amortized over their useful lives unless these lives are determined to be indefinite. Purchased intangible assets are carried at cost less accumulated amortization. No impairment of intangibles has been identified since the date of acquisition.

Impairment of Long-lived Assets

In accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, long-lived assets and certain identifiable intangible assets held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is evaluated by a comparison of the carrying amount of assets to estimated undiscounted net cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amounts of the assets exceed the fair value of the assets. There has been no impairment as of December 31, 2008.

F-7

INTEGRATED FREIGHT SYSTEMS, INC.
Notes to Unaudited Consolidated Financial Statements

Revenue Recognition

The Company recognizes revenues, for both asset-based and non-asset-based operations, when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable and collectibility is probable. These conditions are met upon delivery. EITF Issue No. 99-19, Reporting Revenue Gross as a Principal versus Net as an Agent, establishes the criteria for recognizing revenues on a gross or net basis. Pursuant to this guidance, revenue for both asset-based and non-asset-based operations is reported on a gross basis.

Advertising Costs

The Company charges advertising costs to expense as incurred. During the period ended December 31, 2008, advertising expense was approximately $10,000.

Income Taxes

The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.  The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

The Company records net deferred tax assets to the extent it believes these assets will more likely than not be realized. In making such determination, the Company considers all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and recent financial operations. 

The Company recognizes a tax benefit from an uncertain tax position when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits.

Stock-based Compensation

The Company has adopted the fair value recognition provisions of Financial Accounting Standards Board (FASB), Statement of Financial Accounting Standards, Share-Based Payment, or SFAS No. 123(R), using the modified prospective application method. Under SFAS No. 123R, stock-based compensation expense is measured at the grant date based on the value of the option or restricted stock and is recognized as expense, less expected forfeitures, over the requisite service period.

Concentrations of Credit Risk

Financial instruments, which potentially subject the Company to concentrations of credit risk, include cash and trade receivables.  For the period ended December 31, 2008, the Company's top four customers, based on revenue, accounted for approximately 25%, of the Company's total revenue.  The Company's top four customers, based on revenue, accounted for approximately 25% of the Company's total trade accounts receivable at December 31, 2008. 

Financial instruments with significant credit risk include cash. The Company deposits its cash with high quality financial institutions in amounts less than the federal insurance limit of $250,000 in order to limit credit risk. As of December 31, 2008, the Company's bank deposits did not exceeded insured limits.

F-8

INTEGRATED FREIGHT SYSTEMS, INC.
Notes to Unaudited Consolidated Financial Statements

Fair Value of Financial Instruments

The carrying amounts of cash, accounts receivable and accounts payable approximate fair value because of their short maturities. At December 31, 2008, the Company had $635,913 outstanding under its revolving credit agreement, and approximately $9,167,911 outstanding under promissory notes with various lenders. The carrying amount of the revolving credit agreement approximates fair value as the rate of interest on the revolving credit facility approximate current market rates of interest for similar instruments with comparable maturities, and the interest rate is variable. The fair value of notes payable to various lenders is based on current rates at which the Company could borrow funds with similar remaining maturities.

Claims Accruals

Losses resulting from personal liability, physical damage, workers' compensation, and cargo loss and damage are covered by insurance subject to deductible, per occurrence. Losses resulting from uninsured claims are recognized when such losses are known and can be estimated. The Company estimates and accrue a liability for the Company's share of ultimate settlements using all available information. The Company accrues for claims reported, as well as for claims incurred but not reported, based upon the Company's past experience. Expenses depend on actual loss experience and changes in estimates of settlement amounts for open claims which have not been fully resolved. These accruals are based on the Company's evaluation of the nature and severity of the claim and estimates of future claims development based on historical trends. Insurance and claims expense will vary based on the frequency and severity of claims and the premium expense. At December 31, 2008, management estimated $-0- in claims accrual.

Earnings per Share

The Company calculates earnings per share in accordance with SFAS No. 128, “Earnings per Share.” Basic income per share is computed by dividing the net income by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed similar to basic income per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common stock equivalents had been issued and if the additional common shares were dilutive.

At December 31, 2008, there was no variance between the basic and diluted loss per share. The 325,000 warrants to purchase common shares outstanding at December 31, 2008 are not included in the weighted-average number of shares computation for diluted earnings per common share, as the warrants are anti-dilutive.

Recent Accounting Pronouncements

In May 2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 162, The Hierarchy of Generally Accepted Accounting Principles (“SFAS No. 162”).  SFAS No. 162 identifies the source of accounting principles and the framework for selecting the principles used in the preparation of financial statements that are presented in accordance with accounting principles generally accepted in the United States.  This statement will be effective 60 days following the Securities and Exchange Commission’s approval of the Public Company Accounting Oversight Board amendments to AU Section 411, “The Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles.”  The Company does not expect the adoption of SFAS No. 162 to have a material impact on the Company’s financial condition, results of operations, and disclosures.

F-9

INTEGRATED FREIGHT SYSTEMS, INC.
Notes to Unaudited Consolidated Financial Statements

In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities (“SFAS No. 161”).  This standard revises the presentation of and requires additional disclosures to an entity’s derivative instruments, including how derivative instruments and related hedged items are accounted for under SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, and how derivative instruments and related hedged items affect its financial position, financial performance and cash flows.  The provisions of SFAS No. 161 are effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008.  The Company is currently evaluating the impact of adopting of SFAS No. 161 on its consolidated financial statements.

In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements – an Amendment of ARB 51 (“SFAS No. 160”).  This statement amends ARB 51 and revises accounting and reporting requirements for noncontrolling interests (formerly minority interests) in a subsidiary and for the deconsolidation of a subsidiary.  Upon the adoption of SFAS No. 160 on April 1, 2009, any noncontrolling interests will be classified as equity, and income attributed to the noncontrolling interest will be included in the Company’s income.  The provisions of this standard are applied retrospectively upon adoption.  

In December 2007, the FASB issued SFAS No. 141 (revised 2007), Business Combinations, (“SFAS No. 141(R)”).  SFAS No. 141(R) clarifies and amends the accounting guidance for how an acquirer in a business combination recognizes and measures the assets acquired, liabilities assumed, and any noncontrolling interest in the acquiree.  The provisions of SFAS No. 141(R) are effective for the Company for any business combinations occurring on or after January 1, 2009.

In December 2008, the FASB issued FSP No. FAS 140-4 and FIN 46(R)-8, which amends SFAS No. 140, to require additional disclosures about transfers of financial assets.  The FSP also amended FASB Interpretation No. 46(R), to provide additional disclosures about entities’ involvement with variable interest entities.  The FSP’s scope is limited to disclosure only and is not expected to have an impact on the Company's consolidated financial position or results of operations.

Note 2. Related Party Transactions

From inception to date, the Company has not entered into any transactions with the Company's directors and executive officers, outside of normal employment transactions, or with their relatives and entities they control; except the following:

• The Company issued 6.5 million shares of its common stock to Mr. Henley for his services related to founding the Company as well as organizational and start up expenses in the amount of approximately $1,786. Mr. Henley is the Company's founder and was its sole director at the date the issue of stock was approved. The Company also issued 500,000 shares to Mr. Jackson L. Morris for his services performed in the Company's organization and start up. The stock issuances have been recorded based upon the estimated fair value of the services rendered.

• The Company does not anticipate entering into any future transactions with the Company's directors, officers and affiliates apart from normal employment transactions.

Note 3. Property and Equipment

Property and equipment consist of the following at December 31, 2008:

	SST	Morris	IFC	Consolidated
Property Plant and Equipment	6,516,317	7,455,215	-0-	13,971,572
Less: accummulated depreciation)	(3,428562)	(3,201,613)	-0-	(6,630,175)
Total	3,087,755	4,253,602	-0-	7,341,357

Depreciation expense totaled $586,243 for the period ended December 31, 2008.

F-10

INTEGRATED FREIGHT SYSTEMS, INC.
Notes to Unaudited Consolidated Financial Statements

Note 4. Intangible Assets

Intangible assets consist of the following at December 31, 2008:

		December 31, 2008
Employment and non-compete agreements	$	1,043,293
Less: accumulated amortization		(115,921)
			$	927,372
Company operating authority		419,666
Less: accumulated amortization		(46,630)		373,036
			$	1,300,408

Amortization expense totaled $162,551 for the period ended December 31, 2008.

The intangible assets acquired in the business combination are expected to amortize over the next three years as follows:

2009	$	284,464
2010		487,653
2011		487,653
2012		203,189
	$	1,462,959

Note 5. Line of Credit

Morris Revolving Credit

At December 31, 2008, Morris is authorized to borrow up to a total of $800,000 under a revolving line of credit. The line of credit is secured by accounts receivable and is due on demand through July 2009. The applicable interest rate under this agreement is based on the prime rate plus 0.75%. At December 31, 2008, $635,913 is outstanding under this agreement.

F-11

INTEGRATED FREIGHT SYSTEMS, INC.
Notes to Unaudited Consolidated Financial Statements

Note 6. Notes Payable

Notes payable owed by Smith consisted of the following as of December 31, 2008:

Notes payable to bank, due Dec 2012, payable in monthly installments of $65,000.00 @ 9% collateralized by substantially all of the Company's assets	$2,350,662
Various notes payable to the bank for revolving credit, due May 2009, with monthly interest payments with interest at 9% collateralized by substantially all of the Company's assets	$1,821,372
Note payable to Platte Valley National Bank, due Dec 2010, payable in monthly installments of $1422.57, with interest at 9.5% collateralized by one unit #525	$      41,393
Various notes payable to Daimler Chrysler, due 2010, payable in monthly installments of $10,745.41, ranging from 8-9%, collateralized by 6 units	$    139,221
One parts note payable to Floyds, due 2010, payable in monthly installments of $2663.81, with interest at 8.5% unsecured	$    63,660
One note payable to General Motors Acceptance Corp., due November 2009, payable in monthly installments of $778.12, with interest at 8%, secured by a vehicle	$      7,078
One note payable to Nissan Motor Corp., due June 2011, payable in monthly installments of $505.35, with interest at 36.9%, secured by a vehicle	$      16,829
One Note payable to Colorado Holdings Company, payable in 2 monthly payments of $1250.00 each, this Note has not interest rate and is unsecured	$40,190
One note payable to Arvada Land & Development, due September 2008, payable in monthly installments of $2500.00	$3,500
Totals	$4,483,905

The carrying amount of assets pledged as collateral for the installment notes payable totaled $4,463,485 at December 31, 2008.

F-12

INTEGRATED FREIGHT SYSTEMS, INC.
Notes to Unaudited Consolidated Financial Statements

Notes payable owed by Morris consisted of the following as of December 31, 2008:

Various notes payable to Chrysler Financial payable in monthly installments ranging from $569 to $5,687 including interest through May 2013 with interest rate ranging from 5.34% to 8.07% secured by equipment	$2,272,360
Various notes payable to First Continental Bank payable in monthly installments ranging from $1,805 to $5,829 including interest through June 2010 with interest rate ranging from 5.9% to 7.25% secured by equipment	114,984
Various notes payable to GE Financial payable in monthly installments ranging from $2,999 to $7,535 including interest through April 2013 with interest rate ranging from 6.69% to 8.53% secured by equipment	1,258,007
6.9% note payable to a GMAC Financial in installments of $667 including interest, through August 2013 secured by a vehicle	32,868
8.59% note payable to a Wells Fargo Bank payable in monthly installments of $4,271 including interest, through October 2011 secured by equipment	131,842
Totals	$3,810,061
The carrying amount of assets pledged as collateral for the installment notes payable totaled $4,371,885 at December 31, 2009
Notes payable owed by Integrated Freight Systems consisted of the following as of December 31, 2008

Note payable to Tangiers payable in January 2009, with interest rate of 9.9% with principal balance of $32,831 with net of an unamortized discount of $15,169.

Future maturities of notes payable for the five years subsequent to December 31, 2008, are as follows:

December 31,
2009	$	5,038,300
2010		1,031,340
2011		962,584
2012		587,156
2013		6,544
	$	7,625,924

As disclosed in Note 10, the Company has $850,000 of debt related to the acquisitions of the Smith and Morris subsidiaries.  The Morris debt of $650,000 carries an 8% interest rate and is payable $300,000 plus interest by June 13, 2009 and $$350,000 plus interest by September 17, 2009.  The Smith debt of $250,000 also carries an 8% interest rate and is payable with interest on October 17, 2009.

F-13

INTEGRATED FREIGHT SYSTEMS, INC.
Notes to Unaudited Consolidated Financial Statements

Note 7 - Income Taxes

The Company accounts for income taxes under SFAS 109, which requires use of the liability method. SFAS 109 provides that deferred tax assets and liabilities are recorded based on the differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes, referred to as temporary differences.

Deferred tax assets and liabilities at the end of each period are determined using the currently effective tax rates applied to taxable income in the periods in which the deferred tax assets and liabilities are expected to be settled or realized. The reconciliation of enacted rates the years ended September 30, 2008 and September 30, 2007 is as follows:

	2008	2007
Federal	34%	34%
State	0%	0%
Net operating loss carryforward	-	-
Increase in valuation allowance	(34%)	(34%)
	-	-

At December 31, 2008, the Company had a net operating loss carry forward of approximately $2,800,000 that may be offset against future taxable income subject to limitations imposed by the Internal Revenue Service. This carry-forward is subject to review by the Internal Revenue Service and, if allowed, may be offset against taxable income through 2028. A portion of the net operating loss carryovers begin expiring in 2019.

Deferred tax assets are as follows:

	2008	2007
Deferred tax asset due to net operating loss	$ 448,082	$331,936
Valuation allowance	(488,082)	(331,936)
Net Asset Less Liability	-	-

The deferred tax asset relates principally to the net operating loss carry-forward. A valuation allowance was established at December 31, 2008 and December 31, 2007 to eliminate the deferred tax benefit that existed at that time since it is uncertain if the tax benefit will be realized. The deferred tax asset (and the related valuation allowance) increased by $373,000 and $270,000 for the years ended December 31, 2008 and December 31, 2007, respectively.

Effective October 1, 2007 the Company must adopt the provisions of Financial Interpretation 48 (FIN 48), “Accounting for Uncertainty in Income Taxes.” Management does not believe the adoption will have a material impact on future results of operations.

F-14

INTEGRATED FREIGHT SYSTEMS, INC.
Notes to Unaudited Consolidated Financial Statements

Note 8. Shareholder’s Equity

Common Stock

On May 13, 2008, the Company issued 7,000,000 shares of its common stock to its officers, directors, and other individuals in exchange for work and services attendant to the organization of the Company.

During May 2008, the Company issued its former CFO 250,000 shares of its common stock valued at $25,000 and 2,300,000 shares of its common stock valued at $230,000 to 3 other unrelated parties for consulting services for various business services. The transactions have been recorded based upon the estimated fair value of the services rendered.

On August 28, 2008, the Company issued 825,000 shares of its common stock to the stockholders of Smith Systems Transportation, Inc. as part of a business combination (see Note 10).

On September 12, 2008, the Company issued 3,000,000 shares of its common stock to the stockholders of Morris Transportation, Inc. as part of a business combination (see Note 10).

Common Stock Awards

On November 26, 2008 the Company’s Board of Directors issued 325,000 common stock warrants to Tangiers Capital as payment for an incentive to extend a senior subordinated secured debenture totaling $48,000. The warrants vested immediately, carry an exercise price of $.10 and expire on November 26, 2011. The Company’s common stock had no quoted market price on the date of issuance. The Company valued the warrants at $.157 per share, or $51,025 in aggregate, in accordance with SFAS 123R. Stock-based compensation expense recognized is based on awards ultimately expected to vest and has been reduced for estimated forfeitures.  SFAS 123R requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

The fair value for the warrants was estimated at the date of valuation using the Black-Scholes option-pricing model with the following assumptions: 

Risk-free interest rate	2.57%
Dividend yield	0.00%
Volatility factor	59.552%
Weighted average expected life	1.33 years

The relative fair value of the warrants, calculated in accordance with Accounting Principles Board (“APB”) Opinion 14, “Accounting for Convertible Debt and Debt issued with Stock Purchase Warrants”; totaled $24,749, or $.076 per share.  The relative fair value of the warrants issued with the debenture has been charged to additional paid-in capital with a corresponding discount on the note payable.  The discount is amortized over the life of the debt. As the discount is amortized, the reported outstanding principal balance of the notes will approach the remaining unpaid value ($32,831 at December 31, 2008).    

F-15

INTEGRATED FREIGHT SYSTEMS, INC.
Notes to Unaudited Consolidated Financial Statements

A summary of the grant activity for the years ended December 31, 2008, is presented below:

	Stock		Weighted
	Awards	Weighted	Average
	Outstanding	Average	Remaining	Aggregate
	&	Exercise	Contractual	Intrinsic
	Exercisable	Price	Term	Value
Balance, May 13, 2008	-	N/A	N/A
Granted	325,000	$ 0.10	2.33 years
Exercised		N/A	N/A
Expired/Cancelled	-	N/A	N/A
Balance, December 31, 2008	325,000	$ 0.10	2.33 years	$       -

As of December 31, 2008, the number of warrants that were currently vested and expected to become vested was 325,000.

Note 9. Commitments and Contingencies

Operating Leases

The Company has no office space under non-cancellable lease agreements. The Company only has informal month to month leases.

The Company leases operating equipment under a capital lease which expires in March, 2009. At December 31, 2008 the cost and accumulated depreciation on the equipment were $223,617 and $89,446, respectively, leaving a net book value of $134,171. Future minimum leased payments under the lease are $8,991, including amount representing interest of $105, leaving a lease obligation of $8,886, which is included in the Balance Sheet in short Term Capital Lease Obligations at December 31, 2008.

Purchase Commitments

The Company’s purchase commitments for revenue equipment are currently under negotiation. Upon execution of the purchase commitments, the Company anticipates that purchase commitments under contract will have a net purchase price of approximately $300,000 and will be paid throughout 2010.

Claims and Assessments

The Company is involved in certain claims and pending litigation arising from the normal conduct of business.  Based on the present knowledge of the facts and, in certain cases, opinions of outside counsel, the Company believes the resolution of these claims and pending litigation will not have a material adverse effect on the Company's financial condition, results of operations or liquidity.

F-16

INTEGRATED FREIGHT SYSTEMS, INC.
Notes to Unaudited Consolidated Financial Statements

Note 10. Business Combinations

Smith Systems Transportation, Inc.

On August 28, 2008, the Company acquired 100% of the common stock of Smith Systems Transportation, Inc. (“Smith”), a Nebraska-based hazardous waste carrier, under the terms of a Stock Exchange Agreement.  The accounting date of the acquisition was September 1, 2008 and the transaction was accounted for under the purchase method in accordance with SFAS 141. Smith’s results of operations have been included in the Company's consolidated financial statements since the date of acquisition. Identifiable intangible assets acquired as part of the acquisition included definite-lived intangibles which totaled $615,924, with a weighted average amortization period of 3 years.

The aggregate purchase price was $463,750, including 825,000 shares of the Company’s common stock valued at $0.25 per share. Below is a summary of the total purchase price:

Common stock (825,000 shares)	$	206,250
Note payable		250,000
	$	456,250

The following table represents the final purchase price allocation to the estimated fair value of the assets acquired and liabilities assumed:

		September 1,
		2008
Cash	$	245,196
Accounts Receivable, Trade		1,913,282
Accounts Receivable, Officers		96,305
Prepayments		255,546
Other Current Assets		39,688
Net Property and Equipment		3,546,996
Employment contract and non-compete		525,000
Company operating authority		419,666
Total assets acquired		7,041,679
		-
Bank overdraft		617,527
Accounts payable		136,049
Accrued liabilities and other current liabilities		310,244
Notes payable		5,185,367
Total liabilities assumed		6,249,187
Net assets acquired before minority interest		792,492
less Minority Interest		(336,242)
Net assets acquired	$	456,250

F-17

INTEGRATED FREIGHT SYSTEMS, INC.
Notes to Unaudited Consolidated Financial Statements

Morris Transportation, Inc.

On September 12, 2008, the Company acquired 100% of the common stock of Morris Transportation, Inc. (“Morris”), an Arkansas-based dry van truckload carrier, under the terms of a Stock Exchange Agreement.  The accounting date of the acquisition was September 1, 2008 and the transaction was accounted for under the purchase method in accordance with SFAS 141. Morris’ results of operations have been included in the Company's consolidated financial statements since the date of acquisition. Identifiable intangible assets acquired as part of the acquisition included definite-lived intangibles which totaled $676,868, with a weighted average amortization period of 3 years.

The aggregate purchase price was $1,500,000, including 3,000,000 shares of the Company’s common stock valued at $0.25 per share. Below is a summary of the total purchase price:

Common stock (3,000,000 shares)	$	750,000
Note payable		600,000
	$	1,350,000

The following table represents the final purchase price allocation to the estimated fair value of the assets acquired and liabilities assumed:

		September 1,
		2008
Cash	$	31,608
Accounts Receivable, Trade		1,196,417
Other current Assets		38,920
Net Property and Equipment		4,656,695
Intangible assets:
Employment and non-compete agreement		518,293
Total assets acquired		6,441,933
Accounts payable		292,039
Accrued liabilities and other current liabilities		7,370
Notes payable		4,792,524
Total liabilities assumed		5,091,933
Net Assets Acquired	$	1,350,000

Contingent Consideration

As part of the purchase price within the Stock Exchange Agreement with Morris, the Company agreed to pay Morris an additional $250,000 contingent upon Morris meeting certain quantifiable earnings measurements. Under the terms of the Agreement, the contingent payment can range between $-0- and $250,000., provided that the company maintains levels of profitability and does not require the further infusion of capital to sustain the current level of operation. The results of the payment contingency may affect the final valuation of the Morris acquisition.

F-18

INTEGRATED FREIGHT SYSTEMS, INC.
Notes to Unaudited Consolidated Financial Statements

Note 11. Subsequent Events

From January 1, 2009 to date of the filing of this report, the Company has issued 5,493,472 shares of its common stock in several transactions pursuant to various debt and equity financings. The transactions involved institutions or accredited investors. Approximately $67,500, in four separate debentures, was extended to the Company. The debentures are to mature on January 10, 2010 and carry interest rates of 9.9%. 960,000 shares of common stock were granted pursuant to these obligations as an incentive to entering into these agreements.

The securities discussed above were offered and sold in reliance upon exemptions from the registration requirements of Section 5 of the Act, pursuant to Section 4(2) of the Act and Rule 506 promulgated there under. Such securities were sold or conveyed exclusively to accredited investors as defined by Rule 501(a) under the Act.

On March 7, 2009, the Company’s Board of Directors issued 350,000 warrants (175,000 each to Broad Street Ventures and VentureBank) as payment for a finder’s fee to introduce a party to infuse equity into the Company. The warrants vested immediately, carry an exercise price of $.01 and expire on November 26, 2011. The Company’s common stock had no quoted market price on the date of issuance. The Company valued the warrants at $.24 per share, or $84,000 in aggregate, in accordance with SFAS 123R. Stock-based compensation expense recognized is based on awards ultimately expected to vest and has been reduced for estimated forfeitures. 

F-19

FINANCIAL STATEMENTS OF SMITH SYSTEMS TRANSPORTATION, INC.

		Page
Report of Independent Registered Public Accounting Firm		F-21
Consolidated Balance Sheets at March 31, 2008 and 2007		F-22
Consolidated Statements of Operations for the years ended
	March 31, 2008 and 2007	F-23
Consolidated Statement of Changes in Stockholder's Equity/(Deficit)
	for the period from April 1, 2006 through March 31, 2008	F-24
Consolidated Statements of Cash Flows for the years ended
	March 31, 2008 and 2007	F-25
Notes to Consolidated Financial Statements		F-26

F-20

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders

Smith Systems Transportation, Inc.

Scottsbluff, Nebraska

We have audited the accompanying consolidated balance sheets of Smith Systems Transportation, Inc. as of March 31, 2008 and 2007, and the related consolidated statements of operations, changes in stockholders’ deficit and cash flows for the years ended March 31, 2008 and 2007. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. 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 control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose 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, 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 financial statements referred to above present fairly, in all material respects, the financial position of Smith Systems Transportation, Inc. as of March 31, 2008 and 2007, and the results of their operations and cash flows for the years ended March 31, 2008 and 2007 in conformity with accounting principles generally accepted in the United States of America.

/s/ Cordovano and Honeck LLP

Cordovano and Honeck LLP

Englewood, Colorado

May 9, 2009

F-21

Smith Systems Transportation Inc.
Consolidated Balance Sheets at March 31, 2008 and 2007

					March 31,
					2008		2007
Assets
Current assets:
	Cash			$	356	$	46,926
	Trade receivables, net of allowance for
		doubtful accounts of $-0- and $-0-, respectively			1,775,854		2,713,436
	Other receivables				109,189		155,438
	Prepaid expenses				405,380		532,976
	Other current assets				40,947		81,665
			Total current assets		2,331,726		3,530,441
Property and equipment, net of accumulated
	depreciation of $3,041,567 and $3,173,875, respectively (Note 3)				2,157,471		2,867,722
Other assets					—		64
			Total assets	$	4,489,197	$	6,398,227
Liabilities and Stockholders' Equity/(Deficit)
Current liabilities:
	Bank overdraft			$	264,529		101,968
	Accounts payable				212,633		226,684
	Current portion of notes payable (Note 4)				1,162,935		3,249,946
	Current portion of capital lease obligations (Note 5)				34,612		32,223
	Accrued liabilities				304,916		351,405
			Total current liabilities		1,979,625		3,962,226
Long term debt:
	Earned escrow				106,051		277,219
	Note payable, less current portion (Note 4)				3,934,616		2,237,254
	Capital lease obligations, less current portion (Note 5)				—		34,611
			Total liabilities		6,020,292		6,511,310
Commitments and contingencies (Note 8)					—		—
Minority interest (Note 9)					303,392		265,566
Stockholders' equity/(deficit) (Note 7):
	Common stock, $10.00 par value; 1,000 shares authorized,
		100 and 100 shares issued and outstanding, respectively			1,000		1,000
	Additional paid-in capital				30,036		30,036
	Retained earnings				(1,865,523)		(409,685)
			Total stockholders' equity/(deficit)		(1,834,487)		(378,649)
			Total liabilities and stockholders' equity/(deficit)	$	4,489,197		6,398,227

F-22

Smith Systems Transportation Inc.

Consolidated Statements of Operations for the years ended

March 31, 2008 and 2007

				Years Ended March 31,
				2008		2007
Operating revenues, including fuel surcharges and rentals			$	12,557,762	$	15,232,314
Operating expenses:
	Rents and purchased transportation			7,316,521		9,436,439
	Salaries, wages and employee benefits			2,509,202		2,547,178
	Fuel and fuel taxes			1,924,647		1,658,548
	Depreciation and amortization			543,010		572,799
	Insurance and claims			779,176		849,979
	Operating taxes and licenses			146,602		144,990
	General and administrative expenses			932,779		586,546
		Total operating expenses		14,151,937		15,796,479
		Operating income		(1,594,175)		(564,165)
Other income/(expense):
	Interest income			594		4,123
	Interest expense			(279,162)		(359,338)
	Gain on disposition of equipment			56,121		60,729
	Other income			415,994		769,447
		Total other income/(expense)		193,547		474,961
		Loss before minority interest		(1,400,628)		(89,204)
Minority interest				(55,210)		(128,655)
		Net loss	$	(1,455,838)	$	(217,859)

F-23

Smith Systems Transportation Inc.

Consolidated Statement of Changes in Stockholder's Equity/(Deficit)

for the period from April 1, 2006 through March 31, 2008

					Additional
	Common Stock				Paid-in		Retained
	Shares		Par Value		Capital		Earnings		Total
Balance at April 1, 2006	100	$	1,000	$	30,036	$	(141,826)	$	(110,790)
Owner distributions	—		—		—		(50,000)		(50,000)
Net income	—		—		—		(217,859)		(217,859)
Balance at March 31, 2007	100		1,000		30,036		(409,685)		(378,649)
Net income	—		—		—		(1,455,838)		(1,455,838)
Balance at March 31, 2008	100	$	1,000	$	30,036	$	(1,865,523)	$	(1,834,487)

F-24

Smith Systems Transportation Inc.

Consolidated Statements of Cash Flows for the years ended

March 31, 2008 and 2007

								Years Ended March 31,
								2008		2007
Cash flows from operating activities:
	Net loss						$	(1,455,838)	$	(217,859)
	Adjustments to reconcile net income to net cash
		used by operating activities:
			Depreciation and amortization					543,010		572,799
			Gain on asset dispositions					(56,121)		(60,729)
			Minority interest in earnings of subsidiary					55,210		128,655
			Changes in operating assets and liabilities:
				(Increase)/decrease in accounts receivable				937,582		(92,386)
				(Increase)/decrease in prepaid expenses				127,596		3,562
				(Increase)/decrease in other current assets				40,718		(364)
				Increase/(decrease) in bank overdraft				162,561		(95,830)
				Increase/(decrease) in accounts payable				(14,051)		5,560
				Increase/(decrease) in other current liabilities				59,562		27,480
				Increase/(decrease) in earned escrow				(277,219)		277,113
					Net cash provided by (used in) operating activities			123,010		548,001
Cash flows from investing activities:
	Acquisitions of property and equipment							(113,945)		—
	Proceeds from asset dispositions							337,307		72,738
	Collection of Accounts Receivable, Officer							46,249		18,316
	Other							64		—
					Net cash provided by (used in) investing activities			269,675		91,054
Cash flows from financing activities:
	Proceeds from notes payable							4,392,975		2,604,198
	Repayment of notes payable							(4,814,846)		(3,078,401)
	Distributions paid to common shareholders							—		(50,000)
	Distributions paid to minority interest							(17,384)		(68,326)
					Net cash provided by (used in)
						financing activities		(439,255)		(592,529)
					Net change in cash			(46,570)		46,526
Cash, beginning of year								46,926		400
Cash, end of year							$	356	$	46,926
Supplemental disclosure of cash flow information:
	Cash paid during the year for:
		Income taxes					$	—	$	—
		Interest					$	694,564	$	968,129

F-25

Smith Systems Transportation Inc.

Notes to Consolidated Financial Statements

March 31, 2008 and 2007

Note 1. Nature of Operations and Summary of Significant Accounting Policies

Nature of Business

Smith Systems Transportation (a Nebraska corporation) and subsidiaries (the “Company”) is a closely held corporation operating as a short to medium-haul truckload carrier of hazardous waste headquartered in Scottsbluff, Nebraska. The Company also has service centers located throughout the United States.  The Company is subject to regulation by the Department of Transportation, OSHEA and various state regulatory authorities.

Principles of Consolidation

The consolidated financial statements include the financial statements of Smith Systems Transportation, Inc. (“Smith”). Smith holds a 60% ownership interest in SST Financial Group, LLC (“SSTFG”). All significant intercompany balances and transactions within the Company have been eliminated upon consolidation.

Use of Estimates

The financial statements contained in this report have been prepared in conformity with accounting principles generally accepted in the United States of America.  The preparation of these statements requires us to make estimates and assumptions that directly affect the amounts reported in such statements and accompanying notes.  The Company evaluates these estimates on an ongoing basis utilizing historical experience, consulting with experts and using other methods the Company considers reasonable in the particular circumstances.  Nevertheless, the Company's actual results may differ significantly from the Company's estimates.

The Company believes that certain accounting policies and estimates are of more significance in the Company's financial statement preparation process than others.  The Company believes the most critical accounting policies and estimates include the economic useful lives and salvage values of the Company's assets, provisions for uncollectible accounts receivable, and estimates of exposures under the Company's insurance and claims plans.  To the extent that actual, final outcomes are different than the Company's estimates, or additional facts and circumstances cause the Company to revise the estimates, the earnings during that accounting period will be affected.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. The Company had no cash equivalents at March 31, 2008.

Accounts Receivable Allowance

The Company's trade accounts receivable includes accounts receivable from brokers and the various clients for whom the Company offers its for-hire transportation services. The Company has experienced minimal losses from its inability to collect bad debts and accordingly, the Company has not made any allowances for uncollectible accounts and revenue adjustments as of March 31, 2008.

F-26

Smith Systems Transportation Inc.

Notes to Consolidated Financial Statements

March 31, 2008 and 2007

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation. Depreciation of property and equipment is calculated on the straight-line method over the following estimated useful lives:

	Years
Land improvements	7- 10
Buildings / improvements	20 - 30
Furniture and fixtures	3 – 5
Shop and service equipment	2 – 5
Revenue equipment	3-5
Leasehold improvements	1 – 5

The Company expenses repairs and maintenance as incurred. The Company periodically reviews the reasonableness of its estimates regarding useful lives and salvage values for revenue equipment and other long-lived assets based upon, among other things, the Company's experience with similar assets, conditions in the used revenue equipment market, and prevailing industry practice. Salvage values are typically 3% to 6% for tractors and trailing equipment and consider any agreements with tractor suppliers for residual or trade-in values for certain new equipment.  The Company capitalizes tires placed in service on new revenue equipment as a part of the equipment cost.  Replacement tires and costs for recapping tires are expensed at the time the tires are placed in service.  Gains and losses on the sale or other disposition of equipment are recognized at the time of the disposition.

Impairment of Long-lived Assets

In accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, long-lived assets and certain identifiable intangible assets held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is evaluated by a comparison of the carrying amount of assets to estimated undiscounted net cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amounts of the assets exceed the fair value of the assets. There has been no impairment as of March 31, 2008.

Revenue Recognition

The Company recognizes revenues, for both asset-based and non-asset-based operations, when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable and collectability is probable. These conditions are met upon delivery. EITF Issue No. 99-19, Reporting Revenue Gross as a Principal versus Net as an Agent, establishes the criteria for recognizing revenues on a gross or net basis. Pursuant to this guidance, revenue for both asset-based and non-asset-based operations is reported on a gross basis.

Advertising Costs

The Company charges advertising costs to expense as incurred. During the years ended March 31, 2008 and 2007, advertising expense was approximately $5,000 and $5,000, respectively.

F-27

Smith Systems Transportation Inc.

Notes to Consolidated Financial Statements

March 31, 2008 and 2007

Income Taxes

The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.  The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

The Company records net deferred tax assets to the extent it believes these assets will more likely than not be realized. In making such determination, the Company considers all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and recent financial operations. 

The Company recognizes a tax benefit from an uncertain tax position when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits.

Stock-based Compensation

The Company has not issued any further stock since inception, but would apply the fair value recognition provisions of Financial Accounting Standards Board (FASB), Statement of Financial Accounting Standards, Share-Based Payment, or SFAS No. 123(R), using the modified prospective application method. Under SFAS No. 123R, stock-based compensation expense is measured at the grant date based on the value of the option or restricted stock and is recognized as expense, less expected forfeitures, over the requisite service period.

Concentrations of Credit Risk

Financial instruments, which potentially subject us to concentrations of credit risk, include cash and trade receivables.  For the years ended March 31, 2008 and 2007, the Company's top four customers, based on revenue, accounted for approximately 40% and 26%, of total revenue, respectively.

Financial instruments with significant credit risk include cash. The Company deposits its cash with high quality financial institutions in amounts less than the federal insurance limit of $250,000 in order to limit credit risk. As of March 31, 2008, the Company's bank deposits did not exceeded insured limits.

Fair Value of Financial Instruments

The carrying amounts of cash, accounts receivable and accounts payable approximate fair value because of their short maturities. At March 31, 2008, the Company had $5,097,551 outstanding under promissory notes with various lenders. The fair value of notes payable to various lenders is based on current rates at which the Company could borrow funds with similar remaining maturities.

F-28

Smith Systems Transportation Inc.

Notes to Consolidated Financial Statements

March 31, 2008 and 2007

Claims Accruals

Losses resulting from personal liability, physical damage, workers' compensation, and cargo loss and damage are covered by insurance subject to deductible, per occurrence. Losses resulting from uninsured claims are recognized when such losses are known and can be estimated. The Company estimates and accrues a liability for its share of ultimate settlements using all available information. The Company accrues for claims reported, as well as for claims incurred but not reported, based upon its past experience. Expenses depend on actual loss experience and changes in estimates of settlement amounts for open claims which have not been fully resolved. These accruals are based on the Company's evaluation of the nature and severity of the claim and estimates of future claims development based on historical trends. Insurance and claims expense will vary based on the frequency and severity of claims and the premium expense. At March 31, 2008, management estimated $-0- in claims accrual.

Recent Accounting Pronouncements

In May 2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 162, The Hierarchy of Generally Accepted Accounting Principles (“SFAS No. 162”).  SFAS No. 162 identifies the source of accounting principles and the framework for selecting the principles used in the preparation of financial statements that are presented in accordance with accounting principles generally accepted in the United States.  This statement will be effective 60 days following the Securities and Exchange Commission’s approval of the Public Company Accounting Oversight Board amendments to AU Section 411, “The Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles.”  The Company does not expect the adoption of SFAS No. 162 to have a material impact on the Company’s financial condition, results of operations, and disclosures.

In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities (“SFAS No. 161”).  This standard revises the presentation of and requires additional disclosures to an entity’s derivative instruments, including how derivative instruments and related hedged items are accounted for under SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, and how derivative instruments and related hedged items affect its financial position, financial performance and cash flows.  The provisions of SFAS No. 161 are effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008.  The Company is currently evaluating the impact of adopting of SFAS No. 161 on its consolidated financial statements.

In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements – an Amendment of ARB 51 (“SFAS No. 160”).  This statement amends ARB 51 and revises accounting and reporting requirements for noncontrolling interests (formerly minority interests) in a subsidiary and for the deconsolidation of a subsidiary.  Upon the adoption of SFAS No. 160 on April 1, 2009, any noncontrolling interests will be classified as equity, and income attributed to the noncontrolling interest will be included in the Company’s income.  The provisions of this standard are applied retrospectively upon adoption.  

In December 2007, the FASB issued SFAS No. 141 (revised 2007), Business Combinations, (“SFAS No. 141(R)”).  SFAS No. 141(R) clarifies and amends the accounting guidance for how an acquirer in a business combination recognizes and measures the assets acquired, liabilities assumed, and any noncontrolling interest in the acquiree.  The provisions of SFAS No. 141(R) are effective for the Company for any business combinations occurring on or after January 1, 2009.

In December 2008, the FASB issued FSP No. FAS 140-4 and FIN 46(R)-8, which amends SFAS No. 140, to require additional disclosures about transfers of financial assets.  The FSP also amended FASB Interpretation No. 46(R), to provide additional disclosures about entities’ involvement with variable interest entities.  The FSP’s scope is limited to disclosure only and is not expected to have an impact on the Company's consolidated financial position or results of operations.

F-29

Smith Systems Transportation Inc.

Notes to Consolidated Financial Statements

March 31, 2008 and 2007

Note 2. Related Party Transactions

From time to time, the company’s 60% owned subsidiary Smith Systems Financial Group advances operating capital to the parent to accommodate operating cash deficiencies. As of March 31, 2008, SST Financial had advanced $1,034,857. These advances are repaid when availability of funds from the parent company are received. There are no terms on these advances and are eliminated in the presentation of consolidated statements.

Note 3. Property and Equipment

Property and equipment consist of the following at March 31, 2008:

	SST	SST Financial	Consolidated
Property Plant and Equipment	5,189,058	9,980	5,199,038
Less: accumulated depreciation)	(3,033,084)	(8,483)	(3,041,567)
Total	2,155,974	1,497	2,157,471

Depreciation expense totaled $543,010 and $ 572,799, respectively, for the years ended March 31, 2008 and 2007.

Note 4. Notes Payable

Notes payable owed by Smith consisted of the following as of March 31, 2008:

Notes payable to bank, due Dec 2012, payable in monthly installments of $65,000.00 @ 9% collateralized by substantially all of the Company's assets	... $2,692,667
Various notes payable to the bank for revolving credit, due May 2009, with monthly interest payments with interest at 9% collateralized by substantially all of the Company's assets	$1,874,490
Note payable to Platte Valley National Bank, due Dec 2010, payable in monthly installments of $1422.57, with interest at 9.5% collateralized by one unit #525	$   41,393
Various notes payable to Daimler Chrysler, due 2010, payable in monthly installments of $10,745.41, ranging from 8-9%, collateralized by 6 units	$222,010
One parts note payable to Floyds, due 2010, payable in monthly installments of $2663.81, with interest at 8.5% unsecured	$136,340
One note payable to General Motors Acceptance Corp, due November 2009, payable in monthly installments of $778.12, with interest at 8%, secured by a vehicle	$14,081
One note payable to Nissan Motor Corp., due June 2011, payable in monthly installments of $505.35, with interest at 36.9%, secured by a vehicle.	$  20,380
One Note payable to Colorado Holdings Company, payable in 2 monthly payments of $1250.00 each, this Note has not interest rate and is unsecured	$65,190
One note payable to Arvada Land & Development, due September 2008, payable in monthly installments of $2500.00	$31,000
Totals	$5,097,551

F-30

Smith Systems Transportation Inc.

Notes to Consolidated Financial Statements

March 31, 2008 and 2007

The carrying amount of assets pledged as collateral for the installment notes payable totaled $4,463,485 at March 31, 2008.

Note 5. Capital Lease Obligations

The Company leases operating equipment under a capital lease which expires in March, 2009. Information concerning the capital lease is as shown in the tables below.

	March 31
	2008		2007
Cost	$	223,617	$	223,617
Accumulated Depreciation		(89,446)		(67,085)
Net Book Value	$	134,171	$	156,532

The above are included in Property, Plant, and Equipment on the Balance Sheet at March 31, 2008 and 2007 respectively.

Minimum future lease payments under this lease are as follows:

	March 31
	2008		2007
2008	$	–	$	35,964
2009		35,964		35,964
		35,964		71,928
Less Amount Representing Interest		(1,352)		(5,094)
Capital Lease Obligation	$	34,612	$	66,834

The above debt amounts are included in the Balance Sheet in the respective short-term and long-term capital lease obligations at March 31, 2008 and 2009, respectively.

Note 6 - Income Taxes

The Company accounts for income taxes under SFAS 109, which requires use of the liability method. SFAS 109 provides that deferred tax assets and liabilities are recorded based on the differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes, referred to as temporary differences.

F-31

Smith Systems Transportation Inc.

Notes to Consolidated Financial Statements

March 31, 2008 and 2007

Deferred tax assets and liabilities at the end of each period are determined using the currently effective tax rates applied to taxable income in the periods in which the deferred tax assets and liabilities are expected to be settled or realized. The reconciliation of enacted rates the years ended March 31, 2008 and March 31, 2007 is as follows:

	2008	2007
Federal	34%	34%
State	0%	0%
Net operating loss carryforward	-	-
Increase in valuation allowance	(34%)	(34%)
	-	-

At March 31, 2008, the Company had a net operating loss carry forward of approximately $2,495,205.00 that may be offset against future taxable income subject to limitations imposed by the Internal Revenue Service. This carryforward is subject to review by the Internal Revenue Service and, if allowed, may be offset against taxable income through 2028. A portion of the net operating loss carryovers begin expiring in 2019.

Deferred tax assets are as follows:

	2008	2007
Deferred tax asset due to net operating loss	$ 448,082	331,936
Valuation allowance	(448,082)	(331,936)
Net Asset less liability	-0 -	-0 -

The deferred tax asset relates principally to the net operating loss carryforward. A valuation allowance was established at March 31, 2008 and March 31, 2007 to eliminate the deferred tax benefit that existed at that time since it is uncertain if the tax benefit will be realized. The deferred tax asset (and the related valuation allowance) increased by $373,000 and $270,000 for the years ended March 31, 2008 and March 31, 2007, respectively.

Effective October 1, 2007 the Company must adopt the provisions of Financial Interpretation 48 (FIN 48), “Accounting for Uncertainty in Income Taxes.” Management does not believe the adoption will have a material impact on future results of operations.

Note 7. Shareholder’s Equity

Common Stock

The Company has not issued any of its common stock or granted any options or warrants since inception.

F-32

Smith Systems Transportation Inc.

Notes to Consolidated Financial Statements

March 31, 2008 and 2007

Note 8. Commitments and Contingencies

Operating Leases

The Company has no office space under non-cancellable lease agreements. The Company only has informal month to month leases.

The Company leases vehicles and trailers under various non-cancelable operating leases expiring through November 2009. Vehicle and trailer lease expense for the period ended December 31, 2008 totaled $209,975

Purchase Commitments

The Company’s purchase commitments for revenue equipment are currently under negotiation. Upon execution of the purchase commitments, the Company anticipates that purchase commitments under contract will have a net purchase price of approximately $300,000 and will be paid throughout 2010.

Claims and Assessments

The Company is involved in certain claims and pending litigation arising from the normal conduct of business.  Based on the present knowledge of the facts and, in certain cases, opinions of outside counsel, the Company believes the resolution of these claims and pending litigation will not have a material adverse effect on the Company's financial condition, results of operations or liquidity.

Note 9. Business Combinations

Smith Financial Group, LLC is a factoring company which is 60% owned by Smith Systems Transportation Corp.

Smith Financial Group LLC is reported on a consolidated basis, the minority interest of 40% is reported in the mezzanine section of the balance sheet.

Contingent Consideration

The Company has no contingent liabilities at this time.

Note 10. Subsequent Events

On August 28, 2008, all of the Company’s stock was acquired by Integrated Freight Systems, Inc. (“IFG”), a Florida-based company under the terms of a Stock Exchange Agreement, resulting in a change in control.  The accounting date of the acquisition was September 1, 2008 and the transaction was accounted for under the purchase method in accordance with SFAS 141.

F-33

FINANCIAL STATEMENTS OF MORRIS TRANSPORTATION, INC.

		Page
Report of Independent Registered Public Accounting Firm		F-35
Balance Sheets at March 31, 2008 and 2007		F-26
Statements of Operations for the years ended
	March 31, 2008 and 2007	F-37
Statement of Changes in Stockholder’s Equity
	for the period from April 1, 2006 through March 31, 2008	F-38
Statements of Cash Flows for the years ended
	March 31, 2008 and 2007	F-39
Notes to Financial Statements		F-40

F-34

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholder

Morris Transportation, Inc.

Hamburg, Arkansas

We have audited the accompanying balance sheets of Morris Transportation, Inc. as of March 31, 2008 and 2007, and the related statements of operations, changes in stockholders’ equity and cash flows for the years ended March 31, 2008 and 2007. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. 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 control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose 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, 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 financial statements referred to above present fairly, in all material respects, the financial position of Morris Transportation, Inc. as of March 31, 2008 and 2007, and the results of its operations and its cash flows for the years ended March 31, 2008 and 2007 in conformity with accounting principles generally accepted in the United States of America.

/s/ Cordovano and Honeck LLP

Cordovano and Honeck LLP

Englewood, Colorado

May 9, 2009

F-35

Morris Transportation Inc.

Balance Sheets at March 31, 2008 and 2007

				March 31,
					2008		2007
Assets
Current assets:
	Cash			$	78,436	$	69,792
	Trade receivables, net of allowance for
		doubtful accounts of $-0- and $-0-, respectively			918,840		1,270,432
	Other current assets				37,661		36,982
			Total current assets		1,034,937		1,377,206
Property and equipment, net of accumulated
	depreciation of $2,552,307 and $1,749,700, respectively (Note 3)				5,005,351		5,263,056
			Total assets	$	6,040,288	$	6,640,262
Liabilities and Stockholder’s Equity
Current liabilities:
	Accounts payable			$	77,855	$	113,716
	Current portion of notes payable (Note 6)				1,203,995		1,318,108
	Line of credit (Note 5)				744,200		680,138
	Other current liabilities				60,697		128,761
			Total current liabilities		2,086,747		2,240,723
Long term debt:
	Note payable, less current portion (Note 6)				3,293,094		3,558,033
			Total liabilities		5,379,841		5,798,756
Commitments and contingencies (Note 9)					—		—
Stockholder’s equity (Note 8):
	Common stock, $1.00 par value; 1,000 shares authorized,
		200 shares issued and outstanding at March 31, 2008 and March 31, 2007			200		200
	Retained earnings				660,247		841,306
			Total stockholder’s equity		660,447		841,506
			Total liabilities and stockholder’s equity	$	6,040,288	$	6,640,262

F-36

Morris Transportation Inc.

Statements of Operations for the years ended

March 31, 2008 and 2007

				Years Ended March 31,
				2008		2007
Operating revenues, including fuel surcharges and rental			$	12,363,823	$	11,918,175
Operating expenses:
	Rents and purchased transportation			3,626,272		3,801,066
	Salaries, wages and employee benefit			3,122,724		2,781,105
	Fuel and fuel taxes			3,576,765		3,581,861
	Depreciation and amortization			899,267		818,235
	Insurance and claims			392,418		292,474
	Operating taxes and licenses			115,153		68,563
	General and administrative expenses			222,095		159,392
		Total operating expenses		11,954,694		11,502,696
		Operating income		409,129		415,479
Other income/(expense):
	Interest expense			(378,135)		(261,154)
	Loss on disposition of equipment			(71,387)		(119,125)
		Total other income/(expense)		(449,522)		(380,279)
		Loss before income taxes		(40,393)		35,200
Provision for income taxes				—		—
		Net loss	$	(40,393)	$	35,200
Pro forma adjustments (Note 1):
	Officer/shareholder distributions			140,666		234,707
	Income taxes			(46,000)		(89,000)
		Pro forma net loss	$	54,273	$	180,907

F-37

Morris Transportation Inc.

Statement of Changes in Stockholder’s Equity

for the period from April 1, 2006 through March 31, 2008

	Common Stock				Retained
	Shares		Par Value		Earnings		Total
Balance at April 1, 2006	200	$	200	$	1,040,813	$	1,041,013
Owner distributions	—		—		(234,707)		(234,707)
Net income	—		—		35,200		35,200
Balance at March 31, 2007	200		200		841,306		841,506
Owner distributions	—		—		(140,666)		(140,666)
Net income	—		—		(40,393)		(40,393)
Balance at March 31, 2008	200	$	200	$	660,247	$	660,447

F-38

Morris Transportation Inc.

Statements of Cash Flows for the years ended

March 31, 2008 and 2007

								Years Ended March 31,
								2008		2007
Cash flows from operating activities:
	Net loss						$	(40,393)	$	35,200
	Adjustments to reconcile net income to net cash
		used by operating activities:
			Depreciation and amortization					899,267		818,235
			Loss on asset dispositions					71,387		119,125
			Changes in operating assets and liabilities:
				(Increase)/decrease in accounts receivable				351,592		(38,386)
				(Increase)/decrease in other current assets				(679)		(10,799)
				Increase/(decrease) in accounts payable				(35,861)		59,110
				Increase/(decrease) in other current liabilities				(68,064)		17,383
					Net cash provided by (used in)
						operating activities		1,177,249		999,868
Cash flows from investing activities:
	Acquisitions of property and equipment							(712,949)		(1,734,452)
					Net cash provided by (used in)
						investing activities		(712,949)		(1,734,452)
Cash flows from financing activities:
	Proceeds from notes payable							—		948,233
	Repayment of notes payable							(314,990)		—
	Distributions paid to common shareholders							(140,666)		(234,707)
					Net cash provided by (used in)
						financing activities		(455,656)		713,526
					Net change in cash			8,644		(21,058)
Cash, beginning of year								69,792		90,850
Cash, end of year							$	78,436	$	69,792
Supplemental disclosure of cash flow information:
	Cash paid during the year for:
		Income taxes					$	—	$	—
		Interest					$	378,135	$	261,154

F-39

Morris Transportation Inc.

Notes to Financial Statements

March 31, 2008 and 2007

Note 1. Nature of Operations and Summary of Significant Accounting Policies

Nature of Business

Morris Transportation, Inc. (an Arkansas corporation) and subsidiaries (the “Company”) is a closely held S corporation operating as a short to medium-haul truckload carrier of dry van materials headquartered in Hamburg, Arkansas.. The Company also has service centers located throughout the United States. The Company is subject to regulation by the Department of Transportation, OSHEA and various state regulatory authorities.

Note 2.  Uses of Estimates

The financial statements contained in this report have been prepared in conformity with accounting principles generally accepted in the United States of America. The preparation of these statements requires us to make estimates and assumptions that directly affect the amounts reported in such statements and accompanying notes. The Company evaluates these estimates on an ongoing basis utilizing historical experience, consulting with experts and using other methods the Company considers reasonable in the particular circumstances. Nevertheless, actual results may differ significantly from estimates.

The Company believes that certain accounting policies and estimates are of more significance in its financial statement preparation process than others. The Company believes the most critical accounting policies and estimates include the economic useful lives and salvage values of  assets, provisions for uncollectible accounts receivable, and estimates of exposures under the Company's insurance and claims plans. To the extent that actual, final outcomes are different than the Company's estimates, or additional facts and circumstances cause us to revise the Company's estimates, its earnings during that accounting period will be affected.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. The Company had no cash equivalents at March 31, 2008.

Accounts Receivable Allowance

The Company trade accounts receivable includes accounts receivable from brokers and the various clients for whom the Company offer its for-hire transportation services. The Company has experienced minimal losses from the Company's inability to collect bad debts and accordingly, the Company has not made any allowances for uncollectible accounts and revenue adjustments as of March 31, 2008.

Impairment of Long-lived Assets

In accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, long-lived assets and certain identifiable intangible assets held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is evaluated by a comparison of the carrying amount of assets to estimated undiscounted net cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amounts of the assets exceed the fair value of the assets. There has been no impairment as of March 31, 2008.

F-40

Morris Transportation Inc.

Notes to Financial Statements

March 31, 2008 and 2007

Revenue Recognition

The Company recognizes revenues, for both asset-based and non-asset-based operations, when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable and collectability is probable. These conditions are met upon delivery. EITF Issue No. 99-19, Reporting Revenue Gross as a Principal versus Net as an Agent, establishes the criteria for recognizing revenues on a gross or net basis. Pursuant to this guidance, revenue for both asset-based and non-asset-based operations is reported on a gross basis.

Advertising Costs

The Company charges advertising costs to expense as incurred. During the years ended March 31, 2008 and 2007, advertising expense was approximately $5,000 and $5,000, respectively.

Income Taxes

Income Taxes and Related Pro Forma Adjustments

The Company elects to be taxed as an S corporation. As such, there is no provision for income taxes in the accompanying financial statements. As an S corporation, the Company makes distributions to the Company's shareholders annually and charge those distributions to retained earnings.

The accompanying statements of income include pro forma adjustments to reflect as salaries distributions to shareholders and to reflect an estimated provision for income taxes. The effective income tax rate used on the pro forma adjustments is that estimated had the Company been a C corporation.

Stock-based Compensation

The Company has not issued any further stock since inception, but would apply the fair value recognition provisions of Financial Accounting Standards Board (FASB), Statement of Financial Accounting Standards, Share-Based Payment, or SFAS No. 123(R), using the modified prospective application method. Under SFAS No. 123R, stock-based compensation expense is measured at the grant date based on the value of the option or restricted stock and is recognized as expense, less expected forfeitures, over the requisite service period.

Concentrations of Credit Risk

Financial instruments, which potentially subject us to concentrations of credit risk, include cash and trade receivables. For the years ended March 31, 2008 and 2007, the Company's top four customers, based on revenue, accounted for approximately 40% and 36%, of total revenue, respectively. The Company's top four customers, based on revenue, accounted for approximately 30% and 26% of the Company's total trade accounts receivable at March 31, 2008 and 2007, respectively.

Financial instruments with significant credit risk include cash. The Company deposits its cash with high quality financial institutions in amounts less than the federal insurance limit of $250,000 in order to limit credit risk. As of March 31, 2008, the Company’s bank deposits did not exceeded insured limits.

F-41

Morris Transportation Inc.

Notes to Financial Statements

March 31, 2008 and 2007

Fair Value of Financial Instruments

The carrying amounts of cash, accounts receivable and accounts payable approximate fair value because of their short maturities. At March 31, 2008, the Company has $5,097,699 outstanding under promissory notes with various lenders. The fair value of notes payable to various lenders is based on current rates at which the Company could borrow funds with similar remaining maturities.

Claims Accruals

Losses resulting from personal liability, physical damage, workers’ compensation, and cargo loss and damage are covered by insurance subject to deductible, per occurrence. Losses resulting from uninsured claims are recognized when such losses are known and can be estimated. The Company estimates and accrues a liability for the Company's share of ultimate settlements using all available information. The Company accrues for claims reported, as well as for claims incurred but not reported, based upon past experience. Expenses depend on actual loss experience and changes in estimates of settlement amounts for open claims which have not been fully resolved. These accruals are based on evaluation of the nature and severity of the claim and estimates of future claims development based on historical trends. Insurance and claims expense will vary based on the frequency and severity of claims and the premium expense. At March 31, 2008, management estimated $-0- in claims accrual.

Earnings per Share

The Company calculates earnings per share in accordance with SFAS No. 128, “Earnings per Share.” Basic income per share is computed by dividing the net income by the weighted-average number of common shares outstanding during the period. The Company has no warrants or stock option plan that would be dilutive. At December 31, 2008, there was no effect between the basic and diluted loss per share.

Recent Accounting Pronouncements

In May 2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 162, The Hierarchy of Generally Accepted Accounting Principles (“SFAS No. 162”). SFAS No. 162 identifies the source of accounting principles and the framework for selecting the principles used in the preparation of financial statements that are presented in accordance with accounting principles generally accepted in the United States. This statement will be effective 60 days following the Securities and Exchange Commission’s approval of the Public Company Accounting Oversight Board amendments to AU Section 411, “The Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles.”  The Company does not expect the adoption of SFAS No. 162 to have a material impact on the Company’s financial condition, results of operations, and disclosures.

In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities (“SFAS No. 161”). This standard revises the presentation of and requires additional disclosures to an entity’s derivative instruments, including how derivative instruments and related hedged items are accounted for under SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, and how derivative instruments and related hedged items affect its financial position, financial performance and cash flows. The provisions of SFAS No. 161 are effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. The Company is currently evaluating the impact of adopting of SFAS No. 161 on its consolidated financial statements.

F-42

Morris Transportation Inc.

Notes to Financial Statements

March 31, 2008 and 2007

In December 2007, the FASB issued SFAS No. 160, No controlling Interests in Consolidated Financial Statements – an Amendment of ARB 51 (“SFAS No. 160”). This statement amends ARB 51 and revises accounting and reporting requirements for no controlling interests (formerly minority interests) in a subsidiary and for the deconsolidation of a subsidiary. Upon the adoption of SFAS No. 160 on April 1, 2009, any no controlling interests will be classified as equity, and income attributed to the no controlling interest will be included in the Company’s income. The provisions of this standard are applied retrospectively upon adoption.

In December 2007, the FASB issued SFAS No. 141 (revised 2007), Business Combinations, (“SFAS No. 141(R)”). SFAS No. 141(R) clarifies and amends the accounting guidance for how an acquirer in a business combination recognizes and measures the assets acquired, liabilities assumed, and any no controlling interest in the acquire. The provisions of SFAS No. 141(R) are effective for the Company for any business combinations occurring on or after January 1, 2009.

In December 2008, the FASB issued FSP No. FAS 140-4 and FIN 46(R)-8, which amends SFAS No. 140, to require additional disclosures about transfers of financial assets. The FSP also amended FASB Interpretation No. 46(R), to provide additional disclosures about entities’ involvement with variable interest entities. The FSP’s scope is limited to disclosure only and is not expected to have an impact on the Company’s consolidated financial position or results of operations.

Note 3. Property and Equipment

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation. Depreciation of property and equipment is calculated on the straight-line method over the following estimated useful lives:

	Years
Land improvements	7- 10
Buildings / improvements	20 – 30
Furniture and fixtures	3 – 5
Shop and service equipment	2 – 5
Revenue equipment	3-5
Leasehold improvements	1 – 5

The Company expenses repairs and maintenance as incurred. The Company periodically reviews the reasonableness of its estimates regarding useful lives and salvage values for revenue equipment and other long-lived assets based upon, among other things, the Company’s experience with similar assets, conditions in the used revenue equipment market, and prevailing industry practice. Salvage values are typically 3% to 6% for tractors and trailing equipment and consider any agreements with tractor suppliers for residual or trade-in values for certain new equipment. The Company capitalizes tires placed in service on new revenue equipment as a part of the equipment cost. Replacement tires and costs for recapping tires are expensed at the time the tires are placed in service. Gains and losses on the sale or other disposition of equipment are recognized at the time of the disposition.

F-43

Morris Transportation Inc.

Notes to Financial Statements

March 31, 2008 and 2007

Property and equipment consist of the following at March 31, 2008 and 2007:

	March 31,
	2008			2007
Cost	$	7,557,658	$	7,012,756
Accumulated Depreciation		(2,552,307)		(1,749,700)
Net Carrying Value	$	5,005,351	$	5,263,056

Depreciation Expense for the years ended March 31, 2008 and 2007 was $899,267 and $818,235, respectively.

Note 4. Notes Payable

Line of credit with interest rate of 8.5%, $800,000 limit, secured by company receivables maturing August 2008	$744,200
Various notes payable to Chrysler Financial payable in monthly installments ranging from $569 to $5,687 including interest through May 2013 with interest rate ranging from 5.34% to 8.07% secured by equipment	$2,376,667
Various notes payable to First Continental Bank payable in monthly installments ranging from $1,805 to $5,829 including interest through June 2010 with interest rate ranging from 5.9% to 7.25% secured by equipment	$179,028
Various notes payable to GE Financial payable in monthly installments ranging from $2,999 to $7,535 including interest through April 2013 with interest rate ranging from 6.69% to 8.53% secured by equipment	$1,726,436
6.9% note payable to a GMAC Financial in installments of $667 including interest, through August 2013 secured by a vehicle	$15,112
8.59% note payable to a Wells Fargo Bank payable in monthly installments of $4,271 including interest, through October 2011 secured by equipment	$199,846
The carrying amount of assets pledged as collateral for the installment notes payable totaled $4,371,885 at December 31, 2008

F-44

Morris Transportation Inc.

Notes to Financial Statements

March 31, 2008 and 2007

Note 5. Shareholder’s Equity

Common Stock

The Company has not issued any of its common stock or granted any options or warrants since inception.

Note 6. Commitments and Contingencies

Operating Leases

The Company has no office space under non-cancellable lease agreements. The Company only has informal month to month leases.

The Company leases vehicles and trailers under various non-cancelable operating leases expiring through November 2009. Vehicle and trailer lease expense for the period ended December 31, 2008 totaled $209,975

Purchase Commitments

The Company’s purchase commitments for revenue equipment are currently under negotiation. Upon execution of the purchase commitments, the Company anticipates that purchase commitments under contract will have a net purchase price of approximately $300,000 and will be paid throughout 2010.

Claims and Assessments

The Company is involved in certain claims and pending litigation arising from the normal conduct of business. Based on the present knowledge of the facts and, in certain cases, opinions of outside counsel, the Company believes the resolution of these claims and pending litigation will not have a material adverse effect on the Company's financial condition, results of operations or liquidity.

Contingent Consideration

The Company has no contingent liabilities at this time.

Note 7.  Subsequent Events

On August 28, 2008, all of the Company’s stock was acquired by Integrated Freight Systems, Inc. (“IFG”), a Florida-based company under the terms of a Stock Exchange Agreement, resulting in a change in control. The accounting date of the acquisition was September 1, 2008 and the transaction was accounted for under the purchase method in accordance with SFAS 141.

F-45

INTEGRATED FREIGHT SYSTEMS, INC.

Pro Forma Financial Information.

SELECTED UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL DATA

The following unaudited pro forma condensed financial statements give effect to Integrated Freight Systems Inc.’s (“IFS”) acquisitions of Morris Transportation (“Morris”) and Smith Systems Transportation (“Smith”) period from May 13, 2008 (inception) through December 31, 2008.

The unaudited pro forma condensed statements of operations are presented as if the transaction was consummated at the beginning of the period presented.

The unaudited pro forma condensed statements of operations should be read in conjunction with the accompanying notes and the separate audited financial statements and notes thereto of each of the companies included in the pro forma as of the balance sheet date and their respective year-ends.

The unaudited pro forma condensed statements of operations may not be indicative of the results that actually would have occurred if the transaction had been effective on the dates indicated nor are they results that may be obtained in the future.

F-46

INTEGRATED FREIGHT SYSTEMS, INC.
PRO-FORMA STATEMENT OF OPERATIONS
FOR THE PERIOD MAY 13, 2008 (INCEPTION) TO DECEMBER 31, 2008
	Smith		Integrated
	Systems	Morris	Freight	Unaudited
	Transportation	Transportation	Systems	Pro-Forma
	Inc.	Inc.	Inc.	Total
Revenues	$ 5,506,073	$9,355,546	$              -	$14,861,619
Operating Expenses
Rents and purchased transportation	1,930,784	1,500,156		3,430,940
Salaries, wages and employee benefit	1,448,303	2,320,689	375,750	4,144,742
Fuel and fuel taxes	1,318,483	2,192,004		3,510,487
Depreciation and amortization	329,415	622,299	162,551	1,114,265
Insurance and claims	309,936	229,619		539,555
Operating taxes and licenses	48,499	81,050		129,549
General and administrative expenses	200,148	2,160,972	38,632	2,399,752
	5,585,568	9,106,789	576,933	15,269,290
Income before Other Income (Expense)	(79,495)	248,757	(576,933)	(407,671)
Other Income (Expense)
Other income	(10,222)	-		(10,222)
Interest Income		-		-
Gain (Loss) on Equipment Dispositions	28,142	-		28,142
Interest Expense	(39,164)	(237,876)	(95,867)	(372,907)
Total Other Income (Expense)	(21,244)	(237,876)	(95,867)	(354,987)
Net Income Before Minority Interest	(100,739)	10,881	(672,800)	(762,658)
Minority interest in earnings of Subsidiary	(50,885)	-	-	(50,885)
	$(151,624)	$       10,881	$(672,800)	$ (813,543)

F-47

INTEGRATED FREIGHT SYSTEMS, INC.

Pro Forma Financial Information.

Business Combinations

Smith Systems Transportation, Inc.

On August 28, 2008, IFS acquired 100% of the common stock of Smith, a Nebraska-based hazardous waste carrier, under the terms of a Stock Exchange Agreement.  The accounting date of the acquisition was September 1, 2008 and the transaction was accounted for under the purchase method in accordance with SFAS 141. The aggregate purchase price was $456,250, including 825,000 shares of IFS’s common stock valued at $0.25 per share and a $250,000 promissory note.

Morris Transportation, Inc.

On August 28, 2008, IFS acquired 100% of the common stock of Morris, an Arkansas-based dry van truckload carrier, under the terms of a Stock Exchange Agreement.  The accounting date of the acquisition was September 1, 2008 and the transaction was accounted for under the purchase method in accordance with SFAS 141. The aggregate purchase price was $1,350,000, including 3,000,000 shares of IFS’s common stock valued at $0.25 per share and a $600,000 promissory note.

Due to the need for capital at the time of the transaction the Company believes it unlikely any adjustments on a pro-forma basis would be necessary had the transaction been effective May 13, 2008.

F-48

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 20. Indemnification of Directors and Officers.

§607.0850 of the Florida Business Corporation Act and our bylaws permit us to indemnify any person who was or is a party to any proceeding (unless we are suing that person), by reason of the fact that the person is or was a director, officer, employee, or agent of the corporation or is or was serving at the request of the corporation as a director, officer, employee, or agent of a subsidiary against liability incurred in connection with such proceeding, including any appeal thereof, if the person acted in good faith and in a manner the person reasonably believed to be in, or not opposed to, our best interests and, with respect to any criminal action or proceeding, had no reasonable cause to believe the conduct was unlawful. The termination of any proceeding by judgment, order, settlement, or conviction or upon a plea of no contest or its equivalent shall not, of itself, create a presumption that the person did not act in good faith and in a manner which the person reasonably believed to be in, or not opposed to, the best interests of the corporation or, with respect to any criminal action or proceeding, had reasonable cause to believe that his or her conduct was unlawful.

We are also empowered to indemnify any such person who brings an action on our behalf; provided, that no indemnification shall be made in respect of any claim, issue, or matter as to which such person shall have been adjudged to be liable unless, and only to the extent that, the court in which such proceeding was brought, or any other court of competent jurisdiction, shall determine upon application that, despite the adjudication of liability but in view of all circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which such court shall deem proper.

To the extent that any such person has been successful on the merits or otherwise in defense of any proceeding referred to above, or in defense of any claim, issue, or matter therein, he or she shall be indemnified against expenses actually and reasonably incurred by him or her in connection therewith.

Unless indemnification is made pursuant to a determination by a court, we shall make indemnification only as authorized in the specific case upon a determination of (i) our board of directors by a majority vote of a quorum consisting of directors who were not parties to such proceeding or (ii) if such a quorum is not obtainable or, even if obtainable, by majority vote of a committee duly designated by the board of directors (in which directors who are parties may participate) consisting solely of two or more directors not at the time parties to the proceeding or (iii) by independent legal counsel or (iv) by the shareholders by a majority vote of a quorum consisting of shareholders who were not parties to such proceeding or, if no such quorum is obtainable, by a majority vote of shareholders who were not parties to such proceeding.

A complete statement of§607.0850 of the Florida Business Corporation Act is available at http://www.leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&Search_String=&URL=Ch0607/SEC0850.HTM&Title=->2008->Ch0607->Section%200850#0607.0850.

Item 21. Exhibits and Financial Statement Schedules.

Exhibits:

2.01	Amended & Restated Stock Purchase Agreement [Nutmeg/Fortuna Fund, LLLP]
2.02	Stock Purchase Agreement [PlanGraphics]
3.01	Articles of Incorporation
3.02	Bylaws
5	Opinion re: Legality

35

10.01A	Stock Exchange Agreement [Morris Transportation, Inc.]
10.01B	Amendments to Stock Purchase Agreement [Morris Transportation, Inc.]
10.01C	Letter waiver of conditions subsequent in Stock Purchase Agreement [Morris Transportation, Inc.]
10.01D	Amended Secured Promissory Note
10.02A	Stock Exchange Agreement [Smith Systems Transportation, Inc.]
10.02B	Amendments to Stock Purchase Agreement [Smith Systems Transportation, Inc.]
10.02C	Letter waiver of conditions subsequent in Stock Purchase Agreement [Smith Systems Transportation, Inc.]
10.02D	Form of Amended Secured Promissory Note
10.03	Form of Lockup – Leak-out Agreement
21	Subsidiaries of the registrant
23.01	Consent of counsel (included in Exhibit 5)
23.02	Consent of Cordovano & Honeck LLP, independent public accountants
23.03	Consent of Sherb & Co., LLP, independent public accountants

Item 22. Undertakings.

(a) §229.512 (Item 512) Undertakings –

(b) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(c) The undersigned registrant hereby undertakes to supplement the information statement/prospectus, after the expiration of the subscription period, to set forth the results of the subscription offer, the transactions by the underwriters during the subscription period, the amount of unsubscribed securities to be purchased by the underwriters, and the terms of any subsequent reoffering thereof. If any public offering by the underwriters is to be made on terms differing from those set forth on the cover page of the prospectus, a post-effective amendment will be filed to set forth the terms of such offering.

(e) The undersigned registrant hereby undertakes to deliver or cause to be delivered with the information statement/prospectus, to each person to whom the information statement/prospectus is sent or given, the latest annual report to security holders that is incorporated by reference in the prospectus and furnished pursuant to and meeting the requirements of Rule 14a–3 or Rule 14c–3 under the Securities Exchange Act of 1934; and, where interim financial information required to be presented by Article 3 of Regulation S-X are not set forth in the prospectus, to deliver, or cause to be delivered to each person to whom the prospectus is sent or given, the latest quarterly report that is specifically incorporated by reference in the prospectus to provide such interim financial information.

(f) The undersigned registrant hereby undertakes to provide to the underwriter at the closing specified in the underwriting agreements certificates in such denominations and registered in such names as required by the underwriter to permit prompt delivery to each purchaser.

36

(g)(1) The undersigned registrant hereby undertakes as follows: That prior to any public reoffering of the securities registered hereunder through use of a information statement/prospectus which is a part of this registration statement, by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c), the registrant undertakes that such reoffering prospectus will contain the information called for by the applicable registration form with respect to reofferings by persons who may be deemed underwriters, in addition to the information called for by the other Items of the applicable form.

(g)(2) The registrant undertakes that every information statement/prospectus (i) that is filed pursuant to paragraph (h)(1) immediately preceding, or (ii) that purports to meet the requirements of section 10(a)(3) of the Act and is used in connection with an offering of securities subject to Rule 415 (§230.415 of this chapter), will be filed as a part of an amendment to the registration statement and will not be used until such amendment is effective, and that, for purposes of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(h) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

(b) Other S-4 undertakings –

The undersigned registrant hereby undertakes to respond to requests for information that is incorporated by reference into the prospectus pursuant to Items 4, 10(b), 11, or 13 of this Form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request.

The undersigned registrant hereby undertakes to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective.

37

SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Sarasota State of Florida on June 3, 2009.

Integrated Freight Systems, Inc.

By: /s/ Paul A. Henley

Paul A. Henley, Chief Executive Officer

In accordance with the requirements of the Securities Act of 1933, this registration statement was signed by the following persons in the capacities and on the dates stated:

Signature and Name:	Capacity in which signed:	Date:
/s/ Paul A. Henley	Director and Principal Executive Officer	June 3, 2009
Paul A. Henley
/s/ Henry P. Hoffman	Director	June  3, 2009
Henry P. Hoffman
/s/ T. Mark Morris	Director	June  3, 2009
T. Mark Morris
/s/ Monte W. Smith	Director	June  3, 2009
Monte W. Smith
/s/ J. Richard Iler	Principal Accounting Officer	June 3, 2009
J. Richard Iler

38

EX-2.01

AMENDED AND RESTATED STOCK PURCHASE AGREEMENT

Stock Purchase Incident to Change of Control

This Amended and Restated Stock Purchase Agreement (the “Agreement”) is entered into as of May 1, 2009, by and between Nutmeg/Fortuna Fund, LLLP, an Illinois limited liability limited partnership with its principal place of business located at Suite 10, 155 Revere Drive, Northbrook, IL 60062, (the “Seller”) and Integrated Freight Systems, Inc., a Florida Corporation with its principal place of business located at Suite 200, 6371 Business Boulevard, Sarasota, FL 34240 (the “Purchaser”). Each of the Seller and Purchaser shall be referred to as a “Party” and collectively as the “Parties”.

PREAMBLE

WHEREAS, the Seller is the registered owner of 500 shares of Series A 12% Redeemable Preferred Stock, $0.001 par value (the “Preferred Stock”) issued by PlanGraphics, Inc. (“PGRA”), a publicly traded, reporting Colorado corporation; and

WHEREAS, the Parties entered into a Stock Purchase Agreement dated March 4, 2009 (Original Purchase Agreement) pursuant to which the Seller agreed to sell and the Purchaser agreed to purchase 100.0000008 shares of the Preferred Stock; and

WHEREAS, the Purchaser had paid a deposit of $5,000.00 against the original purchase price in the Original Purchase Agreement by delivery of that amount to PGRA’s independent public accountant in payment of audit or review fees; and

                WHEREAS, the Seller has made a Series A Redemption Request, offering in the alternative to a cash redemption to redeem all 500 shares of Preferred Stock (including the 100.0000008 shares to be purchased by the Purchaser pursuant to the Original Purchase Agreement) for shares of PGRA’s common stock (the “Common Stock”), the number of such common shares to be determined by dividing the Series A Redemption Price at the Series A Redemption Date $0.00165, which represents the per share volume weighted average of the highest and lowest closing prices for the Corporation’s common stock published by OTC Bulletin Board for the 60 day period commencing on February 15, 2009 and ending on April 15, 2009; and

WHEREAS, PGRA’s board of directors has approved the redemption of the Preferred Stock for the Common Stock; and

WHEREAS, the Seller and the Purchaser desire to amend and restate the Original Purchase Agreement, as provided herein below;

NOW, THEREFORE, in consideration for the Original Purchase Agreement and the deposit made with respect thereto, the Parties covenant, promise and agree as follows:

AGREEMENT

1. Defined terms. All capitalized terms not defined herein are defined in the Certificate of Designation for the Preferred Stock filed with the Secretary of State of Colorado.

2. Terms of the purchase. The Seller will sell and the Purchaser will purchase the 500 shares of Preferred Stock for a price of $167,000 and 1,307,822 shares of Purchaser’s common stock, par value $0.001 per share, as provided in and subject to the terms and conditions set forth herein. The purchase price, due at the closing

(“Closing”), will be paid by delivery of the Purchaser’s promissory note, due in one year with simple interest at a rate of eight percent per annum, and certificates representing the shares of Purchaser’s common stock. The Seller will deliver certificates representing the Preferred Stock at the closing of the transaction against delivery of the Purchaser’s promissory note and Purchaser’s common stock. The Preferred Stock is and the Purchaser’s common stock will be “restricted securities” as defined in Rule 144 under the Securities Act of 1933. The Seller will enter into a Lockup – Leak-out Agreement in the form of Exhibit “A” with respect to the Purchaser’s common stock.

3. Conditions precedent to completion of sale and purchase. The following conditions shall be satisfied before the Purchaser shall be obligated to complete its purchase of the Preferred Stock:

(a) The Common Stock for which the Preferred Stock is redeemed shall constitute more than one-half of PGRA’s issued and outstanding common stock and PGRA shall have no other options, warrants or other rights outstanding for the purchase of its common stock or other equity securities, except management options currently outstanding for the purchase of not more than 5,666,432 shares of common stock.

(b) The Seller shall have agreed to accept certain income interests from PGRA’s operating subsidiary (“PGI MD”) in full payment of principal of and accrued interest on a January 14, 2009 Convertible Debenture in the principal amount of $30,000 issued by PGRA and to release PGRA from liability therefore and Nutmeg Group LLC shall have released its security interests related to the Preferred Stock.

4. Conditions subsequent to be satisfied. At or after the sale and purchase contemplated by this Agreement, the following conditions subsequent must be satisfied. In the event any one or more such conditions is not satisfied, the Purchaser, at its sole option, may cancel its promissory note and the shares of its common stock issued to the Seller and thereupon shall return to the Seller the Preferred Stock or the Common Stock for which the Preferred Stock has been redeemed.

(a) PGRA’s aggregate liabilities, known, contingent and unknown, shall not exceed an aggregate of $28,000, all other liabilities having been assumed by PGI MD, PGRA released from the assumed liabilities and PGI MD shall have indemnified PGRA to the Purchaser’s reasonable satisfaction against the assumed liabilities and shall maintain the Seller’s directors and officers liability insurance “tail” policy in effect on the date of this Agreement covering Antenucci and Beisser for events occurring while they served as directors or officers of the Seller with continuous coverage without gap or lapse for the three-year period commencing on a change in control;

(b) PGRA shall have transferred all of its assets (other than PGI MD common stock) to PGI MD in full payment of all debts and obligations PGRA owes to PGI MD.

(c) PGRA shall have sold all of PGI MD’s common stock (with stockholder approval) to John C. Antenucci;

(d) PGRA shall have terminated all employees who are employed by it on the date hereof, and settled all employment agreements, without any cost to PGRA in either case;

(e) One or more designees of the Purchaser shall have been elected as the directors of PGRA and PGRA’s current directors, officers and employees shall have resigned;

(f) PGRA shall have reverse split its issued and outstanding common stock (with stockholder approval) in a ratio of 1 to 244.8598;

(g) The Seller, Mr. Antenucci, Frederick G. Beisser and PGI MD shall each enter into a lockup – leak out agreement with respect to any common stock of PGRA that he or it now owns or that he or it receives in connection with Purchaser’s acquisition of control of PGRA.

(h) PGI MD shall have agreed in writing to provide reasonable access at its expense to its books and records as may be required, and to cooperate in the audit thereof, by PGRA’s independent public accountant during normal business hours upon three business days’ notice as and to the extent required for PGRA to satisfy its reporting obligations under the Securities Exchange Act of 1934.

5. Closing. When the conditions identified in Section 3 have been satisfied, the sale and purchase of the Preferred Stock will be closed at a time and place to be determined by the Parties.

6. Press releases. No Party will issue a press release regarding the subject matter of this Agreement and the transactions contemplated hereby, before closing, without the prior approval thereof by the other Party and its counsel.

7. Representations and warranties by the Seller. The Seller represents, warrants and agrees as follows:

(a) The Seller is the legal and beneficial owner of the Preferred Stock;

(b) The Seller has all requisite corporate power and authority to enter into and perform this Agreement and to consummate the transactions contemplated hereby, including the sale of the Common Stock; and

(c) The Seller does not know or have reason to know why all of the transactions contemplated by this Agreement cannot be consummated as planned and the Seller’s sale of the Preferred Stock has been approved by the United States District Court for the Northern District of Illinois.

8.Representations and warranties by the Purchaser. Purchaser hereby represents, warrants and agrees as follows:

(a) Purchaser has all requisite corporate power and authority to enter into and perform this Agreement and to consummate the transactions contemplated hereby, including the purchase of the Common Stock.

(b) The information heretofore furnished by Purchaser to the Seller for purposes of or in connection with this Agreement or any transaction contemplated hereby does not, and all such information hereafter furnished by Purchaser to the Seller will not (in each case taken together and on the date as of which such information is furnished), contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein, in the light of the circumstances under which they are made, not misleading.

(c) The Purchaser does not know or have reason to know why all of the transactions contemplated by this Agreement cannot be consummated as planned.

9. Superseding prior agreement. This Agreement amends and restates the Original Purchase Agreement. This Agreement may not be amended, canceled, revoked or otherwise modified except by written agreement subscribed by all of the Parties to be charged with such modification.

10. Binding effect. This Agreement shall be binding upon and shall inure to the benefit of the Parties hereto and their respective partners, employees, agents, servants, heirs, administrators, executors, successors, representatives and assigns.

11. Construction and jurisdiction. This Agreement and the rights of the parties hereunder shall be governed by and construed in accordance with the laws of the State of Florida including all matters of construction, validity, performance, and enforcement and without giving effect to the principles of conflict of laws. Venue for any action brought under this Agreement shall be in the appropriate court in Manatee County, Florida.

12. Material terms. The Parties agree and stipulate that each and every recital contained in the preamble and every term and condition contained in this Agreement is material, and that each and every recital, term and condition may be reasonably accomplished within the time limitations, and in the manner set forth in this Agreement.

13. Time of essence. The Parties agree and stipulate that time is of the essence with respect to compliance with each and every item set forth in this Agreement.

14. Entire agreement. This Agreement and the agreements generally or specifically identified herein, including a Stock Purchase Agreement to be executed between PGRA and Antenucci, (the “Transaction Agreements”) set forth the entire agreement and understanding of the Parties hereto and supersedes any and all prior agreements, arrangements and understandings related to the subject matter hereof. No understanding, promise, inducement, statement of intention, representation, warranty, covenant or condition, written or oral, express or implied, whether by statute or otherwise, has been made by any party hereto which is not embodied or to be embodied in the Transaction Documents or the written statements, certificates, or other documents delivered pursuant hereto or in connection with the transactions contemplated hereby, and no Party hereto shall be bound by or liable for any alleged understanding, promise, inducement, statement, representation, warranty, covenant or condition not so set forth.

15. Jurisdiction, venue and governing law. Any suit for enforcement of this Agreement shall be brought in the United States District Court for the Middle District of Florida, Tampa Division, and the parties irrevocably consent to the jurisdiction of said court and the venue therein. This Agreement shall be construed in Florida law, not including the conflict of law rules thereof.

16. Counterparts. This Agreement may be executed in one or more counterparts, each of which when executed and delivered shall be an original, and all of which when executed shall constitute one and the same instrument.

IN WITNESS WHEREOF, the Parties hereto, agreeing to be bound hereby, execute this Agreement upon the date first set forth above.

Nutmeg/Fortuna Fund, LLLP

By: /s/ Randall S. Goulding

Randall S. Goulding, Managing Member of its General Partner

Integrated Freight Systems, Inc.

By: /s/ Paul A. Henley

Paul A. Henley, President

EX-3.01

EX-3.02

BYLAWS

OF

INTEGRATED FREIGHT SYSTEMS, INC.

ARTICLE I.  GENERAL

The provisions of this document constitute the Bylaws of Integrated Freight Systems, Inc., a Florida corporation, hereinafter referred to as the Corporation, which Bylaws shall be utilized to govern the management and operation of the Corporation.

ARTICLE II.  OFFICES AND AGENCY

Section 1. Registered Office and Registered Agent. The registered office of the Corporation shall be located in the State of Florida at such place as may be fixed from time to time by the Board of Directors of the Corporation, the members of which shall be hereinafter referred to as Directors, upon filing of such notices as may be required by law, and the registered agent shall have a business office identical with such registered office.

Section 2. Other Offices. The Corporation may have other offices within or outside the State of Florida at such place or places as the Board of Directors may from time to time determine.

ARTICLE III.  STOCKHOLDERS

Section 1. Closing Transfer Books. For the purpose of determining stockholders entitled to notice of, or to vote at, any meeting of stockholders or any adjournment thereof, or entitled to receive payment of any dividend, or in order to make a determination of stockholders for any other purpose, the Board of Directors may provide that the stock transfer books shall be closed for a stated period not to exceed, in any case, sixty (60) days. If the stock transfer books shall be closed for the purpose of determining stockholders entitled to notice of, or to vote at, a meeting of stockholders, such books shall be closed for at least ten (10) days immediately preceding such meeting.

Section 2. Fixing Record Date. In lieu of closing the stock transfer books, the Board of Directors may fix in advance a date as the record date for any determination of stockholders, such date in any case to be not more than sixty (60) days and, in case of a meeting of stockholders, not less than ten (10) days prior to the date on which the particular action requiring such determination of stockholders is to be taken.

Section 3. Other Determination of Stockholders. If the stock transfer books are not closed and no record date is fixed for the determination of stockholders entitled to notice of or to vote at a meeting of stockholders or stockholders entitled to receive payment of a dividend the date on which notice of the meeting is mailed or the date on which the resolution of the Board of Directors declaring such dividend is adopted, as the case may be, shall be the record date for such determination of stockholders.

Section 4. Adjourned Meetings. When a determination of stockholders entitled to vote at any meeting of stockholders has been made as provided in this Article, such determination shall apply to any adjournment thereof, unless the Board of Directors fixes a new record date for the adjourned meeting.

Page 1 of 17 pages, plus History of Bylaws.

Section 5. Record of Stockholders.

(a) If the Corporation has six or more stockholders of record, the officer or agent having charge of the stock transfer books for shares of the Corporation shall make, at least ten (10) days before each meeting of stockholders, a complete list of the stockholders entitled to vote at such meeting or any adjournment thereof, with the address of and the number and class and series, if any, of shares held by each. The list shall be kept on file at the registered office of the Corporation, at the principal place of business of the Corporation or at the office of the transfer agent or registrar of the Corporation for a period of ten (10) days prior to such meeting and shall be subject to inspection by any stockholder at any time during usual business hours. The list shall also be produced and kept open at the time and place of the meeting and shall be subject to the inspection of any stockholder at any time during the meeting.

(b) If the requirements of paragraph (a) above have not been substantially complied with, the meeting, on demand of any stockholder in person or by proxy, shall be adjourned until the requirements are complied with. If no such demand is made, failure to comply with the requirements of paragraph (a) shall not affect the validity of any action at such meeting.

ARTICLE IV.  STOCKHOLDERS' MEETINGS

Section 1. Annual Meetings. The annual meeting of the stockholders for the election of Directors and for the transaction of such other business as may properly come before the meeting, shall be held each year within three months after the end of the fiscal year, or at such other time as the Board of Directors or stockholders shall direct; provided, however, that the annual meeting for any year shall be held at no later than thirteen (13) months after the last preceding annual meeting of stockholders.

Section 2. Special Meetings. Special meetings of the stockholders for any purpose may be called at any time by the President of the Corporation, Board of Directors, or the holders of not less than ten percent (10%) of all shares entitled to vote at the meeting.

Section 3. Place of Meetings. All meetings of the stockholders shall be at the principal place of business of the Corporation or at such other place, either within or without the State of Florida, as the Board of Directors or the stockholders may from time to time designate.

Section 4. Notice. Written or printed notice stating the place, day and hour of any meeting and, in case of a special meeting, the purpose or purposes for which the meeting is called, shall be given to each stockholder of record entitled to vote at such meeting not less than ten (10) nor more than sixty (60) days before the meeting, by or at the direction of the President, the Secretary or other persons calling the meeting. Notice to stockholders shall be given by personal delivery, by first class U.S. Mail or by telephone facsimile with receipt confirmed; and, if mailed, such notice shall be deemed to be delivered when deposited, the deposit thereof certified by the Secretary of the Corporation, in the United States mail addressed to the stockholder at his address as it appears on the stock transfer books of the Corporation, with postage thereon prepaid.

Section 5. Adjourned Meetings. A majority of the stockholders present, whether or not a quorum exists, may adjourn any meeting of the stockholders to another time and place. Notice of any such adjourned meeting, or of the business to be transacted thereat need not be given of any adjourned meeting if the time and place of the adjourned meeting are announced at the time of the adjournment, unless the time of the adjourned meeting is more than thirty days after the meeting at which the adjournment is taken.

Page 2 of 17 pages, plus History of Bylaws.

Section 6. Waiver of Notice. A written waiver of notice signed by any stockholder, whether before or after any meeting, shall be equivalent to the giving of timely notice to said stockholder. Attendance of a stockholder at a meeting shall constitute a waiver of notice of such meeting and a waiver of any and all objections to the place of the meeting, the time of the meeting, or the manner in which it has been called or convened, except when a stockholder attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders need be specified in any written waiver of notice.

                                Section 7. Quorum and Voting.

(a) Stockholders representing a majority of the shares entitled to vote in attendance at any meeting of stockholders, shall constitute a quorum for the transaction of business at such meeting, unless otherwise specifically provided by these Bylaws or applicable law. When a specified item of business is required to be voted on by a class or series of stock, a majority of the shares of such class or series shall constitute a quorum for the transaction of such item of business by that class or series. Attendance shall be either in person, by proxy, or by telephonic or radio connection whereby the distant stockholder and those stockholders present in person all hear and may speak to and be heard on the matters raised therein.

(b) If a quorum is present, the affirmative vote of a majority of the shares represented at the meeting and entitled to vote on the subject matter shall be the act of the stockholders, unless the vote of a greater number or voting by classes is required by the Articles of Incorporation, these Bylaws or applicable law.

(c) After a quorum has been established at a stockholders' meeting, the subsequent withdrawal of stockholders, so as to reduce the number of stockholders entitled to vote at the meeting below the number required for a quorum, shall not affect the validity of any action taken at the meeting or any adjournment thereof. The affirmative vote of a majority of the shares then represented at the meeting and entitled to vote on the subject matter shall be the act of the stockholders unless otherwise provided by the Articles of Incorporation, these Bylaws or applicable law.

(d) A person entitled to vote shares at a meeting of the stockholders shall be deemed to have attended such meeting in person if such person has attended by telephone or radio connection whereby the distant person and the other stockholders present at such meeting all hear and may speak to and be heard on the matters raised therein.

Section 8. Voting of Shares.

(a) Each outstanding share of common stock shall be entitled to one vote, unless otherwise provided in the Articles of Incorporation which authorize it, and each outstanding share of preferred stock shall be entitled to the number of votes provided in the Articles of Incorporation which authorize it, in each case on each matter submitted to a vote at a meeting of stockholders.

(b) Treasury shares, shares of stock of the Corporation owned by another corporation of which the majority of the voting stock is owned or controlled by the Corporation, and shares of stock of the Corporation held by it in a fiduciary capacity shall not be voted, directly or indirectly, at any meeting, and shall not be counted in determining the total number of outstanding shares at any given time.

Page 3 of 17 pages, plus History of Bylaws.

(c) A stockholder may vote either in person or by proxy executed in writing by the stockholder or his duly authorized attorney-in-fact.

(d) Shares standing in the name of another corporation, domestic or foreign, may be voted by the officer, agent, or proxy designated by the bylaws of the corporate stockholder; or, in the absence of any applicable bylaw, by such person as the Board of Directors of the corporate stockholder may designate. Proof of such designation may be made by presentation of a certified copy of the bylaws or other instrument of the corporate stockholder. In the absence of any such designation, or in case of conflicting designation by the corporate stockholder, the chairman of the board, president, any vice president, secretary and treasurer of the corporate stockholder shall be presumed to possess, in that order, authority to vote such shares.

(e) Shares held by an administrator, executor, guardian or conservator may be voted by him, either in person or by proxy, without a transfer of such shares into his name. Shares standing in the name of a trustee may be voted by him, either in person or by proxy, but no trustee shall be entitled to vote shares held by him in trust without a transfer of such shares into his name.

(f) Shares standing in the name of a receiver may be voted by such receiver, and shares held by or under the control of a receiver may be voted by such receiver without the transfer thereof into his name if authority to do so is contained in an appropriate order of the court by which such receiver was appointed.

(g) A stockholder whose shares are pledged shall be entitled to vote such shares until the shares have been transferred into the name of the pledgee, and thereafter the pledgee or his nominee shall be entitled to vote the shares so transferred.

(h) On and after the date on which written notice of redemption of redeemable shares has been mailed to the holders thereof and a sum sufficient to redeem such shares has been deposited with a bank or trust company with irrevocable instruction and authority to pay the redemption price to the holders thereof upon surrender of certificates therefor, such shares shall not be entitled to vote on any matter and shall not be deemed to be outstanding shares.

Section 9. Proxies.

(a) Every stockholder entitled to vote at a meeting of stockholders, or to express consent or dissent without a meeting or a stockholder's duly authorized attorney-in-fact, may authorize another person or persons to act for him by proxy.

(b) Every proxy must be signed by the stockholder or his attorney-in-fact. No proxy shall be valid after the expiration of eleven (11) months from the date thereof unless otherwise provided in the proxy. Every proxy shall be revocable at the pleasure of the stockholder executing it, except as otherwise provided by law.

(c) The authority of the holder of a proxy to act shall not be revoked by the incompetence or death of the stockholder who executed the proxy unless, before the authority is exercised, written notice of an adjudication of such incompetence or of such death is received by the corporate officer responsible for maintaining the list of stockholders.

Page 4 of 17 pages, plus History of Bylaws.

(d) If a proxy for the same shares confers authority upon two or more persons and does not otherwise provide, a majority of them present at the meeting, or if only one is present, then that one, may exercise all the powers conferred by the proxy; but if the proxy holders present at the meeting are equally divided as to the right and manner of voting in any particular case, the voting of such shares shall be prorated.

(e) If a proxy expressly provides, any proxy holder may appoint, in writing, a substitute to act in his place.

Section 10. Voting Trusts. Any number of stockholders of the Corporation may create a voting trust for the purpose of conferring upon a trustee or trustees the right to vote or otherwise represent their shares for a period not to exceed ten (10) years, as provided by law. A counterpart of the voting trust agreement and a copy of the record of the holders of voting trust certificates shall be deposited with the Corporation at its registered office as provided by law. These documents shall be subject to the same right of examination by a stockholder of the Corporation, in person or by agent or attorney, as are the books and records of the Corporation and shall also be subject to examination by any holder of record of voting trust certificates, either in person or by agent or attorney, at any reasonable time for any proper purpose.

Section 11. Stockholders' Agreements. Two or more stockholders of the Corporation may enter a written agreement, signed by the parties thereto, providing for the exercise of voting rights in the manner provided in the agreement or relating to any phase of the affairs of the Corporation as provided by law. Nothing therein shall impair the right of the Corporation to treat the stockholders of record as entitled to vote the shares standing in their names.

Section 12. Action by Stockholders Without a Meeting.

(a) Any action required by law, these Bylaws, or the Articles of Incorporation of the Corporation to be taken at any annual or special meeting of stockholders of the Corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. If any class of shares is entitled to vote thereon as a class, such written consent shall be required of the holders of a majority of the shares of each class of shares entitled to vote as a class thereon and of the total shares entitled to vote thereon.

(b) Within ten (10) days after obtaining such authorization by written consent, notice shall be given to those stockholders who have not consented in writing. The notice shall fairly summarize the material features of the authorized action and, if the action be a merger, consolidation or sale or exchange of assets for which dissenters rights are provided under law, the notice shall contain a clear statement of the right of stockholders dissenting therefrom to be paid the fair value of their shares upon compliance with further provisions of the law regarding the rights of dissenting stockholders.

Section 13. New Business. Any Stockholder of record may make a proposal of new business to be acted upon at an annual or special meeting of Stockholders, only if and provided written notice of such proposed new business is filed with the Secretary of the Corporation not less than five business days prior to the day of meeting, but no other proposal shall be acted upon at such meeting.

Page 5 of 17 pages, plus History of Bylaws.

ARTICLE V.  DIRECTORS

Section 1. Function. All corporate powers shall be exercised by or under the authority of, and the business and affairs of the Corporation shall be managed under the direction of, the Board of Directors, except as may otherwise be provided by the Articles of Incorporation, these Bylaws or applicable law. The Board of Directors shall make appropriate delegations of authority to the officers and, to the extent permitted by law, by appropriate resolution, the Board of Directors may authorize one or more committees to act on its behalf when it is not in session.

Section 2. Qualification. Directors need not be residents of the State of Florida or stockholders of the Corporation.

Section 3. Compensation. The Board of Directors shall have authority to fix the compensation of Directors.

Section 4. Duties of Directors.

(a) A Director shall be expected to attend meetings, whether annual, or special, of the Board of Directors and of any committee to which the Director has been appointed.

(b) A Director shall perform his duties as a Director, including his duties as a member of any committee of the Board of Directors upon which he may serve, in good faith, in a manner he reasonably believes to be in the best interests of the Corporation, and with such care as an ordinarily prudent person in a like position would use under similar circumstances.

(c) In performing his duties, a Director shall be entitled to rely on information, opinions, reports or statements, including financial statements and other financial data, in each case prepared or presented by:

(1) One or more officers or employees of the Corporation whom the Director reasonably believes to be reliable and competent in the matters presented;

(2) Counsel, public accountants or other persons as to matters which the Director reasonably believes to be within such persons' professional or expert competence; or

(3) A committee of the Board of Directors upon which he does not serve, duly designated in accordance with a provision of the Articles of Incorporation or these Bylaws, as to matters within its designated authority, which committee the Director reasonably believes to merit confidence.

(d) A Director shall not be considered to be acting in good faith if he has knowledge concerning the matter in question that would cause such reliance described above to be unwarranted.

(e) A person who performs his duties in compliance with this section shall have no liability by reason of being or having been a Director of the Corporation.

Section 5. Number. The number of Directors of the Corporation shall be five (5). This number may be increased or decreased from time to time by amendment to these Bylaws or by election of a number of persons as directors which exceeds at any time such number, but no decrease shall have the effect of shortening the term of any incumbent Director; provided, that the resignation or removal of a number of directors director(s) which exceeds the number set forth first in this Section shall reduce the authorized number of directors to the number thereof remaining in office, but not to a number less than the number set forth first in this Section. Unfilled vacancies on the board of directors shall not prevent the board of directors from conducting business.

Page 6 of 17 pages, plus History of Bylaws.

                               Section 6. Election and Term.

(a) Each person named in the Articles of Incorporation as a member of the initial Board of Directors shall hold office until the first annual meeting of stockholders and until his successor shall have been elected and qualified or until his earlier resignation, removal from office or death.

(b) At the first meeting of stockholders and at each annual meeting thereafter, the stockholders shall elect Directors to hold office until the next succeeding annual meeting. Each Director shall hold office for the term for which he is elected and until his successor shall have been elected and qualified or until his earlier resignation, removal from office or death.

                                Section 7. Removal of Directors.

(a) At a meeting of stockholders called expressly for that purpose, any Director or the entire Board of Directors may be removed (A) with cause by a majority vote of the holders of the shares then entitled to vote in an election of Directors and (B) without cause by a vote of the holders of seventy percent of the shares then entitled to vote in an election of Directors.

(b) If less than the entire Board of Directors is to be removed and if cumulative voting is permitted by the Articles of Incorporation, no one of the Directors may be removed if the votes cast against his removal would be sufficient to elect him if then cumulatively voted at an election of the entire Board of Directors.

Section 8. Resignation of Director. A Director may resign from the Board of Directors by providing written notification of such resignation to the President of the Corporation, and such resignation shall become effective immediately upon receipt by the President of said written notification or at such later date as may be specified in the notification.

Section 9. Vacancies. Any vacancy occurring in the membership of the Board of Directors, including any vacancy created by reason of an increase in the number of Directors, may be filled by the affirmative vote of a majority of the remaining Directors though less than a quorum of the Board of Directors. A Director so elected shall hold office until the next election of Directors by the stockholders.

ARTICLE VI.  DIRECTORS' MEETINGS

Section 1. Regular Meetings. The Board of Directors shall hold, without notice, a regular meeting immediately after the adjournment of the annual meeting of stockholders and such other regular meetings as they may, by resolution, designate from time to time.

Section 2. Special Meetings. Special meetings of the Board of Directors may be called at any time by the President of the Corporation or by any two Directors.

Section 3. Place of Meeting. All meetings of the Board of Directors shall be held at the principal place of business of the Corporation or at such other place, either within or without the State of Florida, as the Directors may from time to time designate; provided, however, no such meeting shall be held outside the State of Florida if at least two (2) Directors object in writing not less than three (3) days before such meeting.

Page 7 of 17 pages, plus History of Bylaws.

Section 4. Notice of Meeting. Written or printed notice stating the place, day and hour of any special meeting of the Board of Directors must be given to each Director not less than five (5) nor more than thirty (30) days before the meeting, by or at the direction of the President or other persons calling the meeting. Notice shall be given either personally or by telegram, cablegram or first class mail; and if mailed, the notice shall be deemed to be given when deposited in the United States mail addressed to the Director at his address, as it appears in the records of the Corporation, with postage thereon prepaid. Except as otherwise specified in these Bylaws, the notice need not specify the business to be transacted at, nor the purpose of, any meeting.

Section 5. Waiver of Notice. A written waiver of notice signed by any Director, whether before or after any meeting, shall be equivalent to the giving of timely notice to said Director. Attendance of a Director at a meeting shall constitute a waiver of notice of such meeting and waiver of any and all objections to the place of the meeting, the time of the meeting, or the manner in which it has been called or convened, except when a Director attends a meeting for the express purpose, as stated at the beginning of the meeting, of objecting to the transaction of business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any annual or special meeting of the Directors need be specified in any written waiver of notice.

Section 6. Presumption of Assent. A Director of the Corporation who is present at a meeting of the Board of Directors at which action on any corporate matter is taken shall be presumed to have assented to the action taken, unless he votes against such action or abstains from voting in respect thereto because of an asserted conflict of interest.

Section 7. Adjourned Meeting. A majority of the Directors present, whether or not a quorum exists, may adjourn any meeting of the Board of Directors to another time and place. Notice of any such adjourned meeting shall be given to the Directors who were not present at the time of the adjournment and, unless the time and place of the adjourned meeting are announced at the time of the adjournment, to the other Directors.

Section 8. Quorum. A majority of the number of Directors fixed by these Bylaws shall constitute a quorum for the transaction of business at any meeting of the Directors, unless otherwise specifically provided by the Articles of Incorporation, these Bylaws or applicable law. Attendance shall be either in person or by telephonic or radio connection whereby the distant Director and those Directors present in person all hear and may speak to and be heard on the matters raised therein.

Section 9. Voting. Each Director who is entitled to vote and who is present at any meeting of the Board of Directors shall be entitled to one (1) vote on each matter submitted to a vote of the Directors. An affirmative vote, of a majority of the Directors present at a meeting of Directors at which a quorum is present, shall constitute the approval, ratification and confirmation of the Board of Directors.

Section 10. Proxies Prohibited. No Director may authorize another person or entity to act in said Director's stead by proxy or otherwise.

Section 11. Action by Directors Without a Meeting. Any action required or which may be taken at a meeting of the Directors, or of a committee thereof, may be taken without a meeting if a consent in writing, setting forth the action so to be taken, shall be signed by all of the Directors or all of the members of the committee, as the case may be. Such consent shall have the same effect as a unanimous vote.

Page 8 of 17 pages, plus History of Bylaws.

                              Section 12. Directors' Conflicts of Interest.

(a) No contract or other transaction between the Corporation and one or more of its Directors or any other corporation, firm, association or entity in which one or more of the Directors are directors or officers or are financially interested shall be either void or voidable because of such relationship or interest, or because such Director or Directors are present at the meeting of the Board of Directors or a committee thereof which authorizes, approves or ratifies such contract or transaction, or because his or their votes are counted for such purpose, if:

(1) The fact of such relationship or interest is disclosed or known to the Board of Directors or committee which authorizes, approves or ratifies the contract or transaction by a vote or consent sufficient for the purpose, even though less than a majority of the quorum, without counting the votes or consents of such interested Directors; or

(2) The fact of such relationship or interest is disclosed or known to the stockholders entitled to vote, and they authorize, approve or ratify such contract or transaction by vote or written consent; or

(3) The contract or transaction is fair and reasonable as to the Corporation at the time it is authorized by the Board of Directors, a committee or the stockholders.

(b) Common or interested Directors may be counted in determining the presence of a quorum at a meeting of the Board of Directors or a committee thereof which authorizes, approves or ratifies such contract or transaction.

(c) The position of director, officer or employee of a not-for-profit corporation held by a Director of the Corporation shall not be deemed to create a conflict of interest for such Director, with respect to approval of dealings between the Corporation and the not-for-profit corporation.

(d) In the event all Directors of the Corporation are directors, officers or employees of or have a financial interest in another corporation, firm, association or entity, the vote or consent of all Directors shall be counted for purposes of approving any contract or transaction between the Corporation and such other corporation, firm, association or entity.

Section 13. Procedure. The Board of Directors may adopt their own rules of procedure which shall not be inconsistent with the Articles of Incorporation, these Bylaws or applicable law.

ARTICLE VII.  EXECUTIVE AND OTHER COMMITTEES

Section 1. Designation. The Board of Directors, by resolution adopted by a majority of the full Board of Directors may designate from among its members an executive committee and one or more other committees. The Board of Directors, by resolution adopted in accordance with this section, may designate one or more Directors as alternate members of any such committee, who may act in the place and stead of any absent member or members at any meeting of such committee.

Page 9 of 17 pages, plus History of Bylaws.

Section 2. Powers. Any committee designated as provided above shall have and may exercise all the authority granted to it by the Board of Directors, except that no committee shall have the authority to:

(a) Approve or recommend to stockholders actions or proposals required by law to be approved by stockholders;

(b) Designate candidates for the office of Director, for purposes of proxy solicitation or otherwise;

(c) Fill vacancies on the Board of Directors or any committee thereof;

 (d) Amend the Bylaws;

(e) Authorize or approve the reacquisition of shares unless pursuant to a general formula or method specified by the Board of Directors; or

(f) Authorize or approve the issuance or sale of, or any contract to issue or sell, shares or designate the terms of a series of a class of shares, except that the Board of Directors, having acted regarding general authorization for the issuance or sale of shares, or any contract therefor, and, in the case of a series, the designation thereof, may, pursuant to a general formula or method specified by the Board of Directors by resolution or by adoption of a stock option or other plan, authorize a committee to fix the terms of any contract for the sale of the shares and to fix the terms upon which such shares may be issued or sold, including, without limitation, the price, the rate or manner of payment of dividends, provisions for redemption, sinking fund, conversion, voting or preferential rights, and provisions for other features of a class of shares, or a series of a class of shares, with full power in such committee to adopt any final resolution setting forth all the terms thereof and to authorize the statement of the terms of a series for filing with the Department of State.

ARTICLE VIII.  OFFICERS

Section 1. Designation. The officers of the Corporation shall consist of a president, one or more vice presidents (if determined to be necessary by the Board of Directors), a secretary and a treasurer. The Corporation shall also have such other officers, assistant officers and agents as may be deemed necessary or appropriate by the Board of Directors from time to time. Any two or more offices may be held by the same person. The failure to elect a president, vice president, secretary or treasurer shall not affect the existence of the Corporation. The office of the president may, in the discretion of the Board of Directors, be divided into the office of the chief executive officer and the office of the chief operating officer, provided, that the office of the chief executive officer shall be the office of the president for purposes of state and federal laws requiring such office or the signature of such officer.

Section 2. Duties.  The officers of the Corporation shall have the following duties.

(a) President. The President shall be the Chief Executive Officer of the Corporation, shall have general and active management of the business and affairs of the Corporation subject to the directions of the Board of Directors, and shall preside at all meetings of the stockholders and Board of Directors.

Page 10 of 17 pages, plus History of Bylaws.

(b) Vice President. In the absence of the President or in the event of his death, inability or refusal to act, the Vice President (or in the event there is more than one vice president, the vice presidents in the order designated at the time of their election, or in the absence of any designation, then in the order of their election) shall perform the duties of the President and, when so acting, shall have all the powers of and be subject to all the restrictions upon the President. Any Vice President may sign, with the Secretary or an Assistant Secretary, certificates for shares of the Corporation, and shall perform such other duties as from time to time may be assigned to him by the President or by the Board of Directors.

(c) Secretary. The Secretary shall have custody of, and maintain, all of the corporate records except the financial records; shall record the minutes of all meetings of the stockholders and Board of Directors; send out all notices of meetings; and perform such other duties as may be prescribed by the Board of Directors or the President.

(d) Treasurer. The Treasurer shall have custody of all corporate funds and financial records, shall keep full and accurate accounts of receipts and disbursements and render accounts thereof at the annual meetings of stockholders and whenever else required by the Board of Directors or the President, and shall perform such other duties as may be prescribed by the Board of Directors or the President.

Section 3. Election. All officers shall be elected by the Board of Directors.

Section 4. Tenure. Each officer shall take and hold office from the date of his election until the next annual meeting of the Board of Directors and until his successor shall have been duly elected and qualified or until his earlier resignation, removal from office or death.

Section 5. Resignation of Officers. Any officer or agent elected or appointed by the Board of Directors may resign such office by providing written notification of such resignation to the President (or if the President is resigning, to the Vice President) of the Corporation.

Section 6. Removal of Officers.

(a) Any officer or agent elected or appointed by the Board of Directors may be removed by the Board of Directors whenever in its judgment the best interests of the Corporation will be served thereby.

(b) Any officer or agent elected by the stockholders may be removed only by vote of the stockholders, unless the stockholders shall have authorized the Directors to remove such officer or agent.

(c) Removal of any officer shall be without prejudice to the contract rights, if any, of the person so removed; however, election or appointment of an officer or agent shall not of itself create contract rights.

Section 7. Vacancies. Any vacancy, however occurring, in any office, may be filled by the Board of Directors.

ARTICLE IX.  STOCK CERTIFICATES

Section 1. Issuance. Every holder of shares in the Corporation shall be entitled to have a certificate, representing all shares to which he is entitled. No certificate shall be issued for any share until such share is fully paid.

Page 11 of 17 pages, plus History of Bylaws.

Section 2. Form.

(a) Certificates representing shares in this Corporation shall be signed by the President or Vice President and the Secretary or an Assistant Secretary and may be sealed with the seal of this Corporation or a facsimile thereof. The signatures of the President or Vice President and the Secretary or Assistant Secretary may be facsimiles if the certificate is manually signed on behalf of a transfer agent or a registrar, other than the Corporation itself or an employee of the Corporation. In case any officer who signed or whose facsimile signature has been placed upon such certificate shall have ceased to be such officer before such certificate is issued, it may be issued by the Corporation with the same effect as if he were such officer at the date of its issuance.

(b) If there is more than one class of stock, every certificate representing shares issued by the Corporation shall set forth or fairly summarize upon the face or back of the certificate, or shall state that the Corporation will furnish to any stockholder upon request and without charge a full statement of: the designations, preferences, limitations and relative rights of the shares of each class or series authorized to be issued; the variations in the relative rights and preferences between the shares of each series so far as the same have been fixed and determined; and the authority of the Board of Directors to fix and determine the relative rights and preferences of subsequent series.

(c) Every certificate representing shares which are restricted as to the sale, disposition or other transfer of such shares shall state that such shares are restricted as to transfer and shall set forth or fairly summarize upon the certificate, or shall state that the Corporation will furnish to any stockholder upon request and without charge a full statement of, such restrictions.

(d) Each certificate representing shares shall state upon the face thereof: the name of the Corporation; that the Corporation is organized under the laws State of Florida; the name of the person or persons to whom issued; the number and class, if any, of shares, and the designation of the series, if any, which such certificate represents; and the par value of each share represented by such certificate, or a statement that the shares are without par value.

Section 3. Transfers of Stock. Transfers of stock shall be made only upon the stock transfer books of the Corporation, kept at the registered office of the Corporation or at its principal place of business, or at the office of its transfer agent or registrar; and before a new certificate is issued, the old certificate shall be surrendered for cancellation and shall be properly endorsed by the holder of record or by his duly authorized attorney. The Board of Directors may, by resolution, open a share register in any state of the United States and may employ an agent or agents to keep such register and to record transfers of shares therein.

Section 4. Registered Owner.  Registered stockholders only shall be entitled to be treated by the Corporation as the holders in fact of the stock standing in their respective names, and the Corporation shall not be bound to recognize any equitable or other claim to or interest in any share on the part of any other person, whether or not it shall have express or other notice thereof, except as expressly provided by the laws of the State of Florida.

Section 5. Lost, Stolen or Destroyed Certificates.  The Corporation shall issue a new stock certificate in the place of any certificate previously issued if the holder of record of the certificate:

Page 12 of 17 pages, plus History of Bylaws.

(a) Makes proof in affidavit form that it has been lost, destroyed or wrongfully taken;

(b) Requests the issuance of a new certificate before the Corporation has notice that the certificate has been acquired by a purchaser for value in good faith and without notice of any adverse claim;

(c) Gives bond or other security in such form as the Corporation may direct to indemnify the Corporation, the transfer agent and registrar against any claim that may be made on account of the alleged loss, destruction or theft of a certificate; and

(d) Satisfies any other reasonable requirements imposed by the Corporation.

Section 6. Fractional Shares or Scrip.  The Corporation may, but shall not be obliged to, issue a certificate for a fractional share, which shall entitle the holder to exercise voting rights, to receive dividends thereon, and to participate in any of the assets of the Corporation in the event of liquidation. In lieu of fractional shares, the Board of Directors may provide for the issuance of scrip in registered or bearer form which shall entitle the holder to receive a certificate for a full share upon the surrender of such scrip aggregating a full share.

Section 7. Shares of Another Corporation.  Shares owned by the Corporation in another corporation, domestic or foreign, may be voted by such officer, agent or proxy as the Board of Directors may determine or, in the absence of such determination, by the President of the Corporation.

ARTICLE X.  DIVIDENDS

Section 1. Declaration.  The Board may from time to time declare, and the Corporation may pay, dividends on its shares in cash, property or its own shares, except when the Corporation is insolvent, when the payment thereof would render the Corporation insolvent, or when the declaration or payment thereof would be contrary to any restrictions contained in the Articles of Incorporation, subject to the following provisions:

(a) Dividends in cash or property may be declared and paid, except as otherwise provided in this section, only out of the unreserved and unrestricted earned surplus of the Corporation or out of capital surplus, howsoever arising, but each dividend paid out of capital surplus shall be identified as a distribution of capital surplus, and the amount per share paid from such surplus shall be disclosed to the stockholders receiving the same concurrently with the distribution.

(b) Dividends may be declared and paid in the Corporation's own treasury shares.

(c) Dividends may be declared and paid in the Corporation's own authorized but unissued shares out of any unreserved and unrestricted surplus of the Corporation upon the following conditions:

(1) If a dividend is payable in shares having a par value, such shares shall be issued at not less than the par value thereof, and there shall be transferred to stated capital, at the time such dividend is paid, an amount of surplus equal to the aggregate par value of the shares to be issued as a dividend.

Page 13 of 17 pages, plus History of Bylaws.

(2) If a dividend is payable in shares without par value, such shares shall be issued at such stated value as shall be fixed by the Board of Directors by resolution adopted at the time such dividend is declared, and there shall be transferred to stated capital, at the time such dividend is paid, an amount of surplus equal to the aggregate stated value so fixed in respect of such shares; and the amount per share so transferred to stated capital shall be disclosed to the stockholders receiving such dividend concurrently with the payment thereof.

(d) No dividend payable in shares of any class shall be paid to the holders of shares of any other class unless the Articles of Incorporation so provide or such payment is authorized by the affirmative vote or the written consent of the holders of at least a majority of the outstanding shares of the class in which the payment is to be made.

(e) A split-up or division of the issued shares of any class into a greater number of shares of the same class without increasing the stated capital of the Corporation shall not be construed to be a share dividend within the meaning of this section.

Section 2. Holders of Record.  The holders of record shall be determined as provided in Article III of these Bylaws.

ARTICLE XI.  INDEMNIFICATION OF

OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS

Section 1. Indemnification For Actions, Suits or Proceedings

(a) The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that he is or was a Director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding, including any appeal thereof, if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, and with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The adverse termination of any action, suit or proceeding by judgment, order, settlement, conviction, or a plea of nolo contendere or its equivalent, shall not of itself create a presumption that the person did not act in good faith and in a manner in which he reasonably believed to be in or not opposed to the best interests of the Corporation, and with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful.

(b) The Corporation shall indemnify any person who was or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he is or was a Director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys' fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation; provided, however, that no indemnification shall be made in respect to any claim, issue or matter as to which such person shall have been adjudged to be liable for negligence or misconduct in the performance of his duty to the Corporation unless and only to the extent that the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all circumstances of the case, such person is firmly and reasonably entitled to indemnity for such expenses which such court shall deem proper.

Page 14 of 17 pages, plus History of Bylaws.

(c) To the extent that a Director, officer, employee or agent of the Corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in subsections (a) and (b), or in defense of any claim, issue or matter therein, he shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him in connection therewith.

(d) Any indemnification under subsections (a) or (b) (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances because he has met the applicable standard of conduct set forth in subsections (a) or (b). Such determination shall be made:

(1) By the Board of Directors by a majority vote of a quorum consisting of Directors who were not parties to such action, suit or proceeding, or

(2) If such a quorum is not obtainable, or even if obtainable, a quorum of disinterested Directors so directs, by independent legal counsel in a written opinion, or

(3) By the stockholders by a majority vote of a quorum consisting of stockholders who were not parties to such action, suit or proceeding.

(e) Expenses (including attorneys' fees) incurred in defending a civil or criminal action, suit or proceeding may be paid by the Corporation in advance of the final disposition of such action, suit or proceeding as authorized in the manner provided in subsection (d) upon receipt of an undertaking by or on behalf of the Director, officer, employee or agent to repay such amount, unless it shall ultimately be determined that he is entitled to be indemnified by the Corporation as authorized in this section.

Section 2. Other Indemnification.  The indemnification provided by these Articles shall not be deemed exclusive of any other rights to which those indemnified may be entitled under any Bylaw, agreement, vote of stockholders or disinterested Directors, or otherwise, both as to actions in his official capacity and as to actions in another capacity while holding such position and shall continue as to a person who has ceased to be a Director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.

Section 3. Liability Insurance.  The Corporation may purchase and maintain insurance on behalf of any person who is or was a Director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the Corporation shall have indemnified him against such liability under the provisions of this Article XI.

ARTICLE XII.  BOOKS AND RECORDS

Section 1. Books and Records.

(a) This Corporation shall keep correct and complete books and records of account and shall keep minutes of the proceedings of its stockholders, Board of Directors and committees of Directors.

Page 15 of 17 pages, plus History of Bylaws.

(b) This Corporation shall keep at its registered office or principal place of business, or at the office of its transfer agent or registrar, a record of its stockholders, giving the names and addresses of all stockholders and the number, class and series, if any, of the shares held by each.

(c) Any books, records and minutes may be in written form or in any other form capable of being converted into written form within a reasonable time.

Section 2. Stockholders' Inspection Rights.  Any person who shall have been a holder of record of shares or of voting trust certificates therefor at least six (6) months immediately preceding his demand or shall be the holder of record of, or the holder of record of voting trust certificates for, at least five percent (5%) of the outstanding shares of any class or series of the Corporation, upon written demand stating the purpose thereof, shall have the right to examine, in person or by agent or attorney, at any reasonable time or times, for any proper purpose, its relevant books and records of accounts, minutes and records of stockholders and to make extracts therefrom.

Section 3. Financial Information.

(a) Not later than four (4) months after the close of each fiscal year, the Corporation shall prepare a balance sheet showing in reasonable detail the financial condition of the Corporation as of the close of its fiscal year, and a profit and loss statement showing the results of the operations of the Corporation during its fiscal year.

(b) Upon the written request of any stockholder or holder of voting trust certificates for shares of the Corporation, the Corporation shall mail to such stockholder or holder of voting trust certificates a copy of the most recent such balance sheet and profit and loss statement.

(c) The balance sheets and profit and loss statements shall be filed in the registered office of the Corporation in Florida, shall be kept for at least five (5) years, and shall be subject to inspection during business hours by any stockholder or holder of voting trust certificates, in person or by agent.

ARTICLE XIII.  CORPORATE SEAL

The Board of Directors shall provide a corporate seal which shall be circular in form and shall have inscribed thereon the name of the Corporation, the state of incorporation and the year of incorporation.

ARTICLE XIV.  AMENDMENT TO BYLAWS

Section 1. By Stockholder.  The stockholders, by the affirmative vote of a majority of the voting stock, shall have the power to alter, amend, and repeal the Bylaws of this Corporation or to adopt additional Bylaws and any Bylaw so adopted may specifically provide that such Bylaw can only be altered, amended or repealed by the stockholders.

Section 2. By Directors.  The Board of Directors, by affirmative vote of a majority of the Board of Directors, shall have the power to adopt additional Bylaws or to alter, amend, and repeal the Bylaws of this Corporation, except when any Bylaw adopted by the stockholders specifically provides that such Bylaw can only be altered, amended, or repealed by the stockholders.

Page 16 of 17 pages, plus History of Bylaws.

SECRETARY'S CERTIFICATE

I HEREBY CERTIFY that I am the Secretary of Integrated Freight Systems, Inc. and the foregoing Bylaws of said Corporation were duly adopted by the Board of Directors of the Corporation by action by written consent of said Board of Directors effective on 6/15/ 2008.

IN WITNESS WHEREOF, I have affixed my signature on 6/15/ 2008.

/s/ Jackson L. Morris

Jackson L. Morris, Secretary

Page 17 of 17 pages, plus History of Bylaws.

HISTORY OF BYLAWS

The initial Bylaws of Integrated Freight Systems, Inc. were first adopted on June 15, 2008. Amendments made subsequent to that date should be listed below

chANGE NUMBER DATE OF ADOPTION BY WHOM ADOPTED ARTICLE
AMENDED SECTIONS AMENDED

Page 18 of 17 pages, plus History of Bylaws.

EX-5.01

JACKSON L. MORRIS

Attorney at Law

Admitted in Florida and Georgia (inactive)

May 28, 2009

Board of Directors

Integrated Freight Systems, Inc.

Suite 200

6371 Business Boulevard

Sarasota, Florida 34240

Gentlemen:

I have acted, at your request, as special counsel to Integrated Freight Systems, Inc. (“Integrated Freight Systems”), a Florida corporation, for the purpose of rendering an opinion as to the legality of (i) 404,961 shares of Integrated Freight Systems' common stock, par value $0.001 per share, (the “Conversion Shares”) to be issued in conversion or exchange for shares of PlanGraphics, Inc., a Colorado corporation, (“PlanGraphics”) ensuing from the merger of PlanGraphics into Integrated Freight Systems (the “Merger”) and (ii) 404,961 shares of Integrated Freight Systems' common stock, par value $0.001 per share (the “Warrant Shares”) to be included in a registration statement to be filed by Integrated Freight Systems with the U.S. Securities and Exchange Commission (the "SEC") on Form S-4 (“Registration Statement)for the purpose of registering the Conversion Shares and the Warrant Shares of the transactions described in the Registration Statement.

For the purpose of rendering my opinion herein, I have reviewed the Constitution and Statutes of the State of Florida, published decisions of Florida courts to the extent I deem relevant to the matter opined upon herein, certified or purported true copies of the Articles of Incorporation of Integrated Freight Systems, the Bylaws of Integrated Freight Systems, proposed proceedings of the board of directors of Integrated Freight Systems authorizing the merger with PlanGraphics and the issue of the Warrant Shares and the common stock purchase warrants associated therewith, certificates of officers of Integrated Freight Systems and of public officials, and such other documents of Integrated Freight Systems and of public officials as I have deemed necessary and relevant to the matter opined upon herein. I have assumed the due and proper election or appointment of all persons signing and purporting to sign the documents in their respective capacities, as stated therein, the genuineness of all signatures, the conformity to authentic original documents of the copies of all such documents submitted to me as certified, conformed and photocopied, including the quoted, extracted, excerpted and reprocessed text of such documents.

Based upon the review described above, it is my opinion that:

(a) the Conversion Shares are duly authorized and when issued in conversion of PlanGraphics stock in the Merger, subject to the approving resolutions of Integrated Freight Systems’ board of directors, will be, validly issued, fully paid and nonassessable, in accordance with the requirements set forth in §607.0621 of the Florida Business Corporations Act; and

(b) the Warrant Shares are duly authorized and when issued against payment therefore upon exercise of the related common stock purchase warrants, subject to the approving resolutions of Integrated Freight Systems’ board of directors, will be, validly issued, fully paid and nonassessable, in accordance with the requirements set forth in §607.0621 of the Florida Business Corporations Act.

               I am a holder of 500,000 of Integrated Freight Systems’ shares.

I do not nor shall I be deemed to give an opinion with respect to the accuracy or completeness of the information included in the Registration Statement or the compliance and conformity thereof with the rules and regulations of the SEC or the requirements of Form S-4. My forgoing opinion is strictly limited to matters of Florida corporate law; and, I so not express an opinion on the federal law of the United States of America or the law of any state or jurisdiction therein other than Florida, as specified herein.

I consent to the use of my opinion as an exhibit to the Registration Statement and to the reference thereto under the heading “Legal Matters” in the prospectus contained in the Registration Statement.

Very truly yours,

/s/ Jackson L. Morris

Jackson L. Morris

3116 West North A Street • Tampa, Florida 33609-1544 • 813•874•8854 • Cell 813•892•5969

Fax 800•310•1695 • e-mail: jmorris8@tampabay.rr.com; jackson.morris@rule144solution.com

www.Rule144Solution.com

EX-10.1

STOCK EXCHANGEAGREEMENT

THIS STOCK EXCHANGEAGREEMENT, made and entered into as of August 25, 2008, by and among Integrated Freight Systems, Inc., a Florida corporation, (“IFSI”), Mark Morris (“Mr. Morris”) the sole stockholder of Morris Transportation, Inc., an Arkansas corporation, (“MTI”), and MTI for the purpose of its representations, warranties and deliverables set forth herein.

W I T N E S S E T H :

WHEREAS, IFSI is planning (a) to acquire one or more trucking companies and (b) to file a registration statement under the Securities Act of 1933 (“1933 Act) or the Securities Exchange Act of 1934 (“1934 Act”), for the purpose of becoming a “reporting company” and developing a public trading market for its common stock; and

WHEREAS, MTI is a trucking company with its headquarters office located in Hamburg, Arkansas; and

WHEREAS, IFSI desires to acquire MTI as a going concern by the means of an exchange of shares of IFSI’s common stock for all of MTI’s issued and outstanding equity securities (“MTI’s Securities”) and thereafter to operate MTI as a wholly owned subsidiary; and

WHEREAS, Mr. Morris desires to exchange all of MTI’s Securities that he owns for shares of IFSI’s common stock and for MTI to be acquired by IFSI, as contemplated by this Agreement; and

NOW, THEREFORE, in consideration of the premises herein before set forth, in reliance hereon and the mutual promises and respective representations and warranties of the parties, one to another made herein, and the reliance of each party upon the other(s) based hereon and other good and valuable consideration, the receipt and sufficiency of which the parties respectively acknowledge, the parties agree, for purposes of consummating the transaction(s) contemplated herein, as follows:

ARTICLE I

PRELIMINARY MATTERS

Section 1.01. Recitals. The parties acknowledge the recitals herein above set forth in the preamble are correct, and are, by this reference, incorporated herein and are made a part of this Agreement.

Section 1.02. Exhibits and Schedules. Exhibits (which are documents to be executed and delivered at the Closing by the party identified therein or in the provision requiring such delivery) and Schedules (which are attachments setting forth information about a party identified therein or in the provision requiring such attachment) referred to herein and annexed hereto are, by this reference, incorporated herein and made a part of this Agreement, as if set forth fully herein.

Section 1.03. Use of words and phrases. Natural persons may be identified by last name, with such additional descriptors as may be desirable. The words “herein,” “hereby,” “hereunder,” “hereof,” “herein before,” “hereinafter” and any other equivalent words refer to this Agreement as a whole and not to any particular Article, Section or other subdivision hereof. The words, terms and phrases defined herein and any pronoun used herein shall include the singular, plural and all genders. The word “and” shall be construed as a coordinating conjunction unless the context clearly indicates that it should be construed as a copulative conjunction.

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Section 1.04. Accounting terms. All accounting terms not otherwise defined herein shall have the meanings assigned to them under generally accepted accounting principles unless specifically referenced to regulatory accounting principles.

Section 1.05. Calculation of time lapse or passage; Action required on holidays. When a provision of this Agreement requires or provides for the calculation of the lapse or passage of a time period, such period shall be calculated by treating the day on which the event which starts the lapse or passage occurs as zero; provided, that this provision shall not apply to any provision which specifies a certain day for action or payment, e.g. the first day of each calendar month. Unless otherwise provided, the term “month” shall mean a period of thirty days and the term “year” shall mean a period of 360 days, except that the terms “calendar month” and “calendar year” shall mean the actual calendar period indicated. If any day on which action is required to be taken or payment is required to be made under this Agreement is not a Business Day (Business Day being a day on which national banks are open for business where the actor or payor is located), then such action or payment shall be taken or made on the next succeeding Business Day.

Section 1.06. Use of titles, headings and captions. The titles, headings and captions of articles, sections, paragraphs and other subdivisions contained herein are for the purpose of convenience only and are not intended to define or limit the contents of said articles, sections, paragraphs and other subdivisions.

ARTICLE II

TERMS OF THE TRANSACTIONS

Section 2.01.          Stock exchange transaction. In accordance with the terms of this Agreement, on the Closing Date, IFSI shall issue to Mr. Morris shares of its common stock and Mr. Morris shall deliver to IFSI all of MTI’s Securities.

Section 2.02. Consideration. In exchange for MTI’s Securities, IFSI shall deliver to Mr. Morris, at Closing, (i) 2,500,000 shares of IFSI’s common stock (ii) a promissory note in the principal amount of $250,000 with the terms described in Section 2.03 (iii) installment payment of $750,000 as provided in Section 2.04.

Section 2.03. Terms of promissory note. The promissory note required by clause (ii) of Section 2.02 shall have a maturity date of one year after the Closing, an interest at a rate of eight percent per annum payable at maturity and shall be convertible in lieu of payment at maturity at the election of the registered holder into additional shares of IFSI’s common stock, the number of such shares determined by dividing the principal amount of and accrued interest on the note by $1; provided, that the principal amount of such note can be reduced based on performance of Net Operating Profits company remains intact, holds its own business wise, no cash put in by holding company for failing business and company remains profitable, otherwise note is reduced dollar for dollar.  It is not a negative if holding company board decides to put in additional funds to bring in new business.

                   Section 2.04 Installment payments based on performance.

(a) Within 90 days after the Closing, IFSI shall pay to Mr. Morris the sum of $750,000 in cash, provided that the date for payment of this amount shall be extended for a period not to exceed 60 days so long as IFSI is diligently pursuing refinancing of MTI’s equipment to MTI’s satisfaction. The $250,000 remaining balance shall be paid in a promissory note subject to performance of Net Operation Profits as described in Section 2.03.

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Section 2.05. Federal income tax treatment. At or before the Closing Date, the parties shall agree on the value of each of the assets of MTI for federal income tax purposes and for GAAP purposes.

Section 2.06. Transaction costs. Each party shall pay all costs and expenses which it incurs in connection with this Agreement and the transactions contemplated hereby; except, IFSI shall pay all fees and reimbursable expenses which Mr. Morris may be obligated to pay to Cordovano and Honeck LLP, arising from its engagement as MTI’s auditor.

Section 2.07. Press releases. No party will issue a press release regarding the subject matter of this Agreement and the transaction contemplated hereby, either before or after closing, without the prior approval thereof by the other party and its counsel.

ARTICLE III

CLOSING OF THE TRANSACTION

Section 3.01. Location, date and time of the Closing. The Closing of the transaction contemplated by this Agreement shall take place on September ____, 2008, at 2:00 p.m. ("Closing Date”). The Closing shall take place at a location agreed to by the parties. The acts and deliveries which occur on the Closing Date for the purpose of consummating the transactions contemplated by this Agreement and the event itself is referred to herein as the “Closing”.

Section 3.02. Mr. Morris’s and MTI’s deliveries at the Closing. At the Closing, Mr. Morris and MTI will deliver to IFSI:

 

(a) Certificate of good standing in MTI’s state of incorporation and all states in which it is required to qualify to do business;

   

(b) Certificates representing all of MTI’s Securities;

   

(c) Officers’ and Secretary’s and Certificates of MTI in the form set forth in Exhibits “A” and “B”, respectively;

   

(d) A resignation from any member of MTI’s board of directors, other than Mr. Morris;

   

(e) Action by MTI’s board of directors electing Paul A. Henley as a director of MTI.

   

(f) A document reflecting the mutual amendment of Mr. Morris’s employment agreement with MTI to reflect terms of employment negotiated pursuant to this Agreement and the letter of intent between the parties dated July 1, 2008.

   

(g) A non-competition and confidentiality agreement executed by Mr. Morris in favor of IFSI in the form of Exhibit E.

   

(h) The original of MTI’s corporate minute book and related documents.

 

Section 3.03. IFSI’s and Mr. Henley’s deliveries at the Closing. At the Closing, IFSI will deliver to Mr. Morris

 

(a) a certificate(s) representing 2,500,000 shares of IFSI’s common stock, as provided in Section 2.02, registered in the name of Mr. Morris, or at his election jointly with his spouse, provided the election together with the name and social security number of his spouse or any other designee that Mr. Morris shall designate is delivered to IFSI not less than five business days prior to the Closing; and

 

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(b) Action by IFSI’s board of directors electing Mr. Morris as a director of IFSI;

 

(c) Officers’ and Secretary’s Certificates of IFSI in the form set forth in Exhibits “A” and “B”, respectively; and

   

(d) An Employment Agreement in the form set forth in Exhibit “F”.

 

Section 3.04. Closing Memorandum and receipts. As evidence that all parties deem the Closing to have been completed and the transactions contemplated by this Agreement to have been consummated, the parties jointly will execute and deliver a Closing Memorandum, in the form of Exhibit “C”, acknowledging such completion and consummation.

Section 3.06. Waiver of conditions. Notwithstanding Section 12.03, any condition to the Closing which is to the benefit of any party and which is not satisfied prior to or at the Closing, excluding nevertheless any provision of this Agreement which by its terms is to be performed in the future, will be deemed to be waived by the benefited party or otherwise satisfied and waived by virtue of that party executing the Closing Memorandum, except to the extent any such unsatisfied or unperformed condition is expressly preserved by listing it in the Closing Memorandum for satisfaction or performance after the Closing.

Section 3.07. Further assurances. At any time and from time to time after the Closing, at the reasonable request of any party and without further consideration, any other party(ies) shall execute and deliver such other instruments and documents reasonably desirable or necessary to complete and confirm the transactions contemplated by this Agreement.

Section 3.08. Conditions precedent to IFSI’s obligation to Close. All obligations of IFSI hereunder are subject, at the option of IFSI, to the fulfillment of each of the following conditions at or prior to the Closing, and MTI shall exert commercially reasonable efforts to cause each such conditions to be so fulfilled:

(a) All representations and warranties of MTI and of Mr. Morris contained herein and in any document delivered pursuant hereto shall be true and correct in all material respects when made and shall be deemed to have been made again and given at and as of the date of the Closing of the transaction contemplated by this Agreement, and shall then be true and correct in all material respects, except for changes in the ordinary course of business after the date hereof in conformity with the representations, covenants and agreements contained herein.

(b) All covenants, agreements and obligations required by the terms of this Agreement to be performed by MTI and of Mr. Morris at or before the Closing shall have been duly and properly performed in all material respects to IFSI’s reasonable satisfaction.

(c) Since the date of this Agreement there shall not have occurred any Material Adverse Effect. The term “Material Adverse Effect” shall mean any material adverse change in MTI or its operating or financial condition, prospects (financial or otherwise), business, properties or assets of MTI.

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(d) All documents required to be delivered to IFSI at or prior to the Closing shall have been so delivered.

(e) The transaction contemplated by this Agreement shall have been approved in writing by MTI’s board of directors.

(f) MTI shall have not suffered or incurred a material damage, destruction or loss not fully covered by insurance and which has a materially adverse affect on its business and operations.

(g) IFSI shall have received a certificate of good standing for MTI and each subsidiary issued by the secretary of state of its state of organization and of each state in which it and its subsidiary is qualified or required to be qualified to do business as a foreign corporation.

(i) IFSI shall have received financial statements of MTI for December 31, 2006 and 2007 and for each of the interim quarterly periods ended subsequent thereto prepared in accordance with generally accepted accounting principles, which interim quarterly period shall not show any materially adverse results of operation when compared to 2007, the financial condition and performance of MTI disclosed in such financial statements being to the reasonable satisfaction of IFSI in relation to financial statements delivered prior to execution and delivery of this Agreement.

Section 3.09. Conditions precedent to the MTI obligation to Close. All obligations of MTI at the Closing are subject, at the option of MTI, to the fulfillment of each of the following conditions at or prior to the Closing, and IFSI shall exert commercially reasonable efforts to cause each such conditions to be so fulfilled.

(a) All representations and warranties of IFSI contained herein or in any document delivered pursuant hereto shall be true and correct in all material respects when made and as of the Closing.

(b) All covenants, agreements and obligations required by the terms of this Agreement to be performed by IFSI at or before the Closing shall have been duly and properly performed in all material respects to MTI and Mr. Morris’s reasonable satisfaction.

(c) All documents required to be delivered to MTI at or prior to the Closing shall have been so delivered.

(d) The transaction contemplated by this Agreement shall have been approved in writing by IFSI’s board of directors.

(e) MTI shall have received a certificate of good standing for IFSI issued by the secretary of state of its state of organization and of each state in which it is qualified or required to be qualified to do business as a foreign corporation.

(f) MTI shall have received audited financial statements of IFSI that will be complete and available coincidentally with the MTI audit and will be for the same period, ending with the quarter preceding the Closing. The audits are to be available prior to funding.

                   (g) MTI shall have received a listing of IFSI’s shareholders and/or investors.

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ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE PARTIES

Section 4.01. Representations and warranties of MTI and Mr. Morris. Each of MTI (as used in the following representations and warranties with respect to status or condition, “MTI” includes every subsidiary of MTI, all of which are identified in Schedule A) and Mr. Morris represent and warrant, jointly and severally, to IFSI, as follows:

(a) MTI is a duly organized and an existing entity in good standing under the laws of its state of incorporation and has full corporate power to execute, deliver and perform this Agreement.

(b) MTI is qualified to do business and in good standing in each state and jurisdiction in which the nature of its activities and ownership of property require it to be qualified as a foreign corporation.

(c) All licenses required for the conduct of MTI’s businesses in intra and interstate commerce are in full force and effect, all such licenses being transferable in the event the transactions contemplated pursuant to this Agreement are deemed to be a transfer under applicable statutes and regulations; and, there is no proceeding of any nature pending or, to the best knowledge of MTI and Morris, threatened which if determined adversely to MTI would result in a revocation, cancellation of or material limitation or restriction on MTI and the conduct of its or any subsidiary’s business as it is presently conducted.

(d) This Agreement has been duly and validly authorized, executed and delivered by MTI and constitutes the legal, valid and binding obligation of MTI enforceable against it, in accordance with its terms, subject, as to enforceability, to bankruptcy, insolvency, reorganization and other laws of, relating to or affecting stockholders and creditors rights generally and to general equitable principles.

(e) To the best knowledge of MTI and Morris, the execution of this Agreement and consummation of the transactions contemplated hereby does not conflict with and will not result in any adverse consequences to or material breach of any agreement (financing or otherwise), mortgage, instrument, judgment, decree, law or governmental regulation, license, permit or authorization by MTI or in the loss, forfeiture or waiver of any rights, license, authorization or franchise owned by MTI, from which MTI benefits or which is desirable in the conduct of MTI’s business.

(f) To the best knowledge of MTI and Morris, except for such actions as may have been taken, no further action by or before any governmental body or authority of the United States of America or any state or subdivision thereof or any self-regulatory body to which MTI is subject is required in connection with the execution and delivery of this Agreement by MTI and the consummation of the transactions contemplated hereby.

(g) The information MTI has delivered to IFSI relating to MTI was, to the best knowledge of MTI and Morris, on the date reflected in each such item of information accurate in all material respects and, to the best knowledge of MTI and Morris, such information at the date hereof taken as a whole provides full and fair disclosure of all material information relating to MTI and does not, to the best knowledge of MTI and Morris,omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

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(h) MTI has conducted its business in the ordinary course for the last three years or since inception, whichever is less.

(i) Neither MTI nor any employee, to MTI best knowledge, has since inception given or agreed to give any gift or similar benefit valued at more than $20 annually to any customer, supplier, governmental employee or other person who is or may be or have been in a position to help or hinder MTI’s business, or a gift or similar benefit in any amount or value which might subject MTI to damage or penalty in civil, criminal or governmental litigation or proceedings.

(j) MTI’s financial statements delivered to IFSI have been prepared in accordance with generally accepted accounting principles consistently applied and maintained throughout the periods indicated, fairly present the financial condition of MTI in all material respects at the dates and the results of operations for the periods indicated, contain all normally recurring adjustments and do not omit to disclose any contingent, undisclosed or hidden liabilities. MTI’s financial records are maintained in accordance with good business practice.

(k)MTI has good, marketable and insurable title to all of its properties and assets, including intangible assets, if any, which it owns or uses in its business or purports to own, including, without limitation, those reflected in its books and records and in the balance sheet, both tangible and intangible None of the properties and assets are subject to any mortgage, pledge, lien, charge, security interest, encumbrance, restriction, lease, license, easement, liability or adverse claim of any nature whatsoever, direct or indirect, whether accrued, absolute, contingent or otherwise, except as expressly set forth in the notes to MTI’s financial statements as securing specific liabilities or subject to specific capital leases and have arisen only in the ordinary course of business. All of the properties and assets owned, leased or used by MTI are in good operating condition and repair, are suitable for the purposes used, are adequate and sufficient for MTI’s current operations and are directly related to MTI’s business.

(l) All of the material contracts, agreements, leases, licenses and commitments of MTI (other than those which have been fully performed), copies of all of which have been delivered to IFSI, are valid and binding, enforceable in accordance with their respective terms, in full force and effect and there is not there under with respect to any party thereto any existing default or event, which after the giving of notice or lapse of time or both, would constitute a default or result in a right to accelerate or loss of rights and none of such contracts, agreements, leases, licenses and commitments is, either when considered singly or in the aggregate with others, unduly burdensome, onerous or materially adverse to MTI’s business, properties, assets, earnings or prospects, either before or after the Closing, or which would result in any material loss to or liability of MTI.

(m) There is no claim, legal action, suit, arbitration, governmental investigation, or other legal or administrative proceeding, nor any order, decree, judgment or judgment in progress, pending or in effect or to MTI’s knowledge threatened, against or relating to MTI, its directors, officers or employees with respect to MTI or its business or for which MTI may have an indemnity obligation, it properties, assets or business or the transaction contemplated by this Agreement and MTI does not know or have any reason to be aware of any basis for the same, including any basis for a claim of sexual harassment or racial or age discrimination.

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(n) All taxes, including without limitation, income, property, special assessments, sales, use, franchise, intangibles, employees’ income withholding and social security taxes, including employer’s contribution, other than those for which a return or deposit is not yet due and have been disclosed to IFSI, imposed by the United States or any state, municipality, subdivision, authority, which are due and payable, and all interest and penalties thereon, unless disputed in good faith in proper proceedings and reserved for or set aside, have been paid in full and all tax returns required to be filed in connection therewith have been accurately prepared and timely filed and all deposits required by law to be made by MTI with respect to employees’ withholding and social security taxes have been made. MTI is not and has no reason to believe that it will be the subject of an audit by any taxing authority. There is not now in force any extension of time with respect to the date when tax return was or is due to be filed, or any waiver or agreement by MTI for the extension of time for the assessment of any tax and MTI is not a “consenting corporation” within the meaning of Section 341(f)(1) of the Tax Code.

(o) MTI does not have any employee benefit, pension or profit sharing plans subject to ERISA and no such plans to which MTI is obligated or required to make contributions.

(p) None of MTI’s employees are represented by a collective bargaining agent or subject to a collective bargaining agreement and MTI considers its relations with its employees as a whole to be good. MTI has disclosed to IFSI all employee salary, compensation and benefit agreements and no employee, other than Morris, has a written employment agreement.

(q) No person has guaranteed any obligation of MTI, and MTI has not guaranteed the obligation of any other person.

(r) MTI and its management have no reason to believe or expect and do not believe or expect that any event or events will occur which will result in MTI producing results of operations which are materially different from MTI’s recent operations.

(s) Mr. Morris will have operational control through a proxy or other mechanism, to operate MTI in all daily operations as an ongoing concern with authority to carry out those duties, barring interference with IFSI’s overall objectives.

Section 4.02. IFSI’s representations and warranties. IFSI represents and warrants to IFSI that:

(a) IFSI is a duly incorporated and existing corporation in good standing under the laws of its state of incorporation and has full corporate power to execute and deliver this Agreement.

(b) This Agreement has been duly and validly authorized, executed and delivered by IFSI and constitutes the legal, valid and binding obligation of IFSI, enforceable against IFSI in accordance with its terms subject, as to enforceability, to bankruptcy, insolvency, reorganization and other laws of, relating to or affecting shareholders and creditors rights generally and to general equitable principles.

(c) Except for such actions as may have already been taken, no further action by or before any governmental body or authority of the United States of America or any state thereof is required in connection with the execution and delivery of this Agreement by IFSI and the consummation of the transactions contemplated hereby.

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(d) The information IFSI have delivered to MTI was on the date reflected in each such item of information accurate in all material respects and such information at the date hereof as a whole did not contain any untrue statement of material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

(e) The information and financial statements IFSI has provided to Morris, on the date reflected in each element of information and financial statements, are accurate in all material respects and, to the knowledge of IFSI, such information at the date hereof taken as a whole provides, to the best knowledge of IFSI, full and fair disclosure of all material information relating to MTI and does not, to the knowledge of IFSIomit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

Section 4.03. Nature and survival of representation and warranties; Remedies. All statements of fact contained in this Agreement, any certificate delivered pursuant to this Agreement, or any letter, document or other instrument delivered by or on behalf of MTI or of IFSI, and their respective officers, pursuant to the terms of this Agreement shall be deemed representations and warranties made by MTI or by IFSI, respectively, as the case may be, to each other under this Agreement. For purposes of this Section 4.03 and Section 11.01 only, any party or other person seeking to enforce, or claiming the benefit of, any representation and warranty under this Agreement is called a Claimant, and any party or other person against whom a right is claimed is called a Defendant. All representations and warranties of the parties shall survive the Closing; provided, however, that all representations and warranties shall terminate and expire, and be without further force and effect whatever from and after the one year from the date hereof, and neither IFSI, or MTI shall have any liability whatsoever on account of any inaccurate representation or warranty or for any breach of warranty, unless a Claimant shall, on or prior to the expiration of such one year period, serve written notice on a Defendant, with a copy to the Defendant’s counsel, setting forth in reasonable detail the breach and any direct, incidental or consequential damages (including amounts) the Claimant may have suffered as a result of such breach.

ARTICLE V

COVENANTS OF THE PARTIES

  Section 5.01. Conduct of business prior to Closing.

(a) From the date hereof to the Closing, MTI will conduct its business and affairs only in the ordinary course and consistent with its prior practice and shall endeavor to maintain, keep and preserve its assets and properties in good condition and repair and maintain insurance thereon in accordance with present practices, it will use its best efforts (i) to preserve its business and organization intact, (ii) to keep available to IFSI the services of MTI’s present employees, agents and independent contractors, (iii) to preserve for the benefit of IFSI the goodwill of suppliers, customers, distributors, landlords and others having business relations with it, and (iv) to cooperate and use reasonable efforts to obtain the consent of any landlord or other party to any lease or contract with MTI where the consent of such landlord or other party may be required by reason of the transactions contemplated hereby.

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(b) From the date hereof to the Closing, MTI shall not outside the ordinary course of business (i) dispose of any material assets, (ii) engage in any extraordinary transactions without IFSI’s prior approval, including but not limited to, directly or indirectly, soliciting, entertaining, encouraging inquiries or proposals or entering into negotiation or agreement with any third party for sale of assets by MTI, sale of its equity securities or merger, consolidation or combination with any company, (iii) grant any salary or compensation increase to any employee, or (iv) make any commitment for capital expenditures, other than as disclosed to IFSI and approved by it.

(c) IFSI shall open its corporate records and financial books to MTI for its or its agents and representatives review.

Section 5.02. Notice of changes in information. Each party shall give the other party prompt written notice of any change in any of the information contained in their respective representations and warranties made in Article IV, or elsewhere in this Agreement, or the exhibits and schedules referred to herein or any written statements made or given in connection herewith which occurs prior to the Closing.

Section 5.03. Notice of extraordinary changes. MTI shall advise IFSI with respect to any of the following events outside of ordinary course of business and which are materially adverse: (i) the entering into and cancellation or breach of contracts, agreements, licenses, commitments or other understandings or arrangements to which MTI is a party, (ii) any changes in purchasing, pricing or selling policy, or, any changes in its sales, business or employee relations in general, and (iii) the filing or commencement of any litigation or governmental or agency proceedings against MTI.

Section 5.04. Action to preserve MTI’s business and assets. Notwithstanding anything contained in this Agreement to the contrary, MTI will not take or fail to take any action that in MTI’s reasonable business judgment, is likely to give rise to a substantial penalty or a claim for damages by any third party against MTI, or is likely to result in losses, or is otherwise likely to prejudice in any material respect or unduly interfere with the conduct of its business and operations in the ordinary course consistent with prior practice, or is likely to result in a breach by MTI of any of its representations, warranties or covenants contained in this Agreement (unless any such breach is first waived in writing by IFSI).

Section 5.05. Access to information and documents. Upon reasonable notice and during regular business hours, MTI will give to IFSI, its attorneys, accountants and other representatives full access to its personnel (subject to reasonable approval as to the time thereof) and all properties, documents, contracts, books and records and will furnish copies of such documents (certified by officers, if so requested) and with such information with respect to its business, operations, affairs and prospects (financial and otherwise) as IFSI may from time to time request, and the party to whom the information is provided will not improperly disclose the same prior to the Closing. MTI will afford IFSI an opportunity to ask questions and receive answers thereto in furtherance of its duly diligent examination of MTI. Any such furnishing of such information or any investigation shall not affect that party’s right to rely on the other party’s representations and warranties made in this Agreement or in connection herewith or pursuant hereto, except to the extent that written disclosure of information at a variance or in conflict with any such representation or warranty is made and provides specific notice of such variance or conflict.

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Upon reasonable notice and during regular business hours, IFSI will give to MTI, its attorneys, accountants and other representatives full access to its personnel (subject to reasonable approval as to the time thereof) and all properties, documents, contracts, books and records and will furnish copies of such documents (certified by officers, if so requested) and with such information with respect to its business, operations, affairs and prospects (financial and otherwise) as MTI may from time to time request, and the party to whom the information is provided will not improperly disclose the same prior to the Closing. IFSI will afford MTI an opportunity to ask questions and receive answers thereto in furtherance of its duly diligent examination of IFSI. Any such furnishing of such information or any investigation shall not affect that party’s right to rely on the other party’s representations and warranties made in this Agreement or in connection herewith or pursuant hereto, except to the extent that written disclosure of information at a variance or in conflict with any such representation or warranty is made and provides specific notice of such variance or conflict.

Section 5.06. Confidential treatment of information. The provisions of Exhibit “D” shall be binding upon the parties.

Section 5.07. Cooperation by the parties. Each party hereto shall cooperate and shall take such further action as may be reasonably requested by any other party in order to carry out the provisions and purposes of this Agreement. MTI shall cooperate with IFSI, and its independent public accountant, the cost of which shall be the responsibility of IFSI, with respect to an audit of MTI’s financial statements and review of interim, stub period financial statements required to enable IFSI to file a registration statement pursuant to the 1933 Act or the 1934 Act. This covenant shall survive the Closing.

                 Section 5.08. Conduct of MTI’s business after Closing.

(a) The parties acknowledge that it is IFSI’s intent to cause MTI to refinance all of its equipment following the closing, subject to terms and conditions of such refinancing acceptable to IFSI, for the purpose of eliminating personal guaranties and to improve MTI’s working capital.

(b) MTI will be operated as a wholly owned subsidiary of IFSI, and as a separate corporation, and shall not be merged into IFSI or any other subsidiary of IFSI at least until IFSI has paid the additional consideration provided in Section 2.03.

(c) In the event IFSI fails (i) to either pay the sum of $750,000 as provided in Section 2.03(a) or refinance MTI’s equipment within 90 days of Closing with a 60 day extension as provided in Section 2.04 or (ii) to established a public trading market for its common stock within 180 days following funding, provided that the number of days shall be extended for a period not to exceed 60 days so long as IFSI is diligently pursuing establishing a public trading market for IFSI stock, Mr. Morris may elect, by written notice given to IFSI within ten days after either such failure, to return to IFSI the IFSI common stock he received pursuant to Section 2.02 and any cash consideration received pursuant to Section 2.03, without interest, offset or deduction, and IFSI will, upon such election, return MTI’s Securities to Mr. Morris.

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ARTICLE VII

FEDERAL INCOME TAX MATTERS

Section 7.01. Federal income tax treatment. Each party shall be responsible for obtaining his, her or its own tax advice with respect to and understanding the federal income tax consequences of the transactions and the federal income tax consequences thereof contemplated by this Agreement and waives any reliance with respect thereto on any other party. Mr. Morris understands the transaction will be taxable to him to the extent of “boot”.

ARTICLE VIII

SECURITIES LAW MATTERS AND STATUS OF SHARES

Section 8.01. Unregistered shares. IFSI’s common stock delivered to Mr. Morris is not being registered under the 1933 Act and the securities laws of Arkansas or any other state of jurisdiction, and the shares are not transferable, except as permitted under various exemptions contained in the 1933 Act and applicable state securities law. The provisions contained in the following sections are intended to ensure compliance with the 1933 Act and applicable state securities law.

Section 8.02. No transfers in violation of 1933 Act. Mr. Morris will agree at Closing not to offer, sell, assign, pledge, hypothecate, transfer or otherwise dispose of IFSI’s shares, except after full compliance with all of the applicable provisions of and regulations under the 1933 Act and applicable state securities law.

Section 8.03. Investment intent. Mr. Morris will represent and warrant to and covenant with IFSI that he is acquiring IFSI’s shares for his own account for investment and not with a view to resale or other distribution; that he currently has no intention of selling, assigning, transferring, pledging, hypothecating or otherwise disposing of all or any part thereof at any particular time, for any particular price, or on the happening of any particular event or circumstance; and he will acknowledge that he understands IFSI is relying on the truth and accuracy of his covenants, warranties and representations in issuing IFSI’s shares without first registering them under the 1933 Act.

Section 8.04. Investment legend on certificates. Mr. Morris will further agree that the certificates evidencing IFSI’s shares shall contain the following legend or a legend of similar import:

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND IS A “RESTRICTED SECURITY” AS DEFINED UNDER SAID ACT. ACCORDINGLY, NEITHER THIS SECURITY NOR ANY INTEREST THEREIN MAY BE SOLD, OFFERED FOR SALE, ASSIGNED, TRANSFERRED, PLEDGED OR HYPOTHECATED, EXCEPT BY BONA FIDE GIFT OR INHERITANCE, IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS SECURITY UNDER SAID ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER THAT SUCH REGISTRATION IS NOT REQUIRED.

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ARTICLE IX

TERMINATION PRIOR TO CLOSING

Section 9.01. Termination for default. IFSI may, by notice to MTI and Morris given in the manner provided below on or at any time prior to the Closing Date, terminate this Agreement if default shall be made by MTI in the observance or in the due and timely performance of any of any material covenants and agreements contained in this Agreement, made by MTI pursuant to or imposed upon it in this Agreement, if the default has not been fully cured within fifteen days after receipt of the notice specifying the default.

MTI may, by notice to IFSI given in the manner provided below on or at any time prior to the Closing Date, terminate this Agreement if default shall be made by IFSI in the observance or in the due and timely performance of any of any material covenants and agreements contained in this Agreement, made by IFSI pursuant to or imposed upon it in this Agreement, if the default has not been fully cured within fifteen days after receipt of the notice specifying the default.

Section 9.02. Termination for failure to Close. If the Closing does not occur on or before the date provided in Section 3.01, any party, if that party is not then in default in the observance or in the due or timely performance of any covenants and conditions under this Agreement, may at any time terminate this Agreement by giving written notice to the other parties; provided, that the parties may extend the Closing date in writing.

Section 9.03. Termination for loss of bargain. IFSI may, at its option, terminate this Agreement prior to the Closing if (i) in completion of its due diligence examination of MTI, it discovers the existence of a material, adverse variance from its due diligence examination prior to the date of this Agreement, or (ii) the business or assets of MTI have suffered any material damage, destruction or loss (whether or not covered by insurance), or (iii) MTI is prevented by order of court or administrative action from consummating the transactions contemplated by this Agreement, whether or not MTI has exhausted its appeals.

MTI may, at its option, terminate this Agreement prior to the Closing if (i) in completion of its due diligence examination of IFSI, it discovers the existence of a material, adverse variance from its due diligence examination prior to the date of this Agreement, or (ii) the business or assets of IFSI have suffered any material damage, destruction or loss (whether or not covered by insurance), or (iii) IFSI is prevented by order of court or administrative action from consummating the transactions contemplated by this Agreement, whether or not IFSI has exhausted its appeals.

ARTICLE X

NOTICES

Section 10.01. Procedure for giving notices. Any and all notices or other communications required or permitted to be given under any of the provisions of this Agreement shall be in writing and shall be deemed to have been duly given when personally delivered (excluding telephone facsimile and including receipted express courier and overnight delivery service) or mailed by first class certified U.S. mail, return receipt requested showing name of recipient, addressed to the proper party.

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Section 10.02. Addresses for notices. For purposes of sending notices under this Agreement, the addresses of the parties are as follows:

As to MTI and Mr. Morris: Mark Morris, President

Morris Transportation, Inc.

728 Highway 52 West

Hamburg, AR 71646

Copy to: Gary J. Barrett, Esq.

Hancock, Lane & Barrett, PLLC

610 E. 6^th St.

Little Rock, AR 72202

As to IFSI: Paul A. Henley, President

Integrated Freight Systems, Inc.

Suite 192

1767 Lakewood Ranch Boulevard

Bradenton, FL 34211

Copy to: Jackson L. Morris, Esq.

3116 West North A Street

Tampa, Florida 33609-1544

Section 10.03. Change of address. A party may change its address for notices by sending a notice of such change to all other parties by the means provided in Section 10.01.

ARTICLE XI

LEGAL AND OTHER COSTS

Section 11.01. Party entitled to recover. In the event that any party (the “Defaulting Party”) defaults in his or its obligation under this Agreement and, as a result thereof, the other party (the “Non-Defaulting Party”) seeks to legally enforce his or its rights hereunder against the Defaulting Party (whether in an action at law, in equity or in arbitration), then, in addition to all damages and other remedies to which the Non-Defaulting Party is entitled by reason of such default, the Defaulting Party shall promptly pay to the Non-Defaulting Party an amount equal to all costs and expenses (including reasonable attorneys’ fees and expert witness fees) paid or incurred by the Non-Defaulting Party in connection with such enforcement.

Section 11.02. Interest. In the event the Non-Defaulting Party is entitled to receive an amount of money by reason of the Defaulting Party’s default hereunder, then, in addition to such amount of money, the Defaulting Party shall promptly pay to the Non-Defaulting Party a sum equal to interest on such amount of money accruing at the rate of 1.5% per month during the period between the date such payment should have been made hereunder and the date of the actual payments thereof.

ARTICLE XII

MISCELLANEOUS

Section 12.01. Effective date. The effective date of this Agreement shall for all purposes be the date set forth in first paragraph hereof notwithstanding a later actual date of execution by any individual party.

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Section 12.02. Entire agreement. This writing constitutes the entire agreement of the parties with respect to the subject matter hereof, superseding all prior agreements, understandings, representations and warranties.

Section 12.03. Waivers. No waiver of any provision, requirement, obligation, condition, breach or default hereunder, or consent to any departure from the provisions hereof, shall be considered valid unless in writing and signed by the party giving such waiver, and no such waiver shall be deemed a waiver of any subsequent breach or default of the same or similar nature.

Section 12.04. Amendments. This Agreement may not be modified, amended or terminated except by a written agreement specifically referring to this Agreement signed by all of the parties hereto and amendment, modification or alteration of, addition to or termination of this Agreement or any provision of this Agreement shall not be effective unless it is made in writing and signed by the parties.

Section 12.05. Construction. This Agreement has been negotiated by the parties, section by section, and no provision hereof shall be construed more strictly against one party than against the other party by reason of such party having drafted such provision. The order in which the provisions of this Agreement appear are solely for convenience of organization; and later appearing provisions shall not be construed to control earlier appearing provisions.

Section 12.06. Invalidity. It is the intent of the parties that each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law. If any provision hereof shall be prohibited, invalid, illegal or unenforceable, in any respect, under applicable law, such provision shall be ineffective to the extent of such prohibition, invalidity or non enforceability only, without invalidating the remainder of such provision or the remaining provisions of this Agreement; and, there shall be substituted in place of such prohibited, invalid, illegal or unenforceable provision a provision which nearly as practicable carries out the intent of the parties with respect thereto and which is not prohibited and is valid, legal and enforceable.

Section 12.07. Multiple counterparts. This Agreement may be executed in one or more counterparts, each of which shall be an original and, taken together, shall be deemed one and the same instrument.

Section 12.08. Assignment, parties and binding effect. This Agreement, and the duties and obligations of any party shall not be assigned without the prior written consent of the other party(ies). This Agreement shall benefit solely the named parties and no other person shall claim, directly or indirectly, benefit hereunder, express or implied, as a third-party beneficiary, or otherwise. Wherever in this Agreement a party is named or referred to, the successors (including heirs and personal representative of individual parties) and permitted assigns of such party shall be deemed to be included, and all agreements, promises, covenants and stipulations in this Agreement shall be binding upon and inure to the benefit of their respective successors and permitted assigns.

Section 12.09. Survival of representations and warranties. The representations and warranties made herein shall survive the execution and delivery of this Agreement and full performance hereunder of the obligations of the representing and warranting party, subject to the provisions of Section 4.03.

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Section 12.10. Jurisdiction and venue. Any action or proceeding for enforcement of this Agreement and the instruments and documents executed and delivered in connection herewith which is determined by a court of competent jurisdiction not, as a matter of law, which seeks injunctive relief shall be brought and enforced in the courts of the State of Arkansas in and for Ashley County, Arkansas, and the parties irrevocably submit to the jurisdiction of each such court in respect of any such action or proceeding.

Section 12.11. Applicable law. This Agreement and all amendments thereof shall be governed by and construed in accordance with the law of the State of Arkansas applicable to contracts made and to be performed therein (not including the choice of law rules thereof).

[Testimonium on following page.]

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            IN WITNESS WHEREOF, the parties hereto have caused this agreement to be signed by their respective officers thereunto duly authorized and their respective corporate seals to be hereunto affixed, the day and year first above written.

[Corporate Seal] Integrated Freight Systems, Inc.

Attest: By: /s/ Paul A. Henley

Paul A. Henley, President

/s/ Jackson L. Morris, Secretary

[Corporate Seal] Morris Transportation, Inc.

Attest: By: /s/ Mark Morris

Mark Morris, President

_______________, Secretary

/s/ Mark Morris

Mark Morris

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EXHIBIT “A”

OFFICERS’ CERTIFICATE

Pursuant to Section 3.0__ of the Stock Exchange Agreement identified within

The undersigned, ____________, President, and __________, Treasurer, of ________________, a ___________ corporation (the “Corporation”), hereby each certifies that he is familiar with the Stock Exchange Agreement, dated ________________, (the “Agreement”), between the Corporation and ____________ and, to the best of his knowledge, based on reasonable investigation:

(a) All representations and warranties of the _____________ (as defined in the Agreement) contained in the Agreement, and in all Exhibits and Schedules attached thereto containing information delivered by ___________, were true and correct in all material respects when made and when deemed to have been made and are true and correct at the date hereof, except for changes in the ordinary course of business between the date of the Agreement, in conformity with the covenants and agreements contained in the Agreement.

(b) All covenants, agreements and obligations required by the terms of the Agreement to be performed by _______________ at or before the Closing have been duly and properly performed in all material respects.

(c) Since the date of the Agreement there have not occurred any material adverse change in the condition or prospects (financial or otherwise), business, properties or assets of the ____________________.

IN WITNESS WHEREOF, each of the undersigned has executed this certificate this ________________, .

_______________, President

_______________, Treasurer

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EXHIBIT “B”

SECRETARY’S CERTIFICATE

Pursuant to Section 3.0__ of the Stock Exchange Agreement identified within.

I, ___________, the duly elected, qualified and acting Secretary of _________________, a corporation duly organized, existing and in good standing under the laws of ____________, (the “Corporation”) do hereby certify that:

(i) The following is a true and complete copy of Resolution of the Board of Directors of the Corporation taken and adopted on ________________, , approving the Stock Exchange Agreement dated ________________, , by and among the Corporation and _____________, and that said Resolution has not been rescinded, revoked or modified and is in full force and effect at the date hereof:

(ii) The persons whose names, titles and signatures appear below are each the duly elected, qualified and acting officers of the Corporation, hold on the date hereof the offices set forth opposite their respective names and the signatures appearing opposite said names are the genuine signatures of said persons:

Name Title Signature

________________ President ___________________________

________________ Secretary ___________________________

________________ Treasurer ___________________________

(iii) I am authorized by the Corporation to make the within certifications.

IN WITNESS WHEREOF, I have executed this Certificate on ________________, .

(CORPORATE SEAL)

_________________, Secretary

I, ______________, President of _______________, a __________ corporation, hereby certify that ______________ is duly elected, qualified and acting Secretary of ______________ and that the signature appearing above is his genuine signature.

IN WITNESS WHEREOF, I have executed this Certificate on ________________, .

__________________, President

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Exhibit “C”

CLOSING MEMORANDUM

The undersigned parties to that certain Stock Exchange Agreement dated ________________, , (“Agreement”) do hereby certify one to the other that;

1. The Closing of the Agreement was completed, as contemplated by the Agreement, on ________________, at ____ o’clock __.m.

2. All conditions to each of the parties Closing the Agreement have been satisfied and, to the extent not specifically satisfied, have been waived by the party entitled to waive the conditions; except, the following conditions, if any, are waived only for the purpose of Closing of the transaction contemplated by the Agreement, and are required to be satisfied after the Closing by the party required to satisfy such condition:

[insert any such conditions and name of the party required to satisfy it]

3. Capitalized terms herein have the meaning assigned to them in the Stock Exchange Agreement.

For the purposes herein set forth, the parties have executed this Memorandum at the date and time written above.

[Corporate Seal] Integrated Freight Systems, Inc.

Attest: By: _____________________________

Paul A. Henley, President

_______________, Secretary

[Corporate Seal] Morris Transportation, Inc.

Attest: By: _____________________________

Mark Morris, President

_______________, Secretary

_________________________________

Mark Morris

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THE TERMS OF “TREATMENT OF CONFIDENTIAL INFORMATION” ARE TO BE NEGOTIATED SUBSEQUENT TO THE EXECUTION OF THE STOCK EXCHANGE AGREEMENT AND PRIOR TO CLOSING

EXHIBIT “D”

Treatment of Confidential Information

The mutual objective of the parties under the Stock Exchange Agreement to which this Exhibit “D” is attached and incorporated by reference is to provide appropriate protection for Confidential Information while exchanging Confidential Information (defined below) for the parties’ mutual benefit and maintaining their ability to conduct their respective business activities. Each party agrees the following terms apply when a party (the “Discloser”) discloses information to the other (the “Recipient”) under this Agreement. The consideration for this Agreement is the disclosures which a party makes to the other in reliance on this Agreement.

1. Each party agrees and acknowledges that many of the other’s Confidential Information (as described below) is considered to be trade secrets, confidential, proprietary and not readily accessible to the public. Each party believes that its own Confidential Information represents a legitimate, valuable and protectible interest and gives it a competitive advantage, which otherwise would be lost if its Confidential Information was improperly disclosed or revealed.

2. The Recipient shall not, at any time without the express written permission of the Discloser, disclose the Discloser’s Confidential Information directly or indirectly to any person or entity, except the Recipient may disclose the Confidential Information to the Recipient’s Employees, Contractors and Agents (as defined below) during the term of this Agreement if such Employees, Contractors and Agents have a need to know the Confidential Information in order to complete any purpose for which the Confidential Information is disclosed. The Recipient shall have entered into non-disclosure agreements with such Employees, Contractors, and Agents having obligations of confidentiality as strict as those herein prior to disclosure to such employees, contracts, and agents to assure against unauthorized use or disclosure. The Recipient shall not use or threaten to use Confidential Information in any way that is inconsistent with the provisions of this Agreement or contrary to the instructions or interests of the Discloser. The Recipient shall not, directly or indirectly, intentionally or negligently allow or assist others in using the Discloser’s Confidential Information in any way inconsistent with the provisions of this Agreement or contrary to the instructions or interests of the Discloser. The Recipient agrees not to use Confidential Information for its own benefit, unless specifically authorized so to do in writing by the Disclose.

3. Each party recognizes and acknowledges that the improper disclosure or use of the Discloser’s Confidential Information would cause irreparable injury to the Discloserby jeopardizing, compromising, and perhaps eliminating the competitive advance theDiscloser holds or may hold because of the existence and secrecy of the Confidential Information or would provide an unjustly obtained advantage to the Recipient. Thus, each party acknowledges and agrees that monetary damages shall not be a sufficient remedy for the Discloser in the event of any breach or threatened breach of this Agreement. Therefore, each party stipulates and warrants that in the event a Recipient breaches, or reasonably threatens to breach, this Agreement, the Discloser party shall be entitled, without waiving any other rights or remedies in law or in equity, to such injunctive and/or other equitable relief, without (a) having to show or prove irreparable harm as may be deemed proper by a court of competent jurisdiction and (b) the requirement imposed by the Court for posting bond which requirement is hereby specifically and knowingly waived.

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4. The Recipient agrees to use the same care and discretion to avoid improper disclosure, publication or dissemination of the Disclosure’s Confidential Information as it uses with its own similar information that it does not wish to disclose, publish or disseminate, but in no event less than reasonable and prudent care.

5. As used in this Agreement the “Confidential Information” means all tangible and intangible information that is disclosed by the Discloser to the Recipient (either orally, or by visual inspection, and/or in writing), including but not limited to (a) currently available and planned products and services; (b) information regarding distributors, suppliers, developers, contractors and funding sources; (c) financial and management information; (d) product information; (e) research and/or development information; (f) information pertaining to actual and/or potential customers, suppliers, and/or strategic alliances; (g) information of a confidential or private nature relating to Employees and Agents (as defined below); (h) financial data and information; (i) business plans; (j) marketing materials and/or strategies; (k) legal matters, including current and/or potential contracts and/or litigation; (l) in-house e-mail, Internet, security, and/or other systems; (m) information received by the Discloser from third parties that the Discloser is obligated to treat as confidential; and/or (n) any and all information regarding the foregoing that the Discloser discloses to the Recipient. Failure to include a confidentiality notice on any materials disclosed to the Recipient shall not give rise to inference that the information disclosed is not confidential. Confidential Information disclosed to the Recipient by any parent corporation, subsidiary, agent and/or affiliated entities of the Discloser or by persons that owe the obligation of confidentiality to the Discloser, whether by contract or otherwise, is also covered by this Agreement.

“Employees and Agents” shall mean the employees, agents, representatives, consultants and independent contractors affiliated with each of us separately.

6. Confidential Information shall not include any information which the Recipient can, by clear and convincing evidence, establish:

(a) Is or subsequently becomes publicly available without the Recipient’s breach of any obligation owed to the Discloser under this Agreement;

(b) Was rightfully in the possession of or known to the Recipient prior to the Discloser’s disclosure of such information to the Recipient, as evidenced by documentation on record at the time of disclosure;

(c) Became known to the Recipient from a source independent from the Discloser and such independent source did not breach an obligation of confidentiality owed to the Discloser;

(d) Was independently developed by the Recipient without any breach of this Agreement; or

(e) Was originally disclosed as Confidential Information hereunder but which the Discloser thereafter authorizes the Recipient to use and/or disclose, and such authorization is in writing which is signed by authorized representatives of the parties;

(f) Becomes available to the Receiving Party by wholly lawful inspection or analysis of products offered for sale; or

(g) Is transmitted by a party after receiving written notification from the other party that it does not desire to receive any further Confidential Information.

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The Receiving Party may disclose Confidential Information nevertheless pursuant to a valid order issued by a court or government agency, provided that the Receiving Party provides the Disclosing Party (i) prior written notice of such obligation; and (ii) the opportunity to oppose such disclosure or obtain a protective order.

7. The Recipient shall notify the Discloser immediately upon discovery of any unauthorized disclosure of the Confidential Information, or any other breach of this Agreement by the Recipient and/or the Recipient’s Employees and/or Agents, and will cooperate with the Discloser in every reasonable way at the Recipient’s sole cost and expense to prevent its further unauthorized disclosure and/or further breach of this Agreement.

8. neither this Agreement nor any disclosure of Confidential Information hereunder grants the Recipient any rights or license under any trademark, copyright or patent now or hereafter owned or controlled by the Discloser.

9. The Recipient acknowledges and agrees that its limited right to evaluate the Discloser’s Confidential Information shall immediately expire at the completion of the purpose for which the Confidential Information is delivered, if this Agreement is not terminated earlier and then, in that event, the Recipient’s right to evaluate such Confidential Information shall immediately terminate. The Recipient therefore agrees to return any and all Confidential Information of the Discloser that is in a tangible form, including all originals, copies reproductions, and summaries thereof, to the Discloser within five business days of the date this Agreement expires or is terminated, whichever occurs first, or upon the Discloser’s request, and to also completely erase and destroy any and all copies of all portions of any and all software comprising the Confidential Information in its possession and/or under its responsibility or control which may have been loaded onto the computers of the Recipient and/or its Employees and Agents.

10. This Agreement shall continue from the date last written below until terminated by either party by giving thirty days’ written notice to the other party of its intent to terminate this Agreement. Information disclosed pursuant to this Agreement will be subject to the terms of this Agreement for five years following the termination of this Agreement.

11. The terms of confidentiality under this Agreement shall not be construed to limit either party’s right to independently develop or acquire products without use of the other party’s Confidential Information. The Disclosing Party acknowledges that the Receiving Party may currently or in the future be developing information internally, or receiving information from other parties, that is similar to the Confidential Information. Accordingly, nothing in this Agreement prohibit the Receiving Party from developing or having developed for it products, concepts, systems or techniques that are similar to or compete with the products, concepts, systems or techniques contemplated by or embodied in the Confidential Information provided that the Receiving Party does not violate any of its obligations under this Agreement in connection with such development. Further, either party shall be free to use for any purpose the “residuals,” provided that such party shall not use in any manner information that is considered Confidential Information under this Agreement and shall maintain the confidentiality of the Confidential Information as provided herein. The term “residuals” means ideas, concepts, know-how or techniques that may be generated, developed or conceived by the Receiving Party in connection with reviewing the Confidential Information and in no circumstance shall “residuals” be deemed to include Confidential Information. Neither party shall have any obligation to limit or restrict the assignment of such persons or to pay royalties for any work resulting from the use of residuals.

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12. The Receiving Party shall not remove, overprint or deface any notice of confidentiality, copyright, trademark, logo, legend, or other notices of ownership or confidentiality from any originals or copies of Confidential Information it obtains from the Disclosing Party.

13. CONFIDENTIAL INFORMATION IS PROVIDED “AS IS” WITH ALL FAULTS. IN NO EVENT SHALL THE DISCLOSING PARTY BE LIABLE FOR THE ACCURACY OR COMPLETENESS OF THE CONFIDENTIAL INFORMATION. None of the Confidential Information disclosed by the parties constitutes any representation, warranty, assurance, guarantee or inducement by either party to the other with respect to the infringement of trademarks, patents, copyrights; any right of privacy; or any rights of third persons.

14. The parties acknowledge that the Confidential Information disclosed by each of them under this Agreement may be subject to export controls under the laws of the United States. Each party shall comply with such laws and agrees not to knowingly export, re-export or transfer Confidential Information of the other party without first obtaining all required United States or other governmental authorizations or licenses.

15. The parties hereto are independent contractors. Neither this Agreement nor any right granted hereunder shall be assignable or transferable by operation of law or otherwise. Any such purposed assignment shall be void.

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EXHIBIT “E”

AGREEMENT NOT TO COMPETE

THIS AGREEMENT NOT TO COMPETE, made and entered into as of _________ ___, 2008, by and between Integrated Freight Systems, Inc., a Florida corporation, (“IFSI”) and Morris Transportation, Inc., a Michigan corporation, (jointly and severally, the “Benefited Party(ies)”), and Mark Morris (the “Restricted Party”).

W I T N E S S E T H :

WHEREAS, IFSI has exchanged the issued and outstanding equity securities of MTI pursuant to a Stock Exchange Agreement dated as of _________, 2008; and

WHEREAS, MTI is wholly owned by Mr. Morris who personally benefits from such exchange; and

WHEREAS, the Benefited Parties have required as a condition for the exchange of MTI’s Securities, as defined in the Stock Exchange Agreement that the Restricted Party enter into this Agreement Not To Compete as a means of protecting the value of MTI; and

NOW, THEREFORE, in consideration of the premises herein before set forth, in reliance hereon and the mutual promises of the parties, one to another made herein, and the reliance of each party upon the other(s) based hereon and other good and valuable consideration, the receipt and sufficiency of which the parties acknowledge, the parties agree, as follows:

ARTICLE I

PRELIMINARY MATTERS

Section 1.01. Recitals. The parties acknowledge the recitals herein above set forth in the preamble are correct, are, by this reference, incorporated herein and are made a part of this Agreement.

Section 1.02. Use of words and phrases. Natural persons may be identified by last name, with such additional descriptors as may be desirable. The words “herein,” “hereby,” “hereunder,” “hereof,” “herein before,” “hereinafter” and any other equivalent words refer to this Agreement as a whole and not to any particular Article, Section or other subdivision hereof. The words, terms and phrases defined herein and any pronoun used herein shall include the singular, plural and all genders. The word “and” shall be construed as a coordinating conjunction unless the context clearly indicates that it should be construed as a copulative conjunction.

Section 1.03. Accounting terms. All accounting terms not otherwise defined herein shall have the meanings assigned to them under generally accepted accounting principles unless specifically referenced to regulatory accounting principles.

Section 1.04. Calculation of time lapse or passage; Action required on holidays. When a provision of this Agreement requires or provides for the calculation of the lapse or passage of a time period, such period shall be calculated by treating the event which starts the lapse or passage as zero; provided, that this provision shall not apply to any provision which specifies a certain day for action or payment, e.g. the first day of each calendar month. Unless otherwise provided, the term “month” shall mean a period of thirty days and the term “year” shall mean a period of 360 days, except that the terms “calendar month” and “calendar year” shall mean the actual calendar period indicated. If any day on which action is required to be taken or payment is required to be made under this Agreement is not a Business Day (Business Day being a day on which national banks are open for business where the actor or payor is located), then such action or payment shall be taken or made on the next succeeding Business Day.

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Section 1.05. Use of titles, headings and captions. The titles, headings and captions of articles, sections, paragraphs and other subdivisions contained herein are for the purpose of convenience only and are not intended to define or limit the contents of said articles, sections, paragraphs and other subdivisions

ARTICLE II

COVENANTS

Section 2.01. Restrictive Covenant. The Restricted Party shall not enter into or engage in any business in competition with the business of MTI or as it may be conducted in the future by MTI (the “Protected Business”) either as an individual on his own account, or as a partner, joint venturer, employee, agent, or consultant for any person, or as a director, officer or stockholder (other than as a passive investor) of a corporation or other enterprise, or otherwise, in the territory served by such business during the term of and for a period of one year after the date of the Restricted Party’s termination of employment by IFSI or MTI. The parties acknowledge that even though the Restricted Party has been engaged as the founder, owner and employee of MTI, the Restricted Party acknowledges that (a) he believes he will be able to engage in a livelihood apart from the activities which are prohibited by this Agreement during the specified period, (b) the value and expected future value of the consideration received under the Stock Exchange Agreement dated ____, 2008 is sufficient compensation for his agreements hereunder for the duration of this Agreement and (c) the value and expected future value of the consideration received under the Stock Exchange Agreement dated ____, 2008 is expected to be sufficient to provide for his personal needs for the duration of this Agreement.

Section 2.02. Enforcement. It is agreed by the parties that this covenant on the part of the Restricted Party may be enforced against the Restricted Party (a party engaged in the breach being the “Breaching Party”), by injunction, without requirement imposed by the Court for posting bond which the Restricted Party hereby specifically and knowingly waives, as well as by all other legal remedies available to the Benefited Party. It is agreed by the parties that if any portion of this covenant not to compete is held to be unreasonable, arbitrary or against public policy, the covenant herein shall be considered divisible both as to time and geographical area so that a lesser period or geographical area shall remain effective so long as the court determines the same is not unreasonable, arbitrary, or against public policy. The existence of any claim or cause of action of the Restricted Party against the Benefited Parties, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Benefited Parties of this covenant.

Section 2.03. Liquidated damages. It is agreed by the parties that in the event of breach by the Restricted Party of the covenants and agreements herein contained that, as liquidated damages, the Benefited Parties shall be entitled to recover from the Breaching Party attorneys’ fees and costs, including attorneys’ fees on appeal together with, at its election, either (i) the consideration paid to Breaching Party for the covenants and agreements herein contained, or if the breaching party has sold all or part of the non monetary consideration, then the non monetary consideration the Breaching Party has not sold and the gross price at which the Breaching Party sold the balance of the non monetary consideration or (ii) the gross revenues billed by the Breaching Party or any entity owned or controlled (entirely or partially) by the Breaching Party or by any entity employing the Breaching Party for goods and services in competition with the Protected Business, such liquidated damages being for lost business, damage to reputation and bad faith on the part of the Breaching Party and not a penalty.

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Section 2.04. Preservation of business. The Restricted Party, during the period of this Agreement will not engage in any conduct, nor encourage others to engage in any conduct detrimental to the Protected Business and shall not commit any act, or in any way assist others to commit any act, which will injure such Protected Business and will not divulge any confidential information or make available to any others any documents, files or other papers concerning the Protected Business or financial performance of the Protected Business.

Section 2.05. Release and termination. In the event the Benefited Parties permanently cease conducting the Protected Business, the Restricted Party shall be released from this Agreement and this Agreement shall terminate.

ARTICLE III

CONSIDERATION FOR COVENANTS

Section 3.01. Initial consideration. As consideration for the covenants set forth in Article II, at the execution of this Agreement, IFSI will deliver 750,000 shares of its common stock to the Restricted Party or on his order and pay twelve months thereafter the sum of $100,000 (as adjusted pursuant to the Stock Exchange Agreement between IFSI and the Restricted Party dated ______, 2008).

ARTICLE IV

MISCELLANEOUS

Section 4.01. Effective date. The effective date of this Agreement shall for all purposes be the date set forth in first paragraph hereof notwithstanding a later actual date of execution by any individual party.

Section 4.02. Entire agreement. This writing constitutes the entire agreement of the parties with respect to the subject matter hereof, superseding all prior agreements, understandings, representations and warranties, except for the Stock Exchange Agreement among certain of the parties.

Section 4.03. Waivers. No waiver of any provision, requirement, obligation, condition, breach or default hereunder, or consent to any departure from the provisions hereof, shall be considered valid unless in writing and signed by the party giving such waiver, and no such waiver shall be deemed a waiver of any subsequent breach or default of the same or similar nature.

Section 4.04. Amendments. This Agreement may not be modified, amended or terminated except by a written agreement specifically referring to this Agreement signed by all of the parties hereto and amendment, modification or alteration of, addition to or termination of this Agreement or any provision of this Agreement shall not be effective unless it is made in writing and signed by the parties.

Section 4.05. Construction. This Agreement has been negotiated by the parties, section by section, and no provision hereof shall be construed more strictly against one party than against the other party by reason of such party having drafted such provision. The order in which the provisions of this Agreement appear are solely for convenience of organization; and later appearing provisions shall not be construed to control earlier appearing provisions.

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Section 4.06. Invalidity. It is the intent of the parties that each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law. If any provision hereof shall be prohibited, invalid, illegal or unenforceable, in any respect, under applicable law, such provision shall be ineffective to the extent of such prohibition, invalidity or non enforceability only, without invalidating the remainder of such provision or the remaining provisions of this Agreement; and, there shall be substituted in place of such prohibited, invalid, illegal or unenforceable provision a provision which nearly as practicable carries out the intent of the parties with respect thereto and which is not prohibited and is valid, legal and enforceable.

Section 4.07. Multiple counterparts. This Agreement may be executed in one or more counterparts, each of which shall be an original and, taken together, shall be deemed one and the same instrument.

Section 4.08. Assignment, parties and binding effect. This Agreement, and the duties and obligations of any party shall not be assigned without the prior written consent of the other party(ies). This Agreement shall benefit solely the named parties and no other person shall claim, directly or indirectly, benefit hereunder, express or implied, as a third-party beneficiary, or otherwise. Wherever in this Agreement a party is named or referred to, the successors (including heirs and personal representative of individual parties) and permitted assigns of such party shall be deemed to be included, and all agreements, promises, covenants and stipulations in this Agreement shall be binding upon and inure to the benefit of their respective successors and permitted assigns.

Section 4.09. Arbitration. Unless a court of competent jurisdiction shall find that a particular dispute or controversy cannot, as a matter of law, be the subject of arbitration, any dispute or controversy arising hereunder, other than suit for injunctive relief which can be granted only by a court of competent jurisdiction, shall be settled by binding arbitration in Ashley County, Arkansas by a panel of three arbitrators in accordance with the rules of the American Arbitration Association; provided, that the rules of discovery of Circuit Court in and for Ashley County, Arkansas with jurisdiction of the situs of the arbitration shall apply and requests for discovery in accordance therewith shall be enforceable upon application to such court. Judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. The parties may pursue all other remedies with respect to any claim that is not subject to arbitration.

Section 4.10. Jurisdiction and venue. Any action or proceeding for enforcement of this Agreement and the instruments and documents executed and delivered in connection herewith which is determined by a court of competent jurisdiction not, as a matter of law, to be subject to arbitration as provided in Section 5.09 or which seeks injunctive relief shall be brought and enforced in the courts of the State of Arkansas in and for Ashley County, Arkansas, and the parties irrevocably submit to the jurisdiction of each such court in respect of any such action or proceeding.

Section 4.11. Applicable law. This Agreement and all amendments thereof shall be governed by and construed in accordance with the law of the State of Arkansas applicable to contracts made and to be performed therein (not including the choice of law rules thereof).

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IN WITNESS WHEREOF, the parties hereto have caused this agreement to be signed by their respective officers thereunto duly authorized and their respective corporate seals to be hereunto affixed, the day and year first above written.

_____________________________

Mark Morris

[Corporate Seal] Integrated Freight Systems, Inc.

Attest: By: _____________________________

Paul A. Henley, President

Secretary

[Corporate Seal] Morris Transportation, Inc.

Attest: By: _____________________________

Paul A. Henley, Director

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5512854.2 28947/118201

INDEX TO DISCLOSURE SCHEDULES

STOCK EXCHANGE AGREEMENT

AMONG INTEGRATED FREIGHT SYSTEMS, INC., MARK MORRIS AND MORRIS TRANSPORTATION, INC.

DATED ________, 2008

THE DISCLOSURE SCHEDULES WILL BE PROVIDE SUBSEQUENT TO THE EXECUTION OF THE STOCK EXCHANGE AGREEMENT AND PRIOR TO CLOSING

Schedule A	Subsidiaries of Morris Transportation, Inc.
Schedule B	Exceptions to warranties and representations in §4.01(__)
Schedule C
Schedule D
Schedule E
Schedule F	Mark Morris Employment agreement
Schedule G

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5512854.2 28947/118201

EX-10.1

AMENDMENT TO

STOCK EXCHANGE AGREEMENT

THIS AMENDMENT TO STOCK EXCHANGE AGREEMENT dated as of September 2, 2008, ("Exchange Agreement") made and entered into as of September 17, 2008, by and among Integrated Freight Systems, Inc., a Florida corporation, (“IFSI”), Mark Morris (“Mr. Morris”) the sole stockholder of Morris Transportation, Inc., an Arkansas corporation, (“MTI”), and MTI.

W I T N E S S E T H :

WHEREAS, the parties to the Exchange Agreement deem the transactions contemplated by the Exchange Agreement to have been closed on September 2, 2008, the Closing Date; and

WHEREAS, the parties desire to amend the Exchange Agreement for the purpose of making ISFI's affairs more acceptable to public and private investors, in particular by eliminating the feature contained in Section 5.08(c), and providing a greater consideration to Mr. Morris;

NOW, THEREFORE, in consideration of the premises herein before set forth, in reliance hereon and the mutual promises, one to another made herein, and the reliance of each party upon the other(s) based hereon and other good and valuable consideration, the receipt and sufficiency of which the parties respectively acknowledge, the parties agree, for purposes of amending the Exchange Agreement and the transaction(s) contemplated therein, as follows:

Section 2.02(i) of the Exchange Agreement is amended to change the number of shares to 3,000,000 shares from 2,500,000 shares.

Sections 2.02(ii) and 2.04 of the Exchange Agreement are amended to change the principal amount of the promissory note to $750,000 from $250,000.

Section 2.02(iii) and 2.04 of the Exchange Agreement are amended to change the amount of the installment payment to $150,000 from $750,000, payable ninety days from the reset date provided below.

Section 2.03 of the Exchange Agreement is amended by changing the maturity date of the promissory note to thirteen months from twelve months (to allow for the comparison of net revenues provided in that section) and adding a clause providing:

the promissory note shall be secured by a pledge of and security interest in the MTI Securities purchased by IFSI from the noteholder under the Exchange Agreement. In the event ISFI fails to pay a promissory note at maturity and the noteholder takes the pledged MTI Securities in satisfaction thereof, then the noteholder shall return to ISFI all of ISFI's common stock the noteholder received under the Exchange Agreement.

Sections 3.02 and 3.03 of the Exchange Agreement are amended and restated, respectively, as set forth in the attached Schedule of Deliverables.

Section 5.08 of the Exchange Agreement is amended to add a new paragraph (d) which provides:

Within 120 days following the reset date, IFSI will provide $100,000 of working capital to MTI. In the event, MTI is unsuccessful in refinancing MTI's equipment within 180 following the reset date, IFSI will provide an additional $100,000 of working capital to MTI and make a cash payment of $50,000 to Mr. Morris.

Sections 3.02(f) and 3.03(d) of the Exchange Agreement are amended by setting Mr. Morris' salary in his employment agreement at $110,000 per year, with a cash bonus of $25,000 paid within sixty days following the reset date.

                Section 5.08(c) is deleted in its entirely.

                A new Section 8.05 is added to the Exchange Agreement which states:

Restrictions on sale of IFSI's common stock. Mr. Morris shall not sell, transfer, assign or hypothecate any of IFSI's common stock until the promissory note issued pursuant to Section 2.02(iii), as amended, has been paid in full.

The parties acknowledge that it was their respective intents to Close the exchange transaction as of September 2, 2008. In view of these amendments to the Exchange Agreement and the incomplete deliveries made on and after the Closing Date as of September 2, 2008, the parties agree that the deliveries made at and after that Closing date shall be deemed to be held in escrow, subject to completion and deliveries of such documentation in accordance with the Schedule of Deliverables attached hereto and that all time periods beginning on and running from the Closing Date as provided in the Exchange Agreement shall be deemed to begin on and run from the date of this amendment (the "Reset Date").

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be signed by their respective officers thereunto duly authorized and their respective corporate seals to be hereunto affixed, the day and year second above written.

[Corporate Seal] Integrated Freight Systems, Inc.

Attest: By: /s/ Paul A. Henley

Paul A. Henley, President

/s/ Jackson L. Morris, Secretary

[Corporate Seal] Morris Transportation, Inc.

Attest: By: /s/ Mark Morris

Mark Morris, President

/s/ Mark Morris, Secretary

/s/ Mark Morris

Mark Morris

Schedule of Deliverables

Stock Exchange Agreement re: Smith Systems Transportation, Inc.

Exchange Agreement signed by o Morris and o Integrated.

Closing Memorandum signed by o Morris and o Integrated.

Exchange Agreement Amendment signed by o Smiths and o Integrated.

Section 3.02.  Mr. Morris’s and MTI’s deliveries at the Closing. At the Closing, Mr. Morris and MTI will deliver to IFSI:

o (a) Certificate of good standing in MTI’s state of incorporation and all states in which it is required to qualify to do business;

o (b) Certificates representing all of MTI’s Securities;

o (c) Officers’ and Secretary’s and Certificates of MTI in the form set forth in Exhibits “A” and “B”, respectively;

o (d) A resignation from any member of MTI’s board of directors, other than Mr. Morris;

o (e) Action by MTI’s board of directors electing Paul A. Henley as a director of MTI.

o (f) A document reflecting the mutual amendment of Mr. Morris’s employment agreement with MTI to reflect terms of employment negotiated pursuant to this Agreement and the letter of intent between the parties dated July 1, 2008.

o (g) A non-competition and confidentiality agreement executed by Mr. Morris in favor of IFSI in the form of Exhibit E.

o (h) The original of MTI’s corporate minute book and related documents.

Section 3.03. IFSI’s and Mr. Henley’s deliveries at the Closing. At the Closing, IFSI will deliver to Mr. Morris

o (a) a certificate(s) representing 2,500,000 shares of IFSI’s common stock, as provided in Section 2.02, registered in the name of Mr. Morris, or at his election jointly with his spouse, provided the election together with the name and social security number of his spouse or any other designee that Mr. Morris shall designate is delivered to IFSI not less than five business days prior to the Closing; and

o (b) Action by IFSI’s board of directors electing Mr. Morris as a director of IFSI;

o (c) Officers’ and Secretary’s Certificates of IFSI in the form set forth in Exhibits “A” and “B”, respectively; and

o (d) An Employment Agreement in the form set forth in Exhibit “F”.

ADDED:

o (e) A promissory note, as provided in Sections 2.02(ii) and 2.03.

o (f) One certificate representing 500,000 shares of IFSI’s common stock registered in the name of Mr. Morris or as provided in Section 3.03(a), as amended.

EX-10.1

May __, 2009

TO: Integrated Freight Systems, Inc.

Suite 200

6371 Business Boulevard

Sarasota, Florida 34240

The undersigned, in consideration for the issue of an Amended Promissory Note and Security Agreement originally dated September 17, 2008 and amended May __, 2009, does hereby (i) waive all conditions, precedent and subsequent, which remain unsatisfied by Integrated Freight Systems in that certain Stock Exchange Agreement dated August 25, 2008, as amended September 17, 2008, (together, the “Agreement”), (ii) agree that all such conditions shall be and hereby are deemed satisfied and (iii) agree that the Agreement cannot be terminated, cancelled or rescinded for any reason whatsoever.

Very truly yours,

_______________________________

T. Mark Morris

EX-10.1

AMENDED

PROMISSORY NOTE AND SECURITY AGREEMENT

$600,000.00	Original Issue Date September 17, 2008
	Sarasota, Florida
	Amendment Date May 27, 2009

FOR VALUE RECEIVED, Integrated Freight Systems, Inc., a Florida corporation, ("Maker") whose principal executive office is located at Suite 200, 6371 Business Boulevard, Sarasota, Florida 34240, promises to pay to T. Mark Morris ("Holder") the sum of Six Hundred Thousand Dollars and No Cents ($600,000.00), together with simple interest at a rate of eight percent per annum. Principal together with accrued and unpaid interest shall be payable and shall be paid not later than October 31, 2009 (“Maturity Date”), subject nevertheless to and extenson in accordance with Holder’s forebearance agreement for the benefit of Tangiers Investors L.P., at such address as to which written notice is given to Maker by Holder from time to time.

Maker hereby reserves the right to prepay this Note in whole or in part at any time and from time to time prior to the Maturity Date without premium or penalty.

The payment and performance of this Note is secured by and Maker does hereby pledge and grant a first priority security interest in all shares of common stock of Morris Transportation, Inc., an Arkansas corporation, (“Issuer”), being all of the common stock of the Issuer owned by Maker (“Collateral”). This security interest in the Collateral is a purchase money security interest. Upon the occurrence of an event of default described in the next paragraph, Maker shall promptly upon written demand made by Holder deliver the Collateral to Holder, provided that Holder shall likewise and without demand deliver to Maker in exchange for the Collateral (a) all of Maker’s common stock registered in the name of Holder and (b) a sum equal to all payments made by Maker to Holder in payment of principal and interest on this Note and otherwise.

The following shall be events of default, subject as to the payment of money by Maker to Holder to extenson in accordance with Holder’s forebearance agreement for the benefit of Tangiers Investors L.P., under this Note:

• Maker’s failure to pay to Holder when due any installment of principal or interest; or

• Maker’s failure to pay to Holder the sum of $150,000 not later than October 31, 2009; or

• Maker’s failure to pay to Holder the sum of $250,000 on or before October 31, 2009, provided that this payment shall be reduced by an amount equal to the difference, if any, obtained by subtracting (a) the Issuer’s net revenues for the period of twelve months ended August 31, 2009 from (b) the Issuer’s net revenues for the period of twelve months ending August 31, 2008, such net revenues subject in each case to normally occuring and extraordinary accounting adjustments, as made in accordance with GAAP at the fiscal year end in which each respective twelve month period ends; or

• Maker’s failure to contribute as capital the sum of $100,000 to the Issuer not later than December 15, 2009; or

• Maker’s failure to refinance all equipment loans of the Issuer which carry the personal guaranty of Holder not later than March 31, 2010; provided, that in the event Maker fails to achieve such refinancing within the period provided therefore and Maker
(a) contributes as capital the sum of $100,000 to the Issuer, and
(b) pays the sum of $50,000 to Holder,
then Maker shall not, and hereby waives, demand for delivery of the collateral; or

• Any change in the operational integrity of the Issuer prior to full payment of this Note; or

• Maker’s failure to establish a public trading market for its common stock on or before August 31, 2009.

Provided, that in the event principal amount of and accrued interest on this Note are fully paid prior to the satisfaction of Maker’s obligations under these events of default, then the pledge of the Collateral and the remedy for failure to perform Maker’s obligations shall remain in full force and effect until all such obligations have been satisfied.

Maker agrees to pay to Holder's reasonable attorneys' fees and costs, whether or not an action be brought, for the services of counsel and of a collection agency employed after the Maturity Date or upon default to collect this Note or any principal or interest due hereunder, or to protect the collateral security, if any, or enforce the performance of any other agreement contained in this Note or in any instrument of security as aforesaid, including costs and attorneys' fees on appeal, in bankruptcy matters or post judgment relief.

Maker does hereby waive notice of acceptance of this Note, notice of the occurrence of any default under this Note or under any instrument securing this Note and presentment, demand, notice of maturity, protest, notice of dishonor, notice of non-payment and notice of protest and all requirements necessary to hold Maker liable as a maker of this Note.

The use of the proceeds of this Note is for commercial purposes and is not for personal or household purposes. This Note is an Arkansas contract and shall be construed and interpreted under Arkansas law.

Amendment acknowledged and accepted:	Integrated Freight Systems, Inc.
/s/ T. Mark Morris T. Mark Morris	By: /s/ Paul A. Henley Paul A. Henley, President

EX-10.2

STOCK EXCHANGE AGREEMENT

THIS STOCK EXCHANGE AGREEMENT, made and entered into as of [August 19], 2008, by and among Integrated Freight Systems, Inc., a Florida corporation, (“IFSI”), Monte W. Smith and Mary Catherine Smith (“Mr. & Mrs. Smith”) the sole stockholders of Smith Systems Transportation, Inc., a Nebraska corporation, (“SSTI”), and SSTI for the purpose of its representations, warranties and deliverables set forth herein.

W I T N E S S E T H :

WHEREAS, IFSI is planning (a) to acquire one or more trucking companies and (b) to file a registration statement under the Securities Act of 1933 (“1933 Act) or the Securities Exchange Act of 1934 (“1934 Act”), for the purpose of becoming a “reporting company” and developing a public trading market for its common stock; and

WHEREAS, SSTI is a trucking company with its headquarters office located in Scottsbluff, Nebraska; and

WHEREAS, IFSI desires to acquire SSTI as a going concern by the means of an exchange of shares of IFSI’s common stock for all of SSTI’s issued and outstanding equity securities (“SSTI’s Securities”) and thereafter to operate SSTI as a wholly owned subsidiary; and

WHEREAS, Mr. & Mrs. Smith desire to exchange all of SSTI’s Securities that he owns for shares of IFSI’s common stock and for SSTI to be acquired by IFSI, as contemplated by this Agreement; and

NOW, THEREFORE, in consideration of the premises herein before set forth, in reliance hereon and the mutual promises and respective representations and warranties of the parties, one to another made herein, and the reliance of each party upon the other(s) based hereon and other good and valuable consideration, the receipt and sufficiency of which the parties respectively acknowledge, the parties agree, for purposes of consummating the transaction(s) contemplated herein, as follows:

ARTICLE I

PRELIMINARY MATTERS

Section 1.01. Recitals. The parties acknowledge the recitals herein above set forth in the preamble are correct, and are, by this reference, incorporated herein and are made a part of this Agreement.

Section 1.02. Exhibits and Schedules. Exhibits (which are documents to be executed and delivered at the Closing by the party identified therein or in the provision requiring such delivery) and Schedules (which are attachments setting forth information about a party identified therein or in the provision requiring such attachment) referred to herein and annexed hereto are, by this reference, incorporated herein and made a part of this Agreement, as if set forth fully herein.

Section 1.03. Use of words and phrases. Natural persons may be identified by last name, with such additional descriptors as may be desirable. The words “herein,” “hereby,” “hereunder,” “hereof,” “herein before,” “hereinafter” and any other equivalent words refer to this Agreement as a whole and not to any particular Article, Section or other subdivision hereof. The words, terms and phrases defined herein and any pronoun used herein shall include the singular, plural and all genders. The word “and” shall be construed as a coordinating conjunction unless the context clearly indicates that it should be construed as a copulative conjunction.

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Section 1.04. Accounting terms. All accounting terms not otherwise defined herein shall have the meanings assigned to them under generally accepted accounting principles unless specifically referenced to regulatory accounting principles.

Section 1.05. Calculation of time lapse or passage; Action required on holidays. When a provision of this Agreement requires or provides for the calculation of the lapse or passage of a time period, such period shall be calculated by treating the day on which the event which starts the lapse or passage occurs as zero; provided, that this provision shall not apply to any provision which specifies a certain day for action or payment, e.g. the first day of each calendar month. Unless otherwise provided, the term “month” shall mean a period of thirty days and the term “year” shall mean a period of 360 days, except that the terms “calendar month” and “calendar year” shall mean the actual calendar period indicated. If any day on which action is required to be taken or payment is required to be made under this Agreement is not a Business Day (Business Day being a day on which national banks are open for business where the actor or payor is located), then such action or payment shall be taken or made on the next succeeding Business Day.

Section 1.06. Use of titles, headings and captions. The titles, headings and captions of articles, sections, paragraphs and other subdivisions contained herein are for the purpose of convenience only and are not intended to define or limit the contents of said articles, sections, paragraphs and other subdivisions.

ARTICLE II

TERMS OF THE TRANSACTIONS

Section 2.01.          Stock exchange transaction. In accordance with the terms of this Agreement, on the Closing Date, IFSI shall issue to Mr. & Mrs. Smith shares of its common stock and Mr. & Mrs. Smith shall deliver to IFSI all of SSTI’s Securities.

Section 2.02. Consideration. In exchange for SSTI’s Securities, IFSI shall deliver, at closing, 375,000 shares of its common stock to each of Mr. Smith and Mrs. Smith;

Section 2.03. Additional consideration based on performance. One year after the Closing, IFSI shall pay the sum of $125,000 to each of Mr. Smith and Mrs. Smith; provided, that the amount of such payment shall be reduced by an amount equal to the difference between the amount of SSTI’s gross revenues for the twelve month period ended on the last day of the month preceding the closing date and the twelve month period ending twelve months thereafter, subject in each case to normally occurring and extraordinary accounting adjustments, as made at the fiscal year end in which the respective twelve month period end.

Section 2.04. Federal income tax treatment. At or before the Closing Date, the parties shall agree on the value of each of the SSTI’s assets for federal income tax purposes and for GAAP purposes.

Section 2.05. Transaction costs. Each party shall pay all costs and expenses which it incurs in connection with this Agreement and the transactions contemplated hereby; except, IFSI shall pay all fees and reimbursable expenses which Mr. & Mrs. Smith may be obligated to pay (a) Chapman Associates and (b) Cordovano and Honeck LLP.

Section 2.06. Press releases. No party will issue a press release regarding the subject matter of this Agreement and the transaction contemplated hereby, either before or after closing, without the prior approval thereof by the other party and its counsel.

ARTICLE III

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CLOSING OF THE TRANSACTION

Section 3.01. Location, date and time of the Closing. The Closing of the transaction contemplated by this Agreement shall take place on ____________, 2008, at 2:00 p.m. ("Closing Date”). The Closing shall take place at a location agreed to by the parties. The acts and deliveries which occur on the Closing Date for the purpose of consummating the transactions contemplated by this Agreement and the event itself is referred to herein as the “Closing”.

Section 3.02.    Mr. & Mrs. Smith’s and SSTI’s deliveries at the Closing. At the Closing, Mr. & Mrs. Smith and SSTI will deliver to IFSI:

 

(a) Certificate of good standing in SSTI’s state of incorporation and all states in which it is required to qualify to do business;

   

(b) Certificates representing all of SSTI’s Securities;

   

(c) Officers’ and Secretary’s and Certificates of SSTI in the form set forth in Exhibits “A” and “B”, respectively;

   

(d) A resignation from any member of SSTI’s board of directors and officers, other than Mr. & Mrs. Smith;

   

(e) Action by SSTI’s board of directors electing Paul A. Henley as a director of SSTI.

   

(f) A document reflecting the mutual amendment of Mr. Smith’s employment agreement with SSTI to reflect terms of employment negotiated pursuant to this Agreement.

   

(g) A non-competition and confidentiality agreement executed by Mr. Smith in favor of IFSI

   

(h) The original of SSTI’s corporate minute book and related documents.

 

Section 3.03. IFSI’s and Mr. Henley’s deliveries at the Closing. At the Closing, IFSI will deliver to Mr. & Mrs. Smith

 

(a) two certificates each representing 375,000 shares of IFSI’s common stock, as provided in Section 2.02, registered in the name of Mr. Smith and of Mrs. Smith, respectively, provided the social security number of each is delivered to IFSI not less than five business days prior to the Closing; and

 

(b) Action by IFSI’s board of directors electing Mr. Smith as a director of IFSI;

 

(c) Officers’ and Secretary’s Certificates of IFSI in the form set forth in Exhibits “A” and “B”, respectively; and

 

Section 3.04. Closing Memorandum and receipts. As evidence that all parties deem the Closing to have been completed and the transactions contemplated by this Agreement to have been consummated, the parties jointly will execute and deliver a Closing Memorandum, in the form of Exhibit “C”, acknowledging such completion and consummation.

Section 3.06. Waiver of conditions. Notwithstanding Section 12.03, any condition to the Closing which is to the benefit of any party and which is not satisfied prior to or at the Closing, excluding nevertheless any provision of this Agreement which by its terms is to be performed in the future, will be deemed to be waived by the benefited party or otherwise satisfied and waived by virtue of that party executing the Closing Memorandum, except to the extent any such unsatisfied or unperformed condition is expressly preserved by listing it in the Closing Memorandum for satisfaction or performance after the Closing.

Section 3.07. Further assurances. At any time and from time to time after the Closing, at the reasonable request of any party and without further consideration, any other party(ies) shall execute and deliver such other instruments and documents reasonably desirable or necessary to complete and confirm the transactions contemplated by this Agreement.

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Section 3.08. Conditions precedent to IFSI’s obligation to Close. All obligations of IFSI hereunder are subject, at the option of IFSI, to the fulfillment of each of the following conditions at or prior to the Closing, and SSTI shall exert commercially reasonable efforts to cause each such conditions to be so fulfilled:

(a) All representations and warranties of SSTI and of Mr. & Mrs. Smith contained herein and in any document delivered pursuant hereto shall be true and correct in all material respects when made and shall be deemed to have been made again and given at and as of the date of the Closing of the transaction contemplated by this Agreement, and shall then be true and correct in all material respects, except for changes in the ordinary course of business after the date hereof in conformity with the representations, covenants and agreements contained herein.

(b) All covenants, agreements and obligations required by the terms of this Agreement to be performed by SSTI and by Mr. & Mrs. Smith at or before the Closing shall have been duly and properly performed in all material respects to IFSI’s reasonable satisfaction.

(c) Since the date of this Agreement there shall not have occurred any Material Adverse Effect. The term “Material Adverse Effect” shall mean any material adverse change in SSTI or its operating or financial condition, prospects (financial or otherwise), business, properties or assets of SSTI.

(d) All documents required to be delivered to IFSI at or prior to the Closing shall have been so delivered.

(e) The transaction contemplated by this Agreement shall have been approved in writing by SSTI’s board of directors.

(f) SSTI shall have not suffered or incurred a material damage, destruction or loss not fully covered by insurance and which has a materially adverse affect on its business and operations.

(g) IFSI shall have received a certificate of good standing for SSTI and each subsidiary issued by the secretary of state of its state of organization and of each state in which it and its subsidiary is qualified or required to be qualified to do business as a foreign corporation.

[2007 (?) Fiscal Year End 3/31]

(i) IFSI shall have received unaudited financial statements of SSTI for the fiscal years ended March 31, 2007 and 2008 and unaudited financial statements for each of the interim quarterly periods ended subsequent thereto, which interim quarterly period shall not show any materially adverse results of operation when compared to 2008, the financial condition and performance of SSTI disclosed in such financial statements being to the reasonable satisfaction of IFSI in relation to unaudited financial statements delivered prior to execution and delivery of this Agreement.

Section 3.09. Conditions precedent to the SSTI obligation to Close. All obligations of SSTI at the Closing are subject, at the option of SSTI, to the fulfillment of each of the following conditions at or prior to the Closing, and IFSI shall exert commercially reasonable efforts to cause each such conditions to be so fulfilled.

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(a) All representations and warranties of IFSI contained herein or in any document delivered pursuant hereto shall be true and correct in all material respects when made and as of the Closing.

(b) All covenants, agreements and obligations required by the terms of this Agreement to be performed by IFSI at or before the Closing shall have been duly and properly performed in all material respects to SSTI and Mr. & Mrs. Smith’s reasonable satisfaction.

(c) All documents required to be delivered to SSTI at or prior to the Closing shall have been so delivered.

(d) The transaction contemplated by this Agreement shall have been approved in writing by IFSI’s board of directors.

(f) SSTI shall have received a certificate of good standing for IFSI issued by the secretary of state of its state of organization and of each state in which it is qualified or required to be qualified to do business as a foreign corporation.

(g) SSTI shall have received audited financial statements of IFSI for the period of inception to the end of the calendar month preceding the Closing.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE PARTIES

Section 4.01. Representations and warranties of SSTI and Mr. & Mrs. Smith. Each of SSTI (as used in the following representations and warranties with respect to status or condition, “SSTI” includes every subsidiary of SSTI, all of which are identified in Schedule 1) and Mr. & Mrs. Smith represent and warrant, jointly and severally, to IFSI, as follows:

[This includes 60% of SST Financial L.L.C.]

(a) SSTI is a duly organized and an existing entity in good standing under the laws of its state of incorporation and has full corporate power to execute, deliver and perform this Agreement.

(b) SSTI is qualified to do business and in good standing in each state and jurisdiction in which the nature of its activities and ownership of property require it to be qualified as a foreign corporation.

(c) All licenses required for the conduct of SSTI’s businesses in intra and interstate commerce are in full force and effect, all such licenses being transferable in the event the transactions contemplated pursuant to this Agreement are deemed to be a transfer under applicable statutes and regulations; and, there is no proceeding of any nature pending or, to the best knowledge of SSTI and Smith, threatened which if determined adversely to SSTI would result in a revocation, cancellation of or material limitation or restriction on SSTI and the conduct of its or any subsidiary’s business as it is presently conducted.

(d) This Agreement has been duly and validly authorized, executed and delivered by SSTI and constitutes the legal, valid and binding obligation of SSTI enforceable against it, in accordance with its terms, subject, as to enforceability, to bankruptcy, insolvency, reorganization and other laws of, relating to or affecting stockholders and creditors rights generally and to general equitable principles.

(e) To the best knowledge of SSTI and Smith, the execution of this Agreement and consummation of the transactions contemplated hereby does not conflict with and will not result in any adverse consequences to or material breach of any agreement (financing or otherwise), mortgage, instrument, judgment, decree, law or governmental regulation, license, permit or authorization by SSTI or in the loss, forfeiture or waiver of any rights, license, authorization or franchise owned by SSTI, from which SSTI benefits or which is desirable in the conduct of SSTI’s business.

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(f) To the best knowledge of SSTI and Smith, except for such actions as may have been taken, no further action by or before any governmental body or authority of the United States of America or any state or subdivision thereof or any self-regulatory body to which SSTI is subject is required in connection with the execution and delivery of this Agreement by SSTI and the consummation of the transactions contemplated hereby.

(g) The information SSTI has delivered to IFSI relating to SSTI was, to the best knowledge of SSTI and Smith, on the date reflected in each such item of information accurate in all material respects and, to the best knowledge of SSTI and Smith, such information at the date hereof taken as a whole provides full and fair disclosure of all material information relating to SSTI and does not, to the best knowledge of SSTI and Smith,omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

(h) SSTI has conducted its business in the ordinary course for the last three years or since inception, whichever is less.

(i) Neither SSTI nor any employee, to SSTI best knowledge, has since inception given or agreed to give any gift or similar benefit valued at more than $20 annually to any customer, supplier, governmental employee or other person who is or may be or have been in a position to help or hinder SSTI’s business, or a gift or similar benefit in any amount or value which might subject SSTI to damage or penalty in civil, criminal or governmental litigation or proceedings.

(j) SSTI’s financial statements delivered to IFSI have been prepared in accordance with generally accepted accounting principles consistently applied and maintained throughout the periods indicated, fairly present the financial condition of SSTI in all material respects at the dates and the results of operations for the periods indicated, contain all normally recurring adjustments and do not omit to disclose any contingent, undisclosed or hidden liabilities. SSTI’s financial records are maintained in accordance with good business practice.

(k)SSTI has good, marketable and insurable title to all of its properties and assets, including intangible assets, if any, which it owns or uses in its business or purports to own, including, without limitation, those reflected in its books and records and in the balance sheet, both tangible and intangible None of the properties and assets are subject to any mortgage, pledge, lien, charge, security interest, encumbrance, restriction, lease, license, easement, liability or adverse claim of any nature whatsoever, direct or indirect, whether accrued, absolute, contingent or otherwise, except as expressly set forth in the notes to SSTI’s financial statements as securing specific liabilities or subject to specific capital leases and have arisen only in the ordinary course of business. All of the properties and assets owned, leased or used by SSTI are in good operating condition and repair, are suitable for the purposes used, are adequate and sufficient for SSTI’s current operations and are directly related to SSTI’s business.

(l) All of the material contracts, agreements, leases, licenses and commitments of SSTI (other than those which have been fully performed), copies of all of which have been delivered to IFSI, are valid and binding, enforceable in accordance with their respective terms, in full force and effect and there is not there under with respect to any party thereto any existing default or event, which after the giving of notice or lapse of time or both, would constitute a default or result in a right to accelerate or loss of rights and none of such contracts, agreements, leases, licenses and commitments is, either when considered singly or in the aggregate with others, unduly burdensome, onerous or materially adverse to SSTI’s business, properties, assets, earnings or prospects, either before or after the Closing, or which would result in any material loss to or liability of SSTI.

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(m) There is no claim, legal action, suit, arbitration, governmental investigation, or other legal or administrative proceeding, nor any order, decree, judgment or judgment in progress, pending or in effect or to SSTI’s knowledge threatened, against or relating to SSTI, its directors, officers or employees with respect to SSTI or its business or for which SSTI may have an indemnity obligation, it properties, assets or business or the transaction contemplated by this Agreement and SSTI does not know or have any reason to be aware of any basis for the same, including any basis for a claim of sexual harassment or racial or age discrimination.

(n) All taxes, including without limitation, income, property, special assessments, sales, use, franchise, intangibles, employees’ income withholding and social security taxes, including employer’s contribution, other than those for which a return or deposit is not yet due and have been disclosed to IFSI, imposed by the United States or any state, municipality, subdivision, authority, which are due and payable, and all interest and penalties thereon, unless disputed in good faith in proper proceedings and reserved for or set aside, have been paid in full and all tax returns required to be filed in connection therewith have been accurately prepared and timely filed and all deposits required by law to be made by SSTI with respect to employees’ withholding and social security taxes have been made. SSTI is not and has no reason to believe that it will be the subject of an audit by any taxing authority. There is not now in force any extension of time with respect to the date when tax return was or is due to be filed, or any waiver or agreement by SSTI for the extension of time for the assessment of any tax and SSTI is not a “consenting corporation” within the meaning of Section 341(f)(1) of the Tax Code.

(o) SSTI does not have any employee benefit, pension or profit sharing plans subject to ERISA and no such plans to which SSTI is obligated or required to make contributions.

[Other than the 401K matching funds for up to $.03 per mile for drivers participating in our 401K Plan]

(p) None of SSTI’s employees are represented by a collective bargaining agent or subject to a collective bargaining agreement and SSTI considers its relations with its employees as a whole to be good. SSTI has disclosed to IFSI all employee salary, compensation and benefit agreements and no employee, other than Smith, has a written employment agreement.

(q) No person has guaranteed any obligation of SSTI, and SSTI has not guaranteed the obligation of any other person.

(r) SSTI and its management have no reason to believe or expect and do not believe or expect that any event or events will occur which will result in SSTI producing results of operations which are materially different from SSTI’s recent operations.

Section 4.02. IFSI’s representations and warranties. IFSI represents and warrants to IFSI that:

(a) IFSI is a duly incorporated and existing corporation in good standing under the laws of its state of incorporation and has full corporate power to execute and deliver this Agreement.

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(b) This Agreement has been duly and validly authorized, executed and delivered by IFSI and constitutes the legal, valid and binding obligation of IFSI, enforceable against IFSI in accordance with its terms subject, as to enforceability, to bankruptcy, insolvency, reorganization and other laws of, relating to or affecting shareholders and creditors rights generally and to general equitable principles.

(c) Except for such actions as may have been taken, no further action by or before any governmental body or authority of the United States of America or any state thereof is required in connection with the execution and delivery of this Agreement by IFSI and the consummation of the transactions contemplated hereby.

(d) The information IFSI have delivered to SSTI was on the date reflected in each such item of information accurate in all material respects and such information at the date hereof as a whole did not contain any untrue statement of material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

(e) The information and financial statements IFSI has provided to Smith, on the date reflected in each element of information and financial statements, are accurate in all material respects and, to the knowledge of IFSI, such information at the date hereof taken as a whole provides, to the best knowledge of IFSI, full and fair disclosure of all material information relating to SSTI and does not, to the knowledge of IFSIomit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

Section 4.03. Nature and survival of representation and warranties; Remedies. All statements of fact contained in this Agreement, any certificate delivered pursuant to this Agreement, or any letter, document or other instrument delivered by or on behalf of SSTI or of IFSI, and their respective officers, pursuant to the terms of this Agreement shall be deemed representations and warranties made by SSTI or by IFSI, respectively, as the case may be, to each other under this Agreement. For purposes of this Section 4.03 and Section 11.01 only, any party or other person seeking to enforce, or claiming the benefit of, any representation and warranty under this Agreement is called a Claimant, and any party or other person against whom a right is claimed is called a Defendant. All representations and warranties of the parties shall survive the Closing; provided, however, that all representations and warranties shall terminate and expire, and be without further force and effect whatever from and after the one year from the date hereof, and neither IFSI, or SSTI shall have any liability whatsoever on account of any inaccurate representation or warranty or for any breach of warranty, unless a Claimant shall, on or prior to the expiration of such one year period, serve written notice on a Defendant, with a copy to the Defendant’s counsel, setting forth in reasonable detail the breach and any direct, incidental or consequential damages (including amounts) the Claimant may have suffered as a result of such breach.

ARTICLE V

COVENANTS OF THE PARTIES

Section 5.01. Conduct of business prior to Closing.

(a) From the date hereof to the Closing, SSTI will conduct its business and affairs only in the ordinary course and consistent with its prior practice and shall maintain, keep and preserve its assets and properties in good condition and repair and maintain insurance thereon in accordance with present practices, it will use its best efforts (i) to preserve its business and organization intact, (ii) to keep available to IFSI the services of SSTI’s present employees, agents and independent contractors, (iii) to preserve for the benefit of IFSI the goodwill of suppliers, customers, distributors, landlords and others having business relations with it, and (iv) to cooperate and use reasonable efforts to obtain the consent of any landlord or other party to any lease or contract with SSTI where the consent of such landlord or other party may be required by reason of the transactions contemplated hereby.

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(b) From the date hereof to the Closing, SSTI shall not outside the ordinary course of business (i) dispose of any material assets, (ii) engage in any extraordinary transactions without IFSI’s prior approval, including but not limited to, directly or indirectly, soliciting, entertaining, encouraging inquiries or proposals or entering into negotiation or agreement with any third party for sale of assets by SSTI, sale of its equity securities or merger, consolidation or combination with any company, (iii) grant any salary or compensation increase to any employee, or (iv) make any commitment for capital expenditures, other than as disclosed to IFSI and approved by it.

Section 5.02. Notice of changes in information. Each party shall give the other party prompt written notice of any change in any of the information contained in their respective representations and warranties made in Article IV, or elsewhere in this Agreement, or the exhibits and schedules referred to herein or any written statements made or given in connection herewith which occurs prior to the Closing.

Section 5.03. Notice of extraordinary changes. SSTI shall advise IFSI with respect to any of the following events outside of ordinary course of business and which are materially adverse: (i) the entering into and cancellation or breach of contracts, agreements, licenses, commitments or other understandings or arrangements to which SSTI is a party, (ii) any changes in purchasing, pricing or selling policy, or, any changes in its sales, business or employee relations in general, and (iii) the filing or commencement of any litigation or governmental or agency proceedings against SSTI.

Section 5.04. Action to preserve SSTI’s business and assets. Notwithstanding anything contained in this Agreement to the contrary, SSTI will not take or fail to take any action that in SSTI’s reasonable business judgment, is likely to give rise to a substantial penalty or a claim for damages by any third party against SSTI, or is likely to result in losses, or is otherwise likely to prejudice in any material respect or unduly interfere with the conduct of its business and operations in the ordinary course consistent with prior practice, or is likely to result in a breach by SSTI of any of its representations, warranties or covenants contained in this Agreement (unless any such breach is first waived in writing by IFSI).

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Section 5.05. Access to information and documents. Upon reasonable notice and during regular business hours, SSTI will give to IFSI, its attorneys, accountants and other representatives full access to its personnel (subject to reasonable approval as to the time thereof) and all properties, documents, contracts, books and records and will furnish copies of such documents (certified by officers, if so requested) and with such information with respect to its business, operations, affairs and prospects (financial and otherwise) as IFSI may from time to time request, and the party to whom the information is provided will not improperly disclose the same prior to the Closing. SSTI will afford IFSI an opportunity to ask questions and receive answers thereto in furtherance of its duly diligent examination of SSTI. Any such furnishing of such information or any investigation shall not affect that party’s right to rely on the other party’s representations and warranties made in this Agreement or in connection herewith or pursuant hereto, except to the extent that written disclosure of information at a variance or in conflict with any such representation or warranty is made and provides specific notice of such variance or conflict.

Section 5.06. Confidential treatment of information. The provisions of Exhibit “D” shall be binding upon the parties.

Section 5.07. Cooperation by the parties. Each party hereto shall cooperate and shall take such further action as may be reasonably requested by any other party in order to carry out the provisions and purposes of this Agreement. SSTI shall cooperate with IFSI, and its independent public accountant, the cost of which shall be the responsibility of IFSI, with respect to an audit of SSTI’s financial statements and review of interim, stub period financial statements required to enable IFSI to file a registration statement pursuant to the 1933 Act or the 1934 Act. This covenant shall survive the Closing.

                  Section 5.08. Conduct of SSTI’s business after Closing.

(a) The parties acknowledge that it is IFSI’s intent to cause SSTI to refinance all of its equipment following the closing, subject to terms and conditions of such refinancing acceptable to IFSI, for the purpose of eliminating personal guaranties and to improve SSTI’s working capital.

(b) SSTI will be operated as a wholly owned subsidiary of IFSI, and as a separate corporation, and shall not be merged into IFSI or any other subsidiary of IFSI at least until IFSI has paid the additional consideration provided in Section 2.03.

(c) In the event IFSI fails (i) to pay the additional consideration as provided in Section 2.03 within 180 days following the Closing or (ii) to established a public trading market for its common stock within 210 days following the Closing, Mr. & Mrs. Smith may elect, by written notice given to IFSI within ten days after either such failure, to return to IFSI the IFSI common stock he received pursuant to Section 2.02 and any cash consideration received pursuant to Section 2.03, without interest, offset or deduction, and IFSI will, upon such election, return SSTI’s Securities to Mr. & Mrs. Smith.

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ARTICLE VII

FEDERAL INCOME TAX MATTERS

Section 7.01. Federal income tax treatment. Each party shall be responsible for obtaining his, her or its own tax advice with respect to and understanding the federal income tax consequences of the transactions and the federal income tax consequences thereof contemplated by this Agreement and waives any reliance with respect thereto on any other party. Mr. & Mrs. Smith understand the transaction will be taxable to them to the extent of “boot”.

ARTICLE VIII

SECURITIES LAW MATTERS AND STATUS OF SHARES

Section 8.01. Unregistered shares. IFSI’s common stock delivered to Mr. & Mrs. Smith is not being registered under the 1933 Act and the securities laws of Nebraska or any other state of jurisdiction, and the shares are not transferable, except as permitted under various exemptions contained in the 1933 Act and applicable state securities law. The provisions contained in the following sections are intended to ensure compliance with the 1933 Act and applicable state securities law.

Section 8.02. No transfers in violation of 1933 Act. Mr. & Mrs. Smith will agree at Closing not to offer, sell, assign, pledge, hypothecate, transfer or otherwise dispose of IFSI’s shares, except after full compliance with all of the applicable provisions of and regulations under the 1933 Act and applicable state securities law.

Section 8.03. Investment intent. Mr. & Mrs. Smith will represent and warrant to and covenant with IFSI that he is acquiring IFSI’s shares for his own account for investment and not with a view to resale or other distribution; that he currently has no intention of selling, assigning, transferring, pledging, hypothecating or otherwise disposing of all or any part thereof at any particular time, for any particular price, or on the happening of any particular event or circumstance; and he will acknowledge that he understands IFSI is relying on the truth and accuracy of his covenants, warranties and representations in issuing IFSI’s shares without first registering them under the 1933 Act.

Section 8.04. Investment legend on certificates. Mr. & Mrs. Smith will further agree that the certificates evidencing IFSI’s shares shall contain the following legend or a legend of similar import:

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND IS A “RESTRICTED SECURITY” AS DEFINED UNDER SAID ACT. ACCORDINGLY, NEITHER THIS SECURITY NOR ANY INTEREST THEREIN MAY BE SOLD, OFFERED FOR SALE, ASSIGNED, TRANSFERRED, PLEDGED OR HYPOTHECATED, EXCEPT BY BONA FIDE GIFT OR INHERITANCE, IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS SECURITY UNDER SAID ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER THAT SUCH REGISTRATION IS NOT REQUIRED.

ARTICLE IX

TERMINATION PRIOR TO CLOSING

Section 9.01. Termination for default. IFSI may, by notice to SSTI and Smith given in the manner provided below on or at any time prior to the Closing Date, terminate this Agreement if default shall be made by SSTI in the observance or in the due and timely performance of any of any material covenants and agreements contained in this Agreement, made by SSTI pursuant to or imposed upon it in this Agreement, if the default has not been fully cured within fifteen days after receipt of the notice specifying the default.

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Section 9.02. Termination for failure to Close. If the Closing does not occur on or before the date provided in Section 3.01, any party, if that party is not then in default in the observance or in the due or timely performance of any covenants and conditions under this Agreement, may at any time terminate this Agreement by giving written notice to the other parties; provided, that the parties may extend the Closing date in writing.

Section 9.03. Termination for loss of bargain. IFSI may, at its option, terminate this Agreement prior to the Closing if (i) in completion of its due diligence examination of SSTI, it discovers the existence of a material, adverse variance from its due diligence examination prior to the date of this Agreement, or (ii) the business or assets of SSTI have suffered any material damage, destruction or loss (whether or not covered by insurance), or (iii) SSTI is prevented by order of court or administrative action from consummating the transactions contemplated by this Agreement, whether or not SSTI has exhausted its appeals.

ARTICLE X

NOTICES

Section 10.01. Procedure for giving notices. Any and all notices or other communications required or permitted to be given under any of the provisions of this Agreement shall be in writing and shall be deemed to have been duly given when personally delivered (excluding telephone facsimile and including receipted express courier and overnight delivery service) or mailed by first class certified U.S. mail, return receipt requested showing name of recipient, addressed to the proper party.

Section 10.02. Addresses for notices. For purposes of sending notices under this Agreement, the addresses of the parties are as follows:

As to SSTI and Mr. & Mrs. Smith: Monte W. Smith, President

Smith Systems Transportation, Inc.

417 9^th Avenue [/P.O. Box 2455]

Scottsbluff, NE 69363-2455

Copy to:

As to IFSI: Paul A. Henley, President

Integrated Freight Systems, Inc.

Suite 192

1767 Lakewood Ranch Boulevard

Bradenton, FL 34211

Copy to: Jackson L. Morris, Esq.

3116 West North A Street

Tampa, Florida 33609-1544

Section 10.03. Change of address. A party may change its address for notices by sending a notice of such change to all other parties by the means provided in Section 10.01.

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ARTICLE XI

LEGAL AND OTHER COSTS

Section 11.01. Party entitled to recover. In the event that any party (the “Defaulting Party”) defaults in his or its obligation under this Agreement and, as a result thereof, the other party (the “Non-Defaulting Party”) seeks to legally enforce his or its rights hereunder against the Defaulting Party (whether in an action at law, in equity or in arbitration), then, in addition to all damages and other remedies to which the Non-Defaulting Party is entitled by reason of such default, the Defaulting Party shall promptly pay to the Non-Defaulting Party an amount equal to all costs and expenses (including reasonable attorneys’ fees and expert witness fees) paid or incurred by the Non-Defaulting Party in connection with such enforcement.

Section 11.02. Interest. In the event the Non-Defaulting Party is entitled to receive an amount of money by reason of the Defaulting Party’s default hereunder, then, in addition to such amount of money, the Defaulting Party shall promptly pay to the Non-Defaulting Party a sum equal to interest on such amount of money accruing at the rate of 1.5% per month during the period between the date such payment should have been made hereunder and the date of the actual payments thereof.

ARTICLE XII

MISCELLANEOUS

Section 12.01. Effective date. The effective date of this Agreement shall for all purposes be the date set forth in first paragraph hereof notwithstanding a later actual date of execution by any individual party.

Section 12.02. Entire agreement. This writing constitutes the entire agreement of the parties with respect to the subject matter hereof, superseding all prior agreements, understandings, representations and warranties.

Section 12.03. Waivers. No waiver of any provision, requirement, obligation, condition, breach or default hereunder, or consent to any departure from the provisions hereof, shall be considered valid unless in writing and signed by the party giving such waiver, and no such waiver shall be deemed a waiver of any subsequent breach or default of the same or similar nature.

Section 12.04. Amendments. This Agreement may not be modified, amended or terminated except by a written agreement specifically referring to this Agreement signed by all of the parties hereto and amendment, modification or alteration of, addition to or termination of this Agreement or any provision of this Agreement shall not be effective unless it is made in writing and signed by the parties.

Section 12.05. Construction. This Agreement has been negotiated by the parties, section by section, and no provision hereof shall be construed more strictly against one party than against the another party by reason of such party having drafted such provision. The order in which the provisions of this Agreement appear are solely for convenience of organization; and later appearing provisions shall not be construed to control earlier appearing provisions.

Section 12.06. Invalidity. It is the intent of the parties that each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law. If any provision hereof shall be prohibited, invalid, illegal or unenforceable, in any respect, under applicable law, such provision shall be ineffective to the extent of such prohibition, invalidity or non enforceability only, without invalidating the remainder of such provision or the remaining provisions of this Agreement; and, there shall be substituted in place of such prohibited, invalid, illegal or unenforceable provision a provision which nearly as practicable carries out the intent of the parties with respect thereto and which is not prohibited and is valid, legal and enforceable.

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Section 12.07. Multiple counterparts. This Agreement may be executed in one or more counterparts, each of which shall be an original and, taken together, shall be deemed one and the same instrument.

Section 12.08. Assignment, parties and binding effect. This Agreement, and the duties and obligations of any party shall not be assigned without the prior written consent of the other party(ies). This Agreement shall benefit solely the named parties and no other person shall claim, directly or indirectly, benefit hereunder, express or implied, as a third-party beneficiary, or otherwise. Wherever in this Agreement a party is named or referred to, the successors (including heirs and personal representative of individual parties) and permitted assigns of such party shall be deemed to be included, and all agreements, promises, covenants and stipulations in this Agreement shall be binding upon and inure to the benefit of their respective successors and permitted assigns.

Section 12.09. Survival of representations and warranties. The representations and warranties made herein shall survive the execution and delivery of this Agreement and full performance hereunder of the obligations of the representing and warranting party, subject to the provisions of Section 4.03.

Section 12.10. Jurisdiction and venue. Any action or proceeding for enforcement of this Agreement and the instruments and documents executed and delivered in connection herewith which is determined by a court of competent jurisdiction not, as a matter of law, which seeks injunctive relief shall be brought and enforced in the courts of the State of Nebraska in and for Scotts Bluff County, Nebraska, and the parties irrevocably submit to the jurisdiction of each such court in respect of any such action or proceeding.

Section 12.11. Applicable law. This Agreement and all amendments thereof shall be governed by and construed in accordance with the law of the State of Nebraska applicable to contracts made and to be performed therein (not including the choice of law rules thereof).

[Testimonium on following page.]

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            IN WITNESS WHEREOF, the parties hereto have caused this agreement to be signed by their respective officers thereunto duly authorized and their respective corporate seals to be hereunto affixed, the day and year first above written.

[Corporate Seal] Integrated Freight Systems, Inc.

Attest: By: /s/ Paul A. Henley

Paul A. Henley, President

/s/ Jackson L. Morris, Secretary

[Corporate Seal] Smith Systems Transportation, Inc.

Attest: By: /s/ Monte W. Smith

Monte W. Smith, President

/s/ Mary C. Smith, Secretary

/s/ Monte W. Smith

Monte W. Smith

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EXHIBIT “A”

OFFICERS’ CERTIFICATE

Pursuant to Section 3.0__ of the Stock Exchange Agreement identified within

The undersigned, ____________, President, and __________, Treasurer, of ________________, a ___________ corporation (the “Corporation”), hereby each certifies that he is familiar with the Stock Exchange Agreement, dated ________________, (the “Agreement”), between the Corporation and ____________ and, to the best of his knowledge, based on reasonable investigation:

(a) All representations and warranties of the _____________ (as defined in the Agreement) contained in the Agreement, and in all Exhibits and Schedules attached thereto containing information delivered by ___________, were true and correct in all material respects when made and when deemed to have been made and are true and correct at the date hereof, except for changes in the ordinary course of business between the date of the Agreement, in conformity with the covenants and agreements contained in the Agreement.

(b) All covenants, agreements and obligations required by the terms of the Agreement to be performed by _______________ at or before the Closing have been duly and properly performed in all material respects.

(c) Since the date of the Agreement there have not occurred any material adverse change in the condition or prospects (financial or otherwise), business, properties or assets of the ____________________.

IN WITNESS WHEREOF, each of the undersigned has executed this certificate this ________________, .

_______________, President

_______________, Treasurer

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EXHIBIT “B”

SECRETARY’S CERTIFICATE

Pursuant to Section 3.0__ of the Stock Exchange Agreement identified within.

I, ___________, the duly elected, qualified and acting Secretary of _________________, a corporation duly organized, existing and in good standing under the laws of ____________, (the “Corporation”) do hereby certify that:

(i) The following is a true and complete copy of Resolution of the Board of Directors of the Corporation taken and adopted on ________________, , approving the Stock Exchange Agreement dated ________________, , by and among the Corporation and _____________, and that said Resolution has not been rescinded, revoked or modified and is in full force and effect at the date hereof:

(ii) The persons whose names, titles and signatures appear below are each the duly elected, qualified and acting officers of the Corporation, hold on the date hereof the offices set forth opposite their respective names and the signatures appearing opposite said names are the genuine signatures of said persons:

Name Title Signature

________________ President ___________________________

________________ Secretary ___________________________

________________ Treasurer ___________________________

(iii) I am authorized by the Corporation to make the within certifications.

IN WITNESS WHEREOF, I have executed this Certificate on ________________, .

(CORPORATE SEAL)

_________________, Secretary

I, ______________, President of _______________, a __________ corporation, hereby certify that ______________ is duly elected, qualified and acting Secretary of ______________ and that the signature appearing above is his genuine signature.

IN WITNESS WHEREOF, I have executed this Certificate on ________________, .

__________________, President

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Exhibit “C”

CLOSING MEMORANDUM

The undersigned parties to that certain Stock Exchange Agreement dated ________________, , (“Agreement”) do hereby certify one to the other that;

1. The Closing of the Agreement was completed, as contemplated by the Agreement, on ________________, at ____ o’clock __.m.

2. All conditions to each of the parties Closing the Agreement have been satisfied and, to the extent not specifically satisfied, have been waived by the party entitled to waive the conditions; except, the following conditions, if any, are waived only for the purpose of Closing of the transaction contemplated by the Agreement, and are required to be satisfied after the Closing by the party required to satisfy such condition:

[insert any such conditions and name of the party required to satisfy it]

3. Capitalized terms herein have the meaning assigned to them in the Stock Exchange Agreement.

For the purposes herein set forth, the parties have executed this Memorandum at the date and time written above.

[Corporate Seal] Integrated Freight Systems, Inc.

Attest: By: _____________________________

Paul A. Henley, President

_______________, Secretary

[Corporate Seal] Smith Systems Transportation, Inc.

Attest: By: _____________________________

Monte W. Smith, President

_______________, Secretary

_________________________________

Monte W. Smith

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THE TERMS OF “TREATMENT OF CONFIDENTIAL INFORMATION” ARE TO BE NEGOTIATED SUBSEQUENT TO THE EXECUTION OF THE STOCK EXCHANGE AGREEMENT AND PRIOR TO CLOSING

EXHIBIT “D”

Treatment of Confidential Information

The mutual objective of the parties under the Stock Exchange Agreement to which this Exhibit “D” is attached and incorporated by reference is to provide appropriate protection for Confidential Information while exchanging Confidential Information (defined below) for the parties’ mutual benefit and maintaining their ability to conduct their respective business activities. Each party agrees the following terms apply when a party (the “Discloser”) discloses information to the other (the “Recipient”) under this Agreement. The consideration for this Agreement is the disclosures which a party makes to the other in reliance on this Agreement.

1. Each party agrees and acknowledges that many of the other’s Confidential Information (as described below) is considered to be trade secrets, confidential, proprietary and not readily accessible to the public. Each party believes that its own Confidential Information represents a legitimate, valuable and protectible interest and gives it a competitive advantage, which otherwise would be lost if its Confidential Information was improperly disclosed or revealed.

2. The Recipient shall not, at any time without the express written permission of the Discloser, disclose the Discloser’s Confidential Information directly or indirectly to any person or entity, except the Recipient may disclose the Confidential Information to the Recipient’s Employees, Contractors and Agents (as defined below) during the term of this Agreement if such Employees, Contractors and Agents have a need to know the Confidential Information in order to complete any purpose for which the Confidential Information is disclosed. The Recipient shall have entered into non-disclosure agreements with such Employees, Contractors, and Agents having obligations of confidentiality as strict as those herein prior to disclosure to such employees, contracts, and agents to assure against unauthorized use or disclosure. The Recipient shall not use or threaten to use Confidential Information in any way that is inconsistent with the provisions of this Agreement or contrary to the instructions or interests of the Discloser. The Recipient shall not, directly or indirectly, intentionally or negligently allow or assist others in using the Discloser’s Confidential Information in any way inconsistent with the provisions of this Agreement or contrary to the instructions or interests of the Discloser. The Recipient agrees not to use Confidential information for its own benefit, unless specifically authorized so to do in writing by the Disclose.

3. Each party recognizes and acknowledges that the improper disclosure or use of the Discloser’s Confidential Information would cause irreparable injury to the Discloserby jeopardizing, compromising, and perhaps eliminating the competitive advance theDiscloser holds or may hold because of the existence and secrecy of the Confidential Information or would provide an unjustly obtained advantage to the Recipient. Thus, each party acknowledges and agrees that monetary damages shall not be a sufficient remedy for the Discloser in the event of any breach or threatened breach of this Agreement. Therefore, each party stipulates and warrants that in the event a Recipient breaches, or reasonably threatens to breach, this Agreement, the Discloser party shall be entitled, without waiving any other rights or remedies in law or in equity, to such injunctive and/or other equitable relief, without (a) having to show or prove irreparable harm as may be deemed proper by a court of competent jurisdiction and (b) the requirement imposed by the Court for posting bond which requirement is hereby specifically and knowingly waived.

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4. The Recipient agrees to use the same care and discretion to avoid improper disclosure, publication or dissemination of the Disclosure’s Confidential Information as it uses with its own similar information that it does not wish to disclose, publish or disseminate, but in no event less than reasonable and prudent care.

5. As used in this Agreement the “Confidential Information” means all tangible and intangible information that is disclosed by the Discloser to the Recipient (either orally, or by visual inspection, and/or in writing), including but not limited to (a) currently available and planned products and services; (b) information regarding distributors, suppliers, developers, contractors and funding sources; (c) financial and management information; (d) product information; (e) research and/or development information; (f) information pertaining to actual and/or potential customers, suppliers, and/or strategic alliances; (g) information of a confidential or private nature relating to Employees and Agents (as defined below); (h) financial data and information; (i) business plans; (j) marketing materials and/or strategies; (k) legal matters, including current and/or potential contracts and/or litigation; (l) in-house e-mail, Internet, security, and/or other systems; (m) information received by the Discloser from third parties that the Discloser is obligated to treat as confidential; and/or (n) any and all information regarding the foregoing that the Discloser discloses to the Recipient. Failure to include a confidentiality notice on any materials disclosed to the Recipient shall not give rise to inference that the information disclosed is not confidential. Confidential Information disclosed to the Recipient by any parent corporation, subsidiary, agent and/or affiliated entities of the Discloser or by persons that owe the obligation of confidentiality to the Discloser, whether by contract or otherwise, is also covered by this Agreement.

“Employees and Agents” shall mean the employees, agents, representatives, consultants and independent contractors affiliated with each of us separately.

6. Confidential Information shall not include any information which the Recipient can, by clear and convincing evidence, establish:

(a) Is or subsequently becomes publicly available without the Recipient’s breach of any obligation owed to the Discloser under this Agreement;

(b) Was rightfully in the possession of or known to the Recipient prior to the Discloser’s disclosure of such information to the Recipient, as evidenced by documentation on record at the time of disclosure;

(c) Became known to the Recipient from a source independent from the Discloser and such independent source did not breach an obligation of confidentiality owed to the Discloser;

(d) Was independently developed by the Recipient without any breach of this Agreement; or

(e) Was originally disclosed as Confidential Information hereunder but which the Discloser thereafter authorizes the Recipient to use and/or disclose, and such authorization is in writing which is signed by authorized representatives of the parties;

(f) Becomes available to the Receiving Party by wholly lawful inspection or analysis of products offered for sale; or

(g) Is transmitted by a party after receiving written notification from the other party that it does not desire to receive any further Confidential Information.

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The Receiving Party may disclose Confidential Information nevertheless pursuant to a valid order issued by a court or government agency, provided that the Receiving Party provides the Disclosing Party (i) prior written notice of such obligation; and (ii) the opportunity to oppose such disclosure or obtain a protective order.

7. The Recipient shall notify the Discloser immediately upon discovery of any unauthorized disclosure of the Confidential Information, or any other breach of this Agreement by the Recipient and/or the Recipient’s Employees and/or Agents, and will cooperate with the Discloser in every reasonable way at the Recipient’s sole cost and expense to prevent its further unauthorized disclosure and/or further breach of this Agreement.

8. Neither this Agreement nor any disclosure of Confidential Information hereunder grants the Recipient any rights or license under any trademark, copyright or patent now or hereafter owned or controlled by the Discloser.

9. The Recipient acknowledges and agrees that its limited right to evaluate the Discloser’s Confidential Information shall immediately expire at the completion of the purpose for which the Confidential Information is delivered, if this Agreement is not terminated earlier and then, in that event, the Recipient’s right to evaluate such Confidential Information shall immediately terminate. The Recipient therefore agrees to return any and all Confidential Information of the Discloser that is in a tangible form, including all originals, copies reproductions, and summaries thereof, to the Discloser within five business days of the date this Agreement expires or is terminated, whichever occurs first, or upon the Discloser’s request, and to also completely erase and destroy any and all copies of all portions of any and all software comprising the Confidential Information in its possession and/or under its responsibility or control which may have been loaded onto the computers of the Recipient and/or its Employees and Agents.

10. This Agreement shall continue from the date last written below until terminated by either party by giving thirty days’ written notice to the other party of its intent to terminate this Agreement. Information disclosed pursuant to this Agreement will be subject to the terms of this Agreement for five years following the termination of this Agreement.

11. The terms of confidentiality under this Agreement shall not be construed to limit either party’s right to independently develop or acquire products without use of the other party’s Confidential Information. The Disclosing Party acknowledges that the Receiving Party may currently or in the future be developing information internally, or receiving information from other parties, that is similar to the Confidential Information. Accordingly, nothing in this Agreement prohibit the Receiving Party from developing or having developed for it products, concepts, systems or techniques that are similar to or compete with the products, concepts, systems or techniques contemplated by or embodied in the Confidential Information provided that the Receiving Party does not violate any of its obligations under this Agreement in connection with such development. Further, either party shall be free to use for any purpose the “residuals,” provided that such party shall not use in any manner information that is considered Confidential Information under this Agreement and shall maintain the confidentiality of the Confidential Information as provided herein. The term “residuals” means ideas, concepts, know-how or techniques that may be generated, developed or conceived by the Receiving Party in connection with reviewing the Confidential Information and in no circumstance shall “residuals” be deemed to include Confidential Information. Neither party shall have any obligation to limit or restrict the assignment of such persons or to pay royalties for any work resulting from the use of residuals.

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12. The Receiving Party shall not remove, overprint or deface any notice of confidentiality, copyright, trademark, logo, legend, or other notices of ownership or confidentiality from any originals or copies of Confidential Information it obtains from the Disclosing Party.

13. CONFIDENTIAL INFORMATION IS PROVIDED “AS IS” WITH ALL FAULTS. IN NO EVENT SHALL THE DISCLOSING PARTY BE LIABLE FOR THE ACCURACY OR COMPLETENESS OF THE CONFIDENTIAL INFORMATION. None of the Confidential Information disclosed by the parties constitutes any representation, warranty, assurance, guarantee or inducement by either party to the other with respect to the infringement of trademarks, patents, copyrights; any right of privacy; or any rights of third persons.

14. The parties acknowledge that the Confidential Information disclosed by each of them under this Agreement may be subject to export controls under the laws of the United States. Each party shall comply with such laws and agrees not to knowingly export, re-export or transfer Confidential Information of the other party without first obtaining all required United States or other governmental authorizations or licenses.

15. The parties hereto are independent contractors. Neither this Agreement nor any right granted hereunder shall be assignable or transferable by operation of law or otherwise. Any such purposed assignment shall be void.

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THE TERMS OF “AGREEMENT NOT TO COMPETE” ARE TO BE NEGOTIATED SUBSEQUENT TO THE EXECUTION OF THE STOCK EXCHANGE AGREEMENT AND PRIOR TO CLOSING

EXHIBIT “E”

[this to be moved to employment agreement]

AGREEMENT NOT TO COMPETE

THIS AGREEMENT NOT TO COMPETE, made and entered into as of _________ ___, 2008, by and between Integrated Freight Systems, Inc., a Florida corporation, (“IFSI”) and Smith Systems Transportation, Inc., a Michigan corporation, (jointly and severally, the “Benefited Party(ies)”), and Monte W. Smith (the “Restricted Party”).

W I T N E S S E T H :

WHEREAS, IFSI has exchanged the issued and outstanding equity securities of SSTI pursuant to a Stock Exchange Agreement dated as of _________ ___, 2008; and

WHEREAS, SSTI is wholly owned by Mr. & Mrs. Smith who personally benefits from such exchange; and

WHEREAS, the Benefited Parties have required as a condition for the exchange of SSTI’s Securities, as defined in the Stock Exchange Agreement that the Restricted Party enter into this Agreement Not To Compete as a means of protecting the value of SSTI; and

NOW, THEREFORE, in consideration of the premises herein before set forth, in reliance hereon and the mutual promises of the parties, one to another made herein, and the reliance of each party upon the other(s) based hereon and other good and valuable consideration, the receipt and sufficiency of which the parties acknowledge, the parties agree, as follows:

ARTICLE I

PRELIMINARY MATTERS

Section 1.01. Recitals. The parties acknowledge the recitals herein above set forth in the preamble are correct, are, by this reference, incorporated herein and are made a part of this Agreement.

Section 1.02. Use of words and phrases. Natural persons may be identified by last name, with such additional descriptors as may be desirable. The words “herein,” “hereby,” “hereunder,” “hereof,” “herein before,” “hereinafter” and any other equivalent words refer to this Agreement as a whole and not to any particular Article, Section or other subdivision hereof. The words, terms and phrases defined herein and any pronoun used herein shall include the singular, plural and all genders. The word “and” shall be construed as a coordinating conjunction unless the context clearly indicates that it should be construed as a copulative conjunction.

Section 1.03. Accounting terms. All accounting terms not otherwise defined herein shall have the meanings assigned to them under generally accepted accounting principles unless specifically referenced to regulatory accounting principles.

Section 1.04. Calculation of time lapse or passage; Action required on holidays. When a provision of this Agreement requires or provides for the calculation of the lapse or passage of a time period, such period shall be calculated by treating the event which starts the lapse or passage as zero; provided, that this provision shall not apply to any provision which specifies a certain day for action or payment, e.g. the first day of each calendar month. Unless otherwise provided, the term “month” shall mean a period of thirty days and the term “year” shall mean a period of 360 days, except that the terms “calendar month” and “calendar year” shall mean the actual calendar period indicated. If any day on which action is required to be taken or payment is required to be made under this Agreement is not a Business Day (Business Day being a day on which national banks are open for business where the actor or payor is located), then such action or payment shall be taken or made on the next succeeding Business Day.

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                 Section 1.05. Use of titles, headings and captions. The titles, headings and captions of articles, sections, paragraphs and other subdivisions contained herein are for the purpose of convenience only and are not intended to define or limit the contents of said articles, sections, paragraphs and other subdivisions

ARTICLE II

COVENANTS

Section 2.01. Restrictive Covenant. The Restricted Party shall not enter into or engage in any business in competition with the business of SSTI or as it may be conducted in the future by SSTI (the “Protected Business”) either as an individual on his own account, or as a partner, joint venturer, employee, agent, or consultant for any person, or as a director, officer or stockholder (other than as a passive investor) of a corporation or other enterprise, or otherwise, in the territory served by such business during the term of and for a period of one year after the date of the Restricted Party’s termination of employment by IFSI or SSTI. The parties acknowledge that even though the Restricted Party has been engaged as the founder, owner and employee of SSTI, the Restricted Party acknowledges that (a) he believes he will be able to engage in a livelihood apart from the activities which are prohibited by this Agreement during the specified period, (b) the value and expected future value of the consideration received under the Stock Exchange Agreement dated ____, 2008 is sufficient compensation for his agreements hereunder for the duration of this Agreement and (c) the value and expected future value of the consideration received under the Stock Exchange Agreement dated ____, 2008 is expected to be sufficient to provide for his personal needs for the duration of this Agreement.

Section 2.02. Enforcement. It is agreed by the parties that this covenant on the part of the Restricted Party may be enforced against the Restricted Party (a party engaged in the breach being the “Breaching Party”), by injunction, without requirement imposed by the Court for posting bond which the Restricted Party hereby specifically and knowingly waives, as well as by all other legal remedies available to the Benefited Party. It is agreed by the parties that if any portion of this covenant not to compete is held to be unreasonable, arbitrary or against public policy, the covenant herein shall be considered divisible both as to time and geographical area so that a lesser period or geographical area shall remain effective so long as the court determines the same is not unreasonable, arbitrary, or against public policy. The existence of any claim or cause of action of the Restricted Party against the Benefited Parties, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Benefited Parties of this covenant.

Section 2.03. Liquidated damages. It is agreed by the parties that in the event of breach by the Restricted Party of the covenants and agreements herein contained that, as liquidated damages, the Benefited Parties shall be entitled to recover from the Breaching Party attorneys’ fees and costs, including attorneys’ fees on appeal together with, at its election, either (i) the consideration paid to Breaching Party for the covenants and agreements herein contained, or if the breaching party has sold all or part of the non monitory consideration, then the non monitory consideration the Breaching Party has not sold and the gross price at which the Breaching Party sold the balance of the non monitory consideration or (ii) the gross revenues billed by the Breaching Party or any entity owned or controlled (entirely or partially) by the Breaching Party or by any entity employing the Breaching Party for goods and services in competition with the Protected Business, such liquidated damages being for lost business, damage to reputation and bad faith on the part of the Breaching Party and not a penalty.

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Section 2.04. Preservation of business. The Restricted Party, during the period of this Agreement will not engage in any conduct, nor encourage others to engage in any conduct detrimental to the Protected Business and shall not commit any act, or in any way assist others to commit any act, which will injure such Protected Business and will not divulge any confidential information or make available to any others any documents, files or other papers concerning the Protected Business or financial performance of the Protected Business.

Section 2.05. Release and termination. In the event the Benefited Parties permanently cease conducting the Protected Business, the Restricted Party shall be released from this Agreement and this Agreement shall terminate.

ARTICLE III

CONSIDERATION FOR COVENANTS

Section 3.01. Initial consideration. As consideration for the covenants set forth in Article II, at the execution of this Agreement, IFSI will deliver 750,000 shares of its common stock to the Restricted Party or on his order and pay twelve months thereafter the sum of $100,000 (as adjusted pursuant to the Stock Exchange Agreement between IFSI and the Restricted Party dated ______, 2008).

ARTICLE IV

MISCELLANEOUS

Section 4.01. Effective date. The effective date of this Agreement shall for all purposes be the date set forth in first paragraph hereof notwithstanding a later actual date of execution by any individual party.

Section 4.02. Entire agreement. This writing constitutes the entire agreement of the parties with respect to the subject matter hereof, superseding all prior agreements, understandings, representations and warranties, except for the Stock Exchange Agreement among certain of the parties.

Section 4.03. Waivers. No waiver of any provision, requirement, obligation, condition, breach or default hereunder, or consent to any departure from the provisions hereof, shall be considered valid unless in writing and signed by the party giving such waiver, and no such waiver shall be deemed a waiver of any subsequent breach or default of the same or similar nature.

Section 4.04. Amendments. This Agreement may not be modified, amended or terminated except by a written agreement specifically referring to this Agreement signed by all of the parties hereto and amendment, modification or alteration of, addition to or termination of this Agreement or any provision of this Agreement shall not be effective unless it is made in writing and signed by the parties.

Section 4.05. Construction. This Agreement has been negotiated by the parties, section by section, and no provision hereof shall be construed more strictly against one party than against the another party by reason of such party having drafted such provision. The order in which the provisions of this Agreement appear are solely for convenience of organization; and later appearing provisions shall not be construed to control earlier appearing provisions.

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Section 4.06. Invalidity. It is the intent of the parties that each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law. If any provision hereof shall be prohibited, invalid, illegal or unenforceable, in any respect, under applicable law, such provision shall be ineffective to the extent of such prohibition, invalidity or non enforceability only, without invalidating the remainder of such provision or the remaining provisions of this Agreement; and, there shall be substituted in place of such prohibited, invalid, illegal or unenforceable provision a provision which nearly as practicable carries out the intent of the parties with respect thereto and which is not prohibited and is valid, legal and enforceable.

Section 4.07. Multiple counterparts. This Agreement may be executed in one or more counterparts, each of which shall be an original and, taken together, shall be deemed one and the same instrument.

Section 4.08. Assignment, parties and binding effect. This Agreement, and the duties and obligations of any party shall not be assigned without the prior written consent of the other party(ies). This Agreement shall benefit solely the named parties and no other person shall claim, directly or indirectly, benefit hereunder, express or implied, as a third-party beneficiary, or otherwise. Wherever in this Agreement a party is named or referred to, the successors (including heirs and personal representative of individual parties) and permitted assigns of such party shall be deemed to be included, and all agreements, promises, covenants and stipulations in this Agreement shall be binding upon and inure to the benefit of their respective successors and permitted assigns.

Section 4.09. Arbitration. Unless a court of competent jurisdiction shall find that a particular dispute or controversy cannot, as a matter of law, be the subject of arbitration, any dispute or controversy arising hereunder, other than suit for injunctive relief which can be granted only by a court of competent jurisdiction, shall be settled by binding arbitration in Scotts Bluff County, Nebraska by a panel of three arbitrators in accordance with the rules of the American Arbitration Association; provided, that the rules of discovery of Circuit Court in and for Scotts Bluff County, Nebraska with jurisdiction of the situs of the arbitration shall apply and requests for discovery in accordance therewith shall be enforceable upon application to such court. Judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. The parties may pursue all other remedies with respect to any claim that is not subject to arbitration.

Section 5.10. Jurisdiction and venue. Any action or proceeding for enforcement of this Agreement and the instruments and documents executed and delivered in connection herewith which is determined by a court of competent jurisdiction not, as a matter of law, to be subject to arbitration as provided in Section 5.09 or which seeks injunctive relief shall be brought and enforced in the courts of the State of Nebraska in and for Scotts Bluff County, Nebraska, and the parties irrevocably submit to the jurisdiction of each such court in respect of any such action or proceeding.

Section 5.11. Applicable law. This Agreement and all amendments thereof shall be governed by and construed in accordance with the law of the State of Nebraska applicable to contracts made and to be performed therein (not including the choice of law rules thereof).

Page 27 of a 15 page Agreement, plus Exhibits and Schedules

5512854.2 28947/118201

IN WITNESS WHEREOF, the parties hereto have caused this agreement to be signed by their respective officers thereunto duly authorized and their respective corporate seals to be hereunto affixed, the day and year first above written.

_____________________________

Monte W. Smith

[Corporate Seal] Integrated Freight Systems, Inc.

Attest: By: _____________________________

Paul A. Henley, President

Secretary

[Corporate Seal] Smith Systems Transportation, Inc.

Attest: By: _____________________________

Paul A. Henley, Director

Page 28 of a 15 page Agreement, plus Exhibits and Schedules

5512854.2 28947/118201

INDEX TO DISCLOSURE SCHEDULES

STOCK EXCHANGE AGREEMENT

AMONG INTEGRATED FREIGHT SYSTEMS, INC, AND SMITH SYSTEMS TRANSPORTATION, INC.

DATED ________, 2008

Schedule 1. Subsidiaries of SSTI.

OTHER DISCLOSURE SCHEDULES WILL BE PROVIDE SUBSEQUENT TO THE EXECUTION OF THE STOCK EXCHANGE AGREEMENT AND PRIOR TO CLOSING

Page 29 of a 15 page Agreement, plus Exhibits and Schedules

5512854.2 28947/118201

DISCLOSURE SCHEDULE 1S

STOCK EXCHANGE AGREEMENT

AMONG INTEGRATED FREIGHT SYSTEMS, INC, AND SMITH SYSTEMS TRANSPORTATION, INC.

DATED ________, 2008

SUBSIDIARIES OF SSTI

1. SST Financial, LLC, 60% owned.

Page 30 of a 15 page Agreement, plus Exhibits and Schedules

5512854.2 28947/118201

EX-10.2

AMENDMENT TO

STOCK EXCHANGEAGREEMENT

THIS AMENDMENT TO STOCK EXCHANGEAGREEMENT dated as of September 2, 2008, ("Exchange Agreement") made and entered into as of [September 17], 2008, by and among Integrated Freight Systems, Inc., a Florida corporation, (“IFSI”), Monte W. Smith and Mary Catherine Smith (“Mr. & Mrs. Smith”) the sole stockholders of Smith Systems Transportation, Inc., a Nebraska corporation, (“SSTI”), and SSTI.

W I T N E S S E T H :

WHEREAS, the parties to the Exchange Agreement deem the transactions contemplated by the Exchange Agreement to have been closed on September 2, 2008, the Closing Date; and

WHEREAS, the parties desire to amend the Exchange Agreement for the purpose of making ISFI's affairs more acceptable to public and private investors, in particular by eliminating the feature contained in Section 5.08(c), and providing a greater consideration to Mr. & Mrs. Smith;

NOW, THEREFORE, in consideration of the premises herein before set forth, in reliance hereon and the mutual promises, one to another made herein, and the reliance of each party upon the other(s) based hereon and other good and valuable consideration, the receipt and sufficiency of which the parties respectively acknowledge, the parties agree, for purposes of amending the Exchange Agreement and the transaction(s) contemplated therein, as follows:

Section 2.02 of the Exchange Agreement is amended to change the number of shares issuable to each of Mr. Smith and Mrs. Smith to 412,500 shares from 375,000 shares.

                 Section 2.03 of the Exchange Agreement is amended and restated as follows:

Promissory note based on performance. IFSI will deliver a promissory note in the sum of $125,000 to each of Mr. Smith and Mrs. Smith; provided, that in the event (a) SST's net revenues for the twelve month period ending on the last day of the month preceding 365th day after the Closing Date is less than (b) the net revenues the twelve month period ended on the last day of the month preceding the Closing Date (such gross revenue amounts subject in each case to normally occurring and extraordinary accounting adjustments, as made in accordance with GAAP at the fiscal year end in which the respective twelve month periods end), then the principal amount of each promissory note shall be reduce by one-half of the remainder derived by subtracting (a) from (b). Each promissory note shall have a maturity date of thirteen months (to allow for the comparison of gross revenues provided in the preceding sentence), bear interest at a rate of eight percent simple interest per annum and shall be secured by a pledge of and security interest in the SSTI Securities purchased by IFSI from the noteholder under the Exchange Agreement. In the event ISFI fails to pay a promissory note at maturity and the noteholder takes the pledged SSTI Securities in satisfaction thereof, then the noteholder shall return to ISFI all of ISFI's common stock the noteholder received under the Exchange Agreement.

Sections 3.02 and 3.03 of the Exchange Agreement are amended and restated, respectively, as set forth in the attached Schedule of Deliverables.

Section 5.08(b) of the Exchange Agreement is amended to change the words "additional consideration" to "promissory notes.

                 Section 5.08(c) is deleted in its entirely.

                A new Section 8.05 is added to the Exchange Agreement which states:

Restrictions on sale of IFSI's common stock. Neither Mr. nor Mrs. Smith shall sell, transfer, assign or hypothecate any of IFSI's common stock until the promissory notes issued pursuant to Section 2.03, as amended, have been paid in full.

The parties acknowledge that it was their respective intents to Close the exchange transaction as of September 2, 2008. In view of these amendments to the Exchange Agreement and the incomplete deliveries made on and after the Closing Date as of September 2, 2008, the parties agree that the deliveries made at and after that Closing date shall be deemed to be held in escrow, subject to completion and deliveries of such documentation in accordance with the Schedule of Deliverables attached hereto and that all time periods beginning on and running from the Closing Date as provided in the Exchange Agreement shall be deemed to begin on and run from _________, 2008.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be signed by their respective officers thereunto duly authorized and their respective corporate seals to be hereunto affixed, the day and year second above written.

[Corporate Seal] Integrated Freight Systems, Inc.

Attest: By: /s/ Paul A. Henley

Paul A. Henley, President

/s/ Jackson L. Morris, Secretary

[Corporate Seal] Smith Systems Transportation, Inc.

Attest: By: /s/ Monte W. Smith

Monte W. Smith, President

/s/ Mary C. Smith, Secretary

/s/ Monte W. Smith

Monte W. Smith

/s/ Mary C. Smith

Mary Catherine Smith

Schedule of Deliverables

Stock Exchange Agreement re: Smith Systems Transportation, Inc.

Exchange Agreement signed by o Smiths and o Integrated.

Closing Memorandum signed by o Smiths and o Integrated.

Exchange Agreement Amendment signed by o Smiths and o Integrated.

Section 3.02.  Mr. & Mrs. Smith’s and SSTI’s deliveries at the Closing. At the Closing, Mr. & Mrs. Smith and SSTI will deliver to IFSI:

o (a) Certificate of good standing in SSTI’s state of incorporation and all states in which it is required to qualify to do business;

o (b) Certificates representing all of SSTI’s Securities;

o (c) Officers’ and Secretary’s and Certificates of SSTI in the form set forth in Exhibits “A” and “B”, respectively;

o (d) A resignation from any member of SSTI’s board of directors and officers, other than Mr. & Mrs. Smith;

o (e) Action by SSTI’s board of directors electing Paul A. Henley as a director of SSTI.

o (f) A document reflecting the mutual amendment of Mr. Smith’s employment agreement with SSTI to reflect terms of employment negotiated pursuant to this Agreement.

o (g) A non-competition and confidentiality agreement executed by Mr. Smith in favor of IFSI

o (h) The original of SSTI’s corporate minute book and related documents.

Section 3.03. IFSI’s and Mr. Henley’s deliveries at the Closing. At the Closing, IFSI will deliver to Mr. & Mrs. Smith

o (a) two certificates each representing 375,000 shares of IFSI’s common stock, as provided in Section 2.02, registered in the name of Mr. Smith and of Mrs. Smith, respectively, provided the social security number of each is delivered to IFSI not less than five business days prior to the Closing; and

o (b) Action by IFSI’s board of directors electing Mr. Smith as a director of IFSI;

o (c) Officers’ and Secretary’s Certificates of IFSI in the form set forth in Exhibits “A” and “B”, respectively; and

Additional deliveries added by amendment:

o (d) Two promissory notes in the amount of $125,000 each payable to Mr. Smith and to Mrs. Smith, the notes as described in the Amendment.

o (e) Two certificates each representing 37,500 shares of IFSI’s common stock, as provided in Section 2.02, registered in the name of Mr. Smith and of Mrs. Smith, respectively.

EX-10.2

May __, 2009

TO: Integrated Freight Systems, Inc.

Suite 200

6371 Business Boulevard

Sarasota, Florida 34240

The undersigned, in consideration for the issue of an Amended Promissory Note and Security Agreement originally dated September 17, 2008 and amended May __, 2009, does hereby (i) waive all conditions, precedent and subsequent, which remain unsatisfied by Integrated Freight Systems in that certain Stock Exchange Agreement dated September 2, 2008, as amended September 17, 2008, (together, the “Agreement”), (ii) agree that all such conditions shall be and hereby are deemed satisfied and (iii) agree that the Agreement cannot be terminated, cancelled or rescinded for any reason whatsoever.

Very truly yours,
_______________________________	_______________________________
Monty W. Smith	Mary Catherine Smith

EX-10.2

AMENDED

PROMISSORY NOTE AND SECURITY AGREEMENT

$125,000.00	Original Issue Date September 17, 2008
	Sarasota, Florida
	Amendment Date May 27, 2009

FOR VALUE RECEIVED, Integrated Freight Systems, Inc., a Florida corporation, ("Maker") whose principal executive office is located at Suite 200, 6371 Business Boulevard, Sarasota, Florida 34240, promises to pay to _____ Smith ("Holder") the sum of One Hundred Twenty-five Thousand Dollars and No Cents ($125,000.00), together with simple interest at a rate of eight percent per annum. The principal amount hereof, together with accrued and unpaid interest shall be due and payable and it shall be paid in full not later than October 31, 2009 (“Maturity Date”), subject nevertheless to and extenson in accordance with Holder’s forebearance agreement for the benefit of Tangiers Investors L.P., at such address as to which written notice is given to Maker by Holder from time to time.

Notwithstanding the promise hereinabove made, the principal amount of this Note shall be reduced by an amount equal to the difference, if any, obtained by subtracting (a) the Issuer’s net revenues for the period of twelve months ended August 31, 2009 from (b) the Issuer’s net revenues for the period of twelve months ending August 31, 2008, such net revenues subject in each case to normally occuring and extraordinary accounting adjustments, as made in accordance with GAAP at the fiscal year end in which each respective twelve month period ends.

Maker hereby reserves the right to prepay this Note in whole or in part at any time and from time to time prior to the Maturity Date without premium or penalty.

The payment and performance of this Note is secured by and Maker does hereby pledge and grant a first priority security interest in all shares of common stock of Smith Systems Transportation, Inc., a Nebraska corporation, (“Issuer”), being all of the common stock of the Issuer owned by Maker (“Collateral”). This security interest in the Collateral is a purchase money security interest. Upon the occurrence of an event of default described in the next paragraph, Maker shall promptly upon written demand made by Holder deliver the Collateral to Holder which Maker acquired from Holder, provided that Holder shall likewise and without demand deliver to Maker in exchange for the Collateral all of Maker’s common stock registered in the name of Holder.

The following shall be events of default under this Note:

• Maker’s failure to pay to Holder when due any installment of principal or interest; or

• Maker’s failure to refinance all equipment loans of the Issuer which carry the personal guaranty of Holder not later than March 31, 2010; or

• Maker’s failure to establish a public trading market for its common stock on or before August 31, 2009; or

• Any change in the operational integrity of the Issuer prior to full payment of this Note; or

• The occurrence of an event of default under Maker’s note to Monte W. Smith;

Provided, that in the event principal amount of and accrued interest on this Note are fully paid prior to the satisfaction of Maker’s obligations under these events of default, then the pledge of the Collateral and the remedy for failure to perform Maker’s obligations shall remain in full force and effect until all such obligations have been satisfied.

Maker agrees to pay to Holder's reasonable attorneys' fees and costs, whether or not an action be brought, for the services of counsel and of a collection agency employed after the Maturity Date or upon default to collect this Note or any principal or interest due hereunder, or to protect the collateral security, if any, or enforce the performance of any other agreement contained in this Note or in any instrument of security as aforesaid, including costs and attorneys' fees on appeal, in bankruptcy matters or post judgment relief.

Maker does hereby waive notice of acceptance of this Note, notice of the occurrence of any default under this Note or under any instrument securing this Note and presentment, demand, notice of maturity, protest, notice of dishonor, notice of non-payment and notice of protest and all requirements necessary to hold Maker liable as a maker of this Note.

The use of the proceeds of this Note is for commercial purposes and is not for personal or household purposes. This Note is an Nebraska contract and shall be construed and interpreted under Nebraska law.

Amendment acknowledged and accepted:	Integrated Freight Systems, Inc.
_____________________________ ____________ Smith	By: _____________________________ Paul A. Henley, President

EX-21

Exhibit 21

Subsidiaries of the Registrant

1. Morris Transportation, Inc.

2. Smith Systems Transportation, Inc.

a. SST Financial LLC (60%)

EX-23.02

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Securities and Exchange Commission

Washington, D.C. 20549

We consent to the use in this Registration Statement on Form S-4 of Integrated Freight Systems, Inc. of our report dated May 9, 2009, relating to our audits of the financial statements of Morris Transportation, Inc. for the years ended March 31, 2008 and 2007, appearing in the prospectus which is part of this Registration Statement.

We also consent to the references to our Firm under the caption “Experts” in such Prospectus.

/s/ Cordovano and Honeck LLP

Cordovano and Honeck LLP

Englewood, Colorado

June 3, 2009

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Securities and Exchange Commission

Washington, D.C. 20549

We consent to the use in this Registration Statement on Form S-4 of Integrated Freight Systems, Inc. of our report dated May 9, 2009, relating to our audits of the financial statements of Smith Systems Transportation, Inc. for the years ended March 31, 2008 and 2007, appearing in the prospectus which is part of this Registration Statement.

We also consent to the references to our Firm under the caption “Experts” in such Prospectus.

/s/ Cordovano and Honeck LLP

Cordovano and Honeck LLP

Englewood, Colorado

June 3, 2009

EX-23.03