UNITED
STATES

SECURITIES
AND EXCHANGE COMMISSION

WASHINGTON,
D.C. 20549



FORM
10-Q/A

Amendment
No. 1



(Mark
One)



☒  QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



For
The Quarterly Period Ended June 30, 2017



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



For
The Transition Period from ______________________________________ to __________



Commission
file number: 000-29381





| | ACOLOGY,
    INC. | 
| | ----------------- | 

(Exact
name of registrant as specified in its charter)





|Florida                                                            |  | 65-0207200                           
|------------------------------------------------------------------ |  | -------------------------------------
|(State or other jurisdiction
    of incorporation or organization) |  | (IRS Employer Identification
    No.)



|1620
    Commerce Street, Corona, CA         |  | 92880     
|-------------------------------------------- |  | ----------
|(Address of principal
    executive offices) |  | (zip code)





(844)
226-5649



(Registrant’s
telephone number, including area code)



(Former
Name, former address and former fiscal year, if changed since last report)



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



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



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





|Large accelerated filer                           | ☐ | Accelerated filer         | ☐
|------------------------------------------------- | - | ------------------------- | -
|Non-accelerated
filer                             | ☐ | Smaller reporting company | ☒
|(Do not check if a smaller reporting
    company) |   | Emerging Growth Company   | ☒





Indicate
by check mark whether the issuer is a shell company (as defined in rule 12b-2 of the Exchange Act) Yes ☐ No ☒



APPLICABLE
ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS



Check
whether the registrant filed all documents and reports required by Section 12, 13, or 15(d) of the Exchange Act after the distribution
of securities under a plan confirmed by a court Yes ☐ No ☐



APPLICABLE
ONLY TO CORPORATE ISSUERS:



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



As
of August 10, 2017, there were 5,240,770,201 shares of the Registrant’s Common Stock outstanding.











Explanatory
Note

This
Quarterly Report on Form 10-Q has been amended solely to add a disclosure entitled “Evaluation of Disclosure Controls
and Procedures” to Item 4 of Part I. This Quarterly Report otherwise is as originally filed.

















ACOLOGY,
INC.

For
The Quarterly Period Ended June 30, 2017



TABLE
OF CONTENTS







|PART I
    - FINANCIAL INFORMATION                                                                | 3 
|------------------------------------------------------------------------------------------------- | --
|Item 1. Financial Statements                                                                      | 3 
|Item 2. Management’s Discussion
    and Analysis of Financial Condition and Results of Operations | 10
|Item 3. Quantitative and
    Qualitative Disclosures about Market Risk                            | 13
|Item 4. Controls and Procedures                                                                   | 13
|PART II - OTHER INFORMATION                                                                       |   
|Item 1. Legal Proceedings                                                                         | 13
|Item 1A. Risk Factors                                                                             | 13
|Item 2. Unregistered Sales
    Of Equity Securities And Use Of Proceeds.                          | 13
|Item 4. (Removed and Reserved).                                                                   | 14
|Item 5. Other Information                                                                         | 14
|Item 6. Exhibits                                                                                  | 14
|SIGNATURES                                                                                        | 15







THIS
REPORT CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES. SUCH STATEMENTS ARE BASED ON CURRENT EXPECTATIONS,
ASSUMPTIONS, ESTIMATES AND PROJECTIONS ABOUT THE COMPANY AND ITS INDUSTRY. FORWARD-LOOKING STATEMENTS ARE SUBJECT TO KNOWN AND
UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS THAT MAY CAUSE ACTUAL RESULTS, LEVELS OF ACTIVITY, PERFORMANCE, ACHIEVEMENTS AND
PROSPECTS TO BE MATERIALLY DIFFERENT FROM THOSE EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. THE COMPANY UNDERTAKES
NO OBLIGATION TO UPDATE PUBLICLY ANY FORWARD-LOOKING STATEMENTS FOR ANY REASON EVEN IF NEW INFORMATION BECOMES AVAILABLE OR OTHER
EVENTS OCCUR IN THE FUTURE.



2







PART
I - FINANCIAL INFORMATION



ITEM
1. FINANCIAL STATEMENTS



|ACOLOGY, INC.                                                  
|---------------------------------------------------------------
|CONSOLIDATED BALANCE SHEETS                                    
|(Unaudited)                                                    
|                                                               
|                                                               
|                                                               
|ASSETS                                                         
|                                                               
|CURRENT ASSETS:                                                
|                                                               
|Cash                                                           
|Accounts Recievable                                            
|Inventories                                                    
|Note Receivable                                                
|Total Current Assets                                           
|                                                               
|Property & equipment, net of accumulated depreciation          
|Security Deposits                                              
|                                                               
|TOTAL ASSETS                                                   
|                                                               
|LIABILITIES AND STOCKHOLDERS’ DEFICIENCY                       
|                                                               
|CURRENT LIABILITIES:                                           
|                                                               
|Accounts payable                                               
|Convertible notes payable, net of discount                     
|Notes Payable                                                  
|Loan Payable - stockholder                                     
|Accrued expenses                                               
|Derivative Liability                                           
|Capital Lease Payable                                          
|Total Current Liabilities                                      
|                                                               
|STOCKHOLDERS’ DEFICIENCY                                       
|Common Stock, $00001 par value, 6,000,000,000 shares authorized
|5,164,134,794   shares issued and outstanding                  
|at June 30, 2017 and December 31, 2016, respectively           
|Additional Paid in Capital                                     
|Accumulated Deficit                                            
|TOTAL STOCKHOLDERS’ DEFICIENCY                                 
|                                                               
|TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIENCY                 
|                                                               

The accompanying notes are an integral part of these financial statements





3











|ACOLOGY, INC.                                              
|-----------------------------------------------------------
|CONSOLIDATED STATEMENTS OF OPERATIONS                      
|(Unaudited)                                                
|                                                           
|                                                           
|                                                           
|                                                           
|Sales                                                      
|                                                           
|Cost of Sales                                              
|                                                           
|Gross Profit                                               
|                                                           
|Operating expenses:                                        
|General and administrative                                 
|Advertising and marketing                                  
|Total Operating Expenses                                   
|                                                           
|Loss from operations                                       
|                                                           
|Other expenses (income):                                   
|Interest expense                                           
|Gain on extinguishment of debt                             
|Gain on change in fair value of derivative                 
|Total Other Expenses (Income)                              
|                                                           
|Income (Loss) before income taxes                          
|                                                           
|Income tax provision                                       
|                                                           
|NET PROFIT/LOSS                                            
|                                                           
|Loss per common share, basic and diluted                   
|                                                           
|Weighted average common shares outstanding, basic & diluted



The
    accompanying notes are an integral part of these financial statements





4







|ACOLOGY,
    INC.                                                             
|------------------------------------------------------------------------------
|STATEMENTS
    OF CASH FLOWS                                                  
|(Unaudited)                                                                   
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|OPERATING
    ACTIVITIES:                                                     
|Net
    loss                                                                  
|Adjustments to
    reconcile net loss to net cash used in operating activities
|Depreciation
    expense                                                      
|Gain
    on extinguishment of debt                                            
|Gain
    on change in fair value of derivative                                
|Non
    cash interest expense                                                 
|Changes in operating
    assets and liabilities                               
|Accounts
    Recievable                                                       
|Inventories                                                                   
|Accounts
    Payable                                                          
|Advances
    to supplier                                                      
|Accrued
    expenses                                                          
|NET
    CASH USED IN OPERATING ACTIVITIES                                     
|                                                                              
|INVESTING
    ACTIVITIES:                                                     
|Repayment
    of loan from non related party                                  
|Acquisition
    of property and equipment                                     
|NET
    CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES                       
|                                                                              
|FINANCING
    ACTIVITIES:                                                     
|Proceeds
    from notes payable                                               
|Repayment
    of notes and capital lease payable                              
|NET
    CASH USED IN  FINANCING ACTIVITIES                                    
|                                                                              
|DECREASE IN CASH                                                              
|                                                                              
|CASH
    - BEGINNING OF PERIOD                                                
|                                                                              
|CASH
    - END OF PERIOD                                                      
|                                                                              
|Supplemental
    disclosure of cash flow information:                         
|Non-cash
    financing activities                                             
|Conversion
    of convertible debt with derivative into common stock          
|Common
    stock issued in connection with conversion                         



The
accompanying notes are an integral part of these financial statements



5







ACOLOGY,
INC.

Notes
to Financial Statements

June
30, 2017

(Unaudited)



Note
1 – Business



Acology,
Inc. (the “Company”), through its wholly owned subsidiary, D&C Distributors, LLC (“D&C”) is in
the business of designing, manufacturing, branding and selling proprietary plastic medical grade containers that can store pharmaceuticals,
herbs, teas and other solids or liquids, some of which can grind solids and shred herbs, and through D&C’s wholly owned
subsidiary, D&C Printing LLC (“Printing”), is in the business of private labeling and branding for purchasers
of containers and other products.



D&C
and Printing were formed under the laws of the State of California on January 29, 2013, and April 14, 2015, respectively.



Note
2 – Summary of Significant Accounting Policies



Basis
of Presentation and Principals of Consolidation



The
accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in
the United States of America for interim financial statements and with the instructions to Form 10-Q and Article 10 of Regulation
S-X of the United States Securities and Exchange Commission (the “SEC”). Accordingly, they do not contain all information
and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements.
In the opinion of the Company’s management, the accompanying unaudited financial statements contain all the adjustments
necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of June 30,2017,
and the results of operations and cash flows for the periods presented. The results of operations for the three and six months
ended June 30, 2017, are not necessarily indicative of the operating results for the full fiscal year or any future period. These
unaudited consolidated financial statements should be read in conjunction with the financial statements and related notes thereto
included in the Form 10-K for the year ended December 31, 2016, filed with the SEC on April 14, 2017.



The
consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances
and transactions have been eliminated.



Use
of Estimates



The
preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial
statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those
estimates. Certain of the Company’s estimates could be affected by external conditions, including those unique to its industry,
and general economic conditions. It is possible that these external factors could have an effect on the Company’s estimates
that could cause actual results to differ from its estimates. The Company re-evaluates all of its accounting estimates at least
quarterly based on these conditions and record adjustments when necessary.



Cash



The
Company considers all short-term highly liquid investments with an original maturity at the date of purchase of three months or
less to be cash equivalents.



Revenue
Recognition



The
Company follows the guidance of the Accounting Standards Codification (“ASC”) Topic 605, Revenue Recognition.We
record revenue when persuasive evidence of an arrangement exists, product delivery has occurred, the selling price to the customer
is fixed or determinable and collectability of the revenue is reasonably assured. The Company has not experienced any significant
returns from customers and accordingly, in management’s opinion, no reserve for returns has been provided.



Inventories



Inventories,
which consist of the Company’s product held for resale, are stated at the lower of cost, determined using the first-in first-out,
and net realizable value. Net realizable value is the estimated selling price, in the ordinary course of business, less estimated
costs to complete and dispose of the product.





6









If
the Company identifies excess, obsolete or unsalable items, its inventories are written down to their realizable value in the
period in which the impairment is first identified. Shipping and handling costs incurred for inventory purchases and product shipments
are recorded in cost of sales in the Company’s statements of operations.



Fair
Value Measurements



The
Company adopted the provisions of ASC Topic 820, Fair Value Measurements and Disclosures,which defines fair value as used
in numerous accounting pronouncements, establishes a framework for measuring fair value and expands disclosure of fair value measurements.



The
estimated fair value of certain financial instruments, including cash and cash equivalents, accounts receivable, accounts payable
and accrued expenses are carried at historical cost basis, which approximates their fair values because of the short-term nature
of these instruments. The carrying amounts of our short- and long-term credit obligations approximate fair value because the effective
yields on these obligations, which include contractual interest rates taken together with other features such as concurrent issuances
of warrants and/or embedded conversion options, are comparable to rates of returns for instruments of similar credit risk.



ASC
820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price)
in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants
on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable
inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may
be used to measure fair value:



Level
1 – quoted prices in active markets for identical assets or liabilities



Level
2 – quoted prices for similar assets and liabilities in active markets or inputs that are observable



Level
3 – inputs that are unobservable (for example cash flow modeling inputs based on assumptions)



The
derivative liability in connection with the conversion feature of the convertible debt, classified as a Level 3 liability, is
the only financial liability measure at fair value on a recurring basis.



The
change in the Level 3 financial instrument is as follows:



|Balance,
    January 1, 2017                              |  | $ | 481,767  |  
|--------------------------------------------------------- |  | - | -------- | -
|●      
    Converted during the Period                   |  |   | 0        |  
|●      
    Change in fair value recognized in operations |  |   | (164,515 | )
|Balance,
    June 30, 2017                                |  | $ | 317,252  |  



Property
and Equipment



Property
and equipment is stated at cost less accumulated depreciation. Depreciation is provided for on a straight-line basis over the
useful lives of the assets. For furniture and fixtures the useful life is 5 years, Leasehold Improvements are depreciated over
the 2-year lease term. Expenditures for additions and improvements are capitalized; repairs and maintenance are expensed as incurred.



Convertible
Instruments



The
Company evaluates and accounts for conversion options embedded in convertible instruments in accordance with ASC 815, Derivatives
and Hedging Activities.



Applicable
GAAP requires companies to bifurcate conversion options from their host instruments and account for them as free standing derivative
financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics
and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks
of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is
not re-measured at fair value under other GAAP with changes in fair value reported in earnings as they occur and (c) a separate
instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument.



The
Company accounts for convertible instruments (when it has been determined that the embedded conversion options should not be bifurcated
from their host instruments) as follows: The Company records, when necessary, discounts to convertible notes for the intrinsic
value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common
stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under
these arrangements are amortized over the term of the related debt to their stated date of redemption.





7









The
Company accounts for the conversion of convertible debt when a conversion option has been bifurcated using the general extinguishment
standards. The debt and equity linked derivatives are removed at their carrying amounts and the shares issued are measured at
their then-current fair value, with any difference recorded as a gain or loss on extinguishment of the two separate accounting
liabilities. During the six months ended June 30, 2017, there were no conversions of convertible debt.



Advertising



Advertising
and marketing expenses are charged to operations as incurred.



Income
Taxes



The
Company use the asset and liability method of accounting for income taxes in accordance with ASC Topic 740, Income Taxes.Under
this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year and (ii) deferred
tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements
or tax returns. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in
the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date.
A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive
and negative evidence, it is more likely than not some portion or all of the deferred tax assets will not be realized.



ASC
Topic 740.10.30 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements
and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a
tax position taken or expected to be taken in a tax return. ASC Topic 740.10.40 provides guidance on derecognition, classification,
interest and penalties, accounting in interim periods, disclosure, and transition. The Company has no material uncertain tax positions.



Recent
accounting pronouncements



The
Company does not believe there are any recently issued, but not yet effective; accounting standards that would have a significant
impact on the Company’s financial position or results of operations.



Note
3 – Going Concern



The
accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and
the satisfaction of liabilities in the normal course of business. At June 30, 2017, the Company had a stockholders’ deficiency
of $1,484,909 and a working capital deficit of $1,560,451. In addition, the Company has generated operating losses since inception
and has notes payable that are currently in default. These factors, among others, raise substantial doubt about the ability of
the Company to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the successful
execution of its operating plan which includes increasing sales of existing products while introducing additional products and
services, controlling operation expenses, negotiating extensions of existing loans and raising either debt or equity financing.
There is no assurance that we will be able to increase sales or to obtain or extend financing on terms acceptable to us or at
all or successfully execute any of the other measures set forth in the previous sentence.



Note
4 – Note Receivable



On
August 11, 2015, the Company loaned $150,000 to an unrelated person who is one of the convertible noteholders referred to in Note
6. The note accrues interest at the highest lawful rate, but not more the 20% per annum, the Company is accruing interest at 10%
per annum based on California usury rates. The principal amount was repaid on February 16, 2017, but accrued interest of $20,836
remains unpaid at June 30, 2017.



Note
5 – Convertible Notes Payable



The
following is a description of convertible notes payable at June 30, 2017:



On
August 20, 2015, the Company entered into a convertible promissory note in the principal amount of $400,000 to a then-related
party, which was reduced to $360,000 as the result of a prepayment. The note bears interest at 0.28% per annum. It originally
matured on March 4, 2015, but its maturity was extended to September 14, 2016, as described below. The note is subject to acceleration
in the event of certain events of default, contains certain restrictive covenants, and is secured by a pledge of all the membership
units in D&C. The note provided that if an event of default were to occur, the unpaid principal amount and interest accrued
thereon would be convertible into shares of the Company’s common stock at a conversion price per share equal to 50% of the
average daily closing price for 3 consecutive trading days ending on the trading day immediately prior to the conversion date.
The note was in default when it was not paid on March 4, 2015. On August 20, 2015, the holder of the note assigned it to an unrelated
third party and on September 14, 2015, the maturity of the note was extended to September 14, 2016, the holder waived all events
of default and any right to receive interest at the default rate, and the Company agreed that the holder could convert the principal
and interest of the note into common stock, notwithstanding the cure of defaults. On September 14, 2016, the maturity of this
note was extended to September 14, 2017. On August 28, 2015, the holder converted $50,000 of principal of the note into 428,571,429
shares of common stock and on March 10, 2016, the holder converted $60,000 of principal of the note into 189,513,580 shares of
common stock.





8









During
the three months ended June 30, 2017, there were no conversions of this note. The principal balance of the note at June 30, 2017,
was $250,000.





The
Company entered into a convertible promissory note, dated December 15, 2015, in favor of the unrelated party referred to above
in the principal amount of $8,000. This note is convertible into shares of the Company’s common stock at a conversion price
equal to the average of the daily closing price for a share of Common Stock for the 3 consecutive trading days ending on the trading
day immediately prior to the day on which a notice of conversion is delivered. The note matured on December 27, 2016, and bears
interest at the highest lawful rate, but not more than 20% per annum. The Company is currently negotiating an extension of the
maturity date.



The
Company made two convertible promissory notes, one dated February 11, 2016, and the other dated April 25, 2016, in favor of the
unrelated party referred to above, each in the principal amount of $7,500. Each note is due 1 year after the date on which it
was made, bears simple interest at the rate of 20 percent per annum and is convertible into shares of Common Stock at a conversion
price per share equal to 50% of the average daily closing price for 3 consecutive trading days ending on the trading day immediately
prior to the conversion date. The Company is currently negotiating an extension of the maturity dates.



The
Company has determined that the conversion feature embedded in the notes described above contain a potential variable conversion
amount which constitutes a derivative which has been bifurcated from the note and recorded as a derivative liability at fair value,
with a corresponding discount recorded to the associated debt. The excess of the derivative value over the face amount of the
note is recorded immediately to interest expense at inception. The above notes are presented net of a discount of $493 at June
30, 2017, on the accompanying balance sheet. The Company used the Black-Scholes-Merton valuation model to value the conversion
features using the expected life of each note, average volatility rate of approximately 396% and a discount rate of 0.52%



A
series of promissory note conversion agreements that the Company entered into during 2014 with 10 unaffiliated persons in the
aggregate amount of $224,500. These notes are convertible into shares of the Company’s common stock at a conversion price
of $0.05 per share. The loans are non-interest bearing and have no stated maturity date. During the year ended December 31, 2016,
the Company entered into agreements with four of the individuals in which the Company agreed to pay to them an additional amount
equal to the current principal balance (which aggregated $32,000), which was recorded as interest expense. The notes were amended
such that the Company agreed to repay the new balance over 10 monthly equal installments. The Company repaid $25,900 during the
year ended December 31, 2016, and $0 during the three months ended June 30, 2017. There was a balance of $220,600 for all 10 of
these notes at June 30, 2017.



A
promissory note conversion agreement that the Company entered into with an unaffiliated persons in the amount of $10,000. This
note is convertible into shares of the Company’s common stock at a conversion price of $0.05 per share. The note bears interest
at 15% per annum and matured April 3, 2015. The Company is currently negotiating an extension of the maturity date.



Note
6 – Notes Payable



During
2014, the Company entered into a series of promissory notes with four unaffiliated persons in the original aggregate amount of
$457,000. During the year ended December 31, 2016, the Company repaid one of these notes in the original principal amount of $7,000.
These notes bear interest at rates ranging from 10% to 15% (with a weighted-average rate of 11.7%) and matured as follows:



|April 10,
    2015 |  |  | $ | 300,000 | 
|------------------ |  |  | - | ------- | 
|May 19, 2015       |  |  |   | 150,000 | 



These
notes are currently past due and the Company is negotiating an extension of their respective maturity dates.





9







On August 15, 2015, the Company entered into a promissory
note in the amount of $150,000 to an unrelated third party. The note bears interest at 0.48% per annum provided that the note is
paid on or before maturity date, or 2 percentage points over the Wall Street Journal Prime Rate, if not repaid on or before the
maturity date. This note matured on August 11, 2016. Upon an event of default, as defined in the note, interest shall be compounded
daily. The Company is currently negotiating an extension of the maturity date.



During the
year ended December 31, 2016, the Company entered into a capitalized equipment lease. The capital lease is payable in 24 monthly
installments of $2,000, including interest at the rate of 19.87% per annum.



Note
7 – Loan Payable - Shareholder



During the
year ended December 31, 2015, the Company received advances from one of its stockholders, who is a related party, to help finance
its operations. These advances are non-interest bearing and have no set maturity date. The balance at June 30, 2017, and December
31, 2016, was $83,494. The Company expects to repay these loans when cash flows become available.



Note
8 – Concentrations



For the
six months ended June 30, 2017, one of our customers accounted for approximately 17% of sales. During the six months ended June
30, 2016, one of our customers accounted for 10% of sales.



For the
six months ended June 30, 2017 and 2016, the Company purchased approximately 63% and 95% of its products from one distributor.



Note
9 – Commitments



The Company
is committed under an operating lease for its premises. The lease originally called for monthly payments of $6,300 plus 55% of
operating expenses until May 31, 2015. The lease was amended to provide for monthly payments of $7,500 plus 100% of operating
expenses thereafter, until the lease was to have expired June 30, 2016. On June 1, 2016, the lease was amended to extend its term
until June 30, 2018, without changing its other terms.



Note
10 – Subsequent Events



In
July 2017, the Company exchanged $412,600 of its debt, including interest, for 76,635,407 shares of Common Stock and retired
a convertible promissory note, of which $250,000 was outstanding.



ITEM
2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS



THE FOLLOWING
DISCUSSION SHOULD BE READ IN CONJUNCTION WITH THE COMPANY’S FINANCIAL STATEMENTS AND THE NOTES TO THOSE STATEMENTS AND OTHER FINANCIAL
INFORMATION APPEARING ELSEWHERE IN THIS REPORT.



Introduction



Acology
has no material assets other than all of the outstanding membership units of its two subsidiaries and has no plans to conduct
any business activities other than obtaining or guaranteeing financing for the businesses conducted by its subsidiaries or assisting
them in obtaining such financing.



Through
D&C Distributors LLC and D&C Printing LLC, we are in the business of selling and distributing patented containers that
can store, grind and shred pharmaceuticals, herbs, teas and other solids or liquids. We provide custom printing of labeling for
our products and products manufactured by others. We have commenced sales of humidity control inserts, hydroponic grow towers,
smell-proof bags and lighters and are actively developing markets for them. Our principal product is the Medtainer®.”
Sales of our Medtainer® products accounted for 86% of our revenue in 2016, as compared with 92% in 2015, 65% of our sales
in the quarter ended June 30, 2017, as compared with 87% of our sales in the quarter ended June 30, 2016. The most significant
components of revenues from our other products and services were printing services, which comprised 6% of our revenue in 2016,
and humidity control inserts, which we introduced in 2016, comprised approximately about 3% of our revenue for that year. In the
quarter ended June 30, 2017, sales of printing services and humidity control inserts comprised 7% and 14% of our revenue; in the
quarter ended June 30, 2016, sales of printing services and humidity control were each less than 5% of our revenue.



We market
directly to businesses through our phone room to the retail public through internet sales and, and to wholesalers and other businesses
who resell our products to other businesses and end users.





10







Some of
our products can be utilized for marijuana-related purposes. In light of the facts that the possession and use of marijuana have
been legalized, subject to varying restrictions, in many states and that several other states are considering such legalization,
we believe that our products may be of interest to a large number of users of marijuana in and we advertise our products on our
website and elsewhere as suitable for that purpose. However, since we do not seek information from our customers who are end users
as to how they intend to utilize our products and have no similar knowledge respecting end users of products sold through our
distributor, we are unable to determine the extent of its use in connection with the storage and grinding of marijuana or any
other purpose.



Acology
was incorporated on September 9, 1997, in the State of Florida. Acology has two operating subsidiaries, D&C Distributors LLC,
which Acology acquired on March 28, 2014, and which commenced operations on January 29, 2013, and D&C Printing LLC, which
was formed and commenced operations on April 14, 2015.



RESULTS
OF OPERATIONSTHREE MONTHS ENDED JUNE 30, 2017COMPARED TO THREE MONTHS ENDED JUNE 30, 2016



Three
Months Ended June 30, 2017, Compared with Three Months Ended June 30, 2016



Sales:Our
sales for the three months ended June 30, 2017, were $545,205, from which we earned a gross profit of $360,381. Our sales for
the three months ended June 30, 2016, were $427,026, from which we earned a gross profit of $247,431.



Operating
Expenses:For the three months ended June 30, 2017, total operating expenses of $374,796 were incurred, including $365,070
for general and administrative expenses, of which $35,404 was paid to each of Mr. Fairbrother and Mr. Heldoorn as officers’
compensation, and $9,726 for advertising and marketing. For the three months ended June 30, 2016, total operating expenses of
$292,891 were incurred, including $177,139 for general and administrative expenses, of which $38,717 and $30,000 were paid to
Mr. Fairbrother and Mr. Heldoorn, respectively, as officers’ compensation, and $115,752 for advertising and marketing. The
principal reasons for the increase in general and administrative expense of $187,931 in the later period was due to an increase
in payroll, professional fees. Advertising and marketing decreased by $106,026 in the later period because we have cut our advertising
due to our increase in organic growth.



Loss
from Operations.Loss from operations decreased from $45,460 for the three months ended June 30, 2016, to $14,415 for
the three months ended June 30, 2017, mainly due to the increase in gross profit of $118,179.



Other Expenses.During
the three months ended June 30, 2017, and 2016, we incurred interest expense of $15,464 and $79,725, respectively. Interest expense
was lower in the later period because the accounting treatment of the excess of the fair value of the embedded conversion feature
of the note over its principal amount, which excess is charged as interest upon inception, was a higher amount in 2016 than for
the amount of convertible debt issued in 2017, which contained an embedded conversion feature. We incurred no gain on extinguishment
of debt during the three months ended June 30, 2017. We incurred $128,527 of gain on change in fair value of derivative during
the three months ended June 30, 2017, as the result of a change in the fair value of the embedded conversion feature of a note
over its principal amount, which excess is charged as interest upon inception, versus $34,571 during the three months ended June
30, 2016.



Net Income
(Loss):For the reasons set forth above, we recorded net income $98,645 for the three months ended June 30, 2017, as
compared with a net loss of $90,614 for the three months ended June 30, 2016.



Six
Months Ended June 30, 2017, Compared with Six Months Ended June 30, 2016



Sales:Sales for the six months ended June 30, 2017, were $1,090,035, from which we earned a gross profit of $751,311. Sales for
the six months ended June 30, 2016, were $962,328, from which we earned a gross profit of $696,163.



Operating
Expenses:For the six months ended June 30, 2017, total operating expenses of $775,421 were incurred, including $734,593
for general and administrative expenses, of which $69,305 was paid to each of Mr. Fairbrother and Mr. Heldoorn as officers’
compensation, and $40,828 for advertising and marketing. For the six months ended June 30, 2016, total operating expenses of $764,263
were incurred, including $567,678 for general and administrative expenses, of which $74,299 and $60,000 were paid to Mr. Fairbrother
and Mr. Heldoorn, respectively, as officers’ compensation, and $196,585 for advertising and marketing. The principal reasons
for the increase in general and administrative expense of $166,915 in the later period was due to an increase in payroll, professional
fees. Advertising and marketing decreased by $155,757 in the later period because we have cut our advertising due to our increase
in organic growth.



Loss
from Operations.Loss from operations decreased from $68,100 for the six months ended June 30, 2016, to $24,110 for the
six months ended June 30, 2017, mainly due to the increase of gross profit of $55,148.





11







Other Expenses.During
the six months ended June 30, 2017, and 2016, we incurred interest expense of $33,880 and $163,234, respectively. Interest expense
was lower in the later period because the accounting treatment of the excess of the fair value of the embedded conversion feature
of the note over its principal amount, which excess is charged as interest upon inception, was higher in 2016 than in 2017, which
contained an embedded conversion feature. We incurred no gain on extinguishment of debt during the six months ended June 30, 2017.
In addition, we recorded a gain of $164,515 on change in fair value of derivative during the six months ended June 30, 2017, as
the result of a change in the fair value of the embedded conversion feature of a note over its principal amount, which excess
is charged as interest upon inception, versus $95,549 during the six months ended June 30, 2016.



Net Income
(Loss):For the reasons set forth above, we recorded net income $106,525 for the six months ended June 30, 2017, as compared
with net loss of $119,243 for the six months ended June 30, 2016.



LIQUIDITY
AND CAPITAL RESOURCES



Liquidity
and Capital Resources



As of December
31, 2016, we had $24,452 in cash and accounts receivable of $67,034, and as of June 30, 2017, we had $629 in cash and accounts
receivable of $97,829. We commenced business in January 2013. Our sales grew over the course of 2013, averaging 11,500 units per
month for 2013. During the year ended December 31, 2014, we sold approximately 180,000 units. During the year ended December 31,
2015, we sold an approximately 314,000 units. During the year ended December 31, 2016, we sold approximately 419,000 units of
our Medtainer® products and 160,000 units of our other products. We sold approximately 104,000 units of our Medtainer®
products and approximately 147,000 units of our other products during the three months ended June 30, 2017. Revenues from printing
services have grown from $37,000 in the year ended December 31, 2015, to $112,208 in the year ended December 31, 2016; revenues
were $38,300 during the three months ended June 30. 2017. Sales of humidity control inserts were $76,592 during the three months
ended June 30, 2017, compared with $3539 in the three months ended June 30, 2016. During the three months ended June 30, 2017,
we did not borrow.



We have
a current inventory of approximately 154,000 containers, which we believe will be sold for approximately $710,000 and an inventory
of 120,000 units of our other products, which we believe will be sold for approximately $320,000.



In July
2017, the Company exchanged $412,600 of its debt, including accrued interest, for
_76,635,407 shares of Common Stock and retired a convertible promissory note, on
which $250,000 was outstanding, thereby reducing its obligations for borrowed money to _$879,401,
of which $879,401 is past due, thereby reducing its funding requirements. As a result,
the Company believes that it will require approximately $1,000,000 in additional
funding for the next 12 months, including $879,401 to repay loans that are past
due, assuming that the Company’s operating loss remains at the same level. The Company plans to seek extensions of overdue
loans, in which case the amount of such funding will be reduced, but cannot give assurances as to the extent that it will be successful.
The Company plans to fund its activities, during the balance of 2017 and beyond through loans from banks and other financial institutions
and the sale of debt or equity securities to private investors. While the Company believes that the reduction in debt makes it
more attractive to lenders and investors, it can give no assurance that it will be successful in so doing or that such funding,
if available, can be obtained on acceptable terms.



The Company
has devoted, and Management believes that the Company should continue to devote, manpower and capital to increasing its sales
to the extent that it is available and prudent. For this reason, it has increased its sales staff from two 2 in 2013 to 18 today.
Management further believes that increased sales will ultimately exceed operating expenses. The Company expects the reduction
in indebtedness and the associated reduction in gain in fair value of derivative will improve its net income, but this will be
offset by a gain on extinguishment of debt associated with $250,000 of retired indebtedness. However, as indicated in note 3 of
the Notes to Financial Statements, there are substantial doubts as to the ability of the Company to continue as a going concern
and Management recognizes that the Company can take measures to increase sales only within the parameters set forth therein. Our
ability to continue as a going concern is dependent on the successful execution of our operating plan, which includes increasing
sales of existing products while introducing additional products and services, controlling operation expenses, negotiating extensions
of existing loans and raising either debt or equity financing. During 2016 and during the six months ended June 30, 2017, we increased
sales of our Medtainer ®products increased sales of printing services and introduced new products, resulting
in increased revenues.



The Company’s
revenues have grown every year since in commenced business. In 2013, our sales were $254,992; in 2014, they were $460,756; in
2015, they were $1,441,441; and in 2016, they were $1,975,923. We reversed from our net loss from $90,614 for the three months
ended June 30, 2016, to a net profit of $98,648 for the three months ended June 30, 2017. We hope that we can improve these results
in the balance of 2017 and beyond, but cannot assure that we will be able to do so.



We can give
no assurance that any of the funding described above will be available on acceptable terms, or available at all. If we are unable
to raise funds in sufficient amount, when required or on acceptable terms, we may have to significantly reduce, or discontinue,
our operations. To the extent that we raise additional funds by issuing equity securities or securities that are convertible into
Acology’s equity securities, its shareholders may experience significant dilution.





12







Off-Balance
Sheet Arrangements.



We currently
do not have any off-balance sheet arrangements.



ITEM
3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK



We are a
smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide information
under this item.



ITEM
4. CONTROLS AND PROCEDURES





Evaluation
of Disclosure Controls and Procedures

Our
management, with the participation of our Principal Executive Officer and Principal Financial Officer, has evaluated the effectiveness
of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act as
of June 30, 2017. Based on this evaluation, our Principal Executive Officer and Principal Financial Officer concluded that these
disclosure controls and procedures were not effective as of such date, at a reasonable level of assurance, in ensuring that the
information required to be disclosed by our company in the reports we file or submit under the Exchange Act is: (i) accumulated
and communicated to our management (including the Principal Executive Officer and Principal Financial Officer) in a timely manner,
and (ii) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.



Evaluation
of Internal Controls



Our management
is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in
Exchange Act Rules 13a-15(f). Under the supervision and with the participation of our management, including our Chief Executive
Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting
based on the criteria in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations
of the Treadway Commissionas of the end of the period covered by this report. Based on that evaluation, our Principal
Executive Officer and Principal Financial Officer concluded that there was a material weakness in our disclosure controls and
procedures as of the end of the period covered by this report because the information required to be disclosed by us in reports
filed under the Exchange Act was not being (i) recorded, processed, summarized and reported within the time periods specified
in the SEC’s rules and forms and (ii) accumulated and communicated to our Principal Executive Officer and Principal
Financial Officer, as appropriate to allow timely decisions regarding disclosure. We are a growing company and we currently lack
documented procedures included documentation related to testing of processes, data validation procedures from the systems into
the general ledger, testing of systems, validation of results, disclosure review, and other analytics. Furthermore, we lacked
sufficient personnel to properly segregate duties. A controls system cannot provide absolute assurance, however, that the objectives
of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances
of fraud, if any, within a company have been detected.



Remediation
Plan



Management
has been actively engaged in developing a remediation plan to address the above mentioned material weakness. Implementation of
the remediation plan is in process and consists of establishing a formal review process As of June 30, 2017, management had not
yet completed these remediation efforts. Management believes the foregoing efforts will effectively remediate the material weakness.
As we continue to evaluate and work to improve our internal control over financial reporting, management may execute additional
measures to address potential control deficiencies or modify the remediation plan described above. Management will continue to
review and make necessary changes to the overall design of our internal control.



Changes
in Internal Control over Financial Reporting



There was
no change in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of
1934, as amended) during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our
internal control over financial reporting.



PART II
- OTHER INFORMATION



ITEM 1. LEGAL PROCEEDINGS



We are not
a party to nor do we expect the institution of any litigation by or against us.



ITEM 1A.
RISK FACTORS



We are a
smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide information
under this item.



ITEM 2. UNREGISTERED SALES OF
EQUITY SECURITIES AND USE OF PROCEEDS.



In July
2017, the Company entered into agreements with 11 persons under which they exchanged
$412,600 principal amount of convertible and nonconvertible debt, including accrued
interest of $131,500 for 76,635,407
shares of the Company’s common stock. The Company believe that the sales of these shares by reason of the exchange was exempt
from registration under the Securities Act of 1933 because they were transactions by an issuer not involving a public offering
under Section 4(a)(2) thereof.





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ITEM 3. DEFAULTS UPON SENIOR
SECURITIES



None.



ITEM 4. (REMOVED AND RESERVED).



ITEM 5. OTHER INFORMATION



None.



ITEM 6. EXHIBITS



|EXHIBIT |  |                                                                                    
|------- |  | -----------------------------------------------------------------------------------
|NUMBER  |  | DESCRIPTION                                                                        
|        |  |                                                                                    
|31.1    |  | Certification of Principal Executive Officer pursuant to Sarbanes-Oxley Section 302
|32.1    |  | Certification of Chief Executive Officer pursuant to Sarbanes-Oxley Section 906    







14







SIGNATURES



Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this amended report to be signed
on its behalf by the undersigned thereunto duly authorized.





|                         |     |                                               | 
|------------------------ | --- | --------------------------------------------- | 
|                         | By: | /s/
    Curtis Fairbrother                    | 
|Date:  November 24, 2017 |     | Name: Curtis Fairbrother                     
|                         |     | Title: Chief Executive Officer,
    Principal
|                         |     | Accounting Officer, Director                 



15