**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**Washington,      D.C. 20549**

**FORM      10-QSB**

**            (MARK      ONE)**

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

**For      the quarterly period ended June 30, 2005**

|  | o | **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 incorporation or organization) | (I.R.S.                  Employer Identification No.) |
|                                                                            |                                                  |

**435      Devon Park Drive, Bldg. 400, Wayne, PA 19087**

**(610)      975-4909**

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**PART      I **
**-**
**      FINANCIAL INFORMATION**

**Item      1. Financial Statements. **

**MILLSTREAM      II ACQUISITION CORPORATION**

**(a      corporation in the development stage)**

**BALANCE      SHEET**

|                                                                                                                                                                                                                            |   | **(Unaudited)****June                30,****2005** |       |  **December                31,****2004** |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------|------------|-----------------------------------------------|--------|
|                                                                                                                                                                                                                            |   |                                               |       |                                          |   |
| **ASSETS**                                                                                                                                                                                                                      |   |                                               |       |                                          |   |
| Cash                and cash equivalents                                                                                                                                                                                        |   | $                                                  | 830,523    |                                          | $      | 941,943 |   |
| Investments                held in trust                                                                                                                                                                                        |   |                                               | 24,038,297 |                                          |   | 23,745,193 |   |
| Prepaid                expenses                                                                                                                                                                                                 |   |                                               | 27,375     |                                          |   | 62,125 |   |
| Total                assets                                                                                                                                                                                                     |   | $                                                  | 24,896,195 |                                          | $      | 24,749,261 |   |
|                                                                                                                                                                                                                            |   |                                               |       |                                          |   |   |   |
| **LIABILITIES                AND STOCKHOLDERS’ EQUITY**                                                                                                                                                                   |   |                                               |       |                                          |   |   |   |
| Accounts                payable and accrued expenses                                                                                                                                                                            |   | $                                                  | 77,740     |                                          | $      | 44,728 |   |
| Deferred                interest                                                                                                                                                                                                |   |                                               | 60,479     |                                          |   | 1,838 |   |
| Total                liabilities                                                                                                                                                                                                |   |                                               | 138,219    |                                          |   | 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; issuedand                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                                                                                                                                                 |   |                                               | 42,222     |                                          |   | (13,059 | ) |
| Total                stockholders’ equity                                                                                                                                                                                 |   |                                               | 20,013,150 |                                          |   | 19,957,869 |   |
|                                                                                                                                                                                                                            |   |                                               |       |                                          |   |   |   |
| Total                liabilities and stockholders’ equity                                                                                                                                                                 |   | $                                                  | 24,896,195 |                                          | $      | 24,749,261 |   |

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**MILLSTREAM      II ACQUISITION CORPORATION**

**(a      corporation in the development stage)**

**STATEMENT      OF OPERATIONS (UNAUDITED)**

|                                               |   |  **Quarter****Ended****June                30,****2005** |    | ** Six                Months****Ended****June                30,****2005** |   | ** September                24,****2004                (Inception)****to                June 30,****2005** |   |
|----------------------------------------------------|--------|---------------------------------------------------------------|---------|---------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------|--------|
|                                               |   |                                                          |    |                                                                            |   |                                                                                                            |   |
| General                and administrative expenses |   | $                                                             | 72,472  |                                                                            | $      | 152,297                                                                                                         |   | $ | 172,711 |   |
|                                               |   |                                                          |    |                                                                            |   |                                                                                                            |   |   |   |   |
| Operating                loss                      |   |                                                          | (72,472 | )                                                                               |   | (152,297                                                                                                        | )      |   | (172,711 | ) |
|                                               |   |                                                          |    |                                                                            |   |                                                                                                            |   |   |   |   |
| Other                income:                       |   |                                                          |    |                                                                            |   |                                                                                                            |   |   |   |   |
| Interest                income                     |   |                                                          | 3,238   |                                                                            |   | 7,865                                                                                                           |   |   | 7,865 |   |
| Interest                on trust fund investment   |   |                                                          | 127,438 |                                                                            |   | 234,713                                                                                                         |   |   | 242,068 |   |
| Total                other income                  |   |                                                          | 130,676 |                                                                            |   | 242,578                                                                                                         |   |   | 249,933 |   |
|                                               |   |                                                          |    |                                                                            |   |                                                                                                            |   |   |   |   |
| Income                before income taxes          |   |                                                          | 58,204  |                                                                            |   | 90,281                                                                                                          |   |   | 77,222 |   |
|                                               |   |                                                          |    |                                                                            |   |                                                                                                            |   |   |   |   |
| Income                tax provision                |   |                                                          | (26,200 | )                                                                               |   | (35,000                                                                                                         | )      |   | (35,000 | ) |
|                                               |   |                                                          |    |                                                                            |   |                                                                                                            |   |   |   |   |
| Net                income                          |   | $                                                             | 32,004  |                                                                            | $      | 55,281                                                                                                          |   | $ | 42,222 |   |
|                                               |   |                                                          |    |                                                                            |   |                                                                                                            |   |   |   |   |

|                                             |   |   |      |   |   |      |   |
|--------------------------------------------------|--------|--------|-----------|--------|--------|-----------|--------|
| Weighted                average shares of common |   |   |      |   |   |      |   |
| stock                outstanding                 |   |   |      |   |   |      |   |
|                                             |   |   |      |   |   |      |   |
| Basic                and diluted                 |   |   | 5,600,000 |   |   | 5,600,000 |   |   | 4,215,636 |   |
|                                             |   |   |      |   |   |      |   |   |   |   |
| Earnings                per common share         |   |   |      |   |   |      |   |   |   |   |
|                                             |   |   |      |   |   |      |   |   |   |   |
| Basic                and diluted                 |   | $      | .01       |   | $      | .01       |   | $ | .01 |   |
|                                             |   |   |           |   |   |      |   |   |   |   |
|                                             |   |   |           |   |   |      |   |   |   |   |
|                                             |   |   |           |   |   |      |   |   |   |   |

----

**MILLSTREAM      II ACQUISITION CORPORATION**

**(a      corporation in the development stage)**

**STATEMENT      OF CASH FLOWS (UNAUDITED)**

|                                                                                                        |   |                **Six                Months****Ended****June                30,****2005** |        |                **September                24,****2004                (Inception)****to                June 30,****2005** |   |
|-------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------|-------------|-------------------------------------------------------------------------------------------------------------------------------|--------|
| **Cash                flows from operating activities:**                                                    |   |                                                                                          |        |                                                                                                                          |   |
| Net                income                                                                                   |   | $                                                                                             | 55,281      |                                                                                                                          | $      | 42,222 |   |
| Adjustments                to reconcile net income to net cash used in operating                activities: |   |                                                                                          |        |                                                                                                                          |   |   |   |
| Interest                income on treasury bills                                                            |   |                                                                                          | (293,342    | )                                                                                                                             |   | (302,535 | ) |
| Decrease                (increase) in prepaid expenses                                                      |   |                                                                                          | 34,750      |                                                                                                                          |   | (27,375 | ) |
| Increase                in accounts payable and accrued expenses                                            |   |                                                                                          | 65,413      |                                                                                                                          |   | 77,740 |   |
| Increase                in deferred interest                                                                |   |                                                                                          | 58,641      |                                                                                                                          |   | 60,479 |   |
| Net                cash used in operating activities                                                        |   |                                                                                          | (79,257     | )                                                                                                                             |   | (149,469 | ) |
|                                                                                                        |   |                                                                                          |        |                                                                                                                          |   |   |   |
| **Cash                flows from investing activities:**                                                    |   |                                                                                          |        |                                                                                                                          |   |   |   |
| Purchase                of treasury bills held in trust                                                     |   |                                                                                          | (24,027,946 | )                                                                                                                             |   | (47,762,475 | ) |
| Maturity                of treasury bills held in trust                                                     |   |                                                                                          | 24,027,000  |                                                                                                                          |   | 24,027,000 |   |
| Decrease                (increase) in cash held in trust                                                    |   |                                                                                          | 1,184       |                                                                                                                          |   | (287 | ) |
| Net                cash provided by (used in) investing activities                                          |   |                                                                                          | 238         |                                                                                                                          |   | (23,735,762 | ) |
|                                                                                                        |   |                                                                                          |        |                                                                                                                          |   |   |   |
| **Cash                flows from financing activities:**                                                    |   |                                                                                          |        |                                                                                                                          |   |   |   |
| Proceeds                from sale of shares of common stock to initial stockholders                         |   |                                                                                          | 3⁄4      |                                                                                                                          |   | 25,000 |   |
| Proceeds                from note payable, stockholder                                                      |   |                                                                                          | 3⁄4      |                                                                                                                          |   | 35,000 |   |
| Repayment                of note payable, stockholder                                                       |   |                                                                                          | 3⁄4      |                                                                                                                          |   | (35,000 | ) |
| Proceeds                from public offering of 4,600,000 units                                             |   |                                                                                          | 3⁄4      |                                                                                                                          |   | 27,600,000 |   |
| Proceeds                from issuance of option                                                             |   |                                                                                          | 3⁄4      |                                                                                                                          |   | 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                                         |   |                                                                                          | (111,420    | )                                                                                                                             |   | 830,523 |   |
| Cash                and cash equivalents at beginning of period                                             |   |                                                                                          | 941,943     |                                                                                                                          |   | 3⁄4 |   |
| Cash                and cash equivalents at end of period                                                   |   | $                                                                                             | 830,523     |                                                                                                                          | $      | 830,523 |   |

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**MILLSTREAM      II ACQUISITION CORPORATION**

**(a      corporation in the development stage)**

**NOTES      TO UNAUDITED FINANCIAL STATEMENTS**

**1.      Basis of Presentation**

** **

**2.      Organization and Business Operations**

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**MILLSTREAM      II ACQUISITION CORPORATION**

**(a      corporation in the development stage)**

**NOTES      TO UNAUDITED FINANCIAL STATEMENTS - (Continued)**

**2.      Organization and Business Operations (continued)**

**3.      Investments Held in Trust**

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**MILLSTREAM      II ACQUISITION CORPORATION**

**(a      corporation in the development stage)**

**NOTES      TO UNAUDITED FINANCIAL STATEMENTS - (Continued)**

**4.      Earnings per Share**

|                                                          |   |   **Quarter                Ended****June                30, 2005** |      |   **Six                Months Ended****June                30, 2005** |   |  **Cumulative                From September 24, 2004****(Inception)                to****June                30, 2005** |   |
|---------------------------------------------------------------|--------|------------------------------------------------------------------------------|-----------|---------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                          |   |                                                                         |      |                                                                            |   |                                                                                                                         |   |
| Numerator:                Net income                          |   | $                                                                            | 32,004    |                                                                            | $      | 55,281                                                                                                                       |   | $ | 42,222 |   |
|                                                          |   |                                                                         |      |                                                                            |   |                                                                                                                         |   |   |   |   |
| Denominator:                Average common shares outstanding |   |                                                                         | 5,600,000 |                                                                            |   | 5,600,000                                                                                                                    |   |   | 4,215,636 |   |
|                                                          |   |                                                                         |      |                                                                            |   |                                                                                                                         |   |   |   |   |
| Basic                and diluted earnings per share           |   | $                                                                            | .01       |                                                                            | $      | .01                                                                                                                          |   | $ | .01 |   |
|                                                          |   |                                                                         |      |                                                                            |   |                                                                                                                         |   |   |   |   |

**5.      Stockholders’ Equity**

**The      Offering**

**Preferred      Stock **

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**MILLSTREAM      II ACQUISITION CORPORATION**

**(a      corporation in the development stage)**

**NOTES      TO UNAUDITED FINANCIAL STATEMENTS - (Continued)**

**5.      Stockholders’ Equity (continued)**

**Common      Stock Commitments**

**6.**
**Commitment**

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**Item      2. Plan of Operation.**

***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 March 30, 2005. The following discussion      should be read in conjunction with our Financial Statements and related Notes      thereto included elsewhere in this report.*

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*Off-balance      sheet arrangements*

**Item      3. Controls and Procedures.**

**PART      II **
**-**
**      OTHER INFORMATION**

**Item      6. Exhibits.**

|  | 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. |
|--|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**SIGNATURES**

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

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