UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                   FORM 10-QSB

(MARK ONE)

|X|      QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
         SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended June 30, 2004


|_|      TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
         SECURITIES EXCHANGE ACT OF 1934

                  For the transition period from         to

                        Commission file number 000-50348
                                              -----------

                       MILLSTREAM ACQUISITION CORPORATION
        (Exact Name of Small Business Issuer as Specified in Its Charter)

                  Delaware                          06-1688360
          (State of Incorporation)      (I.R.S. Employer Identification No.)

     435 Devon Park Drive, Bldg. 400              (610) 293-2511
        Wayne, Pennsylvania 19087            (Issuer's Telephone Number,
 (Address of Principal Executive Offices)       Including Area Code)


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

      State the number of shares  outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: 4,775,000 as of July 30, 2004

      Transitional small business disclosure format.   Yes  |_|  No |X|


<PAGE>



                       MILLSTREAM ACQUISITION CORPORATION
                    (a corporation in the development stage)

                                FORM 10-QSB INDEX
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<CAPTION>

<S>                                                                                                                     <C>


                                                                                                                  Page No.
                                                                                                                 -----------

Part I.        FINANCIAL INFORMATION:

               Item 1 - Financial Statements

                        Consolidated Balance Sheets at June 30, 2004 (Unaudited) and December 31, 2003                  2

                        Consolidated Statements of Operations (Unaudited) for the Three Months and Six
                        Months Ended June 30, 2004, the Period From April 11, 2003 (Inception) to June
                        30, 2003 and Cumulative From April 11, 2003 (Inception) to June 30, 2004                        3

                        Consolidated Statements of Cash Flows (Unaudited) for the Six Months Ended June
                        30, 2004, the Period From April 11, 2003 (Inception) to June 30, 2003 and
                        Cumulative From April 11, 2003 (Inception) to June 30, 2004                                     4

                        Notes to Unaudited Consolidated Financial Statements                                            5

               Item 2 - Plan of Operations                                                                              9

               Item 3 - Controls and Procedures                                                                        11


Part II.       OTHER INFORMATION:

               Item 6 - Exhibits and Reports on Form 8-K                                                               12

               Signature Page                                                                                          14

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                                       1


<PAGE>


<TABLE>
<CAPTION>

<S>                                                                             <C>                   <C>


                         PART I - FINANCIAL INFORMATION

                          ITEM 1 - FINANCIAL STATEMENTS

                       MILLSTREAM ACQUISITION CORPORATION
                    (a corporation in the development stage)

                           CONSOLIDATED BALANCE SHEETS


                                                                                    (Unaudited)
                                                                                      June 30,           December 31,
                                                                                        2004                 2003
                                                                                --------------------- -------------------
 ASSETS
 Cash and cash equivalents                                                      $             62,939  $           557,123
 Investments held in trust                                                                20,845,444           20,751,198
 Prepaid acquisition costs                                                                   467,587                    -
 Prepaid expenses and other current assets                                                    43,000               89,270
                                                                                --------------------- -------------------
      Total assets                                                              $         21,418,970  $        21,397,591
                                                                                ===================== ===================

 LIABILITIES AND STOCKHOLDERS' EQUITY
 Current Liabilities:
    Accounts payable                                                            $            147,462  $            18,815
    Accrued expenses                                                                          15,000               24,250
                                                                                --------------------- -------------------
      Total current liabilities                                                              162,462               43,065
                                                                                --------------------- -------------------

 Common stock, subject to possible redemption, 804,598 shares at
    conversion value                                                                       4,103,450            4,103,450

 Commitment

 Stockholders' Equity:
    Preferred stock, $.0001 par value, authorized 1,000,000 shares; none                           -                    -
       issued
    Common stock,  $.0001 par value,  authorized  20,000,000 shares;  issued and
       outstanding 3,970,402 shares, net of 804,598 shares subject to
       possible redemption                                                                       397                  397
    Additional paid-in capital                                                            17,338,918           17,338,918
    Deficit accumulated during development stage                                            (186,257)             (88,239)
                                                                                --------------------- -------------------
      Total stockholders' equity                                                          17,153,058           17,251,076
                                                                                --------------------- -------------------
      Total liabilities and stockholders' equity                                $         21,418,970  $        21,397,591
                                                                                ===================== ===================


                         See   accompanying   notes   to   unaudited   financial statements.

</TABLE>

                                       2


<PAGE>


                       MILLSTREAM ACQUISITION CORPORATION
                    (a corporation in the development stage)



                CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)


<TABLE>
<CAPTION>

<S>                                             <C>               <C>                  <C>                 <C>



                                                                     Period From                            Cumulative From
                                                Three Months        April 11, 2003                           April 11, 2003
                                                    Ended           (Inception) to     Six Months Ended      (Inception) to
                                                June 30, 2004       June 30, 2003        June 30, 2004        June 30, 2004
                                              ------------------  ------------------- ------------------- --------------------
General and administrative expenses             $        81,592                    -   $         193,110   $          348,692
                                              ------------------  ------------------- ------------------- --------------------
       Operating loss                                   (81,592)                   -            (193,110)            (348,692)

Other income:
       Interest income                                      103                    -                 846                1,741
       Interest on trust fund investment                 48,452                    -              94,246              160,694
                                              ------------------  ------------------- ------------------- --------------------
       Total other income                                48,555                    -              95,092              162,435
                                              ------------------  ------------------- ------------------- --------------------
 Net loss                                       $       (33,037)                   -   $         (98,018)  $         (186,257)
                                              ==================  =================== =================== ====================





                                                                     Period From                            Cumulative From
                                                Three Months        April 11, 2003                          April 11, 2003
                                                    Ended           (Inception) to     Six Months Ended     (Inception) to
                                                June 30, 2004       June 30, 2003        June 30, 2004       June 30, 2004
                                              ------------------  ------------------- ------------------- --------------------
 Weighted average shares of common
   stock outstanding

       Basic and diluted                              4,775,000              750,000           4,775,000            4,775,000
                                              ==================  =================== =================== ====================

  Loss per common share

       Basic and diluted                        $          (.01)                   -   $            (.02)  $             (.04)
                                              ==================  =================== =================== ====================


                         See   accompanying   notes   to   unaudited   financial statements.

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                                       3


<PAGE>

<TABLE>
<CAPTION>

<S>                                                                              <C>                <C>             <C>


                                             MILLSTREAM ACQUISITION CORPORATION
                                          (a corporation in the development stage)

                                       CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)


                                                                                                    Period From      Cumulative
                                                                                                     April 11,     From April 11,
                                                                                                        2003            2003
                                                                                Six Months Ended   (Inception) to  (Inception) to
                                                                                  June 30, 2004     June 30, 2003   June 30, 2004
                                                                               -----------------------------------------------------
Cash flows from operating activities:
Net loss                                                                         $         (98,018)                 $      (186,257)
Adjustments to reconcile net loss to net cash used in operating activities:
   Change in operating assets and liabilities:
    Decrease (increase) in prepaid expenses and other current assets                        46,270                          (43,000)
    (Decrease) increase in accounts payable and accrued expenses                           (27,712)                          15,353
                                                                               --------------------                 ----------------
      Net cash used in operating activities                                                (79,460)                        (213,904)
                                                                               --------------------                 ----------------

Cash flows from investing activities:
Investments held in trust fund                                                             (94,246)                     (20,845,444)
Prepaid acquisition costs                                                                 (320,478)                        (320,478)
                                                                               --------------------                 ----------------
      Net cash used in investing activities                                               (414,724)                     (21,165,922)
                                                                               --------------------                 ----------------

Cash flows from financing activities:
Proceeds from sale of shares of common stock to initial stockholders                            --     $     25,039          25,039
Proceeds from note payable, shareholder                                                         --           35,000          35,000
Repayment of note payable, shareholder                                                          --               --         (35,000)
Costs associated with initial public offering                                                   --          (36,562)             --
Proceeds from public stock offering of 4,025,000 units, net of underwriting
   discount and offering expenses                                                               --               --      21,417,726
                                                                               -----------------------------------------------------
      Net cash provided by financing activities                                                 --           23,477      21,442,765
                                                                               -----------------------------------------------------

Net (decrease) increase in cash and cash equivalents                                      (494,184)          23,477          62,939
Cash and cash equivalents at beginning of period                                           557,123               --              --
                                                                               -----------------------------------------------------
Cash and cash equivalents at end of period                                      $           62,939   $       23,477  $       62,939
                                                                               =====================================================



                         See   accompanying   notes   to   unaudited   financial statements.


</TABLE>


                                       4


<PAGE>


                       MILLSTREAM ACQUISITION CORPORATION
                    (a corporation in the development stage)

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1.  Basis of Presentation

The  financial  statements  are unaudited and include the accounts of Millstream
Acquisition Corporation (a corporation in the development stage) ("the Company")
and its inactive subsidiary, N Merger L.L.C.

In the opinion of management,  all adjustments  (consisting of normal  accruals)
have been made that are necessary to present  fairly the  financial  position of
the Company as of June 30, 2004 and the results of its  operations  and its cash
flows for the three  months and six  months  ended June 30,  2004.  The  Company
commenced  operations  effective  August 29,  2003.  Operating  results  for the
interim  period  presented are not  necessarily  indicative of the results to be
expected for a full year.  All activity  through  August 28, 2003 related to the
Company's  formation  and  preparation  of its  initial  public  offering  ("the
Offering").

The  statements  and related notes have been prepared  pursuant to the rules and
regulations of the U.S. Securities and Exchange Commission. Accordingly, certain
information and footnote  disclosures  normally included in financial statements
prepared in accordance with generally accepted  accounting  principles have been
omitted pursuant to such rules and regulations.

2.  Organization and Business Operations

The  Company  was  incorporated  in  Delaware on April 11, 2003 as a blank check
company  whose  objective is to acquire an  operating  business.  The  Company's
initial  stockholders  purchased  750,000 common shares,  $.0001 par value,  for
$25,039 on April 14, 2003.

The  registration  statement for the Offering was declared  effective August 25,
2003.  The Company  consummated  the  Offering on August 28, 2003 and raised net
proceeds of  $21,417,726.  The Company's  management has broad  discretion  with
respect  to the  specific  application  of the  net  proceeds  of the  Offering,
although  substantially  all of the net proceeds of the Offering are intended to
be  generally  applied  toward  consummating  a  business  combination  with  an
operating  business  ("Business  Combination").  There is no assurance  that the
Company will be able to successfully effect a Business Combination.  $20,685,000
of net proceeds of the Offering are being held in a trust account ("Trust Fund")
and invested in government  securities until the earlier of (i) the consummation
of the Company's first Business  Combination or (ii) liquidation of the Company.
The Trust Fund indenture limits investments to U.S.  government  securities with
maturities of 180 days or less.  The  remaining  proceeds may be used to pay for
business,  legal and accounting due diligence on  prospective  acquisitions  and
continuing general and administrative expenses.

The Company,  after  signing a definitive  agreement  for the  acquisition  of a
target business,  will submit the transaction for stockholder  approval.  In the
event that  stockholders  owning 20% or more of the outstanding stock excluding,
for this  purpose,  those persons who were  stockholders  prior to the Offering,
vote against the Business  Combination,  the  Business  Combination  will not be
consummated.  All of the Company's stockholders prior to the Offering, including
all of the officers and directors of the Company ("Initial Stockholders"),  have
agreed to vote their 750,000 shares of common stock in accordance  with the vote
of the majority of all other stockholders of the Company ("Public Stockholders")
with respect to any Business  Combination.  After  consummation of the Company's
first Business  Combination,  all of these voting  safeguards  will no longer be
applicable.


                                       5


<PAGE>


                       MILLSTREAM ACQUISITION CORPORATION
                    (a corporation in the development stage)

       NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


2.  Organization and Business Operations (continued)

With respect to the first Business Combination that is approved and consummated,
any Public  Stockholder  who voted against the Business  Combination  may demand
that the Company redeem his shares.  The per share  redemption  price will equal
the  amount  in the  Trust  Fund as of the  record  date  for  determination  of
stockholders  entitled to vote on the Business Combination divided by the number
of shares of common stock held by Public Stockholders at the consummation of the
Offering.  Accordingly,  Public  Stockholders  holding  19.99% of the  aggregate
number of shares owned by all Public  Stockholders  may seek redemption of their
shares in the event of a Business  Combination.  Such  Public  Stockholders  are
entitled to receive their per share interest in the Trust Fund computed  without
regard to the shares held by Initial Stockholders. Accordingly, a portion of the
net proceeds  from the Offering has been  classified  as common stock subject to
possible redemption in the balance sheet.

The Company's Certificate of Incorporation provides for mandatory liquidation of
the Company,  without stockholder  approval,  in the event that the Company does
not  consummate  a Business  Combination  within 18 months  from the date of the
consummation  of the  Offering  (February  28,  2005),  or 24  months  from  the
consummation  of the Offering  (August 28, 2005) if certain  extension  criteria
have been  satisfied.  In the event of  liquidation,  it is likely  that the per
share  value  of  the  residual  assets  remaining  available  for  distribution
(including  Trust Fund assets) will be less than the offering price per share in
the Offering due to costs  related to the Offering,  general and  administrative
expenses incurred prior to the liquidation event. There will be no distributions
in respect to the Company's warrants (see Note 5). On March 9, 2004, the Company
entered into a definitive merger agreement (see Note 6).

3.  Investments Held in Trust

Investments held in trust as of June 30, 2004 are primarily  comprised of a zero
coupon United States treasury bill with a face value of $20,845,000 purchased at
a  discount  of  99.9269%  due July 1,  2004 and are  carried  on the  Company's
financial  statements at $20,845,444,  which includes  accreted interest and the
trust cash account.

4.  Earnings per Share

The following table sets forth the computation of basic and diluted earnings per
share:

<TABLE>
<CAPTION>
<S>                                                               <C>               <C>               <C>

                                                                                                  Cumulative From
                                                             Three Months                          April 11, 2003
                                                                Ended          Six Months Ended    (Inception) to
                                                            June 30, 2004       June 30, 2004       June 30, 2004
                                                           -------------------------------------------------------

Numerator:  Net loss                                           $ (33,037)         $ (98,018)         $ (186,257)

Denominator:  Average common shares outstanding                 4,775,000         4,775,000           4,775,000

Basic and diluted earnings per share                           $     (.01)        $    (.02)         $     (.04)

</TABLE>

                                       6


<PAGE>


                       MILLSTREAM ACQUISITION CORPORATION
                    (a corporation in the development stage)

       NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


4.  Earnings per Share (continued)

Operations  commenced  subsequent to the  Offering,  therefore,  average  common
shares  outstanding  reflect shares issued in the Offering.  No computation  for
diluted earnings per share was prepared for the Redeemable Common Stock Purchase
Warrants,  the underwriters' option (see Note 5) and other warrants (see Note 8)
that were  outstanding  at June 30, 2004 to purchase an  aggregate  of 9,145,000
shares of common stock at $5.00 per share,  $6.00 per share and $8.50 per share,
respectively,  because exercise of the warrants and  underwriters'  option would
have had an antidilutive effect on loss per share.

5.  Stockholders' Equity

The Offering
The Company sold 4,025,000 units  ("Units") in the Offering,  which included all
of the 525,000 Units subject to the underwriters'  over-allotment  option.  Each
Unit consists of one share of the Company's common stock,  $.0001 par value, and
two  Redeemable  Common  Stock  Purchase  Warrants  ("Warrants").  Each  Warrant
entitles the holder to purchase from the Company one share of common stock at an
exercise  price of $5.00  commencing  the later of the  completion of a business
combination  with a target  business or August 25, 2004 and expiring  August 25,
2007.  The Warrants  will be  redeemable  at a price of $.01 per Warrant upon 30
days notice after the Warrants  become  exercisable,  only in the event that the
last  sale  price of the  common  stock is at least  $8.50  per share for any 20
trading days within a 30 trading day period ending on the third day prior to the
date on which notice of  redemption is given.  In connection  with the Offering,
the Company issued an option for $100 to the  representative of the underwriters
to purchase  350,000 Units at an exercise  price of $9.90 per Unit. The warrants
underlying such Units are exercisable at $6.00 per share, but otherwise have the
same terms and conditions as the Warrants.  Separate trading of the Common Stock
and Warrants underlying the Company's Units commenced on September 9, 2003.

Preferred Stock
The Company is  authorized to issue  1,000,000  shares of preferred  stock,  par
value  $.0001 per share,  with such  designations,  voting and other  rights and
preferences as may be determined from time to time by the Board of Directors. As
of June 30, 2004, no shares of preferred stock have been issued.

Common Stock Reserved
The Company has  9,145,000  shares of common stock  reserved  for issuance  upon
exercise of the Warrants and the underwriters' option.

6.  Merger

On March 9, 2004, the Company  entered into a definitive  merger  agreement with
NationsHealth Holdings, L.L.C. ("NationsHealth"), a privately held company based
in Sunrise,  Florida that  provides  medical  products and pharmacy  benefits to
Medicare  participants  and other  senior  citizens.  Upon  consummation  of the
merger,  Millstream will change its name to  NationsHealth,  Inc. As a result of
the merger, the members of NationsHealth will receive an aggregate of $3,000,000
and the membership interests in NationsHealth will be converted into


                                       7


<PAGE>


                       MILLSTREAM ACQUISITION CORPORATION
                    (a corporation in the development stage)

       NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

6.  Merger (continued)

shares of common  stock of the  Company.  Following  the merger,  the members of
NationsHealth  will own approximately  81.7% of the outstanding  common stock of
the combined  company.  The  consummation  of the merger is subject to customary
closing  conditions,  including  the  approval  of the merger  agreement  by our
stockholders. In addition, as the merger will constitute a Business Combination,
in order for us to consummate the merger, holders of less than 20% of the shares
of our common  stock may vote  against  the  merger  and elect to convert  their
shares of common stock into a pro rata share of the Trust Fund.

On April 9, 2004, the Company filed a  Registration  Statement on Form S-4/Proxy
Statement  with  the  Securities  and  Exchange  Commission.   The  Registration
Statement on Form S-4 will register the issuance of the securities  that will be
tendered  to the members of  NationsHealth  as merger  consideration.  The Proxy
Statement is for a special meeting of our stockholders at which our stockholders
will vote on the merger and the  adoption of a stock  incentive  plan.  Assuming
that  we  receive  the  requisite  vote  of  our  stockholders,   we  anticipate
consummating  the  merger  promptly  after the date of this  special  meeting of
stockholders. Amendments to the Registration Statement on Form S-4 were filed on
June 4,  2004  and  July 1,  2004.  On  August  9,  2004,  the  Company  filed a
Preliminary  Proxy  Statement on Schedule 14A with the  Securities  and Exchange
Commission.  On  August  13,  2004,  the  Company  withdrew  the  filing  of the
Registration  Statement on Form S-4 as the securities  issued in the merger will
be issued in a private  placement  transaction  and, thus,  registration of such
securities is not necessary.

7.  Commitment

The Company  presently  occupies  office  space  provided by an  affiliate of an
Initial Stockholder.  Such affiliate has agreed that, until the acquisition of a
target  business  by the  Company,  it will make the  office  space,  as well as
certain office and  secretarial  services,  available to the Company,  as may be
required  by the Company  from time to time.  The Company has agreed to pay such
affiliate $7,500 per month for such services commencing September 1, 2003.

8.  Warrants

On March 9, 2004,  the Company  granted  warrants to  purchase an  aggregate  of
45,000  shares of common stock at an exercise  price of $8.50 per share to three
consultants who assisted in the due diligence investigation of NationsHealth and
other  aspects of the merger.  The  consultants  are all  employed by  companies
affiliated  with directors of the Company.  The warrants are  exercisable  for a
period of seven  years  from the date on which the merger is  completed  and the
value of the warrants is not significant to the Company.

9.  Contingent Liabilities

The Company has incurred  approximately $140,000 of contingent fees and expenses
related to the merger (see Note 6). Final negotiated  amounts will be accrued at
such  time as they  become  fixed  and  determinable  and the  merger  has  been
consummated.


                                       8


<PAGE>


                           ITEM 2 - PLAN OF OPERATIONS


               CAUTIONARY STATEMENT FOR FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-QSB includes forward-looking  statements within
the  meaning of Section  27A of the  Securities  Act of 1933,  as  amended,  and
Section 21E of the  Securities  Exchange Act of 1934, as amended.  We have based
these  forward-looking  statements on our current  expectations  and projections
about future events. These  forward-looking  statements are subject to known and
unknown risks,  uncertainties and assumptions about us that may cause our actual
results,  levels of  activity,  performance  or  achievements  to be  materially
different  from  any  future  results,   levels  of  activity,   performance  or
achievements  expressed or implied by such forward-looking  statements.  In some
cases, you can identify forward-looking statements by terminology such as "may,"
"should,"   "could,"  "would,"   "expect,"  "plan,"   "anticipate,"   "believe,"
"estimate,"  "continue,"  or  the  negative  of  such  terms  or  other  similar
expressions.  Factors  that  might  cause or  contribute  to such a  discrepancy
include,  but are not limited to, those  described in our other  Securities  and
Exchange  Commission  filings,  including  our report on Form 10-KSB as filed on
February 13, 2004. The following  discussion  should be read in conjunction with
our Financial  Statements and related Notes thereto  included  elsewhere in this
report.

We were  formed  on April  11,  2003 to serve as a  vehicle  to effect a merger,
capital stock exchange,  asset acquisition or other similar business combination
that we believe  has  significant  growth  potential.  We intend to utilize  the
proceeds  of  our  initial  public  offering,  our  capital  stock,  debt  or  a
combination   of  cash,   capital  stock  and  debt,  in  effecting  a  business
combination.

We  consummated  our  initial  public  offering on August 28,  2003.  Operations
commenced August 29, 2003. $20,685,000 of the net proceeds of the Offering, plus
accrued  interest  thereon,  is held in trust  and the  remaining  proceeds  are
available to be used to provide for business, legal and accounting due diligence
on prospective  acquisitions and continuing general and administrative expenses.
We are  entitled  to use  substantially  all of the net  proceeds of our initial
public  offering  to  acquire  a  target  business,  including  identifying  and
evaluating prospective  acquisition  candidates,  selecting the target business,
and structuring,  negotiating and consummating the business combination.  To the
extent that our capital  stock is used in whole or in part as  consideration  to
effect a business  combination,  the proceeds held in the trust fund, as well as
any other net proceeds not expended,  will be used to finance the  operations of
the target business.

On  March  9,  2004,  we  entered  into a merger  agreement  with  NationsHealth
Holdings,  LLC, a provider of medical products and pharmacy benefits to Medicare
participants and other senior  citizens.  Pursuant to the merger  agreement,  NH
Merger, LLC, our wholly owned subsidiary, will merge with and into NationsHealth
and  NationsHealth  will be the  surviving  company.  Upon  consummation  of the
merger, NationsHealth will be our wholly owned subsidiary and we will change our
name to NationsHealth, Inc.

As a result  of the  merger,  the  members  of  NationsHealth  will  receive  an
aggregate of $3,000,000 and the membership  interests of  NationsHealth  will be
converted into shares of our common stock.  Following the merger, the members of
NationsHealth  will own approximately  81.7% of the outstanding  common stock of
the combined company.

Concurrently  with the execution of the merger  agreement,  Arthur Spector,  our
chairman,  president  and chief  executive  officer,  and  RGGPLS  Holding,  the
majority  member of  NationsHealth,  executed a governance  agreement  providing
generally  that the board of directors of the  combined  company will  initially
consist of eleven  members,  nine of whom are to be designated by RGGPLS Holding
and two of whom are to be designated by Mr.  Spector.  Also  concurrent with the
execution of the merger  agreement,  RGGPLS Holding  entered into a


                                       9


<PAGE>


stockholders  agreement  with GRH  Holdings,  a  member  of  NationsHealth.  The
stockholders  agreement  provides  that GRH Holdings  must vote a portion of the
shares of our common stock that GRH Holdings  receives in the merger as directed
by RGGPLS Holding.

Upon  completion  of the merger,  $2,000,000 of the funds held in the trust fund
will  be  transferred  to  an  escrow  agent.  If  NationsHealth   breaches  any
representation  or  warranty  contained  in the  merger  agreement,  or fails to
perform any covenant requiring performance prior to the merger, the escrow agent
will pay to our stockholders existing prior to the merger who have not exercised
their  conversion  rights the amount of losses that we experience as a result of
any such  breach,  up to a maximum  amount of  $2,000,000.  The  escrowed  funds
represent  the  exclusive  remedy for our  stockholders  with  regards to losses
incurred in connection with a breach by  NationsHealth.  The escrowed funds will
be  available  only to satisfy  claims  that are made  within one year after the
completion of the merger.

The  consummation  of the  merger is subject to  customary  closing  conditions,
including the approval of the merger agreement by our stockholders. In addition,
in order for us to consummate the merger, holders of less than 20% of the shares
of our common  stock may vote  against  the  merger  and elect to convert  their
shares of common  stock  into a pro rata  share of the trust  account in which a
substantial  portion of the net  proceeds of our  initial  public  offering  are
deposited. On April 9, 2004, we filed a Registration Statement on Form S-4/Proxy
Statement  with  the  Securities  and  Exchange  Commission.   The  Registration
Statement on Form S-4 will register the issuance of the securities  that will be
tendered  to the members of  NationsHealth  as merger  consideration.  The Proxy
Statement is for a special meeting of our stockholders at which our stockholders
will vote on the merger and the  adoption of a stock  incentive  plan.  Assuming
that  we  receive  the  requisite  vote  of  our  stockholders,   we  anticipate
consummating  the  merger  promptly  after the date of this  special  meeting of
stockholders. Amendments to the Registration Statement on Form S-4 were filed on
June 4,  2004  and  July 1,  2004.  On  August  9,  2004,  the  Company  filed a
Preliminary  Proxy  Statement on Schedule 14A with the  Securities  and Exchange
Commission.  On  August  13,  2004,  the  Company  withdrew  the  filing  of the
Registration  Statement on Form S-4 as the securities  issued in the merger will
be issued in a private  placement  transaction  and, thus,  registration of such
securities is not necessary.

Upon consummation of the merger,  Glenn Parker, M.D., chief executive officer of
NationsHealth,  will become chief executive officer of the combined company. The
executive  management  team  of the  combined  company  will  also  include  Tim
Fairbanks as chief financial  officer,  Robert Gregg as chief operating  officer
and Lewis Stone as president and chief information officer. We have entered into
employment  agreements with each of these individuals that will become effective
upon  consummation  of the  merger.  Arthur  Spector,  our  chairman  and  chief
executive  officer,  will serve as  Chairman  of the Board of  Directors  of the
combined company.

Net loss of  $33,037  reported  for the  quarter  ended June 30,  2004  consists
primarily  of $33,000  expense for  director  and officer  liability  insurance,
$22,500 expense for the monthly  administrative  services agreement,  $7,408 for
professional  fees and  $18,684  for other  expenses.  Income on the trust  fund
investment was $48,452 and other  interest  income was $103. Net loss of $98,018
reported  for the six months ended June 30, 2004  consists  primarily of $66,000
expense for director and officer  liability  insurance,  $45,000 expense for the
monthly  administrative  services  agreement,  $60,307 for professional fees and
$21,803 for other expenses.  Income on the trust fund investment was $94,246 and
other interest income was $846.


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<PAGE>


We received net proceeds of $21,417,726 in our initial  public  offering.  After
depositing  $20,685,000  in the trust fund,  we have used the balance of the net
proceeds totaling $732,726 as follows:

Acquisition related costs                                        $ 324,230
Directors and officers insurance policy for one year               132,000
Professional fees (attorneys, accountants, consultants)             71,000
Federal and state taxes, including franchise/capital stock taxes    15,130
Administrative services fee                                         82,500
Other operational costs                                             42,663
Remaining cash at July 31, 2004                                     65,203



Through July 31, 2004,  we have paid  $324,230 of costs  relating to the merger,
including  $250,000 to  NationsHealth  upon  execution of the merger  agreement.
NationsHealth  will reimburse us the sum of $250,000 if the merger  agreement is
terminated  under  certain   circumstances.   As  of  July  31,  2004,  we  have
approximately $65,000 in cash and cash equivalents, excluding the trust fund. We
believe that we have  sufficient  available  funds  outside of the trust fund to
operate until the merger is  consummated,  or, in the case of termination of the
merger and the  reimbursement  of the  $250,000,  we believe we have  sufficient
funds to operate through 2004 and into 2005.  Anticipating closure of the merger
within  two  months,  we  estimate  costs  of  approximately   $15,000  for  the
administrative  fee  payable  to 400  Building  LLC  ($7,500  per  month for two
months),  $10,000 of expenses in legal and accounting fees relating to quarterly
SEC  reporting  obligations  and  $40,000 for  merger-related  costs and general
corporate  working  capital.  To the extent  that  merger-related  costs  exceed
amounts available outside the trust fund, trust fund assets will be used to fund
the excess  costs of the merger if the  merger is  completed  and the trust fund
assets are released to us.

We are  obligated to pay to 400 Building  LLC, an  affiliate of Mr.  Spector,  a
monthly fee of $7,500 for general and  administrative  services through the date
the merger is consummated.  In addition, on April 28, 2003, Mr. Spector advanced
$35,000 to us, on a  non-interest  bearing  basis,  for payment on our behalf of
offering expenses. This loan was repaid in September 2003 out of proceeds of our
initial public offering.


                        ITEM 3 - CONTROLS AND PROCEDURES

Under the supervision and with the  participation  of our management,  including
our chief executive officer and chief financial  officer,  we have evaluated the
effectiveness  of the  design  and  operation  of our  disclosure  controls  and
procedures  as of June 30, 2004 (the  "Evaluation  Date"),  and,  based on their
evaluation,  our chief  executive  officer  and  chief  financial  officer  have
concluded that these controls and procedures were effective as of the Evaluation
Date.  There were no  significant  changes in our internal  controls or in other
factors that  significantly  affect these controls during the quarter ended June
30, 2004.

Disclosure  controls  and  procedures  (as  defined  in the  Exchange  Act Rules
13a-15(e) and 15d-15(e)) are controls and other  procedures that are designed to
ensure  that  information  required  to be  disclosed  in our  reports  filed or
submitted  under  the  Exchange  Act are  recorded,  processed,  summarized  and
reported,  within the time  periods  specified  in the  Securities  and Exchange
Commission's  rules.   Disclosure  controls  and  procedures  include,   without
limitation, controls and procedures designed to ensure that information required
to be disclosed in our reports filed under the Exchange Act is  accumulated  and
communicated  to  management  to  allow  timely  decisions   regarding  required
disclosures.


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                           PART II - OTHER INFORMATION

                    ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

(a)  EXHIBITS

Exhibit
  No.                          Description
-------  -----------------------------------------------------------------------
3.1      Amended and Restated Certificate of Incorporation (incorporated by
         reference to the Company's Registration Statement on Form S-1 filed on
         May 19, 2003).
3.2      By-laws (incorporated by reference to the Company's Registration
         Statement on Form S-1 filed on May 19, 2003).
4.1      Specimen Common Stock Certificate (incorporated by reference to
         Amendment No. 3 to the Company's Registration Statement on Form S-1
         filed on July 24, 2003).
4.2      Specimen Warrant Certificate (incorporated by reference to Amendment
         No. 1 to the Company's Registration Statement on Form S-1 filed on June
         27, 2003).
4.3      Form of Unit Purchase Option to be granted to Representative
         (incorporated by reference to Amendment No. 5 to the Company's
         Registration Statement on Form S-1 filed on August 1, 2003).
4.4      Form of Warrant Agreement between Continental Stock Transfer & Trust
         Company and the Registrant (incorporated by reference to Amendment No.
         4 to the Company's Registration Statement on Form S-1 filed on July 28,
         2003).
4.5      Specimen Unit Certificate (incorporated by reference to Amendment No. 3
         to the Company's Registration Statement on Form S-1 filed on July 24,
         2003).
4.6      Form of Stock Purchase Warrant Granted to Consultants.
9.1      Governance Agreement, dated as of March 9, 2004, among Millstream
         Acquisition Corporation, RGGPLS Holding, Inc. and Arthur Spector
         (incorporated by reference to the Company's Registration Statement on
         Form S-4 filed on April 9, 2004).
9.2      Stockholders Agreement, dated as of March 9, 2004, among Millstream
         Acquisition Corporation, RGGPLS Holding, Inc. and GRH Holdings, L.L.C.
         (incorporated by reference to the Company's Registration Statement on
         Form S-4 filed on April 9, 2004).
10.1     Letter Agreement among the Registrant, EarlyBirdCapital, Inc. and
         Arthur Spector (without schedules) (incorporated by reference to the
         Company's Registration Statement on Form S-1 filed on May 19, 2003).
10.2     Letter Agreement among the Registrant, EarlyBirdCapital, Inc. and Dr.
         Heinz C. Schimmelbusch (without schedules) (incorporated by reference
         to the Company's Registration Statement on Form S-1 filed on May 19,
         2003).
10.3     Letter Agreement among the Registrant, EarlyBirdCapital, Inc. and The
         Spector Family Trust (without schedules) (incorporated by reference to
         the Company's Registration Statement on Form S-1 filed on May 19,
         2003).
10.4     Letter Agreement among the Registrant, EarlyBirdCapital, Inc. and J.
         Brian O'Neill (without schedules) (incorporated by reference to the
         Company's Registration Statement on Form S-1 filed on May 19, 2003).
10.5     Form of Letter Agreement among the Registrant, EarlyBirdCapital, Inc.
         and each of Robert E. Keith and Don K. Rice (without schedules)
         (incorporated by reference to the Company's Registration Statement on
         Form S-1 filed on May 19, 2003).
10.6     Form of Investment Management Trust Agreement between Continental Stock
         Transfer & Trust Company and Registrant (incorporated by reference to
         Amendment No. 4 to the Company's Registration Statement on Form S-1
         filed on July 28, 2003).
10.7     Form of Stock Escrow Agreement between the Registrant, Continental
         Stock Transfer & Trust Company and the Initial Stockholders
         (incorporated by reference to Amendment No. 4 to the Company's
         Registration Statement on Form S-1 filed on July 28, 2003).
10.8     Form of Letter Agreement between 400 Building LLC and Registrant
         regarding administrative support (incorporated by reference to the
         Company's Registration Statement on Form S-1 filed on May 19, 2003).
10.9     Promissory Note dated April 28, 2003 in the principal amount of $35,000
         issued to Arthur Spector (incorporated by reference to the Company's
         Registration Statement on Form S-1 filed on May 19, 2003).


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<PAGE>


10.10    Warrant Purchase Agreement between Arthur Spector and EarlyBirdCapital,
         Inc. (incorporated by reference to Amendment No. 3 to the Company's
         Registration Statement on Form S-1 filed on July 24, 2003).
10.11    Letter Agreement among the Registrant, EarlyBirdCapital, Inc. and each
         of Arthur Spector, Dr. Heinz C. Schimmelbusch, The Spector Family
         Trust, J. Brian O'Neill, Robert E. Keith, Jr. and Don K. Rice
         (incorporated by reference to Amendment No. 3 to the Company's
         Registration Statement on Form S-1 filed on July 24, 2003).
10.12    Registration Rights Agreement among the Registrant and the Investors
         (incorporated by reference to Amendment No. 2 to the Company's
         Registration Statement on Form S-1 filed on July 21, 2003).
10.13    Letter Agreement among the Registrant, EarlyBirdCapital, Inc. and
         Robert E. Keith, Jr. (without schedules) (incorporated by reference to
         Amendment No. 3 to the Company's Registration Statement on Form S-1
         filed on July 24, 2003).
10.14    Letter Agreement among the Registrant, EarlyBirdCapital, Inc. and Don
         K. Rice (without schedules) (incorporated by reference to Amendment No.
         3 to the Company's Registration Statement on Form S-1 filed on July 24,
         2003).
10.15    Agreement and Plan of Merger, dated as of March 9, 2004 among
         Millstream Acquisition Corporation, N Merger L.L.C. and NationsHealth
         Holdings, L.L.C. (incorporated by reference to the Company's
         Registration Statement on Form S-4 filed on April 9, 2004).
10.16    Indemnification and Escrow Agreement, dated as of March 9, 2004, among
         Millstream Acquisition Corporation, RGGPLS Holding, Inc., Arthur
         Spector and Continental Stock Transfer & Trust Company (incorporated by
         reference to the Company's Registration Statement on Form S-4 filed on
         April 9, 2004).
10.17    Form of Employment Agreement, dated as of March 9, 2004, between Glenn
         M. Parker, M.D. and Millstream Acquisition Corporation (incorporated by
         reference to the Company's Registration Statement on Form S-4 filed on
         April 9, 2004).
10.18    Form of Employment Agreement, dated as of March 9, 2004, between Robert
         Gregg and Millstream Acquisition Corporation (incorporated by reference
         to the Company's Registration Statement on Form S-4 filed on April 9,
         2004).
10.19    Form of Employment Agreement, dated as of March 9, 2004, between Lewis
         Stone and Millstream Acquisition Corporation (incorporated by reference
         to the Company's Registration Statement on Form S-4 filed on April 9,
         2004).
10.20    Registration Rights Agreement, dated as of March 9, 2004, among
         Millstream Acquisitions Corporation, RGGPLS Holding, Inc., GRH Holdings
         LLC and Becton, Dickinson and Company (incorporated by reference to the
         Company's Registration Statement on Form S-4 filed on April 9, 2004).
31.1     Certification of Chief Executive Officer pursuant to Section 302 of the
         Sarbanes-Oxley Act of 2002
31.2     Certification of Chief Financial Officer pursuant to Section 302 of the
         Sarbanes-Oxley Act of 2002
32       Certification of Chief Executive Officer and Chief Financial Officer
         pursuant to Section 906 of the Sarbanes-Oxley Act of 2002


(b)  REPORTS ON FORM 8-K

         None.


                                       13


<PAGE>


                                   SIGNATURES

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



                                MILLSTREAM ACQUISITION CORPORATION
                                By: /s/ Arthur Spector
                                ---------------------------
                                Arthur Spector
                                Chairman, President and Chief Executive Officer


Date:  August 13, 2004





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