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 March 31, 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 April 30, 2004

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


<PAGE>


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<CAPTION>


<S>                                                                                                                    <C>

                       MILLSTREAM ACQUISITION CORPORATION
                    (a corporation in the development stage)

                                FORM 10-QSB INDEX


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

Part I.        FINANCIAL INFORMATION:

               Item 1 - Financial Statements (Unaudited)

                        Balance Sheet at March 31, 2004                                                                 2

                        Statement of Operations for the Quarter Ended March 31, 2004 and April 11, 2003
                        (Inception) to March 31, 2004                                                                   3

                        Statement of Cash Flows for the Quarter Ended March 31, 2004 and April 11, 2003
                        (Inception) to March 31, 2004                                                                   4

                        Notes to Unaudited Financial Statements                                                         5

               Item 2 - Plan of Operations                                                                              9

               Item 3 - Controls and Procedures                                                                        11


Part II.       OTHER INFORMATION:

               Item 2 - Changes in Securities and Small Business Issuer Purchases of Equity Securities                 12

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

               Signature Page                                                                                          15


                                       1
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</TABLE>

<TABLE>
<CAPTION>

<S>                                                                             <C>               <C>
                         PART I - FINANCIAL INFORMATION

                          ITEM 1 - FINANCIAL STATEMENTS

                       MILLSTREAM ACQUISITION CORPORATION
                    (a corporation in the development stage)


                                  BALANCE SHEET


                                                                               (Unaudited)
                                                                                 March 31,        December 31,
                                                                                    2004             2003
                                                                                ------------      ------------

ASSETS
Cash and cash equivalents                                                       $    142,631      $    557,123
Investments held in trust                                                         20,796,992        20,751,198
Prepaid acquisition costs                                                            402,774              --
Prepaid expenses                                                                      55,000            89,270
                                                                                ------------      ------------
     Total assets                                                               $ 21,397,397      $ 21,397,591
                                                                                ============      ============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
   Accounts payable                                                             $     71,852      $     18,815
   Accrued expenses                                                                   36,000            24,250
                                                                                ------------      ------------
     Total current liabilities                                                       107,852            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                                     (153,220)          (88,239)
                                                                                ------------      ------------
     Total stockholders' equity                                                   17,186,095        17,251,076
                                                                                ------------      ------------

     Total liabilities and stockholders' equity                                 $ 21,397,397      $ 21,397,591
                                                                                ============      ============




</TABLE>


            See accompanying notes to unaudited financial statements.


                                       2
<PAGE>


                       MILLSTREAM ACQUISITION CORPORATION
                    (a corporation in the development stage)



                       STATEMENT OF OPERATIONS (UNAUDITED)



                                           Quarter       April 11, 2003
                                            Ended        (Inception) to
                                           March 31,        March 31,
                                             2004             2004
                                         -----------      -----------


General and administrative expenses      $   111,518      $   267,100
                                         -----------      -----------

   Operating loss                           (111,518)        (267,100)

Other income:
   Interest income                               743            1,638
   Interest on trust fund investment          45,794          112,242
                                         -----------      -----------
   Total other income                         46,537          113,880
                                         -----------      -----------

Net loss                                 $   (64,981)     $  (153,220)
                                         ===========      ===========



                                           Quarter       April 11, 2003
                                            Ended        (Inception) to
                                           March 31,        March 31,
                                             2004             2004
                                         -----------      -----------

 Weighted average shares of common
   stock outstanding

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

  Loss per common share

       Basic and diluted                 $      (.01)     $      (.03)
                                         ===========      ===========







            See accompanying notes to unaudited financial statements.



                                       3
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<CAPTION>

<S>                                                                             <C>               <C>

                       MILLSTREAM ACQUISITION CORPORATION
                    (a corporation in the development stage)

                       STATEMENT OF CASH FLOWS (UNAUDITED)


                                                                                  Quarter        April 11, 2003
                                                                                   Ended         (Inception) to
                                                                                  March 31,        March  31,
                                                                                   2004               2004
                                                                                ------------      ------------
Cash flows from operating activities:
Net loss                                                                        $    (64,981)     $   (153,220)
Adjustments to reconcile net loss to net cash used in operating activities:
   Change in operating assets and liabilities:
    Decrease (increase) in prepaid expenses                                           34,270           (55,000)
    (Decrease) increase in accounts payable and accrued expenses                     (30,158)           12,907
                                                                                ------------      ------------
      Net cash used in operating activities                                          (60,869)         (195,313)
                                                                                ------------      ------------

Cash flows from investing activities:
Investments held in trust fund                                                       (45,794)      (20,796,992)
Prepaid acquisition costs                                                           (307,829)         (307,829)
                                                                                ------------      ------------
      Net cash used in investing activities                                         (353,623)      (21,104,821)
                                                                                ------------      ------------

Cash flows from financing activities:
Proceeds from sale of shares of common stock to initial stockholders                    --              25,039
Proceeds from note payable, shareholder                                                 --              35,000
Repayment of note payable, shareholder                                                  --             (35,000)
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                                         --          21,442,765
                                                                                ------------      ------------

Net (decrease) increase in cash and cash equivalents                                (414,492)          142,631
Cash and cash equivalents at beginning of period                                     557,123              --
                                                                                ------------      ------------
Cash and cash equivalents at end of period                                      $    142,631      $    142,631
                                                                                ============      ============




            See accompanying notes to unaudited financial statements.
</TABLE>


                                       4
<PAGE>



                       MILLSTREAM ACQUISITION CORPORATION
                    (a corporation in the development stage)

                     NOTES TO UNAUDITED 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").

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 March 31, 2004 and the results of its  operations and its cash
flows for the quarter  ended March 31, 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 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 and since no value would be
attributed to the Warrants contained in the Units sold (see Note 5). On March 9,
2004, the Company  entered into a definitive  merger  agreement (see Notes 6 and
9).

3.  Investments Held in Trust

Investments held in trust as of March 31, 2004 are primarily comprised of a zero
coupon United States treasury bill with a face value of $20,800,000 purchased at
a  discount  of  99.9277%  due April 8, 2004 and are  carried  on the  Company's
financial statements at $20,796,992, which includes accreted interest.

4.  Earnings per Share

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

<TABLE>
<CAPTION>

<S>                                                            <C>               <C>

                                                           Quarter Ended      April 11, 2003
                                                           March 31, 2004     (Inception) to
                                                                              March 31, 2004
                                                          ----------------- -------------------

Numerator:  Net loss                                           $ (64,981)        $ (153,220)

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


Basic and diluted earnings per share                            $   (.01)        $     (.03)


</TABLE>



                                       6
<PAGE>



                       MILLSTREAM ACQUISITION CORPORATION
                    (a corporation in the development stage)

              NOTES TO UNAUDITED 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  and the  underwriters'  option (see Note 5) that were  outstanding  at
March 31, 2004 to purchase an aggregate  of 9,100,000  shares of common stock at
$5.00  per  share  and $6.00 per  share,  respectively,  because  the  warrants'
exercise  price was greater than the average  market price of the common  shares
and  conversion  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 March 31, 2004, no shares of preferred stock have been issued.

Common Stock Reserved
The Company has  9,100,000  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 shares of
common stock of the Company.  Following the merger, the members of NationsHealth
will own  approximately  80% of the  outstanding  common  stock of the  combined
company. In addition, the members of NationsHealth will collectively receive one
warrant  exercisable at $8.50 per share for each  Millstream  warrant  currently
outstanding, of which there are 8,050,000. An additional 1,050,000 warrants will
be issued to existing



                                       7
<PAGE>



                       MILLSTREAM ACQUISITION CORPORATION
                    (a corporation in the development stage)

              NOTES TO UNAUDITED FINANCIAL STATEMENTS - (Continued)

6.  Merger (continued)

NationsHealth  members  exercisable at $11.00 per share. 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.

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  considered  significant  to the overall  financial
statement presentation as of March 31, 2004.

9.  Subsequent Event

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.









                                       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,  L.L.C.,  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 80% of the outstanding common stock of the
combined  company.  In  addition,  the  members of  NationsHealth  will  receive
warrants to purchase an  aggregate  of  8,050,000  shares of common  stock at an
exercise  price of $8.50 per share.  We will also issue  warrants to purchase an
aggregate of 1,050,000 shares of common stock at an exercise price of $11.00 per
share to the members of NationsHealth.

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


                                       9
<PAGE>


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 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.

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.

The net loss of $64,981  reported for the quarter  ended March 31, 2004 consists
primarily  of $33,000  expense for  director  and officer  liability  insurance,
$22,500 expense for the monthly administrative  services agreement,  $52,899 for
professional  fees and  $3,119  for other  expenses.  Income  on the trust  fund
investment was $45,794 and other interest income was $743.

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                                              $ 333,808
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          25,240
Administrative services fee                                               60,000
Other operational costs                                                   37,144
Remaining cash at April 30, 2004                                          73,534



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<PAGE>



Through April 30, 2004,  we have paid $333,808 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  April  30,  2004,  we  had
approximately $74,000 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  three  months,  we  estimate  costs  of  approximately  $22,500  for the
administrative  fee  payable to 400  Building  LLC  ($7,500  per month for three
months),  $10,000 of expenses in legal and accounting fees relating to quarterly
SEC  reporting  obligations  and  $41,500 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 March 31, 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  could  significantly  affect  these  controls  subsequent  to the
Evaluation Date.

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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<PAGE>







                           PART II - OTHER INFORMATION

ITEM 2 - CHANGES IN SECURITIES  AND SMALL  BUSINESS  ISSUER  PURCHASES OF EQUITY
SECURITIES

         On March 9, 2004, we issued warrants to purchase an aggregate of 45,000
shares of our 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. These warrants were issued pursuant to the
exemption from registration contained in Section 4(2) of the Securities Act.


                    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).




                                       12
<PAGE>


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).
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



                                       13
<PAGE>


We  filed a  Current  Report  on Form  8-K  with  the  Securities  and  Exchange
Commission on March 9, 2004 announcing that we entered into a definitive  merger
agreement with NationsHealth  Holdings,  L.L.C. The press release describing the
terms of the merger agreement was included as Exhibit 99.1 of the Form 8-K.


                                       14
<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:  May 17, 2004








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