The discussion contained herein contains "forward-looking statements" that involve risk and uncertainties. These statements may be identified by the use of terminology such as "believes," "expects," "may," "should" or "anticipates" or expressing this terminology negatively or similar expressions or by discussions of strategy. Our actual results could differ materially from those discussed in this report. The following discussion should be read in conjunction with the financial statements and the related notes included herein as Item 8.





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Accounting Policies and Estimates

The methods, estimates and judgments that we use in applying our critical accounting policies have a significant impact on the results that we report in our financial statements. Some of our accounting policies require us to make difficult and subjective judgments, often as a result of the need to make estimates regarding matters that are inherently uncertain. We also have other policies that we consider key accounting policies; however, these policies typically do not require us to make estimates or judgments that are difficult or subjective.

We have identified the accounting policies that we consider critical in Note 1 "Nature of Business and Significant Accounting Policies" of the notes to our financial statements included in this report.





Overview

Trailblazer Resources, Inc., formerly Energy Composites Corporation ("we," "us," "our," or the "Company"), a Nevada corporation, currently has no business operations.

The Company had one operating subsidiary, ECC Corrosion, Inc. ("ECC-C"), which was sold on October 21, 2011 due to the continuing losses that the Company had incurred since the reverse acquisition in October 2008. Formerly known as Advanced Fiberglass Technologies ("AFT"), ECC-C was incorporated in the state of Wisconsin on January 1, 2005, following nearly ten years operating as M&W Fiberglass, LLC ("M&W"). Founded in 1995 by Jamie and Jennifer Mancl, M&W was the operating entity that developed and operated AFT's business. In January 2005, M&W transferred all operating assets and liabilities into a newly formed S-Corporation: AFT. On September 1, 2010, AFT changed its name to ECC Corrosion, Inc.

On October 21, 2011, the Company sold all of the stock of ECC-C to Jamie and Jennifer Mancl and their affiliated entities (the "Mancls") in exchange for substantially all of the Mancls' shares of the Company's common stock (the "ECC-C Sale"). These shares were then cancelled, reducing the number of shares issued and outstanding of the Company to 22,752,955. In addition, we changed the name of the Company to "Trailblazer Resources, Inc." effective October 17, 2011.





Results of Operations

We currently do not generate any revenues, but incur general and administrative expenses related to our status as a publicly-held company, such as legal, accounting and transfer agent fees, as well as other applicable expenses such as investor relations expenses.

General and administrative expenses

Total general and administrative expenses were $148,104 for the fiscal year ended December 31, 2017 and $90,749 for the fiscal year ended December 31, 2016, consisting of legal, accounting and other professional fees. The increase is due to additional legal and accounting costs associated with efforts to become current in the Company's SEC filings and impending merger related costs in 2017 compared to 2016.





Loss from operations

The Company's net loss from operations was $148,104 and $90,749 for the years ended December 31, 2017 and 2016, respectively. The increase in our net loss from operations was due to higher general and administrative costs and consulting expenses in the current year as discussed above.

Gain on extinguishment of debt

The Company recognized a loss on extinguishment debt of $17,180 and a $38,259 gain on extinguishment of debt during the years ended December 31, 2017 and 2016, respectively. The 2017 loss occurred as a result of the conversion of $33,041 of accrued interest for shares of company common stock with a fair value of $50,221 and the prior gain on extinguishment of debt was related to the conversion of certain convertible noteholders exchanging debt of $150,000 and accrued interest of $24,453 in exchange for shares of company common stock with an aggregate fair market value of $136,194 on the respective conversion dates in December 2016.





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Interest expense

Interest expense was $32,391 for the year ended December 31, 2017 compared to $43,948 for the year ended December 31, 2016. Interest expense during 2017 and 2016 primarily consisted of accrued interest on (a) convertible promissory notes of $24,000 and $32,730, (b) a revolving convertible note of $4,375 and $4,375, and (c) notes payable to a related party of $4,003 and $6,843, respectively.





Income tax benefit

In 2009, the Company established a full valuation allowance against its deferred tax assets because it was deemed more likely than not, that the net deferred tax assets would not be realized. Since 2009, the Company has continued to record a full valuation allowance and therefore, there is no tax provision recorded for the years ended December 31, 2017 and 2016.





Net loss

The Company's net loss increased from $96,438 in 2016 to a loss of $197,675 in 2017 due to the factors described above.

Liquidity and Capital Resources

At December 31, 2017, the corporate shell company had no cash and a working capital deficiency of $1,717,817.





Operating Cash Flows

Operating activities used $125,292 in cash during the 2017 fiscal year compared to using $76,886 during the 2016 fiscal year.





Investing Cash Flows

There were no investing transactions during the years ended December 31, 2017 and 2016.





Financing Cash Flows

Financing cash flow activities for the year ended December 31, 2017 consisted of proceeds from a promissory note of $124,943.

Financing cash flow activities for the year ended December 31, 2016 consisted of: (1) an increase in short-term notes payable of $46,000, (2) payments on short-term notes payable to shareholders of $25,213, and (3) an increase in short-term notes payable, shareholder of $36,638 and investor advances of $17,500.





Debenture Financing

From August 2008 to December 2008, we raised $6,370,000 by selling units, each unit consisting of (i) a 3-year, 6% convertible debenture (the "Debentures") with a conversion price of $2.50 per share (subject to adjustment for stock splits and stock dividends), and (ii) a number of warrants equal to the number of shares issuable upon conversion of the principal amount of the Debenture (the "Warrants"). The Debentures sold included the issuance of 2,548,000 Warrants. Each Warrant was originally exercisable into shares of common stock for a term of 3 years at $5.00 per share. The Warrants also provided anti-dilution protection for the following events: reorganization, reclassification, consolidation, merger or sale; subdivision, combination or dividend of our common stock. The Warrants expired June 30, 2014.





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At December 31, 2017 and 2016, Debentures totaling $400,000 were outstanding and currently due. Many of the remaining Debenture holders have elected to receive interest in the form of stock, lowering our cash outlays for debt service on the Debentures. Since the Company does not have the capital resources at this time to repay these Debentures, we are working with the Debenture holders in an attempt to convert them to common stock, extend or otherwise renegotiate their terms. In December 2016, certain debenture holders converted $150,000 in outstanding principal and $24,453 in accrued interest payable to 69,782 shares of common stock. Additionally, 13,216 shares were issued to pay $33,041 of accrued interest for non-converting debentures. The shares were issued in January 2017 and consequently recorded as common stock payable as of December 31, 2016. The accrued interest expense included in accrued expenses was $124,175 and $133,217 as of December 31, 2017 and 2016, respectively.

Revolving Convertible Note Financing

On February 21, 2013, the Company established an unsecured revolving convertible note in the amount of $250,000 with Diversified Equities Partners, LLC, a shareholder of the Company ("DEP"). Under the terms of the note, DEP had agreed to make loans to the Company during the three-year term of the revolving credit commitment period. Interest accrued on the unpaid principal balance at a rate of eight percent per annum and required quarterly payments beginning May 31, 2013; however, none of the interest has been paid as of December 31, 2017.

During 2015, the entire $250,000 principal balance of the revolving note was repaid, funded entirely by the proceeds of the note payable from GCS, discussed in Note 4. Note Payable. Accrued expenses include $49,260 of interest due to shareholders relating to this revolving convertible note as of December 31, 2017 and 2016, respectively.





Note Payable Financing

On April 15, 2015, we established a promissory note in the amount of $250,000 with Global CashSpot Corp ("GCS"). Under the terms of the promissory note, GCS agreed to advance the Company funds up to $250,000 to fund accounting, legal and other operating costs. The unsecured promissory note was non-interest bearing, and repayment was to be due within 60 days following notice of demand by GCS. In the event the Company were to enter into a business combination with GCS, the promissory note would be deemed paid in full. In September 2015, the Company and GCS agreed to amend the promissory note, increasing its amount to $350,000. The borrowing amount was further increased to $515,000 and $523,500 in February and August 2016, respectively. During the years ended December 31, 2017 and 2016, GCS advanced $108,393 and $46,000 under the promissory note, respectively. The balance of the notes payable are $648,443 and $523,500 as of December 31, 2017 and 2016, respectively.





Going Forward

The illiquidity and continuing losses suffered by ECC-C led to its sale to the Mancls in exchange for their shares in the Company. This allows the Company to potentially acquire another business operation, which hopefully will have a greater potential for profitability. The Company will still need to convert, extend or otherwise renegotiate the terms of the Debentures and other financings described above. The Company is relying upon the limited funds provided from shareholders to continue to operate as a public company in good standing while we look for a target business. The Company anticipates that any acquisition with a target company will be consummated primarily through the issuance of the Company's shares of stock, as we do not have sufficient cash to use for such purposes.

We will need to seek additional funding for our operations and ongoing general and administrative expenses. Our current plan is to identify and evaluate industries and business opportunities in order to identify a suitable acquisition target for the Company. We cannot give any assurance that we will be successful in this effort or that if a suitable acquisition target is obtained, it will result in profitable operations nor can we give any assurances that we will obtain adequate funding to stay in business until a suitable acquisition target is identified.

Off-Balance Sheet Arrangements

As of December 31, 2017, we did not have any off-balance sheet arrangements.

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