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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-K/A
 Amendment No. 1
 (Mark One)
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2007.
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to.
 Commission File Number: 000-50348
 NATIONSHEALTH, INC.
  Delaware
    
    06-1688360(State or other jurisdiction of incorporation or organization)
    
    (I.R.S. Employer Identification No.)13630 NW 8thStreet, Suite 210, Sunrise, FL
(Address of principal executive offices)
    
    33325
(Zip Code)
 (954) 903-5000
  (Title of each class) 
Common Stock, $0.0001 par value per share
    
    (Name of each exchange on which registered)
The NASDAQ Capital Market
  
 o þ
 o þ
 þ o
 o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ
 o þ
   Documents Incorporated By Reference




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EXPLANATORY NOTE
   2




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##### 



NATIONSHEALTH, INC.
 FORM 10-K/A
 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2007
 INDEX
 PagePART IIIItem 10 Directors, Executive Officers and Corporate Governance
    
    
    4Item 11 Executive Compensation
    
    
    9Item 12 Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters
    
    
    16Item 13 Certain Relationships and Related Transactions, and
Director Independence
    
    
    19Item 14 Principal Accountant Fees and Services
    
    
    21PART IVItem 15 Exhibits, Financial Statement Schedules
    
    
    23SIGNATURES
    
    
    24Exhibit 31.1Exhibit 31.2
   3




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PART III
 
 Item 10. Directors, Executive Officers and Corporate Governance.
 Directors and Executive Officers
  Name
    
    Age
    
    PositionGlenn M. Parker, M.D.
    
    44
    
    Director and Chief Executive OfficerLewis P. Stone
    
    47
    
    Director, President and Chief Information OfficerTimothy Fairbanks
    
    34
    
    Director, Executive Vice President and Chief Financial OfficerArthur Spector
    
    67
    
    Chairman of the BoardElliot F. Hahn, Ph.D.
    
    63
    
    DirectorRichard R. Howard
    
    59
    
    DirectorMark H. Rachesky, M.D.
    
    49
    
    DirectorGeorge F. Raymond
    
    71
    
    DirectorDon K. Rice
    
    59
    
    DirectorGary D. Small, D.P.M.
    
    44
    
    DirectorRaymond N. Steinman
    
    44
    
    DirectorMichael D. Tabris
    
    70
    
    DirectorRodney Carson
    
    49
    
    Executive Vice President of OperationsJoshua B. Weingard
    
    35
    
    Executive Vice President, Chief Legal Officer and Secretary
  Glenn M. Parker, M.D.
 Lewis P. Stone
  4




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Timothy Fairbanks
 Arthur Spector
 Elliot F. Hahn, Ph.D.
 Richard R. Howard
  5




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Mark H. Rachesky, M.D.
 George F. Raymond
 Don K. Rice
 Gary D. Small, D.P.M.
 Raymond N. Steinman
  6




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Michael D. Tabris
 Rodney Carson
 Joshua B. Weingard
 Governance and Stockholder Agreements
    7




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Section 16(a) Beneficial Ownership Reporting Compliance
  Audit Committee Members and Financial Expert
  Code of Ethics
 www.nationshealth.com
  8




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Item 11. Executive Compensation.
 SUMMARY COMPENSATION TABLE
  Non-EquityName
    
    
    
    
    
    
    
    
    
    
    
    
    
    Stock
    
    
    Option
    
    
    Incentive Plan
    
    
    All Otherand
    
    
    
    
    
    Salary
    
    
    Bonus
    
    
    Awards
    
    
    Awards
    
    
    Compensation
    
    
    Compensation
    
    
    TotalPrincipal Position
    
    Year
    
    
    ($)
    
    
    ($)
    
    
    ($)(2)
    
    
    ($)(3)
    
    
    ($)(4)
    
    
    ($)(5)
    
    
    ($)Dr. Glenn M. Parker
    
    
    2007
    
    
    $
    487,500
    
    
    $
    
    
    
    $
    
    
    
    $
    108,988
    
    
    $
    
    
    
    $
    55,757
    
    
    $
    652,245Chief Executive Officer
    
    
    2006
    
    
    $
    483,333
    
    
    $
    
    
    
    $
    
    
    
    $
    114,831
    
    
    $
    
    
    
    $
    66,120
    
    
    $
    664,284Timothy Fairbanks
    
    
    2007
    
    
    $
    320,000
    
    
    $
    
    
    
    $
    53,750
    
    
    $
    
    
    
    $
    
    
    
    $
    39,758
    
    
    $
    413,508Chief Financial Officer
    
    
    2006
    
    
    $
    279,936
    
    
    $
    
    
    
    $
    342,122
    
    
    $
    17,758
    
    
    $
    75,000
    
    
    $
    33,461
    
    
    $
    748,277Lewis P. Stone
    
    
    2007
    
    
    $
    475,000
    
    
    $
    
    
    
    $
    
    
    
    $
    108,988
    
    
    $
    
    
    
    $
    39,712
    
    
    $
    623,700President and Chief
    
    
    2006
    
    
    $
    466,667
    
    
    $
    
    
    
    $
    
    
    
    $
    114,831
    
    
    $
    
    
    
    $
    50,771
    
    
    $
    632,269Information OfficerRodney Carson
    
    
    2007
    
    
    $
    275,000
    
    
    $
    
    
    
    $
    26,231
    
    
    $
    
    
    
    $
    
    
    
    $
    43,598
    
    
    $
    344,829Executive Vice
    
    
    2006
    
    
    $
    226,423
    
    
    $
    
    
    
    $
    1,680
    
    
    $
    26,670
    
    
    $
    68,750
    
    
    $
    26,242
    
    
    $
    349,765President, OperationsJoshua Weingard (1)
    
    
    2007
    
    
    $
    225,000
    
    
    $
    
    
    
    $
    26,063
    
    
    $
    
    
    
    $
    
    
    
    $
    32,155
    
    
    $
    283,218Executive Vice
President and Chief
Legal Officer
    
    
    2006
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
 
  (1)
    
    Mr. Weingards employment with us commenced on December 26, 2006.(2)
    
    The amounts in the Stock Awards column reflect the dollar amounts recognized for
financial statement reporting purposes for the fiscal year ended December 31, 2007, in
accordance with Statement of Financial Accounting Standards No. 123 (revised) (FAS
123(R)), excluding the impact of estimated forfeitures related to service-based vesting
conditions, and include amounts attributable to awards granted during and prior to fiscal
2007. Assumptions made in the calculation of these amounts are included in Note 14 to our
audited financial statements for the fiscal year ended December 31, 2007, included in our
Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 28,
2008. There were no forfeitures of restricted stock during 2007 for the named executive
officers. Additional information regarding restricted stock awards is
set forth in the Outstanding Equity Awards at Fiscal Year-End Table below.  9




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(3)
    
    The amounts in the Option Awards column reflect the dollar amounts recognized for
financial statement reporting purposes for the fiscal year ended December 31, 2007, in
accordance with FAS 123(R), excluding the impact of estimated forfeitures related to
service-based vesting conditions, and include amounts attributable to awards granted during
and prior to fiscal 2007. Assumptions made in the calculation of these amounts are
included in Note 14 to our audited financial statements for the fiscal year ended December
31, 2007, included in our Annual Report on Form 10-K filed with the Securities and Exchange
Commission on March 28, 2008. In connection with his restricted common stock grant on
November 15, 2006, Timothy Fairbanks forfeited 12,500 stock options with an exercise price
of $6.87, granted on October 22, 2004. In connection with his restricted stock grant on
November 15, 2006, Rodney Carson forfeited 15,000 options with an exercise price of $6.80,
granted on September 11, 2005. In connection with the employment agreement between the
Company and Mr. Carson, dated as of April 27, 2007, Mr. Carson forfeited all of the 80,000
stock options granted on May 22, 2006. Other than Mr. Carson, there were no forfeitures of
stock options during 2007 for the named executive officers. Additional information
regarding stock option awards is set forth in the
Outstanding Equity Awards at Fiscal Year-End Table below.(4)
    
    Awards of non-equity incentive plan compensation for 2006 were paid in April 2007.(5)
    
    Items included under All Other Compensation for each named executive officer are set
forth in the table below: ALL OTHER COMPENSATION TABLE
 Perquisitesand Other
    
    
    
    
    
    
    
    
    
    
    SeverancePersonal
    
    
    Tax
    
    
    Insurance
    
    
    Payments /Benefits(a)
    
    
    Reimbursements
    
    
    Premiums
    
    
    Accruals
    
    
    TotalName
    
    Year
    
    
    ($)
    
    
    ($)
    
    
    ($)
    
    
    ($)
    
    
    ($)Dr. Glenn M. Parker
    
    
    2007
    
    
    $
    25,602
    (c)
    
    $
    4,847
    
    
    $
    25,308
    (b)
    
    $
    
    
    
    $
    55,7572006
    
    
    $
    41,398
    
    
    $
    4,414
    
    
    $
    20,308
    
    
    $
    
    
    
    $
    66,120Timothy Fairbanks
    
    
    2007
    
    
    $
    9,603
    
    
    $
    4,847
    
    
    $
    25,308
    (b)
    
    $
    
    
    
    $
    39,7582006
    
    
    $
    9,745
    
    
    $
    4,414
    
    
    $
    19,302
    
    
    $
    
    
    
    $
    33,461Lewis P. Stone
    
    
    2007
    
    
    $
    9,557
    
    
    $
    4,847
    
    
    $
    25,308
    (b)
    
    $
    
    
    
    $
    39,7122006
    
    
    $
    26,049
    
    
    $
    4,414
    
    
    $
    20,308
    
    
    $
    
    
    
    $
    50,771Rodney Carson
    
    
    2007
    
    
    $
    18,763
    (d)
    
    $
    4,629
    
    
    $
    20,206
    (b)
    
    $
    
    
    
    $
    43,5982006
    
    
    $
    13,422
    
    
    $
    3,518
    
    
    $
    9,302
    
    
    $
    
    
    
    $
    26,242Joshua Weingard
    
    
    2007
    
    
    $
    2,000
    
    
    $
    4,847
    
    
    $
    25,308
    (b)
    
    $
    
    
    
    $
    32,1552006
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
 (a)
    
    The value of these perquisites and other personal benefits is calculated based on their
incremental cost to the Company, which is determined based upon the actual cost of
providing these perquisites and other personal benefits.(b)
    
    Represents reimbursement of life insurance premiums and Company-paid group medical and
dental coverage for 2007.(c)
    
    Represents $1,694 for personal use of Company car service, $2,231 for personal cellular
phone use, $12,038 for entertainment and meals, $9,039 in fees paid for legal services and
$600 for credit card and airline membership fees.(d)
    
    Represents $17,500 for rental/temporary housing and $1,263 for entertainment and meals.  10




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OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR-END TABLE  2007
  Option Awards
    
    
    Stock AwardsMarketNumber of
    
    
    Number of
    
    
    
    
    
    
    
    
    
    
    Number of
    
    
    Value ofSecurities
    
    
    Securities
    
    
    
    
    
    
    
    
    
    
    Shares or
    
    
    Shares orUnderlying
    
    
    Underlying
    
    
    
    
    
    
    
    
    
    
    Units of
    
    
    Units ofUnexercised
    
    
    Unexercised
    
    
    Option
    
    
    
    
    
    
    Stock That
    
    
    Stock ThatOptions
    
    
    Options
    
    
    Exercise
    
    
    Option
    
    
    Have Not
    
    
    Have Not(#)
    
    
    (#)
    
    
    Price
    
    
    Expiration
    
    
    Vested
    
    
    VestedName
    
    Exercisable
    
    
    Unexercisable
    
    
    ($)
    
    
    Date
    
    
    (#)
    
    
    ($)(1)Dr. Glenn M. Parker
    
    
    98,062
    
    
    
    32,688
    (2)
    
    $
    6.87
    
    
    
    10/21/2010
    
    
    
    
    
    
    
    Timothy Fairbanks
    
    
    12,500
    
    
    
    
    
    
    $
    6.87
    
    
    
    10/21/2010
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    75,000
    (3)
    
    $
    35,250Lewis P. Stone
    
    
    98,062
    
    
    
    32,688
    (2)
    
    $
    6.87
    
    
    
    10/21/2010
    
    
    
    
    
    
    
    Rodney Carson
    
    
    5,000
    
    
    
    
    
    
    $
    6.80
    
    
    
    9/10/2011
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18,750
    (3)
    
    $
    8,813
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50,000
    (4)
    
    $
    23,500Joshua Weingard
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    56,250
    (5)
    
    $
    26,438
 
  (1)
    
    Based upon closing stock price of $0.47 on December 31, 2007.(2)
    
    Vesting 50.0% on April 22, 2008 and 50.0% on October 22, 2008.(3)
    
    Vesting 16.7% on May 15, 2008 and each six-month anniversary thereafter.(4)
    
    Vesting 25.0% on April 27, 2008, and 12.5% on each six-month anniversary thereafter.(5)
    
    Vesting 16.7% on June 26, 2008 and each six-month anniversary thereafter.  11




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POTENTIAL
PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL TABLE
  Employees VoluntaryTermination
    
    
    Termination forwithout Cause
    
    
    Any Reason after aName
    
    
    Benefit
    
    or for Good Reason
    
    
    Change in Control
    
    
    DisabilityDr. Glenn M. Parker(1)(6)
    
    Base Salary
    
    $
    1,000,000
    
    
    
    N/A
    
    
    $
    1,000,000Medical Insurance
    
    
    34,453
    
    
    
    
    
    
    
    34,453Vesting of Stock Options
    
    
    98,966
    
    
    
    
    
    
    
    98,966Total
    
    $
    1,133,419
    
    
    
    
    
    
    $
    1,133,419Timothy Fairbanks(2)
    
    Base Salary
    
    $
    720,000
    
    
    $
    720,000
    
    
    $
    720,000Medical Insurance
    
    
    34,453
    
    
    
    34,453
    
    
    
    34,453Vesting of Restricted Stock
    
    
    154,531
    
    
    
    154,531
    
    
    
    154,531Total
    
    $
    908,984
    
    
    $
    908,984
    
    
    $
    908,984Lewis P. Stone(3)(6)
    
    Base Salary
    
    $
    1,000,000
    
    
    
    N/A
    
    
    $
    1,000,000Medical Insurance
    
    
    34,453
    
    
    
    
    
    
    
    34,453Vesting of Stock Options
    
    
    98,966
    
    
    
    
    
    
    
    98,966Total
    
    $
    1,133,419
    
    
    
    
    
    
    $
    1,133,419Rodney Carson(4)
    
    Base Salary
    
    $
    275,000
    
    
    
    N/A
    
    
    $
    275,000Medical Insurance
    
    
    22,968
    
    
    
    
    
    
    
    22,968Vesting of Restricted Stock
    
    
    101,340
    
    
    
    
    
    
    
    101,340Total
    
    $
    399,308
    
    
    
    
    
    
    $
    399,308Joshua Weingard(5)
    
    Base Salary
    
    $
    225,000
    
    
    $
    225,000
    
    
    $
    225,000Medical Insurance
    
    
    22,968
    
    
    
    22,968
    
    
    
    22,968Vesting of Restricted Stock
    
    
    77,837
    
    
    
    77,837
    
    
    
    77,837Total
    
    $
    325,805
    
    
    $
    325,805
    
    
    $
    325,805
 
  (1)
    
    We have an employment contract with Dr. Parker, our Chief Executive Officer, dated as of
March 9, 2004 (the Parker Agreement). The term of the Parker Agreement is five years and is
extended at the end of the term on an annual basis unless terminated by either party. The
Parker Agreement provides for a minimum annual base salary to be paid to Dr. Parker of
$500,000, an annual bonus based upon achievement of Company established goals and the payment
of additional incentive compensation based upon the satisfaction of one or more performance
goals. If the Parker Agreement
is terminated by us other than for cause or by Dr.
Parker for good reason or by reason of his disability, then Dr. Parker is entitled to
termination benefits. Dr. Parkers termination benefits include payment of an amount equal to
his base salary for 24 months, medical insurance for Dr. Parker and his immediate family for
the maximum period allowed under COBRA, and full vesting of any unvested stock options and
restricted stock then held by him.  12




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(2)
    
    We have an employment contract with Mr. Fairbanks, our Chief Financial Officer, dated as of
April 15, 2005 (the Fairbanks Agreement). The term of the Fairbanks Agreement is three
years and is extended at the end of the term on an annual basis unless terminated by either
party. The Fairbanks Agreement provides for a minimum annual base salary to be paid to Mr.
Fairbanks of $250,000, which has subsequently been increased to $360,000 by the Compensation
Committee, an annual bonus based upon achievement of Company established goals and the payment
of additional incentive compensation based upon the satisfaction of one or more performance
goals. If the Fairbanks Agreement is terminated by us other than for cause or by Mr.
Fairbanks for good reason or, after a change in control, for any reason or by reason of his
disability, then Mr. Fairbanks is entitled to termination benefits. Mr. Fairbanks
termination benefits include payment of an amount equal to his then-current base salary for 24
months, medical insurance for Mr. Fairbanks and his immediate family for the maximum period
allowed under COBRA, and full vesting of any unvested stock options and restricted stock then
held by him. During the term of the Fairbanks Agreement and for one year thereafter, Mr.
Fairbanks has agreed not to compete with, solicit business from the customers of, or solicit
employees of, the Company and its affiliates.(3)
    
    We have an employment contract with Mr. Stone, our President and Chief Information Officer,
dated as of March 9, 2004 (the Stone Agreement). The term of the Stone Agreement is five
years and is extended at the end of the term on an annual basis unless terminated by either
party. The Stone Agreement provides for a minimum annual base salary to be paid to Mr. Stone
of $500,000, an annual bonus based on achievement of goals established by us and the payment
of additional incentive compensation based upon the satisfaction of one or more performance
goals. If the Stone Agreement is terminated by us other than for cause or by Mr. Stone for
good reason or by reason of his disability, then Mr. Stone is entitled to termination
benefits. Mr. Stones termination benefits include payment of an amount equal to his base
salary for 24 months, medical insurance for Mr. Stone and his immediate family for the maximum
period allowed under COBRA, and full vesting of any unvested stock options and restricted
stock then held by him.(4)
    
    We have an employment contract with Mr. Carson, our Executive Vice President of Operations,
dated as of April 27, 2007 (the Carson Agreement). The term of the Carson Agreement is
three years and is extended at the end of the term on an annual basis unless terminated by
either party. The Carson Agreement provides for a minimum annual base salary to be paid to
Mr. Carson of $275,000, an annual bonus based upon achievement of goals established by us and
the payment of additional incentive compensation based upon the satisfaction of one or more
performance goals. If the Carson Agreement is terminated by us other than for cause or by Mr.
Carson for good reason or by reason of his disability, then Mr. Carson is entitled to
termination benefits. Mr. Carsons termination benefits include payment of his then-current
base salary for 12 months (in accordance with our normal payroll cycle), medical insurance for
Mr. Carson and his immediate family for 12 months, and full vesting of any unvested stock
options or restricted stock then held by him. Under the Carson Agreement, upon a change in
control, we will fully vest 50% of any unvested restricted stock then held by him which had
been issued on or prior to April 27, 2007 (the Carson Outstanding Restricted Stock) and will
fully vest any unvested stock options then held by him. Nine months after the change of
control, we will fully vest the remaining Carson Outstanding Restricted Stock, provided that
Mr. Carson is then employed by us. If, during such nine month period, the Carson Agreement is
terminated by us other than for cause or by Mr. Carson for good reason, then we will fully
vest the remaining Carson Outstanding Restricted Stock. During the term of the Carson
Agreement and for one year thereafter, Mr. Carson has agreed not to compete with, solicit
business from the customers of, or solicit employees of, the Company and its affiliates.  13




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##### Table of Contents



(5)
    
    We have an employment contract with Mr. Weingard, our Executive Vice President, Chief Legal
Officer and Secretary, dated as of December 26, 2006 (the Weingard Agreement). The term of
the Weingard Agreement is three years and is extended at the end of the term on an annual
basis unless terminated by either party. The Weingard Agreement provides for a minimum annual
base salary to be paid to Mr. Weingard of $225,000, an annual bonus based upon achievement of
goals established by us and the payment of additional incentive compensation based upon the
satisfaction of one or more performance goals. If the Weingard Agreement is terminated by us
other than for cause or by Mr. Weingard for good reason or, after a change of control, for any
reason or by reason of his disability, then Mr. Weingard is entitled to termination benefits.
Mr. Weingards termination benefits include payment of his then-current base salary for 12
months (in accordance with our normal payroll cycle), medical insurance for Mr. Weingard and
his immediate family for 12 months, and full vesting of any unvested stock options or
restricted stock (except as noted below for his restricted stock following a change of
control) then held by him. Under the Weingard Agreement, upon a change in control, we will
fully vest 50% of any unvested restricted stock then held by him which had been issued on or
prior to December 26, 2006 (the Weingard Outstanding Restricted Stock) and will fully vest
any unvested stock options then held by him. Nine months after the change of control, we will
fully vest the remaining Weingard Outstanding Restricted Stock, provided that Mr. Weingard is
then employed by us. If, during such nine month period, the Weingard Agreement is terminated
by us other than for cause or by Mr. Weingard for good reason, then we will fully vest the
remaining Weingard Outstanding Restricted Stock. During the term of the Weingard Agreement
and for one year thereafter, Mr. Weingard has agreed not to compete with, solicit business
from the customers of, or solicit employees of, the Company and its affiliates.(6)
    
    The Parker Agreement and Stone Agreement also provide that if we or the executive terminates
employment in several specified events, that the executive has the right to cause us to
repurchase a number of shares of the our Common Stock owned by the executive with a value of
up to $3,000,000 based on then current market prices. Alternatively, we may elect to sell
these shares of Common Stock to third parties or to register the resale of these shares. If
such a sale or registration results in proceeds less than the amount the executive is to
receive related to his right to sell, then we are required to pay to the executive the
difference between the requested dollar amount and the proceeds of the sale. Director Compensation
 Director Fees
  14




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##### Table of Contents



Equity Awards.
 DIRECTOR COMPENSATION TABLE
  Fees Earned or
    
    
    
    
    
    
    RestrictedPaid in Cash
    
    
    Option Awards(1)
    
    
    Stock Awards(2)
    
    
    TotalName
    
    ($)
    
    
    ($)
    
    
    ($)
    
    
    ($)Arthur Spector, Chairman
    
    $
    190,445
    
    
    $
    54,494
    
    
    
    
    
    
    $
    244,939Elliot F. Hahn, Ph.D.
    
    $
    51,750
    
    
    $
    37,984
    
    
    $
    7,650
    
    
    $
    97,384George F. Raymond
    
    $
    58,000
    
    
    $
    37,285
    
    
    $
    7,650
    
    
    $
    102,935Richard R. Howard
    
    $
    88,750
    
    
    $
    38,502
    
    
    $
    7,650
    
    
    $
    134,902Don K. Rice
    
    $
    92,250
    
    
    $
    36,496
    
    
    $
    7,650
    
    
    $
    136,396Michael D. Tabris
    
    $
    16,500
    
    
    
    
    
    
    $
    7,650
    
    
    $
    24,150Gary D. Small, D.P.M.
    
    $
    14,500
    
    
    
    
    
    
    $
    7,650
    
    
    $
    22,150Raymond N. Steinman
    
    $
    15,500
    
    
    
    
    
    
    $
    7,650
    
    
    $
    23,150Mark H. Rachesky, M.D.
    
    $
    13,500
    
    
    
    
    
    
    $
    7,650
    
    
    $
    21,150
 
  (1)
    
    The amounts in the Option Awards column reflect the dollar amount recognized for financial
statement reporting purposes for the fiscal year ended December 31, 2007, in accordance with
FAS 123(R), excluding the impact of estimated forfeitures related to service-based vesting
conditions, and include amounts attributable to awards granted during and prior to 2007.
Assumptions made in the calculation of these amounts are included in Note 14 to our audited
financial statements for the fiscal year ended December 31, 2007, included in our Annual
Report on Form 10-K filed with the Securities and Exchange Commission on March 28, 2008.
There were no forfeitures during 2007. The aggregate number of stock options held by each
non-employee director as of December 31, 2007 is as follows: Stock OptionsOutstandingName
    
    As of 12/31/07Arthur Spector, Chairman
    
    
    57,203Elliot F. Hahn, Ph. D.
    
    
    39,375George F. Raymond
    
    
    38,250Richard R. Howard
    
    
    39,000Don K. Rice
    
    
    36,375Michael D. Tabris
    
    
    5,000Gary D. Small, D.P.M.
    
    
    5,000Raymond N. Steinman
    
    
    5,000Mark H. Rachesky, M.D.
    
    
    
 (2)
    
    Each of the non-employee directors, other than
Arthur Spector, received a grant of 5,000 shares of fully vested restricted stock on
April 10, 2007.  The amounts in the Restricted Stock Awards column reflect the dollar
amount recognized for financial statement reporting purposes for the fiscal year ended
December 31, 2007, in accordance with FAS 123(R).  These amounts reflect the
value of the common shares granted on the date of the award.
As of December 31, 2007, there were no unvested shares of restricted stock held by
the non-employee directors.  15




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##### Table of Contents



Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters.
 Share Ownership
  Number of SharesName and Address of
    
    Beneficially OwnedBeneficial Owner
    
    Shares(1)(2)
    
    
    PercentLewis P. Stone (3)
    
    
    16,904,216
    (4)
    
    
    57.84
    %Glenn M. Parker, M.D. (3)
    
    
    16,896,342
    (5)
    
    
    57.81
    %RGGPLS, LLC (and certain related persons) (3)
    
    
    16,781,936
    (6)
    
    
    57.65
    %13630 N.W. 8th Street, Suite 210
Sunrise, Florida 33325Mark H. Rachesky, M.D. (and certain related persons) (7)
    
    
    5,805,900
    (8)
    
    
    18.49
    %40 West 57th Street, 24th Floor
New York, NY 10019GRH Holdings, L.L.C. (and certain related persons) (9)
    
    
    4,254,953
    (9)
    
    
    14.62
    %6701 Nob Hill Road
Tamarac, FL 33321Connecticut General Life Insurance Company
    
    
    3,239,480
    (10)
    
    
    10.11
    %900 Cottage Grove Road, Suite S 155
Hartford, CT 06152Arthur Spector
    
    
    419,828
    (11)
    
    
    1.44
    %Timothy Fairbanks
    
    
    304,060
    (12)
    
    
    1.04
    %Rodney Carson
    
    
    258,299
    (13)
    
    
    *Don K. Rice
    
    
    61,375
    (14)
    
    
    *George F. Raymond
    
    
    43,950
    (15)
    
    
    *Elliot F. Hahn, Ph.D.
    
    
    44,375
    (16)
    
    
    *Richard R. Howard
    
    
    44,000
    (17)
    
    
    *Gary D. Small, D.P.M.
    
    
    10,000
    (18)
    
    
    *Michael D. Tabris
    
    
    10,000
    (18)
    
    
    *Raymond N. Steinman
    
    
    10,000
    (18)
    
    
    *Joshua Weingard
    
    
    75,000
    (19)
    
    
    *All executive officers and directors as a group (14 persons)
    
    
    24,034,219
    (20)
    
    
    75.42
    %
 *
    
    Less than 1%.  16




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##### Table of Contents



(1)
    
    Except as otherwise set forth herein, we believe that all persons
referenced in the table have sole voting and investment power with
respect to all shares of Common Stock reflected as beneficially owned
by such persons.(2)
    
    Applicable percentage of ownership as of April 28, 2008 is based upon
29,110,722 shares of Common Stock outstanding as of that date.
Beneficial ownership is determined in accordance with the rules and
regulations of the SEC, and includes voting and investment power with
respect to shares. Common Stock subject to options or warrants
currently exercisable or exercisable within 60 days of April 28, 2008
are referred to as presently exercisable stock options or presently
exercisable warrants. Presently exercisable stock options are deemed
outstanding for purposes of computing the percentage of ownership of
the person holding such options, but are not deemed outstanding for
computing the percentage of any other person.(3)
    
    Based on the Schedule 13D/A filed by RGGPLS LLC. (RGGPLS) with the
SEC on July 18, 2007, the shareholders of RGGPLS, who are deemed to
share voting and dispositive power over our Common Stock owned by
RGGPLS, are Robert Gregg, Lewis P. Stone, Glenn M. Parker, M.D., the
Glenn M. Parker 2004 Multigenerational Trust, the Lewis P. Stone 2004
Multigenerational Trust, the Robert Gregg 2004 Multigenerational Trust
and the Robert Gregg Revocable Trust dated December 18, 2000.(4)
    
    Consists of the securities included in Note (6) below, as well as,
7,874 shares of Common Stock held directly and presently exercisable
options to purchase 114,406 shares of Common Stock.(5)
    
    Consists of the securities included in Note (6) below and presently
exercisable options to purchase 114,406 shares of Common Stock.(6)
    
    Consists of (i) 10,140,017 shares of Common Stock held by RGGPLS,
(ii) 696,247 shares of Common Stock held by RGGPLS, as trustee of the
RGGPLS Holding Bonus Plan and Trust, (iii) 2,809,958 shares of Common
Stock issued to GRH Holdings, L.L.C., a Florida limited liability
company (GRH) which are subject to a Stockholders Agreement dated as
of March 9, 2004, and amended as of June 2, 2004, by and among us,
RGGPLS and GRH pursuant to which GRH must vote certain of its shares
of Common Stock as directed by RGGPLS, (iv) 1,785,714 shares of Common
Stock issued to MHR Capital Partners LP, a Delaware limited
partnership (MHR) and OTQ LLC, a Delaware limited liability company
(OTQ) which are subject to a Stockholders Agreement dated as of
February 28, 2005, by and among us, RGGPLS, GRH, MHR and OTQ pursuant
to which MHR and OTQ must vote certain of their shares of Common Stock
as directed by RGGPLS and (v) 1,350,000 shares of Common Stock held by
Glenn M. Parker, M.D. which are subject to a voting rights agreement
dated as of December 5, 2005, pursuant to which Dr. Parker must vote
these shares of Common Stock as directed by RGGPLS.(7)
    
    Based on the Schedule 13D filed by Dr. Mark H. Rachesky and related
entities with the SEC on February 26, 2008, Dr. Rachesky exercises
voting and/or investment control over the portfolio securities of MHR,
OTQ and MHR Capital Partners (100) LP, a Delaware limited partnership
(Capital Partners).(8)
    
    Includes (i) 2,046,096 shares of Common Stock held for the account of
MHR, (ii) 1,151,129 shares of Common Stock that can be obtained by MHR
pursuant to the presently convertible MHR Notes held for the account
of MHR, (iii) 273,285 shares of Common Stock held for the account of
Capital Partners, (iv) 153,750 shares of Common Stock that can be
obtained by Capital Partners pursuant to the presently convertible MHR
Notes held for the account of Capital Partners, (v) 1,020,833 shares
of Common Stock held for the account of OTQ, (vi) 981,707 shares of
Common Stock that can be obtained by OTQ pursuant to the presently
convertible MHR Notes held for the account of OTQ and (vii) 179,100
shares of Common Stock held for certain personal, trusts, retirement
and charitable foundation accounts established by Dr. Rachesky.  17




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##### Table of Contents



(9)
    
    Based on the Form 4 filed by GRH and certain related entities with
the SEC on February 14, 2008, the managing member of GRH is Viaura
Holdings, Ltd., a Florida limited partnership (Viaura Holdings).
The general partner of Viaura Holdings is Viaura, Inc., a Florida
corporation (Viaura). The sole directors and holders of a majority
of the issued and outstanding shares of Viaura are Michael and Robin
Gusky.(10)
    
    Consists of 303,030 shares of Common Stock held directly and
presently exercisable warrants to purchase 2,936,450 shares of Common
Stock.(11)
    
    Consists of 362,625 shares of Common Stock and presently exercisable
options to purchase 57,203 shares of Common Stock.(12)
    
    Consists of (i) 145,370 shares of unrestricted Common Stock held
directly, (ii) 71,190 shares of Common Stock held by the RGGPLS
Holding Bonus Plan and Trust of which Mr. Fairbanks is the
beneficiary, (iii) 75,000 shares of restricted common stock vesting
16.67% on May 15, 2008 and every six months thereafter and
(iv) presently exercisable options to purchase 12,500 shares of
Common Stock.(13)
    
    Consists of (i) 184,549 shares of Common Stock, (ii) 18,750 shares of
restricted common stock vesting 16.67% on May 15, 2008 and every six
months thereafter, (iii) 50,000 shares of restricted common stock
vesting 25% on April 27, 2008 and 12.5% every six months thereafter
and (iv) presently exercisable options to purchase 5,000 shares of
Common Stock.(14)
    
    Consists of (i) presently exercisable options to purchase 36,375
shares of Common Stock and (ii) 25,000 shares of Common Stock.(15)
    
    Consists of (i) presently exercisable options to purchase 38,250
shares of Common Stock and (ii) 5,700 shares of Common Stock.(16)
    
    Consists of (i) presently exercisable options to purchase 39,375
shares of Common Stock and (ii) 5,000 shares of Common Stock.(17)
    
    Consists of (i) presently exercisable options to purchase 39,000
shares of Common Stock and (ii) 5,000 shares of Common Stock.(18)
    
    Consists of (i) presently exercisable options to purchase 5,000
shares of Common Stock and (ii) 5,000 shares of Common Stock.(19)
    
    Consists of (i) 18,750 shares of unrestricted Common Stock and (ii)
56,250 shares of restricted common stock vesting 16.67% on June 26,
2008 and every six months thereafter.(20)
    
    Includes 2,286,586 shares of Common Stock convertible pursuant to the
presently convertible MHR Notes and presently exercisable options to
purchase 471,515 shares of Common Stock.  18




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##### Table of Contents



Item 13. Certain Relationships and Related Transactions, and Director Independence.
 Review, Approval and Ratification of Transactions with Related Persons
  Transactions with Related Persons
     19




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20




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Director Independence
  
 Item 14. Principal Accountant Fees and Services.
 Independent Auditor Fees
  Year EndedDecember 31,2007
    
    
    2006Audit fees (1)
    
    $
    372,000
    
    
    $
    331,000Audit related fees (2)
    
    
    40,000
    
    
    
    9,000Tax fees (3)
    
    
    
    
    
    
    All other fees (4)
    
    
    1,500
    
    
    
    1,500Total fees
    
    $
    413,500
    
    
    $
    341,500
 (1)
    
    Audit Fees.Includes fees billed for professional services rendered by Ernst & Young LLP
for the audit of NationsHealths annual consolidated financial statements included in our Annual
Report on Form 10-K and the review of the quarterly consolidated financial statements included in
each of our Forms 10-Q.(2)
    
    Audit-Related Fees.Audit-related fees consist primarily of fees for assistance provided
to us with SEC comment letters.(3)
    
    Tax Fees.There were no tax fees in 2007 and 2006.(4)
    
    All Other Fees.Other fees pertain to subscription fees paid to Ernst & Young LLP for
access to their online accounting research library.  21




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Pre-Approval of Services
     22




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PART IV
 
 Item 15. Exhibits.
     23




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SIGNATURES
  NATIONSHEALTH, INC.By:
    /s/ Glenn M. ParkerGlenn M. Parker, M.D.Chief Executive Officer April 28, 2008
  Name
    
    Title
    
    Date/s/ Glenn M. Parker

Glenn M. Parker
    
    Chief Executive Officer and
Director (Principal Executive
Officer)
    
    April 28, 2008/s/ Timothy Fairbanks

Timothy Fairbanks
    
    Chief Financial Officer and
Director (Principal Financial
Officer)
    
    April 28, 2008/s/ Bryan Happ

Bryan Happ
    
    Chief Accounting Officer 
(Principal Accounting Officer)
    
    April 28, 2008/s/ Arthur R. Spector

Arthur R. Spector
    
    Chairman of the Board of Directors
    
    April 28, 2008/s/ Lewis P. Stone

Lewis P. Stone
    
    Director, President and Chief
Information Officer
    
    April 28, 2008/s/ Elliot F. Hahn

Elliot F. Hahn, Ph.D.
    
    Director
    
    April 28, 2008/s/ Gary D. Small

Gary D. Small
    
    Director
    
    April 28, 2008/s/ Raymond N. Steinman

Raymond N. Steinman
    
    Director
    
    April 28, 2008/s/ Michael D. Tabris

Michael D. Tabris
    
    Director
    
    April 28, 2008/s/ Mark H. Rachesky

Mark H. Rachesky, M.D.
    
    Director
    
    April 28, 2008/s/ Don K. Rice

Don K. Rice
    
    Director
    
    April 28, 2008/s/ Richard R. Howard

Richard R. Howard
    
    Director
    
    April 28, 2008/s/ George F. Raymond

George F. Raymond
    
    Director
    
    April 28, 2008
  24




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NATIONSHEALTH, INC.
 
 EXHIBIT INDEX
 Exhibit No.
    
    Description31.1
    
    Certification of Chief Executive Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002. Filed
herewith.31.2
    
    Certification of Chief Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002. Filed
herewith.
  25