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, 2005


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

                        For the transition period from  to

                        Commission file number: 000-51065

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


                   Delaware                                  20-1665695
         (State or other jurisdiction of                 (I.R.S. Employer
         incorporation or organization)                 Identification No.)


                435 Devon Park Drive, Bldg. 400, Wayne, PA 19087
                    (Address of principal executive offices)

                                 (610) 975-4909
                           (Issuer's telephone number)



Check whether the 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 registrant 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: 5,600,000 common shares as of April
30, 2005

Transitional Small Business Disclosure Format.   Yes  |_|  No |X|



<PAGE>
<TABLE>

<S>                                                                            <C>            <C>

                         PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

                      MILLSTREAM II ACQUISITION CORPORATION
                    (a corporation in the development stage)


                                  BALANCE SHEET

                                                                               (Unaudited)
                                                                                March 31,      December 31,
                                                                                   2005            2004
                                                                               ------------   ------------
ASSETS
Cash and cash equivalents                                                      $    875,661   $    941,943
Investments held in trust                                                        23,879,019     23,745,193
Prepaid expenses                                                                     44,170         62,125
                                                                               ------------   ------------
     Total assets                                                              $ 24,798,850   $ 24,749,261
                                                                               ============   ============

LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses                                          $     44,239   $     44,728
Deferred interest                                                                    28,639          1,838
                                                                               ------------   ------------
     Total liabilities                                                               72,878         46,566
                                                                               ------------   ------------

Commitment

Common stock, subject to possible conversion, 919,540 shares at
   conversion value                                                               4,744,826      4,744,826
                                                                               ------------   ------------

Stockholders' Equity:
   Preferred stock, $.0001 par value, authorized 1,000,000 shares; none
      issued                                                                           --             --
   Common stock, $.0001 par value, authorized 15,000,000 shares; issued
     and outstanding 5,600,000 shares (which includes 919,540 shares subject
     to possible conversion)                                                            560            560
   Additional paid-in capital                                                    19,970,368     19,970,368
   Retained earnings (deficit) accumulated during development stage                  10,218        (13,059)
                                                                               ------------   ------------
     Total stockholders' equity                                                  19,981,146     19,957,869
                                                                               ------------   ------------

     Total liabilities and stockholders' equity                                $ 24,798,850   $ 24,749,261
                                                                               ============   ============


</TABLE>




            See accompanying notes to unaudited financial statements.


                                       1
<PAGE>

                      MILLSTREAM II ACQUISITION CORPORATION
                    (a corporation in the development stage)


                       STATEMENT OF OPERATIONS (UNAUDITED)



                                         Quarter    September 24, 2004
                                          Ended       (Inception) to
                                        March 31,       March 31,
                                           2005           2005
                                       -----------    -----------

 General and administrative expenses   $    79,825    $   100,239
                                       -----------    -----------

   Operating loss                          (79,825)      (100,239)

Other income:
   Interest income                           4,627          4,627
   Interest on trust fund investment       107,275        114,630
                                       -----------    -----------
   Total other income                      111,902        119,257
                                       -----------    -----------

Income before income taxes                  32,077         19,018

Income tax provision                        (8,800)        (8,800)
                                       -----------    -----------

Net income                             $    23,277    $    10,218
                                       ===========    ===========



 Weighted average shares of common
   stock outstanding

       Basic and diluted                 5,600,000      3,530,978
                                       ===========    ===========

  Earnings per common share

       Basic and diluted               $       .00    $       .00
                                       ===========    ===========




            See accompanying notes to unaudited financial statements.


                                       2
<PAGE>


<TABLE>
<CAPTION>

<S>                                                                             <C>             <C>

                      MILLSTREAM II ACQUISITION CORPORATION
                    (a corporation in the development stage)


                       STATEMENT OF CASH FLOWS (UNAUDITED)


                                                                                   Quarter   September 24, 2004
                                                                                    Ended        (Inception)
                                                                                  March 31,      to March 31,
                                                                                    2005             2005
                                                                                ------------    ------------
Cash flows from operating activities:
Net income                                                                      $     23,277    $     10,218
Adjustments to reconcile net income to net cash used in operating activities:
   Interest income on treasury bills                                                (134,070)       (143,263)
   Decrease (increase) in prepaid expenses                                            17,955         (44,170)
   Increase in accounts payable and accrued expenses                                  31,912          44,239
   Increase in deferred interest                                                      26,801          28,639
                                                                                ------------    ------------
      Net cash used in operating activities                                          (34,125)       (104,337)
                                                                                ------------    ------------

Cash flows from investing activities:
Purchase of treasury bills held in trust                                                --       (23,734,529)
Decrease (increase) in cash held in trust                                                244          (1,227)
                                                                                ------------    ------------
      Net cash provided by (used in) investing activities                                244     (23,735,756)
                                                                                ------------    ------------

Cash flows from financing activities:
Proceeds from sale of shares of common stock to initial stockholders                    --            25,000
Proceeds from note payable, stockholder                                                 --            35,000
Repayment of note payable, stockholder                                                  --           (35,000)
Proceeds from public offering of 4,600,000 units                                        --        27,600,000
Proceeds from issuance of option                                                        --               100
Payment of costs of public offering                                                  (32,401)     (2,909,346)
                                                                                ------------    ------------
      Net cash (used in) provided by financing activities                            (32,401)     24,715,754
                                                                                ------------    ------------

Net (decrease) increase in cash and cash equivalents                                 (66,282)        875,661
Cash and cash equivalents at beginning of period                                     941,943            --
                                                                                ------------    ------------
Cash and cash equivalents at end of period                                      $    875,661    $    875,661
                                                                                ============    ============


</TABLE>


            See accompanying notes to unaudited financial statements.



                                       3
<PAGE>


                      MILLSTREAM II ACQUISITION CORPORATION
                    (a corporation in the development stage)

                     NOTES TO UNAUDITED FINANCIAL STATEMENTS

1.  Basis of Presentation

The financial  statements at March 31, 2005 and for the three-month period ended
March 31, 2005 and for the period from  September 24, 2004  (inception) to March
31, 2005 are unaudited  and include the accounts of  Millstream  II  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, 2005 and the results of its  operations and its cash
flows for the quarter  ended March 31, 2005.  The Company  commenced  operations
effective September 24, 2004. Operating results for the interim period presented
are not necessarily indicative of the results to be expected for a full year.

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 September 24, 2004 as a blank check
company  whose  objective is to acquire an  operating  business.  The  Company's
initial  stockholders  purchased  347,500  common shares for $24,947 and 527,500
common shares for $53 on September  29, 2004. On December 7, 2004,  the Board of
Directors  authorized a stock  dividend of 0.1428571  shares of common stock for
each share of common stock outstanding,  bringing the initial outstanding shares
to 1,000,000.  All references in the  accompanying  financial  statements to the
number of shares of stock  outstanding  for the initial  shareholders  have been
retroactively restated to reflect this transaction.

The  registration  statement for the Company's  initial  public  offering  ("the
Offering") was declared effective on December 17, 2004. The Company  consummated
the  Offering on December 23, 2004 and December 30, 2004 and raised net proceeds
of approximately $24,691,000. 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. An amount of
$23,736,000 of the net proceeds was placed in an interest-bearing  trust account
("Trust  Account")  until the  earlier  of (i) the  consummation  of a  Business
Combination or (ii)  liquidation of the Company.  Under the agreement  governing
the Trust  Account,  funds will be  invested  only in United  States  government
securities (Treasury Bills) with a maturity of 180 days or less. This amount has
been invested in United States Treasury Bills,  which have been accounted for as
trading  securities  (see Note 3). The  remaining  net proceeds (not held in the
Trust  Account)  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 such transaction for stockholder  approval. In the
event that  stockholders  owning 20% or more of the shares sold in the  Offering
vote  against the Business  Combination  and exercise  their  conversion  rights
described  below, the Business  Combination will not be consummated.  All of the
Company's  stockholders  prior  to  the  Offering,



                                       4
<PAGE>


                      MILLSTREAM II ACQUISITION CORPORATION
                    (a corporation in the development stage)

              NOTES TO UNAUDITED FINANCIAL STATEMENTS - (Continued)

2.  Organization and Business Operations (continued)

including  all  of  the  officers  and   directors  of  the  Company   ("Initial
Stockholders"),  have agreed to vote their  1,000,000  founding shares of common
stock in accordance  with the vote of the majority of all other  stockholder  of
the Company ("Public  Stockholders")  with respect to any Business  Combination.
After  consummation of a Business  Combination,  these voting safeguards will no
longer be applicable.

With respect to a Business  Combination  that is approved and  consummated,  any
Public  Stockholder  who voted against the Business  Combination may demand that
the Company  convert  his shares to cash.  The per share  conversion  price will
equal the amount in the Trust Account,  calculated as of two business days prior
to the consummation of 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 conversion of their shares in
the event of a Business  Combination.  Such Public  Stockholders are entitled to
receive their per share interest in the Trust Account computed without regard to
the  shares  held by  Initial  Stockholders.  Accordingly,  a portion of the net
proceeds from the Offering  (19.99% of the amount held in the Trust Account) has
been  classified  as  common  stock  subject  to  possible   conversion  in  the
accompanying  balance sheets and 19.99% of the related  interest earned has been
recorded as deferred interest.

The Company's Certificate of Incorporation,  as amended,  provides for mandatory
liquidation  of the Company in the event that the Company does not  consummate a
Business  Combination  within 18 months from the date of the consummation of the
Offering  (June 23, 2006),  or 24 months from the  consummation  of the Offering
(December 23, 2006) 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 Account assets)
will be less than the initial  public  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).

3.  Investments Held in Trust

Investments  held in trust are  primarily  comprised  of two zero coupon  United
States Treasury Bills with face values of $21,416,000  and $2,611,000  purchased
at  discounts  of 98.7816%  and  98.7917%,  respectively,  due June 23, 2005 and
carried  on  the  Company's  financial  statements  as  of  March  31,  2005  at
$23,879,019,  which includes interest of $143,263 and trust cash of $1,227;  and
as of December 31, 2004 at  $23,745,193,  which includes  interest of $9,193 and
trust cash of $1,471.

4.  Earnings per Share

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


<TABLE>
<CAPTION>

<S>                                                    <C>                 <C>

                                                                        September 24, 2004
                                                  Quarter Ended          (Inception) to
                                                  March 31, 2005         March 31, 2005
                                                 ------------------ -------------------------

Numerator:  Net income                                 $   23,277          $   10,218

Denominator:  Average common shares outstanding         5,600,000           3,530,978

Basic and diluted earnings per share                   $      .00          $      .00


</TABLE>




                                       5
<PAGE>


                      MILLSTREAM II ACQUISITION CORPORATION
                    (a corporation in the development stage)

              NOTES TO UNAUDITED FINANCIAL STATEMENTS - (Continued)

4   Earnings per Share (continued)

No  computation  for diluted  earnings per share was prepared for the Redeemable
Common  Stock  Purchase  Warrants  (see  Note 5) to  purchase  an  aggregate  of
9,200,000 shares of common stock at $5.00 per share and the underwriters' option
(see Note 5) to purchase  300,000  Units at an exercise  price of $9.90 per Unit
(with  underlying  warrants  at  $6.25  per  share),  respectively,   that  were
outstanding  at March 31, 2005 because the shares  underlying  the conversion of
the  warrants  are   contingently   issuable  and  the  exercise  price  of  the
underwriters' option is in excess of the related market value of the Units.

5.  Stockholders' Equity

The Offering
The Company sold 4,600,000 units  ("Units") in the Offering,  which included all
of the 600,000 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 December 17, 2005 and expiring  December
17, 2008. 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 this Offering,
the  Company  issued  an  option,   for  $100,  to  the  representative  of  the
underwriters  to purchase  300,000 Units at an exercise  price of $9.90 per Unit
(see Common Stock  Commitments  below).  The warrants  underlying such Units are
exercisable at $6.25 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 in January 2005.

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, 2005, no shares of preferred stock have been issued.

Common Stock Commitments
The Company has  10,100,000  shares of common stock  commitments  in the form of
Warrants and the underwriters' option, which are currently not exercisable. Only
9,400,000  common shares are available for issuance  under the current amount of
authorized  shares.  The Company  intends to increase  its number of  authorized
shares in connection with a business  combination and prior to the date in which
the Warrants and the  underwriters'  option  become  exercisable.  The Company's
underwriters  have  committed  that the Company  will not be  obligated to issue
240,000 of the Units described in The Offering above if the Company is unable to
increase its number of authorized shares.  These 240,000 Units represent 720,000
shares of common stock commitments.


                                       6
<PAGE>





                      MILLSTREAM II ACQUISITION CORPORATION
                    (a corporation in the development stage)

              NOTES TO UNAUDITED FINANCIAL STATEMENTS - (Continued)

6.  Commitment

The Company  presently  occupies  office  space  provided by an  affiliate of an
Initial  Stockholder,  who is also an officer.  Such  affiliate has agreed that,
until the  acquisition  of a target  business by the Company,  it will make such
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 the affiliate  $7,500 per month for such  services  commencing
December 17, 2004.



                                       7
<PAGE>



Item 2. Plan of Operation.

               CAUTIONARY STATEMENT FOR FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q 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
March 30, 2005. 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  September  24, 2004 to serve as a vehicle to effect a merger,
capital stock exchange,  asset acquisition or other similar business combination
with a currently unidentified operating business that we believe has significant
growth  potential.  We consummated  our initial public  offering on December 23,
2004.  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.

Net income of $23,277  reported  for the quarter  ended March 31, 2005  consists
primarily  of $14,250  expense for  director  and officer  liability  insurance,
$22,500 expense for a monthly  administrative  services  agreement,  $17,215 for
franchise  and state  capital  stock  taxes,  $14,147 for legal and  accounting,
$8,800 for  federal  and state  income  taxes and  $11,713  for other  expenses.
Interest  on the trust  fund  investment  was  $107,275,  excluding  $26,801  of
deferred interest, and interest earned on the money market account was $4,627.

Net  income  of  $10,218  reported  for  the  period  from  September  24,  2004
(inception) to March 31, 2005 consists primarily of $16,625 expense for director
and officer liability  insurance,  $26,250 expense for a monthly  administrative
services agreement, $28,901 for franchise and state capital stock taxes, $14,147
for legal and accounting,  $8,800 for federal and state income taxes and $14,316
for  other  expenses.  Interest  on the  trust  fund  investment  was  $114,630,
excluding $28,639 of deferred interest,  and interest earned on the money market
account was $4,627.

$23,736,000 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 will 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 account as well as any other net proceeds not expended will be used to
finance  the  operations  of the  target  business.  We  believe  that  we  have
sufficient  available funds outside of the trust account to operate for at least
24 months from the date of the Offering (December 23, 2006), assuming a business
combination  is not  consummated  during that time.  Over this time  period,  we
anticipate  approximately  $180,000 of expenses for legal,  accounting and other
expenses  attendant  to  the  due  diligence  investigations,   structuring  and
negotiating  of a business  combination,  $180,000  for the  administrative  fee
payable  to 400  Building  LLC  ($7,500  per month for two  years),  $50,000  of
expenses for the due diligence and  investigation of a target business,  $40,000
of  expenses  in  legal  and  accounting  fees  relating  to our  SEC  reporting
obligations  and  $505,000  for general  working



                                       8
<PAGE>


capital that will be used for  miscellaneous  expenses and  reserves,  including
approximately  $114,000 for director and officer  liability  insurance  premiums
(for two  years).  We do not believe we will need to raise  additional  funds in
order to meet the expenditures required for operating our business.  However, we
may need to raise  additional funds through a private offering of debt or equity
securities  if it is  required  to  consummate  a business  combination  that is
presented to us. We would only consummate such a fundraising simultaneously with
the consummation of a business combination.

We are obligated,  commencing  December 17, 2004, to pay to 400 Building LLC, an
affiliate of Arthur Spector,  our chairman of the board, chief executive officer
and president, a monthly fee of $7,500 for general and administrative  services.
In addition,  on September 29, 2004,  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 December 2004 out of proceeds of the Offering.

Off-balance sheet arrangements

There were no off-balance sheet arrangements  during the quarter ended March 31,
2005 that have or are  reasonably  likely to have a current or future  effect on
our financial condition,  changes in financial condition,  revenues or expenses,
results of operations,  liquidity,  capital  expenditures,  or capital resources
that are material to our investors.

Item 3. Controls and Procedures.

Our management  carried out an evaluation,  with the  participation of our Chief
Executive Officer (principal  executive,  financial and accounting officer),  of
the  effectiveness  of our  disclosure  controls and  procedures as of March 31,
2005. Based upon that evaluation, our Chief Executive Officer concluded that our
disclosure  controls and procedures  were  effective to ensure that  information
required  to be  disclosed  by us in  reports  that we file or submit  under the
Securities  and  Exchange  Act of 1934 is recorded,  processed,  summarized  and
reported,  within  the time  periods  specified  in the  rules  and forms of the
Securities and Exchange Commission.

There has not been any change in our internal  control over financial  reporting
in connection with the evaluation  required by Rule 13a-15(d) under the Exchange
Act that occurred  during the quarter ended March 31, 2005,  that has materially
affected,  or is reasonably  likely to materially  affect,  our internal control
over financial reporting.



                           PART II - OTHER INFORMATION

Item 6.  Exhibits.

EXHIBITS

    Exhibit No.            Description
    -----------            -----------

         31       Certification  of  Chairman,   Chief  Executive   Officer  and
                  President pursuant to Section 302 of the Sarbanes-Oxley Act of
                  2002.

         32       Certification  of  Chairman,   Chief  Executive   Officer  and
                  President pursuant to Section 906 of the Sarbanes-Oxley Act of
                  2002.



                                       9
<PAGE>





                                   SIGNATURES

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



                              MILLSTREAM II ACQUISITION CORPORATION

                              By:         /s/ Arthur Spector
                              -------------------------------
                              Arthur Spector
                              Chairman, President and Chief Executive Officer
                             (Principal executive and financial and accounting
                              officer)

Date:  May 13, 2005






                                       10