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<P ALIGN="CENTER"><FONT SIZE=2><B>As filed with the Securities and Exchange Commission on May&nbsp;19, 2003  </B></FONT></P>

<P ALIGN="RIGHT"><FONT SIZE=2><B> Registration No.&nbsp;333-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=5><B>UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION<BR>  </B></FONT><FONT SIZE=2><B>Washington, D.C. 20549  </B></FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=5><B>FORM S-1  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><B>REGISTRATION STATEMENT<BR>
UNDER<BR>
THE SECURITIES ACT OF 1933  </B></FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=5><B>MILLSTREAM ACQUISITION CORPORATION<BR>  </B></FONT><FONT SIZE=2>(Exact name of registrant as specified in its charter) </FONT></P>

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<TD WIDTH="32%" ALIGN="CENTER"><FONT SIZE=2><B>Delaware</B></FONT><FONT SIZE=2><BR>
(State or other jurisdiction of<BR>
incorporation or organization)</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="32%" ALIGN="CENTER"><FONT SIZE=2><B>6770</B></FONT><FONT SIZE=2><BR>
(Primary Standard Industrial<BR>
Classification Code Number)</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="32%" ALIGN="CENTER"><FONT SIZE=2><B>06-1688360</B></FONT><FONT SIZE=2><BR>
(I.R.S. Employer Identification<BR>
Number)</FONT></TD>
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<P ALIGN="CENTER"><FONT SIZE=2><B>435 Devon Park Drive, Building 400<BR>
Wayne, Pennsylvania 19087<BR>
(610)&nbsp;293-2511<BR>  </B></FONT><FONT SIZE=2>(Address, including zip code, and telephone number, including area code, <BR>
of registrant's principal executive offices) </FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2><B>Arthur Spector<BR>
435 Devon Park Drive, Building 400<BR>
Wayne, Pennsylvania 19087<BR>
(610)&nbsp;293-2511<BR>  </B></FONT><FONT SIZE=2>(Name, address, including zip code, and telephone number, including area code, of agent for service) </FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2>Copies
to: </FONT></P>

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<TD WIDTH="49%" ALIGN="CENTER"><FONT SIZE=2>David Alan Miller, Esq.<BR>
Graubard Miller<BR>
600 Third Avenue<BR>
New York, New York 10016<BR>
(212) 818-8800<BR>
(212) 818-8881 &#151; Facsimile</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="49%" ALIGN="CENTER"><FONT SIZE=2>Barry J. Siegel, Esq.<BR>
Klehr, Harrison, Harvey, Branzburg &amp; Ellers LLP<BR>
260 South Broad Street, Suite 400<BR>
Philadelphia, Pennsylvania 19102<BR>
(215) 568-6060<BR>
(215) 568-6603 &#151; Facsimile</FONT></TD>
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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>Approximate date of commencement of proposed sale to the public:</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;As soon as practicable after the effective date of this
registration statement. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule&nbsp;415 under the Securities Act of 1933 check the following
box.&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="WINGDINGS">&#253;</FONT> </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
this Form is filed to register additional securities for an offering pursuant to Rule&nbsp;462(b) under the Securities Act, please check the following box and list the Securities
Act registration statement number of the earlier
effective registration statement for the same offering.&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="WINGDINGS">&#111;</FONT> </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
this Form is a post-effective amendment filed pursuant to Rule&nbsp;462(c) under the Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same offering.&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="WINGDINGS">&#111;</FONT> </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
this Form is a post-effective amendment filed pursuant to Rule&nbsp;462(d) under the Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same offering.&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="WINGDINGS">&#111;</FONT> </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
delivery of the prospectus is expected to be made pursuant to Rule&nbsp;434, please check the following box.&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="WINGDINGS">&#111;</FONT> </FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2><B>CALCULATION OF REGISTRATION FEE  </B></FONT></P>

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<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
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<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Title of each Class of<BR>
Security being registered</B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="15%" ALIGN="CENTER"><FONT SIZE=1><B>Amount being<BR>
Registered</B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Proposed<BR>
Maximum<BR>
Offering Price Per<BR>
Share(1)</B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Proposed<BR>
Maximum<BR>
Aggregate Offering<BR>
Price(1)</B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Amount of<BR>
Registration<BR>
Fee</B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TH>
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<TR VALIGN="TOP">
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<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
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<TD COLSPAN=2><FONT SIZE=1>Units, each consisting of one share of Common Stock, $.0001 par value, and two Warrants (2)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=1>3,450,000 Units</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=1>6.00</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=1>20,700,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=1>1,674.63</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
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<TR VALIGN="TOP">
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<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
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<TD COLSPAN=2><FONT SIZE=1>Shares of Common Stock included as part of the Units(2)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=1>3,450,000 Shares</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=1>&#151;(3</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>)</FONT></TD>
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<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
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<TD COLSPAN=2><FONT SIZE=1>Warrants included as part of the Units(2)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=1>6,900,000 Warrants</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=1>&#151;(3</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>)</FONT></TD>
</TR>
<TR VALIGN="TOP">
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<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
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<TD COLSPAN=2><FONT SIZE=1>Shares of Common Stock underlying the Warrants included in the Units(4)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=1>6,900,000 Shares</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=1>5.00</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=1>34,500,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=1>2,791.05</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
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<TR VALIGN="TOP">
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<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
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<TD COLSPAN=2><FONT SIZE=1>Underwriter's Unit Purchase Option</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=1>1</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=1>100</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=1>100</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=1>&#151;(3</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>)</FONT></TD>
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<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
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<TD COLSPAN=2><FONT SIZE=1>Units underlying the Underwriter's Unit Purchase Option ("Underwriter's Units")(4)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=1>300,000 Units</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=1>6.60</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=1>1,980,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=1>160.18</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
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<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
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<TD COLSPAN=2><FONT SIZE=1>Shares of Common Stock included as part of the Underwriter's Units(4)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=1>300,000 Shares</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=1>&#151;(3</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=13><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=1>Warrants included as part of the Underwriter's Units(4)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=1>600,000 Warrants</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=1>&#151;(3</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>)</FONT></TD>
</TR>
<TR VALIGN="TOP">
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<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
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<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=1>Shares of Common Stock underlying the Warrants included in the Underwriter's Units(4)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=1>600,000 Shares</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=1>5.00</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=1>3,000,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=1>242.70</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=13><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
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<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="24%"><FONT SIZE=1>Total</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=1>60,180,100</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=1>4,868.56</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=13><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
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<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=1>(1)</FONT></DT><DD><FONT SIZE=1>Estimated
solely for the purpose of calculating the registration fee.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=1>(2)</FONT></DT><DD><FONT SIZE=1>Includes
450,000 Units and 450,000 shares of Common Stock and 900,000 Warrants underlying such Units which may be issued on exercise of a 45-day option granted to the
Underwriter to cover over-allotments, if any.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=1>(3)</FONT></DT><DD><FONT SIZE=1>No
fee pursuant to Rule&nbsp;457(g).
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=1>(4)</FONT></DT><DD><FONT SIZE=1>Pursuant
to Rule&nbsp;416, there are also being registered such indeterminable additional securities as may be issued as a result of the anti-dilution provisions. </FONT></DD></DL>
<BR>
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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><B>The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective
date until the registrant shall file&nbsp;a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section&nbsp;8(a) of
the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section&nbsp;8(a), may
determine.</B></FONT></P>

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<P><FONT SIZE=2><B>The information in this prospectus is not complete and may be changed. We may not sell these securities until the
registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities
in any state where the offer or sale is not permitted.   </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><B> <A NAME="ca1189_preliminary_prospectus___ca102029"> </A>
<A NAME="toc_ca1189_1"> </A>
<BR>    </B></FONT><FONT SIZE=2><B>Preliminary Prospectus<BR>  Subject to Completion, May&nbsp;19, 2003    <BR>    </B></FONT></P>

<P><FONT SIZE=2><B>PROSPECTUS  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="ca1189_$18,000,000_millstream_acquisi__$1801427"> </A>
<A NAME="toc_ca1189_2"> </A>
<BR></FONT><FONT SIZE=4><B>$18,000,000  <BR>    <BR>    </B></FONT><FONT SIZE=5><B>MILLSTREAM ACQUISITION CORPORATION  <BR>    <BR>    </B></FONT><FONT SIZE=4><B>3,000,000 units  <BR>  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Millstream Acquisition Corporation is a newly organized Specified Purchase Acquisition Company&#153;, or SPAC&#153;. This is an
initial public offering of our securities. Each unit consists of: </FONT></P>

<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>one
share of our common stock; and
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>two
warrants. </FONT></DD></DL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each
warrant entitles the holder to purchase one share of our common stock at a price of $5.00. Each warrant will become exercisable on the later of our completion of a business
combination or&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2004 </FONT><FONT SIZE=2><B>[one year from the date of this prospectus]</B></FONT><FONT SIZE=2>, and will expire on
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2007 </FONT><FONT SIZE=2><B>[four years from the date of this prospectus]</B></FONT><FONT SIZE=2>, or earlier upon redemption. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
have granted the underwriters a 45-day option to purchase up to 450,000 additional units solely to cover any over-allotments, if any. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There
is presently no public market for our units, common stock or warrants. </FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>Investing in our securities involves a high degree of risk. See "Risk Factors" beginning on page 7 of this prospectus for a discussion of information that should
be considered in connection with an investment in our securities.</B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Neither
the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or
complete. Any representation to the contrary is a criminal offense. </FONT></P>

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<TABLE WIDTH="85%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Public<BR>
offering price</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Underwriting<BR>
discount and<BR>
commissions</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Proceeds,<BR>
before<BR>
expenses, to us</B></FONT><HR NOSHADE></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Per unit</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>6.00</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=2>0.42</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=2>5.58</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="37%"><FONT SIZE=2>Total</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>18,000,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=2>1,260,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=2>16,740,000</FONT></TD>
</TR>
</TABLE>
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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Of
the net proceeds we receive from this offering, $15,300,000 ($5.10 per unit) will be deposited into trust. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EarlyBirdCapital,&nbsp;Inc.
on behalf of the underwriters, expects to deliver our securities to purchasers on or about&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2003.
</FONT></P>

<P ALIGN="CENTER"><FONT SIZE=5><B>EarlyBirdCapital,&nbsp;Inc.  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2003. </FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="cc1189_state_blue_sky_information"> </A>
<A NAME="toc_cc1189_1"> </A>
<BR></FONT><FONT SIZE=2><B>State Blue Sky Information    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We will only offer and sell the units for retail sales in Delaware, the District of Columbia, Florida, Hawaii, Illinois, Maryland, New York and Rhode Island.
Additionally, we believe that the units, upon completion of this offering, and the common stock and warrants comprising the units, once they become separately transferable, will be eligible for sale
on a secondary market basis in each those states and in Colorado, Illinois, Kentucky, Massachusetts, Pennsylvania, Tennessee, Washington and Wisconsin. If you are not an institutional investor, you
may purchase our securities in this offering or in any subsequent trading market which may develop only in the jurisdictions described above. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="cc1189_table_of_contents"> </A>
<A NAME="toc_cc1189_2"> </A>
<BR></FONT><FONT SIZE=2><B>Table Of Contents    <BR>    </B></FONT></P>

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<TR VALIGN="BOTTOM">
<TH WIDTH="92%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="5%" ALIGN="CENTER"><FONT SIZE=1><B>Page</B></FONT><HR NOSHADE></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="92%"><FONT SIZE=2>Prospectus Summary</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>1</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="92%"><FONT SIZE=2>Summary Financial Data</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>6</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="92%"><FONT SIZE=2>Risk Factors</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>7</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="92%"><FONT SIZE=2>Forward Looking Statements</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>13</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="92%"><FONT SIZE=2>Use of Proceeds</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>14</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="92%"><FONT SIZE=2>Dilution</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>16</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="92%"><FONT SIZE=2>Capitalization</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>17</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="92%"><FONT SIZE=2>Management's Discussion and Analysis of Financial Condition and Results of Operations</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>18</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="92%"><FONT SIZE=2>Proposed Business</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>18</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="92%"><FONT SIZE=2>Management</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>27</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="92%"><FONT SIZE=2>Principal Stockholders</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>30</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="92%"><FONT SIZE=2>Certain Transactions</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>32</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="92%"><FONT SIZE=2>Description Of Securities</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>33</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="92%"><FONT SIZE=2>Underwriting</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>37</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="92%"><FONT SIZE=2>Legal Matters</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>40</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="92%"><FONT SIZE=2>Experts</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>40</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="92%"><FONT SIZE=2>Where You Can Find Additional Information</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>40</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="92%"><FONT SIZE=2>Index to Financial Statements</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>F-1</FONT></TD>
</TR>
</TABLE>
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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>You should rely only on the information contained or incorporated by reference in this prospectus. We have not authorized anyone to provide you with different
information. We are not making an offer of these securities in any jurisdiction where the offer is not permitted. You should not assume that the
information in this prospectus is accurate as of any date other than the date on the front of this prospectus.</B></FONT></P>

<HR NOSHADE ALIGN="CENTER" WIDTH="120">

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>"SPAC" and "Specified Purpose Acquisition Company" are service marks of EarlyBirdCapital.com,&nbsp;Inc., the parent of
EarlyBirdCapital,&nbsp;Inc.</B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>i</FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="cg1189_prospectus_summary"> </A>
<A NAME="toc_cg1189_1"> </A>
<BR></FONT><FONT SIZE=2><B>Prospectus Summary    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>This summary highlights certain information appearing elsewhere in this prospectus. This summary is not complete and does not contain all
of the information that you should consider before purchasing our securities. Unless otherwise stated in this prospectus, references to "we," "us" or "our" refer to Millstream Acquisition Corporation.
Unless we tell you otherwise, the information in this prospectus assumes that the underwriters will not exercise their over-allotment option.</I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
are a blank check company known as a Specified Purpose Acquisition Company, or a SPAC. We were organized under the laws of the State of Delaware on April&nbsp;11, 2003. We were
formed to effect a merger, capital stock exchange, asset acquisition or other similar business combination with a currently unidentified operating business with significant growth potential. To date,
our efforts have been limited to organizational activities. The implementation of our business plan is wholly contingent upon the successful sale of the units offered by this prospectus. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
efforts in identifying a prospective target business will not be limited to a particular industry. Instead, we intend to focus on various industries where changes in industrial
technology provide particular opportunities for growth. Innovative industrial technologies have given small and medium-sized companies the ability not only to compete with larger organizations, but to
leapfrog existing products, processes and services and establish new market leadership. We believe that companies with these types of innovations obtain a competitive edge and the opportunity for
rapid and sustainable growth. Innovations of this nature occur frequently in chemicals and other material sciences, energy, medical products and manufacturing processes. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
believe that certain key trends create favorable circumstances for our acquisition of a target business. As a result of current market conditions, many privately held companies have
been shut off from the public marketplace. Additionally, as the economy has slowed, many companies are attempting to divest non-core assets and divisions and valuations have decreased
significantly. As a result, we believe that there are substantial opportunities to effect attractive acquisitions and that, as a well-financed public entity possessing broad investment and
acquisition expertise, we are well positioned to identify target acquisitions and to effect a business combination. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
effect a business combination, we intend to use: </FONT></P>

<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>cash
derived from the proceeds of this offering,
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>our
capital stock,
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>debt,
or
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>a
combination of cash, capital stock and debt. </FONT></DD></DL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
believe that the skills and expertise of our officers and directors, their collective access to acquisition opportunities and ideas, their contacts, and their transactional expertise
will enable us to successfully identify and effect an acquisition. These individuals will play a key role in identifying and evaluating prospective acquisition candidates, selecting the target
business, and structuring, negotiating and consummating its acquisition. Our officers and directors are: </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Arthur
Spector, our chairman of the board, chief executive officer and president, has extensive experience in mergers and acquisitions and managing private equity funds.
Mr.&nbsp;Spector served as chairman of the board, chief executive officer and president of Information Systems Acquisition Corp., a SPAC that completed an initial public offering in 1993 which
raised gross proceeds of approximately $13.8&nbsp;million and merged with Neoware Systems,&nbsp;Inc., a manufacturer of sophisticated computer appliances and related software. He is also a
managing director of the general partner and management company of Safeguard International Fund L.P., a private equity fund that makes controlling investments in industrial companies. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>1</FONT></P>

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<BR>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Robert
E. Keith, Jr., a director of ours, is a managing director of the management companies of TL Ventures, a group of private equity funds that invest in companies in the internet,
software, information technology, communications and life science industries. Mr.&nbsp;Keith is also a co-founder of EnerTech Capital Partners and EnerTech Capital Partners II, venture
capital funds that invest in technology and service companies related to energy, communications and the broader utilities marketplace. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Don
K. Rice, a director of ours, is the managing partner of Rice Sangalis Toole&nbsp;&amp; Wilson, which he co-founded in 1989 and which manages a group of funds that invest
primarily in subordinated debt of middle market companies in diverse industries. He was previously president and chief executive officer of First Texas Merchant Banking Group, a firm which provided
mezzanine financing, and a vice president of PruCapital,&nbsp;Inc., an investment subsidiary of The Prudential Insurance Company of America. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dr.&nbsp;Heinz
C. Schimmelbusch, a director of ours, is a managing director of the general partner and management company of Safeguard International Fund L.P. He is also chairman of
the board and chief executive officer of Timminco Limited, a publicly held Canadian company that manufactures and supplies magnesium products and chief executive officer of Metallurg,&nbsp;Inc., a
specialty metals company. He is also chairman and chief executive officer of Allied Resource Corporation, a global technology and engineering company. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
a more complete description of the background and business experience of our officers and directors, see the section entitled "Management" below. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
offices are located at 435 Devon Park Drive, Building 400, Wayne, Pennsylvania 19087, and our telephone number is (610)&nbsp;293-2511. </FONT></P>

<P><FONT SIZE=2><B>The Offering  </B></FONT></P>

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<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Securities offered:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2>3,000,000 units, at $6.00 per unit, each unit consisting of:</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&#149;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="46%"><FONT SIZE=2>one share of common stock; and</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&#149;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="46%"><FONT SIZE=2>two warrants.</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2>The units may begin trading on the date of this prospectus. Each of the common stock and warrants may trade separately on the 90th day after the date of this prospectus unless EarlyBirdCapital, Inc. determines that an
earlier date is acceptable. The common stock and warrants may be traded separately only if we file with the SEC an audited balance sheet reflecting our receipt of the proceeds of this offering. We expect to file an audited balance sheet upon the
consummation of this offering.</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Common stock:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="46%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="44%" VALIGN="TOP"><FONT SIZE=2>Number outstanding before this offering</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=3 VALIGN="TOP"><FONT SIZE=2>750,000 shares</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="44%" VALIGN="TOP"><FONT SIZE=2>Number to be outstanding after this offering</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=3 VALIGN="TOP"><FONT SIZE=2>3,750,000 shares</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Warrants:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="46%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="44%" VALIGN="TOP"><FONT SIZE=2>Number outstanding before this offering</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=3 VALIGN="TOP"><FONT SIZE=2>0</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="46%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER"><FONT SIZE=2>2</FONT></P>

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<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="44%" VALIGN="TOP"><FONT SIZE=2>Number to be outstanding after this offering</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=3 VALIGN="TOP"><FONT SIZE=2>6,000,000 warrants</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="44%"><FONT SIZE=2>Exercisability</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2>Each warrant is exercisable into one share of common stock.</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="44%"><FONT SIZE=2>Exercise price</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2>$5.00</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="44%"><FONT SIZE=2>Exercise period</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2>The warrants will become exercisable on the later of:</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&#149;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="46%"><FONT SIZE=2>the completion of a business combination with a target business, or</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&#149;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="46%"><FONT SIZE=2>[&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;], 2004 </FONT><FONT SIZE=2><B>[one year from the date of this prospectus],</B></FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2>and will expire at 5:00 p.m., New York City time, on [&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;], 2007; [four years from the date of this prospectus] or earlier upon redemption.</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="44%"><FONT SIZE=2>Redemption</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2>We may redeem the outstanding warrants:</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&#149;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="46%"><FONT SIZE=2>in whole and not in part,</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&#149;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="46%"><FONT SIZE=2>at a price of $.01 per warrant at any time after the warrants become exercisable,</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&#149;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="46%"><FONT SIZE=2>upon a minimum of 30 days' prior written notice of redemption, and</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&#149;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="46%"><FONT SIZE=2>if and only if the last sales price of our common stock equals or exceeds $8.50 per share for the 20 consecutive trading days ending three business days before we send the notice of redemption.</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 VALIGN="TOP"><FONT SIZE=2>Proposed OTC Bulletin Board symbols for our:</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="46%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="44%"><FONT SIZE=2>Units</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2><B>[MSACU]</B></FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="44%"><FONT SIZE=2>Common stock</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2><B>[MSAC]</B></FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="44%"><FONT SIZE=2>Warrants</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2><B>[MSACW]</B></FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Offering proceeds to be held in trust:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2>$15,300,000 of the proceeds of this offering ($5.10 per unit) will be placed in a trust fund. These proceeds will not be released until the earlier of the completion of a business combination or our liquidation. Therefore,
unless and until a business combination is consummated, the proceeds held in the trust fund will not be available for our use for any expenses related to this offering or expenses which we may incur related to the investigation and selection of a
target business and the negotiation of an agreement to acquire a target business. These expenses may be paid prior to a business combination only from the net proceeds of this offering not held in the trust fund (approximately $735,000).</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="46%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE>
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<BR>
<P ALIGN="CENTER"><FONT SIZE=2>3</FONT></P>

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<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2>Since none of the warrants may be exercised until after the consummation of a business combination and, thus, after the proceeds of the trust fund have been disbursed, the warrant exercise price will be paid directly to
us.</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Stockholders must approve business combination:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=3 VALIGN="BOTTOM"><FONT SIZE=2>We will seek stockholder approval before we effect any business combination, even if the nature of the acquisition would not ordinarily require stockholder approval under applicable state law. We will not
effect a business combination if:</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&#149;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="46%"><FONT SIZE=2>stockholders purchasing shares in this offering or in the open market following this offering, i.e., public stockholders, who own at least a majority of our shares, vote against the transaction; or</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&#149;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="46%"><FONT SIZE=2>public stockholders owning 20% or more of the shares sold in this offering exercise their conversion rights (described below).</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Conversion rights for stockholders voting to reject a business combination:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=3 VALIGN="BOTTOM"><FONT SIZE=2>Each public stockholder presented with the right to vote on a business combination may, if she votes "no," demand that her stock be converted into her pro rata share of the trust fund if the business
combination is approved and completed. Any public stockholder who converts her stock into her share of the trust fund still has the right to exercise the warrants that she received as part of the units.</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Voting rights and restrictions for our existing stockholders:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=3 VALIGN="BOTTOM"><FONT SIZE=2>In connection with the vote required for any business combination, all of our existing stockholders, including all of our officers and directors, have agreed to vote the shares of common stock owned by them
immediately before this offering in accordance with the vote of the public stockholders owning a majority of our outstanding shares. Any shares included in units purchased in this offering or purchased following this offering in the open market by
any of our existing stockholders, officers and directors will not be similarly restricted. Our existing stockholders, officers and directors may vote all of their shares in any manner they determine, in their sole discretion, with respect to any
other items that come before a vote of our stockholders.</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Liquidation if no business combination:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2>We will dissolve and distribute only to our public stockholders the amount in our trust fund plus any remaining net assets, if we do not effect a business combination within:</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="46%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER"><FONT SIZE=2>4</FONT></P>

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<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&#149;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="46%"><FONT SIZE=2>18 months after the completion of this offering, or</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&#149;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="46%"><FONT SIZE=2>24 months after the completion of this offering if either a letter of intent, an agreement in principle or a definitive agreement relating to a prospective business combination was entered into before the end of the 18
month period.</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2>All of our existing stockholders, including all of our officers and directors, have waived the liquidation rights described above with respect to the shares they own before this offering. However, we will treat any shares
included in units and any other shares purchased following this offering in the open market which are acquired by our stockholders, officers and directors in the same manner as shares owned by public stockholders.</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2>A public stockholder shall be entitled to receive funds from the trust fund only in the event of a liquidation or if she seeks to convert her shares into cash in connection with a business combination which she voted
against and which is actually consummated. In no other circumstances shall a public stockholder have any right or interest of any kind to or in the trust fund.</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Escrow of management shares:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2>All of our existing stockholders, including all of our officers and directors, have placed the shares they own before this offering into an escrow account. Subject to certain limited exceptions, these shares will not be
released from escrow until [&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;], 2006 </FONT><FONT SIZE=2><B>[three years from the date of this prospectus].</B></FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->


<P><FONT SIZE=2><B>Risks  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In making your decision on whether to invest in our securities, you should take into account not only the backgrounds and expertise of our management team, but
also the special risks we face as a blank check company including that: </FONT></P>

<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>We
may be forced to liquidate before a business combination is effected. If this occurs, our public stockholders will receive less than what they paid for their securities
in this offering because of expenses we will incur.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>We
have not currently selected a particular industry or any target business with which to complete a business combination. Investors are therefore unable to determine the
merits or risks of the industry or business in which we may ultimately operate.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>We
may need to issue shares of common stock or preferred stock to complete a business combination which would dilute the equity interests of our public stockholders.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>Our
key personnel will not be required to remain associated in any way with the target business following a business combination. Although we will closely examine the
management of a prospective target business in evaluating the desirability of effecting a business combination, we cannot assure you that our evaluation will prove correct. </FONT></DD></DL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>5</FONT></P>

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<A NAME="page_cg1189_1_6"> </A>
<UL>
<UL>
</UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>You
will not be entitled to protections normally afforded to investors of blank check companies. </FONT></DD></DL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You
should carefully consider all of the risks set forth in the section entitled "Risk Factors" beginning on page 7 of this prospectus. </FONT></P>

<P><FONT SIZE=2><B>Summary Financial Data  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table summarizes the relevant financial data for our business and should be read with our financial statements, which are included in this
prospectus. We have not had any significant operations to date, so only balance sheet date is presented. </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER"><FONT SIZE=1><B>April 30, 2003</B></FONT><HR NOSHADE></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Actual</B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>As Adjusted</B></FONT><HR NOSHADE></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2><B>Balance Sheet Data:</B></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="64%"><FONT SIZE=2>Working capital</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>25,039</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>16,060,039</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="64%"><FONT SIZE=2>Total assets</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>60,039</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>16,060,039</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="64%"><FONT SIZE=2>Total liabilities</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>35,000</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="64%"><FONT SIZE=2>Value of common stock which may be converted to cash ($5.10 per share)</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>3,059,995</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="64%"><FONT SIZE=2>Stockholders' equity</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>25,039</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>13,000,044</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
as adjusted information gives effect to the sale of the units we are offering and the application of the estimated net proceeds from their sale. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
working capital and total assets amounts include $15,300,000 being held in the trust fund, which will be available to us only upon the consummation of a business combination within
the time period described in this prospectus. If a business combination is not so consummated, we will be dissolved and the proceeds held in the trust fund will be distributed to our public
stockholders. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
we effect a business combination, the conversion rights granted to our public stockholders may result in the conversion into cash of up to approximately 19.99% of the 3,000,000 shares
sold in this offering, or 599,999 shares of common stock, at an initial per-share conversion price of $5.10, without taking into account interest earned on the trust fund. The actual
per-share conversion price will be equal to: </FONT></P>

<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>the
amount in the trust fund as of the record date for the determination of stockholders entitled to vote on the business combination (initially $5.10) plus any interest
accrued through the record date,
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>divided
by the number of shares of common stock sold in the offering. </FONT></DD></DL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>6</FONT></P>

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<UL>
<UL>
</UL>
</UL>
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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="page_da1189_1_7"> </A> </FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="da1189_risk_factors"> </A>
<A NAME="toc_da1189_1"> </A>
<BR></FONT><FONT SIZE=2><B>Risk Factors    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>An investment in our securities involves a high degree of risk. You should consider carefully the risks described below, together with the
other information contained in this prospectus before making a decision to invest in our units.</I></FONT></P>

<P><FONT SIZE=2><B>We are a development stage company with no operating history and very limited resources and will be unable to continue our existence if we do not raise funds in this
offering.</B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
are a recently incorporated development stage company with no operating results to date. Therefore, our ability to begin operations is dependent upon obtaining financing through the
public offering of our securities. Since we do not have an operating history, you will have no basis upon which to evaluate our ability to achieve our business objective, which is to acquire an
operating business. We have not conducted any discussions and we have no plans, arrangements or understandings, with any prospective acquisition candidates. We will not generate any revenues (other
than interest income on the proceeds of this offering) until, at the earliest, after the consummation of a business combination. </FONT></P>

<P><FONT SIZE=2><B>If we are forced to liquidate before a business combination, our public stockholders will receive less than $6.00 per share upon distribution of the trust fund and our warrants
will expire worthless.</B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
we are unable to complete a business combination and are forced to liquidate our assets, the per-share liquidation distribution will be less than $6.00 because of the
expenses of this offering, our general and administrative expenses and the anticipated costs of seeking a business combination. Furthermore, there will be no distribution with respect to our
outstanding warrants and, accordingly, the warrants will expire worthless if we liquidate before the completion of a business combination. </FONT></P>

<P><FONT SIZE=2><B>A third party claim could reduce the proceeds held in trust.</B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
placing of funds in trust may not protect those funds from third party claims against us. The proceeds held in trust could be subject to claims which could take priority over the
claims of our public stockholders. We cannot assure you that the per-share liquidation price will not be less than $5.10, plus interest, due to claims of creditors. If we liquidate before
the completion of a business combination, Arthur Spector, our chairman of the board, chief executive officer and president, and Dr.&nbsp;Heinz C. Schimmelbusch, a director of ours, will be
personally liable under certain circumstances to ensure that the proceeds in the trust fund are not reduced by the claims of various vendors or other entities that are owed money by us for services
rendered or products sold to us. However, we cannot assure you that these individuals could satisfy those obligations. </FONT></P>

<P><FONT SIZE=2><B>Since we have not currently selected a particular industry or any target business with which to complete a business combination, we are unable to currently ascertain the merits
or risks of the industry or business in which we may ultimately operate.</B></FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
may consummate a business combination with a company in any industry we choose and are not limited to any particular industry or type of business. Accordingly, there is no current
basis for prospective investors to evaluate the possible merits or risks of the particular industry in which we may ultimately operate or the target business which we may ultimately acquire. To the
extent we complete a business combination with a financially unstable company or an entity in its development stage, we may be affected by numerous risks inherent in the business operations of those
entities. If we complete a business combination with an entity in an industry characterized by a high level of risk, we may be affected by the currently unascertainable risks of that industry.
Although our management will endeavor to evaluate the risks inherent in a particular industry or target business, we cannot assure you that we will properly ascertain or assess all of the significant
risk factors. We also cannot assure you that an investment in our units will not ultimately prove to be less favorable to investors in this offering than a direct investment, if an opportunity were
available, in a target business. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>7</FONT></P>

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<A NAME="page_da1189_1_8"> </A>
<BR>

<P><FONT SIZE=2><B>We may issue shares of our common stock and preferred stock to complete a business combination, which would reduce the equity interest of our stockholders and likely cause a
change in control of our ownership.</B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
certificate of incorporation authorizes the issuance of up to 20,000,000 shares of common stock, par value $.0001 per share, and 1,000,000 shares of preferred stock, par value $.0001
per share. Upon completion of this offering (assuming no exercise of the underwriters' over-allotment option), there will be 9,350,000 authorized but unissued shares of our common stock
available for issuance (after appropriate reservation for the issuance of shares upon full exercise of our outstanding warrants and the representative's purchase option) and the full 1,000,000 shares
of preferred stock available for issuance. Although we have no commitments as of the date of this offering to issue our securities, we will, in all likelihood, issue a substantial number of additional
shares of our common stock or preferred stock, or a combination of common and preferred stock, to complete a business
combination. The issuance of additional shares of our common stock or any number of shares of our preferred stock may: </FONT></P>

<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>significantly
reduce the equity interest of our stockholders;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>likely
cause a change in control if a substantial number of our shares of common stock are issued, which may affect, among other things, our ability to use our net operating
loss carry forwards, if any, and most likely also result in the resignation or removal of our present officers and directors; and
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>adversely
affect prevailing market prices for our common stock. </FONT></DD></DL>
</UL>

<P><FONT SIZE=2><B>It is likely that our current officers and directors will resign upon consummation of a business combination and we will have only limited ability to evaluate the management of
the target business.</B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
ability to successfully effect a business combination will be totally dependent upon the efforts of our key personnel. The future role of our key personnel in the target business,
however, cannot presently be ascertained. Although it is possible that some of our key personnel will remain associated in various capacities with the target business following a business combination,
it is likely that the management of the target business at the time of the business combination will remain in place. Although we intend to closely scrutinize the management of a prospective target
business in connection with evaluating the desirability of effecting a business combination, there can be no assurance that our assessment of management will prove to be correct. </FONT></P>

<P><FONT SIZE=2><B>Since our officers and directors may allocate their time to other businesses, a conflict of interest may arise as to which business they present a viable acquisition
opportunity.</B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
officers and directors are not required to commit their full time to our affairs, which may result in a conflict of interest in allocating their time between our operations and other
businesses. Some of these persons are now, and may in the future become, affiliated with entities, including other "blank check" companies, engaged in business activities similar to those intended to
be conducted by us. Our officers and directors may become aware of business opportunities which may be appropriate for presentation to us as well as the other entities with which they may be
affiliated. Accordingly, they may have conflicts of interest in determining to which entity a particular business opportunity should be presented. We cannot assure you that these conflicts will be
resolved in our favor. </FONT></P>

<P><FONT SIZE=2><B>All of our directors and officers own shares of our securities which will not participate in liquidation distributions and therefore they may have a conflict of interest in
determining whether a particular target business is appropriate for a business combination.</B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All
of our directors and officers own stock in our company, but have waived their right to receive distributions upon liquidation. Additionally, Arthur Spector has indicated that he (and
certain of his affiliates) intends to purchase warrants in the open market. The shares and warrants owned by our </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>8</FONT></P>

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<A NAME="page_da1189_1_9"> </A>
<BR>

<P><FONT SIZE=2>directors
and officers will be worthless if we do not consummate a business combination. The personal and financial interests of our directors and officers may influence their motivation in
identifying and selecting a target business and completing a business combination timely. Consequently, our directors' and officers' discretion in identifying and selecting a suitable target business
may result in a conflict of interest when determining whether the terms, conditions and timing of a particular business combination are appropriate and in our stockholders' best interest. </FONT></P>

<P><FONT SIZE=2><B>You will not be entitled to protections normally afforded to investors of blank check companies.</B></FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Since
the net proceeds of this offering are intended to be used to complete a business combination with a target business that has not been identified, we may be deemed to be a "blank
check" company under the United States securities laws. However, since we will have net tangible assets in excess of $5,000,000 upon the successful completion of this offering and our units are being
offered at an initial price of $6.00 per unit, we are exempt from rules promulgated by the SEC to protect investors of blank check companies such as Rule&nbsp;419 described below under the section
"Comparison to offerings of blank check companies". Accordingly, investors will not be afforded the benefits or protections of those rules. </FONT></P>


<P><FONT SIZE=2><B>If our common stock becomes subject to the SEC's penny stock rules, broker-dealers may experience difficulty in completing customer transactions and trading activity in our
securities may be adversely affected.</B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
at any time we have net tangible assets of $5,000,000 or less and our common stock has a market price per share of less than $5.00, transactions in our common stock may be subject to
certain rules under the Securities Exchange Act of 1934. Under these rules, broker-dealers who recommend such securities to persons other than institutional accredited investors: </FONT></P>

<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>must
make a special written suitability determination for the purchaser;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>receive
the purchaser's written agreement to a transaction prior to sale;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>provide
the purchaser with risk disclosure documents which identify certain risks associated with investing in "penny stocks" and which describe the market for these "penny
stocks" as well as a purchaser's legal remedies; and
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>obtain
a signed and dated acknowledgment from the purchaser demonstrating that the purchaser has actually received the required risk disclosure document before a transaction
in a "penny stock" can be completed. </FONT></DD></DL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
our common stock becomes subject to these rules, broker-dealers may find it difficult to effectuate customer transactions and trading activity in our securities may be adversely
affected. As a result, the market price of our securities may be depressed, and you may find it more difficult to dispose of our securities. </FONT></P>

<P><FONT SIZE=2><B>It is probable that we will only be able to complete one business combination, which will cause us to be solely dependent on a single business and a limited number of products
or services.</B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
net proceeds from this offering will provide us with only approximately $16,035,000 which we will use to complete a business combination. Consequently, it is probable that we will
have the ability to complete only a single business combination. Accordingly, the prospects for our success may be: </FONT></P>

<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>solely
dependent upon the performance of a single business, or
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>dependent
upon the development or market acceptance of a single or limited number of products, processes or services. </FONT></DD></DL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>9</FONT></P>

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<A NAME="page_da1189_1_10"> </A>
<UL>
<UL>
</UL>
</UL>

<P><FONT SIZE=2>In
this case, we will not be able to diversify our operations or benefit from the possible spreading of risks or offsetting of losses, unlike other entities which may have the resources to complete
several business combinations in different industries or different areas of a single industry. </FONT></P>

<P><FONT SIZE=2><B>There is significant competition for business combination opportunities and we are at a disadvantage because of our limited resources.</B></FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
expect to encounter intense competition from other entities having a business objective similar to ours, including venture capital funds, leveraged buyout funds and operating
businesses competing for acquisitions. Many of these entities are well established and have extensive experience in identifying and effecting business combinations directly or through affiliates. Many
of these competitors possess greater technical, human and other resources than we do and our financial resources will be relatively limited when contrasted with those of many of these competitors.
While we believe that there are numerous potential target businesses that we could acquire with the net proceeds of this offering, our ability to compete in acquiring certain sizable target businesses
will be limited by our available financial resources. This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses. Further, the obligation
we have to seek stockholder approval of a business combination may delay the consummation of a transaction; our obligation to convert into cash the shares of common stock held by public stockholders
in certain instances may reduce the resources available for a business combination; and our outstanding warrants, and the future dilution they potentially represent, may not be viewed favorably by
certain target businesses. Any of these obligations may place us at a competitive disadvantage in successfully negotiating a business combination. </FONT></P>


<P><FONT SIZE=2><B>We may be unable to obtain additional financing, if required, to complete a business combination or to fund the operations and growth of the target business, which could compel
us to restructure the transaction or abandon a particular business combination.</B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Although
we believe that the net proceeds of this offering will be sufficient to allow us to consummate a business combination, inasmuch as we have not yet identified any prospective
target business, we cannot ascertain the capital requirements for any particular transaction. If the net proceeds of this offering prove to be insufficient, either because of the size of the business
combination or the depletion of the available net proceeds in search of a target business, or because we become obligated to convert into cash a significant number of shares from dissenting
stockholders, we will be required to seek additional financing. We cannot assure you that such financing would be available on acceptable terms, if at all. To the extent that additional financing
proves to be unavailable when needed to consummate a particular business combination, we would be compelled to restructure the transaction or abandon that particular business combination and seek an
alternative target business candidate. In addition, if we consummate a business combination, we may require additional financing to fund the operations or growth of the target business. The failure to
secure additional financing could have a material adverse effect on the continued development or growth of the target business. None of our officers, directors or stockholders is required to provide
any financing to us in connection with or after a business combination. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>10</FONT></P>

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<P><FONT SIZE=2><A
NAME="page_de1189_1_11"> </A> </FONT></P>

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<P><FONT SIZE=2><B>Our existing stockholders, including our officers and directors, control a substantial interest in us and thus may influence certain actions requiring stockholder vote.  </B></FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon consummation of our offering, our existing stockholders (including all of our officers and directors) will collectively own 20% of our issued and outstanding
shares of common stock (assuming they do not purchase units in this offering). Our board of directors is divided into two classes, each of which will generally serve for a term of two years with only
one class of directors being elected in each year. It is unlikely that there will be an annual meeting of stockholders to elect new directors prior to the consummation of a business combination, in
which case all of the current directors will continue in office at least until the consummation of the business combination. If there is an annual meeting, as a consequence of our "staggered" board of
directors, only a minority of the board of directors will be considered for election and our existing stockholders, because of their ownership position, will have considerable influence regarding the
outcome. Accordingly, our existing stockholders will continue to exert control at least until the consummation of a business combination. In addition, our existing stockholders and their affiliates
and relatives are not prohibited from purchasing units in this offering or shares in the aftermarket. If they do, we cannot assure you that our existing stockholders will not have considerable
influence upon the vote in connection with a business combination. </FONT></P>

<P><FONT SIZE=2><B>If holders of a majority of shares of our common stock do not approve a business combination or holders of 20% or more of the shares exercise their conversion rights, we will
not be able to complete a business combination.  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We will seek approval by our stockholders before we complete any business combination. We will not complete a business combination if: </FONT></P>

<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>public
stockholders purchasing shares in this offering or in the open market following this offering, who own at least a majority of those shares, vote against the
transaction; or
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>public
stockholders owning 20% or more of the shares sold in this offering exercise their conversion rights. </FONT></DD></DL>
</UL>
<BR>

<P><FONT SIZE=2>In
connection with the vote required for any business combination, all of our existing stockholders, including all of our officers and directors, have agreed to vote the shares of common stock owned
by them immediately before this offering in accordance with the vote of the public stockholders owning a majority of the shares of our outstanding common stock. Even though management may believe that
a business combination may be in our best interests, they will be unable to complete the business combination unless the above requirements are met. </FONT></P>

<P><FONT SIZE=2><B>Our existing stockholders paid a nominal amount for their shares and, accordingly, you will experience immediate and substantial dilution from the purchase of our common stock.  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The difference between the public offering price per share of our common stock and the pro forma net tangible book value per share of our common stock after this
offering constitutes the dilution to you and the other investors in this offering. The fact that our existing stockholders acquired their shares of common stock at a nominal price has significantly
contributed to this dilution. Assuming the offering is completed, you and the other new investors will incur an immediate and substantial dilution of approximately $1.87 per share (the difference
between the pro forma net tangible book value per share of $4.13, and the initial offering price of $6.00 per unit). </FONT></P>

<P><FONT SIZE=2><B>Our outstanding warrants may have an adverse effect on the market price of common stock and make it more difficult to effect a business combination.  </B></FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with this offering, as part of the units, we will be issuing warrants to purchase 6,000,000 shares of common stock. We will also issue an option to
purchase 300,000 units to the </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>11</FONT></P>

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<A NAME="page_de1189_1_12"> </A>
<BR>

<P><FONT SIZE=2>representative
of the underwriters. To the extent we issue shares of common stock to effect a business combination, the potential for the issuance of substantial numbers of additional shares upon
exercise of these warrants and options could make it more difficult to effectuate a business combination or increase the cost of the target business (in terms of number of shares required to be
issued). Additionally, the sale, or even the possibility of sale, of the shares underlying the warrants and options could have an adverse effect on the market price for our securities or on our
ability to obtain future public financing. If and to the extent these options are exercised, you may experience dilution to your holdings. </FONT></P>

<P><FONT SIZE=2><B>If you are not an institutional investor, you may purchase our securities in this offering only if you reside within certain states and may engage in resale transactions only
in those states or within other jurisdictions.  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have applied to register our securities, or have obtained or will seek to obtain an exemption from registration, in Delaware, the District of Columbia,
Florida, Hawaii, Illinois, Maryland, New York and Rhode Island. If you are not an institutional investor, you must be a resident of these jurisdictions to purchase our securities in the offering. In
order to prevent resale transactions in violation of states' securities laws, you may engage in resale transactions only in these states and in other jurisdictions in which an applicable exemption is
available or a blue sky application has been filed and accepted. This restriction on resale may limit your ability to resell the securities purchased in this offering and may impact the price of our
securities. </FONT></P>

<P><FONT SIZE=2><B>We intend to have our securities quoted on the OTC Bulletin Board, which will limit the liquidity and price of our securities more than if our securities were quoted or listed
on the Nasdaq stock market or a national exchange.  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our securities will be traded in the over-the-counter market. It is anticipated that they will be quoted on the OTC Bulletin Board, an
NASD-sponsored and operated inter-dealer automated quotation system for equity securities not included in the Nasdaq Stock Market. Quotation of our securities on the OTC Bulletin Board
will limit the liquidity and price of our securities more than if our securities were quoted or listed on The Nasdaq Stock Market or a national exchange. </FONT></P>

<P><FONT SIZE=2><B>The proposed replacement of the OTC Bulletin Board with the Bulletin Board Exchange may adversely affect the liquidity of our securities.  </B></FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The OTC Bulletin Board is anticipated to be phased out and replaced by the Bulletin Board Exchange in June&nbsp;2004. The Bulletin Board Exchange will not
permit "blank check" companies, such as ours, to be quoted. Accordingly, if we have not consummated a business combination by the time the OTC Bulletin Board is replaced by the Bulletin Board
Exchange, any market in our securities may be reflected only in the Pink Sheets published by the Pink Sheets LLC (formerly the National Quotation Bureau). The liquidity and stock price of our
securities in the secondary market may be adversely affected, and we cannot assure you that a public market for our securities would develop or be sustainable, if we are quoted only on the Pink
Sheets. </FONT></P>

<P><FONT SIZE=2><B>The lead underwriter in the offering will not make a market for our securities which could adversely affect the liquidity and price of our securities.  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EarlyBirdCapital,&nbsp;Inc., the lead underwriter in this offering, does not make a market in securities and will not be making a market in our securities.
Following the completion of this offering, we believe certain broker-dealers other than EarlyBirdCapital will be making a market in our securities. EarlyBirdCapital not acting as a market maker for
our securities may adversely impact the liquidity of our securities. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>12</FONT></P>

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<A NAME="page_de1189_1_13"> </A>
<BR>

<P><FONT SIZE=2><B>If we are deemed to be an investment company, we may be required to institute burdensome compliance requirements and our activities may be restricted, which may make it
difficult for us to complete a business combination  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If we are deemed to be an investment company under the Investment Company Act of 1940, our activities may be restricted, including: </FONT></P>

<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>restrictions
on the nature of our investments; and
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>restrictions
on the issuance of securities, </FONT></DD></DL>
</UL>

<P><FONT SIZE=2>which
may make it difficult for us to complete a business combination. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition, we may have imposed upon us burdensome requirements, including: </FONT></P>

<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>registration
as an investment company;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>adoption
of a specific form of corporate structure; and
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>reporting,
record keeping, voting, proxy and disclosure requirements and other rules and regulations. </FONT></DD></DL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Compliance
with these additional regulatory burdens would require additional expense that we have not allotted for. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="de1189_forward_looking_statements"> </A>
<A NAME="toc_de1189_1"> </A>
<BR></FONT><FONT SIZE=2><B>Forward Looking Statements    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This prospectus contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 relating to, among other
things, our business strategy and anticipated business combination. We identify forward-looking statements in this prospectus using words such as the following statements, the negative of those
statements and other similar statements: </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD WIDTH="23%"><FONT SIZE=2>"believes"<BR>
"predicts"<BR>
"should"<BR>
"estimate"</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="23%"><FONT SIZE=2>"intends"<BR>
"may"<BR>
"contemplates"</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="23%"><FONT SIZE=2>"plans"<BR>
"will"<BR>
"anticipates"</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="23%"><FONT SIZE=2>"expects"<BR>
"would"<BR>
"could"</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->


<P><FONT SIZE=2>These statements are based on our beliefs as well as assumptions we made using information currently available to us. Because these statements reflect our current views
concerning future events as they relate to us, these statements involve risks, uncertainties and assumptions which may be significantly more adverse than the results or expectations discussed in the
forward-looking statements. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>13</FONT></P>

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<A NAME="page_de1189_1_14"> </A>
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="de1189_use_of_proceeds"> </A>
<A NAME="toc_de1189_2"> </A>
<BR></FONT><FONT SIZE=2><B>Use of Proceeds    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We estimate that the net proceeds of this offering, after deducting offering expenses and underwriting discounts, will be $16,035,000, or $18,465,000 if the
underwriters' over-allotment option is exercised in full. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
intend to allocate the net proceeds as follows: </FONT></P>

<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>$15,300,000,
or $17,730,000 if the underwriters' over-allotment option is exercised in full, will be placed in a trust fund maintained
by&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, New York, New York, as trustee. The proceeds will not be released from the trust fund until the earlier
of the completion of a business combination or our liquidation.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>The
net proceeds not held in the trust fund, approximately $735,000, whether or not the underwriters' over-allotment option is exercised in full, will be used
for:
<BR><BR></FONT>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>due
diligence investigations of prospective acquisition candidates;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>legal,
accounting and other expenses attendant to the due diligence investigations and to structuring, negotiating and consummating a business combination;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>legal
and accounting fees relating to our obligation to file periodic reports, proxy statements and other informational material with the SEC; and
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>payment
to 400 Building LLC, an affiliate of our president, of a monthly fee of $7,500 for general and administrative expenses. </FONT></DD></DL>
</DD></DL>
</UL>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
the extent that our capital stock is used in whole or in part as consideration to effect a business combination, the proceeds held in the trust fund as well as any other net proceeds
not expended will be used to finance the operations of the target business. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Arthur
Spector, our chairman of the board, chief executive officer and president, has advanced to us approximately $35,000 for payment of a portion of our expenses of this offering.
These advances will be repaid out of the gross proceeds of this offering. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
net proceeds of this offering not held in the trust fund and not immediately required for the purposes set forth above will be invested in general debt obligations of the United
States Government or other high-quality, short-term interest-bearing investments; </FONT><FONT SIZE=2><I>provided, however</I></FONT><FONT SIZE=2>, that we will attempt to
invest the net proceeds in a manner which does not result in us being deemed to be an investment company under the Investment Company Act. The interest income derived from investment of these net
proceeds during this period will be used to defray our general and administrative expenses, as well as costs relating to compliance with securities laws and regulations, including associated
professional fees, until a business combination is completed. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
believe that, upon consummation of this offering, we will have sufficient available funds to operate for at least the next 24&nbsp;months, assuming that a business combination is
not consummated during that time. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Commencing
on the effective date of this prospectus through the consummation of the acquisition of the target business, we will pay 400 Building LLC, an affiliate of Arthur Spector, our
chairman of the board, chief executive officer and president, an administrative fee of $7,500 per month for providing us with office space, utilities and certain office and secretarial services. Other
than this $7,500 per month administrative fee, no compensation of any kind (including finders and consulting fees) will be paid to any of our existing stockholders, or any of their affiliates, for
services rendered to us prior to or in connection with the consummation of the business combination; </FONT><FONT SIZE=2><I>provided, however</I></FONT><FONT SIZE=2>, that these persons shall be
entitled to receive, upon consummation of a business combination, commissions for monies raised by them for us in connection with the business combination (if permitted under </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>14</FONT></P>

<HR NOSHADE>
<!-- ZEQ.=4,SEQ=18,EFW="2111459",CP="MILLSTREAM ACQUISITION CORP",DN="1",CHK=176942,FOLIO='14',FILE='DISK018:[03PHI9.03PHI1189]DE1189A.;8',USER='SMENEZE',CD='19-MAY-2003;12:26' -->
<A NAME="page_de1189_1_15"> </A>
<BR>

<P><FONT SIZE=2>applicable
law), at rates which are no less favorable to us than those which we would pay to unaffiliated third parties. In addition, our existing stockholders will receive reimbursement for any
out-of-pocket expenses incurred by them in connection with activities on our behalf. Since the role of present management after a business combination is uncertain, we have no
ability to determine what remuneration, if any, will be paid to those persons after a business combination. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
public stockholders will be entitled to receive funds from the trust fund only in the event of our liquidation or if they were to seek to convert their shares into cash in connection
with a business combination which they voted against and which we actually consummate. In no other circumstances will a public stockholder have any right or interest of any kind to or in the trust
fund. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>15</FONT></P>

<HR NOSHADE>
<!-- ZEQ.=5,SEQ=19,EFW="2111459",CP="MILLSTREAM ACQUISITION CORP",DN="1",CHK=703458,FOLIO='15',FILE='DISK018:[03PHI9.03PHI1189]DE1189A.;8',USER='SMENEZE',CD='19-MAY-2003;12:26' -->
<!-- THIS IS THE END OF A COMPOSITION COMPONENT -->
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="page_dg1189_1_16"> </A> </FONT></P>

<!-- TOC_END -->
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="dg1189_dilution"> </A>
<A NAME="toc_dg1189_1"> </A>
<BR></FONT><FONT SIZE=2><B>Dilution    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The difference between the public offering price per share of common stock, assuming no value is attributed to the warrants included in the units, and the pro
forma net tangible book value per share of our common stock after this offering constitutes the dilution to investors in this offering. Net tangible book value per share is determined by dividing our
net tangible book value, which is our total tangible assets less total liabilities (including the value of common stock which may be converted into cash), by the number of outstanding shares of our
common stock. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At
April&nbsp;30, 2003, our net tangible book value was $25,039, or approximately $.03 per share of common stock. After giving effect to the sale of 3,000,000 shares of common stock
included in the units, and the deduction of underwriting discounts and estimated expenses of this offering, our pro forma net tangible book value (as decreased by the value of 599,999 shares of common
stock which may be converted into cash) at April&nbsp;30, 2003 would have been $13,000,044 or $4.13 per share, representing an immediate increase in net tangible book value of $4.10 per share to the
existing stockholders and an immediate dilution of $1.87 per share or 31.2% to new investors not exercising their conversion rights. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table illustrates the dilution to the new investors on a per-share basis, assuming no value is attributed to the warrants included in the units: </FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="82%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Public offering price</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=2>6.00</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="74%"><FONT SIZE=2>Net tangible book value before this offering</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=2>.03</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="74%"><FONT SIZE=2>Increase attributable to new investors</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=2>4.10</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Pro forma net tangible book value after this offering</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=2>4.13</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Dilution to new investors</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=2>1.87</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
pro forma net tangible book value after this offering has been reduced by $3,059,995 because if we effect a business combination, the conversion rights to the public stockholders may
result in the conversion into cash of up to approximately 19.99% of the aggregate number of the shares sold in this offering at a per-share conversion price equal to the amount in the
trust fund as of the record date for the determination of stockholders entitled to vote on the business combination, inclusive of any interest, divided by the number of shares sold in this offering. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table sets forth information with respect to our existing stockholders and the new investors: </FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="94%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="33%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%" ROWSPAN=2><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=3 ROWSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Shares Purchased</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%" ROWSPAN=2><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=4 ROWSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Total Consideration</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="33%" ALIGN="LEFT"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%" ROWSPAN=2><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Average Price<BR>
Per Share</B></FONT><HR NOSHADE></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="33%" ALIGN="LEFT"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="10%" ALIGN="CENTER"><FONT SIZE=1><B>Number</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="9%" ALIGN="CENTER"><FONT SIZE=1><B>Percentage</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Amount</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="9%" ALIGN="CENTER"><FONT SIZE=1><B>Percentage</B></FONT><HR NOSHADE></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="33%"><FONT SIZE=2>Existing stockholders</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>750,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>20</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>25,039</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>0.1</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>0.03</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="33%"><FONT SIZE=2>New investors</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>3,000,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>80</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>18,000,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>99.9</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>6.00</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="33%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="33%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>3,750,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>100</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>18,025,039</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>100.0</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="33%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<P ALIGN="CENTER"><FONT SIZE=2>16</FONT></P>

<HR NOSHADE>
<!-- ZEQ.=1,SEQ=20,EFW="2111459",CP="MILLSTREAM ACQUISITION CORP",DN="1",CHK=869092,FOLIO='16',FILE='DISK018:[03PHI9.03PHI1189]DG1189A.;7',USER='MBARTAS',CD='19-MAY-2003;15:19' -->
<A NAME="page_dg1189_1_17"> </A>
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="dg1189_capitalization"> </A>
<A NAME="toc_dg1189_2"> </A>
<BR></FONT><FONT SIZE=2><B>Capitalization    <BR>    </B></FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth our capitalization at April&nbsp;30, 2003 and as adjusted to give effect to the sale of our units and the application of the
estimated net proceeds derived from the sale of our units: </FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="85%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER"><FONT SIZE=1><B>April 30, 2003</B></FONT><HR NOSHADE></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Actual</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>As Adjusted</B></FONT><HR NOSHADE></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>Common stock, $.0001 par value, -0- and 599,999 shares which are subject to possible conversion, shares at conversion value</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>3,059,995</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>Stockholders' equity:</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="67%"><FONT SIZE=2>Preferred stock, $.0001 par value, 1,000,000 shares authorized; none issued or outstanding</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="67%"><FONT SIZE=2>Common stock, $.0001 par value, 20,000,000 shares authorized; 750,000 shares issued and outstanding; 3,150,001 shares issued and outstanding (excluding 599,999 shares subject to possible conversion), as
adjusted</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>75</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>315</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="67%"><FONT SIZE=2>Additional paid-in capital</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>24,964</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>12,999,729</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="67%"><FONT SIZE=2>Total stockholders' equity:</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>25,039</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>13,000,044</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="67%"><FONT SIZE=2>Total capitalization</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>25,039</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>16,060,039</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
</TR>
</TABLE>
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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
we consummate a business combination, the conversion rights afforded to our public stockholders may result in the conversion into cash of up to approximately 19.99% of the aggregate
number of shares sold in this offering at a per-share conversion price equal to the amount in the
trust fund as of the record date for determination of stockholders entitled to vote on the business combination, inclusive of any interest thereon, divided by the number of shares sold in this
offering. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>17</FONT></P>

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<A NAME="toc_dg1189_3"> </A>
<BR></FONT><FONT SIZE=2><B>Management's Discussion and Analysis<BR>  of Financial Condition and Results of Operations    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We were formed on April&nbsp;11, 2003, 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 which we believe has significant growth potential. We intend to utilize cash derived from the proceeds of this offering, our capital stock, debt or a
combination of cash, capital stock and debt, in effecting a business combination. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
have neither engaged in any operations nor generated any revenues to date. Our entire activity since inception has been to prepare for our proposed fundraising through an offering of
our equity securities. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
estimate that the net proceeds from the sale of the units, after deducting offering expenses and underwriting discounts, will be approximately $16,035,000, or $18,465,000 if the
underwriters' over-allotment option is exercised in full. We will use substantially all of the net proceeds of this offering to acquire a target business, including identifying and
evaluating prospective acquisition candidates, selecting the target business, and structuring, negotiating and consummating the business combination. To the extent that our capital stock is used in
whole or in part as consideration to effect a business combination, the proceeds held in the trust fund as well as any other net proceeds not expended will be used to finance the operations of the
target business. We believe that, upon consummation of this offering, we will have sufficient available funds to operate for at least the next 24&nbsp;months, assuming that a business combination is
not consummated during that time. We do not believe we will need to raise additional funds following this offering in order to meet the expenditures required for operating our business. However, we
may need to raise additional funds if it is required to consummate a business combination that is presented to us. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
are obligated, commencing on the date of this prospectus, 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 expenses. In addition, on April&nbsp;28, 2003, Mr.&nbsp;Spector advanced $35,000 to us, on a non-interest bearing basis, for
payment on our behalf of offering expenses. We intend to repay this loan out of the proceeds of this offering. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="dg1189_proposed_business"> </A>
<A NAME="toc_dg1189_4"> </A>
<BR></FONT><FONT SIZE=2><B>Proposed Business    <BR>    </B></FONT></P>

<P><FONT SIZE=2><B>Introduction  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are a recently organized SPAC, formed to serve as a vehicle for the acquisition of a target business which we believe has significant growth potential. We are
not presently engaged in, and we will not engage in, any substantive commercial business for an indefinite period of time following this offering. We intend to utilize cash derived from the proceeds
of this offering, our capital stock, debt or a combination of these in effecting a business combination. Our management has broad discretion with respect to the specific application of the net
proceeds of this offering and, as a result, this offering can be characterized as a blank check offering. While we may seek to effect business combinations with more than one target business, we will
probably have the ability, as a result of our limited resources, to effect only a single business combination. </FONT></P>

<P><FONT SIZE=2><B>Current trends  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a result of the decline in the United States equity markets over the past two years, many privately held companies have been shut off from the public
marketplace. Additionally, as the economy has slowed, many companies are attempting to divest non-core assets and divisions and valuations of these assets and divisions have decreased
significantly. Due to these factors, we believe that there are substantial opportunities to effect attractive acquisitions and that, as a well-financed public entity </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>18</FONT></P>

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<BR>

<P><FONT SIZE=2>possessing
broad investment and acquisition expertise, we are well positioned to identify target acquisitions and to effect a business combination to take advantage of these current trends. </FONT></P>

<P><FONT SIZE=2><B>Effecting a business combination  </B></FONT></P>

<UL>

<P><FONT SIZE=2><I> General  </I></FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Although substantially all of the net proceeds of this offering are intended to be generally applied toward effecting a business combination as described in this
prospectus, the proceeds are not otherwise being designated for any more specific purposes. Accordingly, prospective investors will invest in us without an opportunity to evaluate the specific merits
or risks of any one or more business combinations. A business combination may involve the acquisition of, or merger with, a company which does not need substantial additional capital but which desires
to establish a public trading market for its shares, while avoiding what it may deem to be adverse consequences of undertaking a public offering itself. These include time delays, significant expense,
loss of voting control and compliance with various Federal and state securities laws. In the alternative, a business combination may involve a company which may be financially unstable or in its early
stages of development or growth. </FONT></P>

<UL>


<P><FONT SIZE=2><I> We have not identified a target business or target industry  </I></FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our efforts in identifying a prospective target business will not be limited to a particular industry and we may ultimately acquire a business in any industry we
deem appropriate. Instead, we intend to focus on various industries where changes in industrial technology provide particular opportunities for growth. Innovative industrial technologies have given
small and medium-sized companies the ability not only to compete with larger organizations, but to leapfrog existing products, processes and services and establish new market leadership. We believe
that companies with these types of innovations obtain a competitive edge and the opportunity for rapid and sustainable growth. Innovations of this nature occur frequently in chemicals and other
material sciences, energy, medical products and manufacturing processes. To date, we have not selected any target business on which to concentrate our search for a business combination. Accordingly,
there is no basis for investors in this offering to evaluate the possible merits or risks of the target business or the particular industry in which we may ultimately operate. To the extent we effect
a business combination with a financially unstable company or an entity in its early stage of development or growth, including entities without established records of sales or earnings, we may be
affected by numerous risks inherent in the business and operations of financially unstable and early stage or potential emerging growth companies. In addition, to the extent that we effect a business
combination with an entity in an industry characterized by a high level of risk, we may be affected by the currently unascertainable risks of that industry. An extremely high level of risk frequently
characterizes many industries which experience rapid growth. In addition, although our management will endeavor to evaluate the risks inherent in a particular industry or target business, we cannot
assure you that we will properly ascertain or assess all significant risk factors. </FONT></P>

<UL>

<P><FONT SIZE=2><I> Sources of target businesses  </I></FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We anticipate that target business candidates will be brought to our attention from various unaffiliated sources, including securities broker-dealers, investment
bankers, venture capitalists, bankers and other members of the financial community, who may present solicited or unsolicited proposals. Our officers and directors and their affiliates may also bring
to our attention target business candidates. While we do not presently anticipate engaging the services of professional firms that specialize in business acquisitions on any formal basis, we may
engage these firms in the future, in which event we may pay a finder's fee or other compensation. In no event, however, will we pay any of our existing officers, directors or stockholders or any
entity with which they are affiliated any finder's fee or other compensation for services rendered to us prior to or in connection with the consummation of a business combination. However, they shall
be entitled to receive, upon consummation of a business </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>19</FONT></P>

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<P><FONT SIZE=2>combination,
commissions for monies raised by them for us in connection with the business combination (if permitted under applicable law), at rates which are no less favorable to us than those which
we would pay to unaffiliated third parties. </FONT></P>

<UL>

<P><FONT SIZE=2><I> Selection of a target business and structuring of a business combination  </I></FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our management will have virtually unrestricted flexibility in identifying and selecting a prospective target business. In evaluating a prospective target
business, our management will consider, among other factors, the following: </FONT></P>

<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>financial
condition and results of operation;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>growth
potential;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>experience
and skill of management and availability of additional personnel;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>capital
requirements;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>competitive
position;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>stage
of development of the products, processes or services;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>degree
of current or potential market acceptance of the products, processes or services;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>proprietary
features and degree of intellectual property or other protection of the products, processes or services;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>regulatory
environment of the industry; and
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>costs
associated with effecting the business combination. </FONT></DD></DL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These
criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular business combination will be based, to the extent relevant, on the above factors
as well as other considerations deemed relevant by our management in effecting a business combination consistent with our business objective. In evaluating a prospective target business, we will
conduct an extensive due diligence review which will encompass, among other things, meetings with incumbent management and inspection of facilities, as well as review of financial and other
information which will be made available to us. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
will endeavor to structure a business combination so as to achieve the most favorable tax treatment to us, the target business and both companies' stockholders. We cannot assure you,
however, that the Internal Revenue Service or appropriate state tax authority will agree with our tax treatment of the business combination. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
time and costs required to select and evaluate a target business and to structure and complete the business combination cannot presently be ascertained with any degree of certainty.
Any costs incurred with respect to the identification and evaluation of a prospective target business with which a business
combination is not ultimately completed will result in a loss to us and reduce the amount of capital available to otherwise complete a business combination. </FONT></P>

<UL>

<P><FONT SIZE=2><I> Probable lack of business diversification  </I></FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Since our initial business combination will be made with the net proceeds of this offering, it is probable that we will have the ability to effect only a single
business combination. Accordingly, the prospects for our success may be entirely dependent upon the future performance of a single business. Unlike other entities which may have the resources to
complete several business combinations of entities operating in multiple industries or multiple areas of a single industry, it is probable that we will not have the resources to diversify our
operations or benefit from the possible spreading of risks or </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>20</FONT></P>

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<P><FONT SIZE=2>offsetting
of losses. By consummating a business combination with only a single entity, our lack of diversification may </FONT></P>

<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>subject
us to numerous economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact upon the particular industry in which we
may operate subsequent to a business combination, and
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>result
in our dependency upon the development or market acceptance of a single or limited number of products, processes or services. </FONT></DD></DL>
</UL>
<UL>

<P><FONT SIZE=2><I> Limited ability to evaluate the target business' management  </I></FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Although we intend to closely scrutinize the management of a prospective target business when evaluating the desirability of effecting a business combination, we
cannot assure you that our assessment of the target business' management will prove to be correct. In addition, we cannot assure you that the future management will have the necessary skills,
qualifications or abilities to manage a public company intending to embark on a program of business development. Furthermore, the future role of our directors, if any, in the target business cannot
presently be stated with any certainty. While it is possible that one or more of our directors will remain associated in some capacity with us following a business combination, it is unlikely that any
of them will devote their full efforts to our
affairs subsequent to a business combination. Moreover, we cannot assure you that our directors will have significant experience or knowledge relating to the operations of the particular target
business. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Following
a business combination, we may seek to recruit additional managers to supplement the incumbent management of the target business. We cannot assure you that we will have the
ability to recruit additional managers, or that additional managers will have the requisite skills, knowledge or experience necessary to enhance the incumbent management. </FONT></P>

<UL>

<P><FONT SIZE=2><I> Opportunity for stockholder approval of business combination  </I></FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prior to the completion of a business combination, we will submit the transaction to our stockholders for approval, even if the nature of the acquisition is such
as would not ordinarily require stockholder approval under applicable state law. In connection with seeking stockholder approval of a business combination, we will furnish our stockholders with proxy
solicitation materials prepared in accordance with the Securities Exchange Act of 1934, which, among other matters, will include a description of the operations of the target business and audited
historical financial statements of the business. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
connection with the vote required for any business combination, all of our existing stockholders, including all of our officers and directors, have agreed to vote their respective
shares of common stock owned by them immediately prior to this offering in accordance with the vote of the public stockholders owning a majority of the shares of our outstanding common stock. This
voting arrangement shall not apply to shares included in units purchased in this offering or purchased following this offering in the open market by any of our existing stockholders, officers and
directors. We will proceed with the business combination only if the public stockholders, who own at least a majority of the shares of common stock sold in this offering, vote in favor of the business
combination and public stockholders owning less than 20% of the shares sold in this offering exercise their conversion rights. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>21</FONT></P>

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<UL>

<P><FONT SIZE=2><I> Conversion rights  </I></FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At the time we seek stockholder approval of any business combination, we will offer each public stockholder the right to have her shares of common stock converted
to cash if she votes against the business combination and the business combination is approved and completed. The actual per-share conversion price will be equal to the amount in the trust
fund, inclusive of any interest, as of the record date for determination of stockholders entitled to vote on the business combination, divided by the number of shares sold in this offering. Without
taking into any account interest earned on the trust fund, the initial per-share conversion price would be $5.10, or $0.90 less than the per-unit offering price of $6.00. An
eligible stockholder may request conversion at any time after the mailing to our stockholders of the proxy statement and prior to the vote taken with respect to a proposed business combination at a
meeting held for that purpose, but the request will not be granted unless the stockholder votes against the business combination and the business combination is approved and completed. Any request for
conversion, once made, may be withdrawn at any time up to the date of the meeting. It is anticipated that the funds to be distributed to stockholders entitled to convert their shares who elect
conversion will be distributed promptly after completion of a business combination. Any public stockholder who converts her stock into her share of the trust fund still has the right to exercise the
warrants that she received as part of the units. We will not complete any business combination if public stockholders, owning 20% or more of the shares sold in this offering, exercise their conversion
rights. </FONT></P>

<UL>

<P><FONT SIZE=2><I> Liquidation if no business combination  </I></FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If we do not complete a business combination within 18&nbsp;months after the completion of this offering, or within 24&nbsp;months if the extension criteria
described below have been satisfied, we will be dissolved and will distribute to all of our public stockholders, in proportion to their respective equity interests, an aggregate sum equal to the
amount in the trust fund, inclusive of any interest, plus any remaining net assets. Our existing stockholders have waived their rights to participate in any liquidation distribution with respect to
shares of common stock owned by them immediately prior to this offering. There will be no distribution from the trust fund with respect to our warrants. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
we were to expend all of the net proceeds of this offering, other than the proceeds deposited in the trust fund, and without taking into account interest, if any, earned on the trust
fund, the initial per-share liquidation price would be $5.10, or $0.90 less than the per-unit offering price of $6.00. The proceeds deposited in the trust fund could, however,
become subject to the
claims of our creditors which could be prior to the claims of our public stockholders. We cannot assure you that the actual per-share liquidation price will not be less than $5.10, plus
interest, due to claims of creditors. If we liquidate prior to the consummation of a business combination, Arthur Spector, our chairman of the board, chief executive officer and president, and
Dr.&nbsp;Heinz Schimmelbusch, a director of ours, will be personally liable under certain circumstances to pay various debts or obligations to vendors or other entities that are owed money by us for
services rendered or products sold to us on our behalf in excess of the net proceeds of this offering not held in the trust account. We cannot assure you, however, that they would be able to satisfy
those obligations. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
we enter into either a letter of intent, an agreement in principle or a definitive agreement to complete a business combination prior to the expiration of 18&nbsp;months after the
completion of this offering, but are unable to complete the business combination within the 18-month period, then we will have an additional six months in which to complete the business
combination contemplated by the letter of intent, agreement in principle or definitive agreement. If we are unable to do so by the expiration of the 24-month period from the completion of
this offering, we will then liquidate. Upon notice from us, the trustee of the trust fund will commence liquidating the investments constituting the trust fund and will turn over the proceeds to our
transfer agent for distribution to our stockholders. We </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>22</FONT></P>

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<P><FONT SIZE=2>anticipate
that our instruction to the trustee would be given promptly after the expiration of the applicable 18-month or 24-month period. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
public stockholders shall be entitled to receive funds from the trust fund only in the event of our liquidation or if the stockholders seek to convert their respective shares into
cash upon a business combination which the stockholder voted against and which is actually completed by us. In no other circumstances shall a stockholder have any right or interest of any kind to or
in the trust fund. </FONT></P>

<P><FONT SIZE=2><B>Competition  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In identifying, evaluating and selecting a target business, we expect to encounter intense competition from other entities having a business objective similar to
ours. Many of these entities are well established and have extensive experience identifying and effecting business combinations directly or through affiliates. Many of these competitors possess
greater technical, human and other resources than us and our financial resources will be relatively limited when contrasted with those of many of these competitors. While we believe there are numerous
potential target businesses that we could acquire with the net proceeds of this offering, our ability to compete in acquiring certain sizable target businesses will be limited by our available
financial resources. This inherent competitive limitation gives others an advantage in pursuing the acquisition of a target business. Further: </FONT></P>

<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>our
obligation to seek stockholder approval of a business combination may delay the completion of a transaction;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>our
obligation to convert into cash shares of common stock held by our public stockholders in certain instances may reduce the resources available to us for a business
combination; and
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>our
outstanding warrants, and the future dilution they potentially represent, may not be viewed favorable by certain target businesses. </FONT></DD></DL>
</UL>

<P><FONT SIZE=2>Any
of these obligations may place us at a competitive disadvantage in successfully negotiating a business combination. Our management believes, however, that our status as a public entity and
potential access to the United States public equity markets may give us a competitive advantage over privately-held entities having a similar business objective as us in acquiring a target
business with significant growth potential on favorable terms. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
we succeed in effecting a business combination, there will be, in all likelihood, intense competition from competitors of the target business. In particular, certain industries which
experience rapid growth frequently attract an increasingly larger number of competitors, including competitors with increasingly greater financial, marketing, technical and other resources than the
initial competitors in the industry. The degree of competition characterizing the industry of any prospective target business cannot presently be ascertained. We cannot assure you that, subsequent to
a business combination, we will have the resources to compete effectively, especially to the extent that the target business is in a high-growth industry. </FONT></P>

<P><FONT SIZE=2><B>Facilities  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We maintain our executive offices at 435 Devon Park Drive, Building 400, Wayne, Pennsylvania 19087. The cost for this space is included in the $7,500
per-month fee 400 Building LLC charges us for general and administrative services. We believe, based on rents and fees for similar services in the Philadelphia metropolitan area, that the
fee charged by 400 Building LLC is at least as favorable as we could have obtained from an unaffiliated person. We consider our current office space adequate for our current operations. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>23</FONT></P>

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<BR>

<P><FONT SIZE=2><B>Employees  </B></FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have four directors and one officer. These individuals intend to devote only as much time as they deem necessary to our affairs. We do not intend to have any
full time employees prior to the consummation of a business combination. </FONT></P>

<P><FONT SIZE=2><B>Periodic Reporting and Audited Financial Statements  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have registered our securities under the Securities Exchange Act of 1934, as amended, and have reporting obligations, including the requirement that we file
annual and quarterly reports with the SEC. In accordance with the requirements of the Securities Exchange Act of 1934, our annual reports will contain financial statements audited and reported on by
our independent accountants. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
will not acquire a target business if audited financial statements cannot be obtained for the target business. Additionally, our management will provide stockholders with audited
financial statements, prepared in accordance with generally accepted accounting principles, of the prospective target business as part of the proxy solicitation materials sent to stockholders to
assist them in assessing the target business. Our management believes that the requirement of having available audited financial statements for the target business will not materially limit the pool
of potential target businesses available for acquisition. </FONT></P>


<P><FONT SIZE=2><B>Comparison to offerings of blank check companies  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table compares and contrasts the terms of our offering and the terms of an offering of blank check companies under Rule&nbsp;419 promulgated by
the SEC assuming that the gross proceeds, underwriting discounts and underwriting expenses for the Rule&nbsp;419 offering are the same as this offering and that the underwriters will not exercise
their over-allotment option. None of the terms under a Rule&nbsp;419 offering will apply to this offering. </FONT></P>

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<DIV ALIGN="CENTER"><TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="32%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="32%" ALIGN="CENTER"><FONT SIZE=1><B>Terms of Our Offering</B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="32%" ALIGN="CENTER"><FONT SIZE=1><B>Terms Under a Rule&nbsp;419 Offering</B></FONT><HR NOSHADE></TH>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="32%"><FONT SIZE=2><B><BR>
Escrow of offering proceeds</B></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><B><BR>&nbsp;</B></FONT></TD>
<TD WIDTH="32%"><FONT SIZE=2><BR>
$15,300,000 of the net offering proceeds will be deposited into a trust fund maintained by&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="32%"><FONT SIZE=2><BR>
$14,580,000 of the offering proceeds would be required to be deposited into either an escrow account with an insured depositary institution or in a separate bank account established by a broker-dealer in which the broker-dealer acts as trustee for
persons having the beneficial interests in the account.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="32%"><FONT SIZE=2><B><BR>
Investment of net proceeds</B></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><B><BR>&nbsp;</B></FONT></TD>
<TD WIDTH="32%"><FONT SIZE=2><BR>
Proceeds will be invested in U.S. government securities or other high-quality, short term interest-bearing investments.</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="32%"><FONT SIZE=2><BR>
Proceeds could be invested only in specified securities such as a money market fund meeting conditions of the Investment Company Act of 1940 or in securities that are direct obligations of, or obligations guaranteed as to principal or interest by,
the United States.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="32%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="32%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="32%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
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<P ALIGN="CENTER"><FONT SIZE=2>24</FONT></P>

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<DIV ALIGN="CENTER"><TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD WIDTH="32%"><FONT SIZE=2><B><BR>
Trading of securities issued</B></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><B><BR>&nbsp;</B></FONT></TD>
<TD WIDTH="32%"><FONT SIZE=2><BR>
The units may commence trading immediately on the date of this prospectus. The common stock and warrants comprising the units will begin to trade separately on the 90th day after the date of this prospectus unless EarlyBirdCapital, Inc. informs us of
its decision to allow earlier separate trading, provided we have filed with the SEC an audited balance sheet reflecting our receipt of the proceeds of this offering.</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="32%"><FONT SIZE=2><BR>
No trading of the units or the underlying common stock and warrants would be permitted until the completion of a business combination. During this period, the securities would be held in the escrow or trust account.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="32%"><FONT SIZE=2><B><BR>
Exercise of the warrants</B></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><B><BR>&nbsp;</B></FONT></TD>
<TD WIDTH="32%"><FONT SIZE=2><BR>
The warrants cannot be exercised until the later of the completion of a business combination or one year from the date of this prospectus, and, accordingly, will only be exercised after the trust fund has been terminated and distributed.</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="32%"><FONT SIZE=2><BR>
The warrants could be exercised prior to the completion of a business combination, but securities received and cash paid in connection with the exercise would be deposited in the escrow or trust account.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="32%"><FONT SIZE=2><B><BR>
Election to remain an investor</B></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><B><BR>&nbsp;</B></FONT></TD>
<TD WIDTH="32%"><FONT SIZE=2><BR>
We will give our stockholders the opportunity to vote on the business combination. In connection with seeking stockholder approval, we will send each stockholder a proxy statement containing information required by the SEC. A stockholder following
the procedures described in this prospectus is given the right to convert his or her shares into his or her pro rata share of the trust fund. However, a stockholder who does not follow these procedures or a stockholder who does not take any action
would not be entitled to the return of any funds.</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="32%"><FONT SIZE=2><BR>
A prospectus containing information required by the SEC would be sent to each investor. Each investor would be given the opportunity to notify the company whether she elects to remain a stockholder of the company. The notification would have to be in
writing within a specified period. If the company has not received the notification by the end of the period, funds and interest or dividends, if any, held in the trust or escrow account would be returned to the stockholder.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="32%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="32%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="32%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
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<BR>
<P ALIGN="CENTER"><FONT SIZE=2>25</FONT></P>

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<TR VALIGN="TOP">
<TD WIDTH="32%"><FONT SIZE=2><B><BR>
Business combination deadline</B></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><B><BR>&nbsp;</B></FONT></TD>
<TD WIDTH="32%"><FONT SIZE=2><BR>
A business combination must occur within 18 months after the completion of this offering or within 24 months after the completion of this offering if a letter of intent or definitive agreement relating to a prospective business combination was
entered into prior to the end of the 18-month period.</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="32%"><FONT SIZE=2><BR>
If an acquisition has not been consummated within 18 months after the effective date of the initial registration statement, funds held in the trust or escrow account would be returned to investors.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="32%"><FONT SIZE=2><B><BR>
Release of funds</B></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><B><BR>&nbsp;</B></FONT></TD>
<TD WIDTH="32%"><FONT SIZE=2><BR>
The proceeds held in the trust account will not be released until the earlier of the completion of a business combination or our liquidation upon failure to effect a business combination within the allotted time.</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="32%"><FONT SIZE=2><BR>
The proceeds held in the escrow account would not be released until the earlier of the completion of a business combination or the failure to effect a business combination within the allotted time.</FONT></TD>
</TR>
</TABLE></DIV>
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<P ALIGN="CENTER"><FONT SIZE=2>26</FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="dk1189_management"> </A>
<A NAME="toc_dk1189_1"> </A>
<BR></FONT><FONT SIZE=2><B>Management    <BR>    </B></FONT></P>

<P><FONT SIZE=2><B> Directors and Executive Officers  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
current directors and executive officers are as follows: </FONT></P>

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<TR VALIGN="BOTTOM">
<TH WIDTH="45%" ALIGN="LEFT"><FONT SIZE=1><B>Name<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="5%" ALIGN="CENTER"><FONT SIZE=1><B>Age</B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="45%" ALIGN="CENTER"><FONT SIZE=1><B>Position</B></FONT><HR NOSHADE></TH>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="45%"><FONT SIZE=2><BR>
Arthur Spector</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><BR>
62</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="45%"><FONT SIZE=2><BR>
Chairman of the Board, Chief Executive Officer and President</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="45%"><FONT SIZE=2><BR>
Robert&nbsp;E. Keith,&nbsp;Jr.</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><BR>
61</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="45%"><FONT SIZE=2><BR>
Director</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="45%"><FONT SIZE=2><BR>
Don&nbsp;K. Rice</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><BR>
54</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="45%"><FONT SIZE=2><BR>
Director</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="45%"><FONT SIZE=2><BR>
Dr.&nbsp;Heinz&nbsp;C. Schimmelbusch</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><BR>
58</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="45%"><FONT SIZE=2><BR>
Director</FONT></TD>
</TR>
</TABLE></DIV>
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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>Arthur Spector</B></FONT><FONT SIZE=2> has been our chairman of the board, chief executive officer and president since our inception. From March&nbsp;1995 to
October&nbsp;2002, Mr.&nbsp;Spector served as chairman of the board of Neoware Systems,&nbsp;Inc., a manufacturer of sophisticated computer appliances and related software, and from
May&nbsp;1996 until June&nbsp;1997, he also served as its president and chief executive officer. Neoware Systems was originally known as Information Systems Acquisition Corp., a SPAC with an
objective to acquire an operating business in the information systems industry. Information Systems Acquisition Corp. was formed in 1992 and from its inception until it merged with a subsidiary of
Neoware Systems, Mr.&nbsp;Spector was its chairman of the board, president and chief executive officer. In this role, Mr.&nbsp;Spector directed the completion of a public offering which raised
gross proceeds of approximately $13.8&nbsp;million. Mr.&nbsp;Spector has also served as a director of Docucorp International, a public document automation company, since 1997. Mr.&nbsp;Spector
received a B.S. from the Wharton School of Finance at the University of Pennsylvania and a J.D. from The University of Pennsylvania Law School. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mr.&nbsp;Spector
has extensive experience in mergers and acquisitions and managing private equity funds. Since 1997, he has served as managing director of the general partner and of
the management company of Safeguard International Fund&nbsp;L.P., a private equity fund investing primarily in controlling positions in industrial companies in North American and Europe. From 1995
to 1996, Mr.&nbsp;Spector served as director of acquisitions of Safeguard Scientifics,&nbsp;Inc., a public company that owns controlling interests in and operates numerous private companies. From
1997 to 1998, Mr.&nbsp;Spector served as a managing director of TL&nbsp;Ventures&nbsp;LLC, a fund management company organized to manage the day-to-day operations of
several of the TL&nbsp;Ventures funds which invest in companies in the internet, software, information technology, communications and life science industries. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>Robert&nbsp;E. Keith,&nbsp;Jr. </B></FONT><FONT SIZE=2>has been a member of our board of directors since our inception. Since 1988, Mr.&nbsp;Keith has been
a managing director of TL&nbsp;Ventures,&nbsp;L.P., its predecessor entity and related entities that serve as the management companies for several of the TL&nbsp;Ventures funds. He has served as
president of Technology Leaders Management,&nbsp;Inc., a private equity capital management company, since 1991 and as its chief executive officer since 1996. Since October&nbsp;2001,
Mr.&nbsp;Keith has served as chairman of the board of directors of Safeguard Scientifics and served as its vice chairman from February&nbsp;1999 through September&nbsp;2001. He was also a member
of the office of the chief executive of Safeguard Scientifics from April&nbsp;2001 through October&nbsp;2001. Mr.&nbsp;Keith is also the chairman of the management companies for, and a senior
advisor to and co-founder of, EnerTech Capital Partners and EnerTech Capital Partners II, venture capital funds that invest in technology and service companies related to energy,
communications and the broader utilities marketplace. Since 1996, Mr.&nbsp;Keith has served as a director of Internet Capital Group,&nbsp;Inc., a public company that provides software solutions
and related services to businesses, and served as its chairman of the board from 1996 through December&nbsp;2001. Mr.&nbsp;Keith received a B.A. from Amherst College and J.D. from Temple
University. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>27</FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>Don K. Rice</B></FONT><FONT SIZE=2> has been a member of our board of directors since our inception. Mr.&nbsp;Rice is the managing partner of Rice Sangalis
Toole&nbsp;&amp; Wilson, a privately held firm that through limited partnerships invests primarily in the subordinated debt of middle market companies located throughout the United States, which he
co-founded in 1989. Prior to forming Rice, Sangalis Toole&nbsp;&amp;
Wilson, Mr.&nbsp;Rice was president and chief executive officer of First Texas Merchant Banking Group, a firm which provided mezzanine financing, and a vice president of PruCapital,&nbsp;Inc., an
investment subsidiary of The Prudential Insurance Company of America. Mr.&nbsp;Rice received a B.B.A. and M.B.A. from the University of Texas. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>Dr.&nbsp;Heinz C. Schimmelbusch</B></FONT><FONT SIZE=2> has been a member of our board of directors since our inception. Since 1997, he has served as managing
director of the general partner and of the management company of Safeguard International. Since April&nbsp;2003, Dr.&nbsp;Schimmelbusch has served as chairman of the board and chief executive
officer of Timminco Limited, a publicly held Canadian company that manufactures and supplies magnesium products. Since July&nbsp;1998, Dr.&nbsp;Schimmelbusch has served as chairman of the board
and a director of Metallurg,&nbsp;Inc., a producer and supplier of specialty metals, and has served as its chief executive officer since November&nbsp;2002. He has also served as president, chief
executive officer and a director of Metallurg Holdings,&nbsp;Inc., Metallurg,&nbsp;Inc.'s parent company, since July&nbsp;1998. Dr.&nbsp;Schimmelbusch is also chairman and chief executive
officer of Allied Resource Corporation, a global technology and engineering group. Dr.&nbsp;Schimmelbusch also served as a member of the Presidency of the Federation of German Industries (BDI) in
Cologne, Germany and chairman of its Environmental Committee and a member of the Presidency of the International Chamber of Commerce (ICC) in Paris, France. He also chaired the International Advisory
Committee of the Austrian Chancellor for which he was awarded the Golden Cross of Honor for services to the Republic of Austria. Dr.&nbsp;Schimmelbusch received a B.A., M.A. and Ph.D. in economics
from the University of Tubingen, Germany. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
board of directors is divided into two classes with only one class of directors being elected in each year and each class surviving a two-year term. The term of office of
the first class of directors, consisting of Dr.&nbsp;Heinz Schimmelbusch and Robert E. Keith Jr., will expire at our next annual meeting of stockholders. The term of office of the second class of
directors, consisting of Arthur Spector and Don K. Rice, will expire at the following annual meeting. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
board of directors established an audit committee comprised of Messrs.&nbsp;Keith and Rice, with Mr.&nbsp;Keith acting as the chairman. Our audit committee appoints, retains,
sets compensation of, and supervises our independent accountants, reviews the results and scope of the audit and other accounting related services and reviews our accounting practices and systems of
internal accounting and disclosure controls. </FONT></P>

<P><FONT SIZE=2><B>Executive Compensation  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No executive officer has received any cash compensation for services rendered. Commencing on the effective date of this prospectus through the acquisition of a
target business, we will pay 400 Building LLC a fee of $7,500 per month for providing us with office space and certain office and secretarial services. Other than this $7,500 per-month
fee, no compensation of any kind, including finders and consulting fees, will be paid to any of our existing stockholders, or any of their respective affiliates, for services rendered prior to or in
connection with a business combination. However, those persons shall be entitled to receive, upon consummation of a business combination, commissions for monies raised by them for us in connection
with the business combination, at rates which are no less favorable to us than those which we would pay to unaffiliated third parties. In addition, our existing stockholders will be reimbursed for any
out-of-pocket expenses incurred in connection with activities on our behalf. There is no limit on the amount of these out-of-pocket expenses and there
will be no review of the reasonableness of the expenses by anyone other than our board of directors, which includes persons who may seek reimbursement. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>28</FONT></P>

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<P><FONT SIZE=2><B>Conflicts of Interest  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Potential investors should be aware of the following potential conflicts of interest: </FONT></P>

<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>None
of our officers and directors are required to commit their full time to our affairs and, accordingly, they may have conflicts of interest in allocating management time
among various business activities.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>In
the course of their other business activities, our officers and directors may become aware of investment and business opportunities which may be appropriate for
presentation to us as well as the other entities with which they are affiliated. They may have conflicts of interest in determining to which entity a particular business opportunity should be
presented.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>Our
officers and directors may in the future become affiliated with entities, including other blank check companies, engaged in business activities similar to those intended
to be conducted by us.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>Since
our directors own shares of our common stock which will be released from escrow only if a business combination is successfully completed, our board may have a conflict
of interest in determining whether a particular target business is appropriate to effect a business combination. The personal and financial interests of our directors and officers may influence their
motivation in identifying and selecting a target business, completing a business combination timely and securing the release of their stock. </FONT></DD></DL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
general, officers and directors of a corporation incorporated under the laws of the State of Delaware are required to present business opportunities to a corporation if: </FONT></P>

<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>the
corporation could financially undertake the opportunity;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>the
opportunity is within the corporation's line of business; and
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>it
would not be fair to the corporation and its stockholders for the opportunity not to be brought to the attention of the corporation. </FONT></DD></DL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accordingly,
as a result of multiple business affiliations, our officers and directors may have similar legal obligations relating to presenting business opportunities meeting the
above-listed criteria to multiple entities. In addition, conflicts of interest may arise when our board evaluates a particular business opportunity with respect to the above-listed criteria. We cannot
assure you that any of the above mentioned conflicts will be resolved in our favor. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
order to minimize potential conflicts of interest which may arise from multiple corporate affiliations, each of our officers and directors has agreed in principle, until the earlier
of a business combination, our liquidation or such time as he ceases to be an officer or director, to present to us for our consideration, prior to presentation to any other entity, any business
opportunity which may reasonably be required to be presented to us under Delaware law, subject to any pre-existing fiduciary obligations he might have or new fiduciary obligations related
to or affiliated with entities to whom he has pre-existing fiduciary obligations, including, but not limited to, fiduciary obligations to next generation, follow-on or
successor entities to any entities to which the individual has pre-existing obligations. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
connection with the vote required for any business combination, all of our existing stockholders, including all of our officers and directors, have agreed to vote their respective
shares of common stock which were owned prior to this offering in accordance with the vote of the public stockholders owning a majority of the shares of our outstanding common stock. In addition, they
have agreed to waive their respective rights to participate in any liquidation distribution but only with respect to those shares of common stock acquired by them prior to this offering. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>29</FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
further minimize potential conflicts of interest, we have agreed not to consummate a business combination with an entity which is affiliated with any of our existing stockholders
unless we obtain an opinion from an independent investment banking firm that the business combination is fair to our stockholders from a financial perspective. </FONT></P>

<P><FONT SIZE=2><B>Prior Involvement of Principals in Blank Check Companies  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Arthur Spector is the only one of our directors and officers who has been a principal of another company that has completed an offering similar to this offering
and executed a business plan similar to our business plan. The table below provides you with information regarding this company: </FONT></P>

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<TR VALIGN="BOTTOM">
<TH WIDTH="35%" ALIGN="CENTER"><FONT SIZE=1><B>Name of Blank Check Company/<BR>
Acquired Business</B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="10%" ALIGN="CENTER"><FONT SIZE=1><B>Date of Initial<BR>
Public Offering</B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="13%" ALIGN="CENTER"><FONT SIZE=1><B>Date of<BR>
business<BR>
combination</B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="18%" ALIGN="CENTER"><FONT SIZE=1><B>Nature<BR>
of Business</B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="18%" ALIGN="CENTER"><FONT SIZE=1><B>Trading Market<BR>
(Ticker Symbol)</B></FONT><HR NOSHADE></TH>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="35%"><FONT SIZE=2>Information Systems Acquisition Corp./<BR>
Neoware Systems, Inc.</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>3/25/93</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>3/2/95</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="18%"><FONT SIZE=2>Information systems and network computing industry</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="18%"><FONT SIZE=2>Nasdaq National Market (NWRE)</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="dk1189_principal_stockholders"> </A>
<A NAME="toc_dk1189_2"> </A>
<BR></FONT><FONT SIZE=2><B>Principal Stockholders    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth information regarding the beneficial ownership of our common stock as of April&nbsp;30, 2003, and as adjusted to reflect the sale
of our common stock included in the units offered by this prospectus, by: </FONT></P>

<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>each
person known by us to be the owner of more than 5% of our outstanding shares of common stock;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>each
of our officers and directors; and
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>all
our officers and directors as a group. </FONT></DD></DL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unless
otherwise indicated, we believe that all persons named in the table have sole voting and investment power with respect to all shares of common stock beneficially owned by them. </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="50%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="20%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=3 ALIGN="CENTER"><FONT SIZE=1><B>Approximate Percentage<BR>
of Outstanding Common Stock</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="50%" ALIGN="LEFT"><FONT SIZE=1><B>Name and Address of Beneficial Owner<SUP>(1)</SUP><BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="20%" ALIGN="CENTER"><FONT SIZE=1><B>Amount and Nature<BR>
of Beneficial<BR>
Ownership</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="11%" ALIGN="CENTER"><FONT SIZE=1><B>Before Offering</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="10%" ALIGN="CENTER"><FONT SIZE=1><B>After Offering</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="50%"><FONT SIZE=2>Arthur Spector<SUP>(2)</SUP></FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="20%" ALIGN="RIGHT"><FONT SIZE=2>360,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>48.0</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>9.6</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="50%"><FONT SIZE=2>Spector Family Trust<SUP>(3)</SUP></FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="20%" ALIGN="RIGHT"><FONT SIZE=2>180,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>24.0</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>4.8</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="50%"><FONT SIZE=2>Dr.&nbsp;Heinz&nbsp;C. Schimmelbusch<SUP>(4)</SUP></FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="20%" ALIGN="RIGHT"><FONT SIZE=2>150,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>20.0</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>4.0</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="50%"><FONT SIZE=2>Robert&nbsp;E. Keith,&nbsp;Jr.<SUP>(4)(5)</SUP></FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="20%" ALIGN="RIGHT"><FONT SIZE=2>20,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>2.7</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>*</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="50%"><FONT SIZE=2>Don&nbsp;K. Rice<SUP>(4)(6)</SUP></FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="20%" ALIGN="RIGHT"><FONT SIZE=2>20,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>2.7</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>*</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="50%"><FONT SIZE=2>All directors and executive officers as a group (4&nbsp;individuals)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="20%" ALIGN="RIGHT"><FONT SIZE=2>550,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>73.3</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>14.7</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>%</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->

<HR NOSHADE ALIGN="LEFT" WIDTH="120">
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=1>*</FONT></DT><DD><FONT SIZE=1>Less
than 1%.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=1>(1)</FONT></DT><DD><FONT SIZE=1>Unless
otherwise indicated, the business address of each of the individuals is 435 Devon Park Drive, Building 400, Wayne, Pennsylvania 19087.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=1>(2)</FONT></DT><DD><FONT SIZE=1>Arthur
Spector is our chairman of the board, chief executive officer and president.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=1>(3)</FONT></DT><DD><FONT SIZE=1>The
Spector Family Trust is a trust established by Mr.&nbsp;Spector and his wife for the benefit of his descendants. Adam B. Spector and Jeremy D. Spector, Mr.&nbsp;Spector's
adult sons, are co-trustees of the trust.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=1>(4)</FONT></DT><DD><FONT SIZE=1>Each
of these individuals is a director of ours. </FONT></DD></DL>
<P ALIGN="CENTER"><FONT SIZE=2>30</FONT></P>

<HR NOSHADE>
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<A NAME="page_dk1189_1_31"> </A>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=1>(5)</FONT></DT><DD><FONT SIZE=1>The
business address of Mr.&nbsp;Keith is 435 Devon Park Drive, Building 700, Wayne, Pennsylvania 19087.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=1>(6)</FONT></DT><DD><FONT SIZE=1>The
business address of Mr.&nbsp;Rice is 517 Fishers Road, Bryn Mawr, Pennsylvania 19010. </FONT></DD></DL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon completion of this offering, our existing stockholders, which includes all of our officers and directors, collectively, will beneficially own
20% of the then issued and outstanding shares of our common stock. These stockholders may be able to effectively exercise control over all matters requiring approval by our stockholders, including the
election of directors and approval of significant corporate transactions other than approval of a business combination. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All
of the shares of our common stock outstanding prior to the date of this prospectus will be placed in escrow with Continental Stock Transfer&nbsp;&amp; Trust Company, as escrow agent,
until the earlier of: </FONT></P>

<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>three
years following the date of this prospectus;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>our
liquidation; or
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>the
consummation of a liquidation, merger, stock exchange or other similar transaction which results in all of our stockholders having the right to exchange their shares of
common stock for cash, securities or other property subsequent to our consummating a business combination with a target business. </FONT></DD></DL>
</UL>

<P><FONT SIZE=2>During
the escrow period, the holders of these shares will not be able to sell their securities, but will retain all other rights as our stockholders, including, without limitation, the right to vote
their shares of common stock. If we are unable to effect a business combination and liquidate, none of our existing stockholders will receive any portion of the liquidation proceeds with respect to
common stock owned by them prior to the date of this prospectus. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mr.&nbsp;Arthur
Spector has indicated that he (and certain of his affiliates) intends to purchase up to 1,000,000 warrants in the public marketplace after separate trading of the
warrants commences. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Messrs.&nbsp;Arthur
Spector, the Spector Family Trust and Heinz Schimmelbusch may be deemed to be our "parents" and "promoters," as these terms are defined under the Federal securities
laws. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>31</FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="page_dm1189_1_32"> </A> </FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="dm1189_certain_transactions"> </A>
<A NAME="toc_dm1189_1"> </A>
<BR></FONT><FONT SIZE=2><B>Certain Transactions    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prior to the date of this prospectus, we issued 360,000 shares of our common stock to Arthur Spector, our chairman, chief executive officer and president, at a
purchase price of approximately $.06944 per share. We also issued a total of 370,000 shares of our common stock to the Spector Family Trust and Messrs.&nbsp;Schimmelbusch, Keith and Rice at a
purchase price of $0.0001 per share as set forth below: </FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="77%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="30%" ALIGN="LEFT"><FONT SIZE=1><B>Name<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="14%" ALIGN="CENTER"><FONT SIZE=1><B>Number of Shares</B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="51%" ALIGN="CENTER"><FONT SIZE=1><B>Relationship to Us</B></FONT><HR NOSHADE></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="30%"><FONT SIZE=2>Arthur Spector</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>360,000</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="51%"><FONT SIZE=2>Chairman of the Board, Chief Executive Officer and President</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="30%"><FONT SIZE=2>Spector Family Trust</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>180,000</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="51%"><FONT SIZE=2>Stockholder</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="30%"><FONT SIZE=2>Dr.&nbsp;Heinz&nbsp;C.&nbsp;Schimmelbusch</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>150,000</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="51%"><FONT SIZE=2>Director</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="30%"><FONT SIZE=2>Robert E. Keith, Jr.</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>20,000</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="51%"><FONT SIZE=2>Director</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="30%"><FONT SIZE=2>Don K. Rice</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>20,000</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="51%"><FONT SIZE=2>Director</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;400
Building LLC, an affiliate of Arthur Spector, our chairman of the board, chief executive officer and president, has agreed that, commencing on the effective date of this prospectus
through the acquisition
of a target business, it will make available to us a small amount of office space and certain office and secretarial services, as we may require from time to time. We have agreed to pay 400 Building
LLC $7,500 per month for these services. Arthur Spector is the sole member and sole manager of 400 Building LLC. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mr.&nbsp;Spector
has made advances aggregating $35,000 to us as of the date of this prospectus to cover expenses related to this offering. The loan will be payable without interest on
the earlier of May&nbsp;1, 2004 or the consummation of this offering. We intend to repay these loans from the proceeds of this offering. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
will reimburse our officers and directors for any reasonable out-of-pocket business expenses. There is no limit on the amount of accountable
out-of-pocket expenses reimbursable by us, which will be reviewed only by our board. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other
than the $7,500 per-month administrative fee and reimbursable out-of-pocket expenses payable to our officers and directors, no compensation or
fees of any kind, including finders and consulting fees, will be paid to any of our existing stockholders, officers or directors who owned our common stock prior to this offering, or to any of their
respective affiliates for services rendered to us prior to or with respect to the business combination. However, they shall be entitled to receive, upon completion of the business combination,
commissions for monies raised by them for us with respect to the business combination, at rates that are no less favorable to us than those which we would pay to unaffiliated third parties. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All
ongoing and future transactions between us and any of our officers and directors or their respective affiliates, will be on terms believed by us to be no less favorable than are
available from unaffiliated third parties and will require prior approval in each instance by a majority of the members of our board who do not have an interest in the transaction. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>32</FONT></P>

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<A NAME="page_dm1189_1_33"> </A>
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="dm1189_description_of_securities"> </A>
<A NAME="toc_dm1189_2"> </A>
<BR></FONT><FONT SIZE=2><B>Description Of Securities    <BR>    </B></FONT></P>


<P><FONT SIZE=2><B>General  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are authorized to issue 20,000,000 shares of common stock, par value $.0001, and 1,000,000 shares of preferred stock, par value $.0001. As of the date of this
prospectus, 750,000 shares of common stock are outstanding, held of record by five persons. No shares of preferred stock are currently outstanding. </FONT></P>

<P><FONT SIZE=2><B>Units  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each unit consists of one share of common stock and two warrants. Each warrant entitles the holder to purchase one share of common stock. The common stock and
warrants will begin to trade separately on the 90th day after the date of this prospectus unless EarlyBirdCapital,&nbsp;Inc. informs us of its decision to allow earlier separate trading, provided
that in no event can the common stock and warrants be traded separately until we have filed with the SEC an audited balance sheet reflecting our receipt of the proceeds of this offering. We expect to
file this audited balance sheet upon the consummation of this offering. </FONT></P>

<P><FONT SIZE=2><B>Common stock  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our stockholders are entitled to one vote for each share held of record on all matters to be voted on by stockholders. In connection with the vote required for
any business combination, all of our existing stockholders, including all of our officers and directors, have agreed to vote their respective shares of common stock owned by them immediately prior to
this offering in accordance with the vote of the public stockholders owning a majority of the shares of our outstanding common stock. This voting arrangement shall not apply to shares included in
units purchased in this offering or purchased following this offering in the open market by any of our existing stockholders, officers and directors. Additionally, our existing stockholders, officers
and directors will vote all of their shares in any manner they determine, in their sole discretion, with respect to any other items that come before a vote of our stockholders. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
will proceed with a business combination only if the public stockholders who own at least a majority of the shares of common stock sold in this offering vote in favor of the business
combination and public stockholders owning less than 20% of the shares sold in this offering exercise conversion rights discussed below. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
board of directors is divided into two classes, each of which will generally serve for a term of two years with only one class of directors being elected in each year. There is no
cumulative voting with respect to the election of directors, with the result that the holders of more than 50% of the shares voted for the election of directors can elect all of the directors. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
stockholders are entitled to receive dividends when, as and if declared by our board out of funds legally available. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
we are forced to liquidate prior to a business combination, our public stockholders are entitled to share ratably in the trust fund, inclusive of any interest, and any net assets
remaining available for distribution to them after payment of liabilities. Our existing stockholders have agreed to waive their rights to share in any distribution with respect to common stock owned
by them prior to the offering if we are forced to liquidate. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
stockholders have no conversion, preemptive or other subscription rights and there are no sinking fund or redemption provisions applicable to the common stock, except that each
public stockholder has the right to have her shares of common stock converted to cash equal to her pro rata share of the trust fund if she votes against the business combination and the business
combination is </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>33</FONT></P>

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<A NAME="page_dm1189_1_34"> </A>
<BR>

<P><FONT SIZE=2>approved
and completed. Any public stockholder who converts her stock into her share of the trust fund still has the right to exercise the warrants that she received as part of the units. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All
of the outstanding shares of common stock are, and the shares of common stock included in the units, when issued and paid for as set forth in this prospectus, will be, fully paid and
nonassessable. </FONT></P>

<P><FONT SIZE=2><B>Preferred stock  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our certificate of incorporation authorizes the issuance of 1,000,000 shares of a blank check preferred stock with such designation, rights and preferences as may
be determined from time to time by our board of directors. No shares of preferred stock are being issued or registered in this offering. Accordingly, our board of directors is empowered, without
stockholder approval, to issue preferred stock with dividend, liquidation, conversion, voting or other rights which could adversely affect the voting power or other rights of the holders of common
stock, although the underwriting agreement prohibits us, prior to a business combination, from issuing preferred stock which participates in any manner in the proceeds of the trust fund, or which
votes as a class with the common stock on a business combination. We may issue some or all of the preferred stock to effect a business combination. In addition, the preferred stock could be utilized
as a method of discouraging, delaying or preventing a change in control of us. Although we do not currently intend to issue any shares of preferred stock, we cannot assure you that we will not do so
in the future. </FONT></P>

<P><FONT SIZE=2><B>Warrants  </B></FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No warrants are currently outstanding. Each warrant entitles the registered holder to purchase one share of our common stock at a price of $5.00 per share,
subject to adjustment as discussed below, at any time commencing on the later of: </FONT></P>

<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>the
completion of a business combination; or
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>one
year from the date of this prospectus. </FONT></DD></DL>
</UL>

<P><FONT SIZE=2>The
warrants will expire four years from the date of this prospectus at 5:00&nbsp;p.m., New York City time. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
may call the warrants for redemption, </FONT></P>

<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>in
whole and not in part,
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>at
a price of $.01 per warrant at any time after the warrants become exercisable,
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>upon
not less than 30&nbsp;days' prior written notice of redemption to each warrantholder, and
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>if,
and only if, the reported last sale price of the common stock equals or exceeds $8.50 per share, for the 20 consecutive trading days ending on the third business day
prior to the notice of redemption to warrantholders. </FONT></DD></DL>
</UL>
<BR>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
warrants will be issued in registered form under a warrant agreement between Continental Stock Transfer&nbsp;&amp; Trust Company, as warrant agent, and us. Reference is made to the
warrant agreement, which has been filed as an exhibit to the registration statement of which this prospectus is a part, for a complete description of the terms and conditions applicable to the
warrants. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
exercise price and number of shares of common stock issuable on exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, or our
recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuances of common stock at a price below their respective exercise prices. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
warrants may be exercised upon surrender of the warrant certificate on or prior to the expiration date at the offices of the warrant agent, with the exercise form on the reverse side
of the warrant certificate completed and executed as indicated, accompanied by full payment of the exercise </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>34</FONT></P>

<HR NOSHADE>
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<A NAME="page_dm1189_1_35"> </A>
<BR>

<P><FONT SIZE=2>price,
by certified check payable to us, for the number of warrants being exercised. The warrantholders do not have the rights or privileges of holders of common stock and any voting rights until they
exercise their warrants and receive common stock. After the issuance of shares of common stock upon exercise of the warrants, each holder will be entitled to one vote for each share held of record on
all matters to be voted on by stockholders. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No
warrants will be exercisable unless at the time of exercise a prospectus relating to common stock issuable upon exercise of the warrants is current and the common stock has been
registered or qualified or deemed to be exempt under the securities laws of the state of residence of the holder of the warrants. We have agreed to meet these conditions and to maintain a current
prospectus relating to common stock issuable upon exercise of the warrants until the expiration of the warrants, under the terms of the warrant agreement. However, we cannot assure you that we will be
able to do so. The warrants may be deprived of any value and the market for the warrants may be limited if the prospectus relating to the common stock issuable upon the exercise of the warrants is not
current or if the common stock is not qualified or exempt from qualification in the jurisdictions in which the holders of the warrants reside. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No
fractional shares will be issued upon exercise of the warrants. However, if a warrantholder exercises all warrants then owned of record by him, we will pay to the warrantholder, in
lieu of the issuance of any fractional share which is otherwise issuable to the warrantholder, an amount in cash based on the market value of the common stock on the last trading day prior to the
exercise date. </FONT></P>

<P><FONT SIZE=2><B>Dividends  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have not paid any dividends on our common stock to date and do not intend to pay dividends prior to the completion of a business combination. The payment of
dividends in the future will be contingent upon our revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of a business combination. The payment
of any dividends subsequent to a business combination will be within the discretion of our then board of directors. It is the present intention of our board of directors to retain all earnings, if
any, for use in our business operations and, accordingly, our board does not anticipate declaring any dividends in the foreseeable future. </FONT></P>


<P><FONT SIZE=2><B>Our Transfer Agent and Warrant Agent  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The transfer agent for our securities and warrant agent for our warrants is Continental Stock Transfer&nbsp;&amp; Trust Company, 17 Battery Place, New York, New
York 10004. </FONT></P>

<P><FONT SIZE=2><B>Shares Eligible for Future Sale  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon the completion of this offering, we will have 3,750,000 shares of common stock outstanding, or 4,200,000 shares if the underwriters'
over-allotment option is exercised in full. Of these shares, the 3,000,000 shares sold in this offering, or 3,450,000 shares if the over-allotment option is exercised, will be
freely tradable without restriction or further registration under the Securities Act, except for any shares purchased by one of our affiliates within the meaning of Rule&nbsp;144 under the
Securities Act. All of the remaining 750,000 shares are restricted securities under Rule&nbsp;144, in that they were issued in private transactions not involving a public offering. None of those
will be eligible for sale under Rule&nbsp;144 prior to April&nbsp;2004. Notwithstanding this, all of those shares have been placed in escrow for a period of three years from the date of this
prospectus and will only be released prior to that date under certain limited circumstances. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>35</FONT></P>

<HR NOSHADE>
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<A NAME="page_dm1189_1_36"> </A>
<BR>
<UL>

<P><FONT SIZE=2><I> Rule&nbsp;144  </I></FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In general, under Rule&nbsp;144 as currently in effect, a person who has beneficially owned restricted shares of our common stock for at least one year would be
entitled to sell within any three-month period a number of shares that does not exceed the greater of either of the following: </FONT></P>

<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>1%
of the number of shares of common stock then outstanding, which will equal 37,500 shares immediately after this offering (or 42,000 if the underwriters' exercise their
over-allotment option); and
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>the
average weekly trading volume of the common stock during the four calendar weeks preceding the filing of a notice on Form&nbsp;144 with respect to the sale. </FONT></DD></DL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sales
under Rule&nbsp;144 are also limited by manner of sale provisions and notice requirements and to the availability of current public information about us. </FONT></P>

<UL>

<P><FONT SIZE=2><I> Rule&nbsp;144(k)  </I></FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under Rule&nbsp;144(k), a person who is not deemed to have been one of our affiliates at the time of or at any time during the three months preceding a sale,
and who has beneficially owned the restricted shares proposed to be sold for at least two years, including the holding period of any prior owner other than an affiliate, is entitled to sell their
shares without complying with the manner of sale, public information, volume limitation or notice provisions of Rule&nbsp;144. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>36</FONT></P>

<HR NOSHADE>
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<A NAME="page_dm1189_1_37"> </A>
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="dm1189_underwriting"> </A>
<A NAME="toc_dm1189_3"> </A>
<BR></FONT><FONT SIZE=2><B>Underwriting    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In accordance with the terms and conditions contained in the underwriting agreement, we have agreed to sell to each of the underwriters named below, and each of
the underwriters, for which EarlyBirdCapital,&nbsp;Inc. is acting as representative, have severally, and not jointly, agreed to purchase on a firm commitment basis the number of units offered in
this offering set forth opposite their respective names below: </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE WIDTH="63%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=1><B>Underwriters<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="16%" ALIGN="CENTER"><FONT SIZE=1><B>Number of Units</B></FONT><HR NOSHADE></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>EarlyBirdCapital, Inc.</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="3%">&nbsp;</TD>
<TD WIDTH="78%"><FONT SIZE=2>Total</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=2>3,000,000</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
copy of the underwriting agreement has been filed as an exhibit to the registration statement of which this prospectus forms a part. </FONT></P>

<P><FONT SIZE=2><B>Pricing of Securities  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have been advised by the representative that the underwriters propose to offer the units to the public at the initial offering price set forth on the cover
page of this prospectus. They may allow some dealers concessions not in excess of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per unit and the dealers may reallow a concession not in excess of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per unit to other
dealers. Upon completion of this offering, the offering price, the concession to selected dealers and the reallowance to other dealers may be changed by the representative. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prior
to this offering there has been no public market for any of our securities. The public offering price of the units and the terms of the warrants were negotiated between us and the
representative. Factors considered in determining the prices and terms of the units, including the common stock and warrants underlying the units, include: </FONT></P>

<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>the
history and prospects of companies whose principal business is the acquisition of other companies;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>prior
offerings of those companies;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>our
prospects for acquiring an operating business at attractive values;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>our
capital structure;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>an
assessment of our management and their experience in identifying operating companies;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>general
conditions of the securities markets at the time of the offering; and
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>other
factors as were deemed relevant. </FONT></DD></DL>
</UL>

<P><FONT SIZE=2>However,
although these factors were considered, the determination of our offering price is more arbitrary than the pricing of securities for an operating company in a particular industry since the
underwriters are unable to compare our financial results and prospects with those of public companies operating in the same industry. </FONT></P>

<P><FONT SIZE=2><B>Over-Allotment Option  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have also granted to the underwriters an option, exercisable during the 45-day period commencing on the date of this prospectus, to purchase from
us at the offering price, less underwriting discounts and the non-accountable expense allowance, up to an aggregate of 450,000 additional units for the sole purpose of covering
over-allotments, if any. The underwriters may exercise that option if the underwriters sell more units than the total number set forth in the table above. If any units </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>37</FONT></P>

<HR NOSHADE>
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<A NAME="page_dm1189_1_38"> </A>
<BR>

<P><FONT SIZE=2>underlying
the option are purchased, the underwriters will severally purchase shares in approximately the same proportion as set forth in the table above. </FONT></P>

<P><FONT SIZE=2><B>Commissions and Discounts  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table shows the public offering price, underwriting discount to be paid by us to the underwriters and the proceeds, before expenses, to us. This
information assumes either no exercise or full exercise by the underwriters of their over-allotment option. </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE WIDTH="74%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="48%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Per unit</B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>With&nbsp;option</B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Without&nbsp;option</B></FONT><HR NOSHADE></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="48%"><FONT SIZE=2>Public offering price</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=2>6.00</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=2>20,700,000</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=2>18,000,000</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="48%"><FONT SIZE=2>Discount</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=2>0.42</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=2>1,449,000</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=2>1,260,000</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="48%"><FONT SIZE=2>Proceeds before expenses</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=2>5.58</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=2>19,251,000</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=2>16,740,000</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
have agreed to pay to the representative an expense allowance on a non-accountable basis equal to 3% of the gross proceeds derived from the sale of the units offered in
this offering (including exercise of the underwriters' over-allotment option described above). </FONT></P>

<P><FONT SIZE=2><B>Purchase Option  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have agreed to sell to the representative, for $100, an option to purchase up to a total of 300,000 units. The units issuable upon exercise of this option are
identical to those offered by this prospectus. This option is exercisable initially at $6.60 per unit commencing on the later of the consummation of a business combination or one year from the date of
this prospectus and expiring five years from the date of this prospectus. The option may not be transferred, sold, assigned or hypothecated during the one-year period following the date of
this prospectus, except to underwriters and selected dealers and to officers and partners of the underwriters or the selected dealers. The option grants to holders demand and "piggy back" rights for
periods of five and seven years, respectively, from
the date of this prospectus with respect to the registration under the Securities Act of the securities directly and indirectly issuable upon exercise of the option. The exercise price and number of
units issuable upon exercise of the option may be adjusted in certain circumstances including in the event of a stock dividend, or our recapitalization, reorganization, merger or consolidation.
However, the option will not be adjusted for issuances of common stock at a price below its exercise price. </FONT></P>

<P><FONT SIZE=2><B>Warrant Solicitation Fee  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have engaged the representative, on a non-exclusive basis, as our agent for the solicitation of the exercise of the warrants. To the extent not
inconsistent with the guidelines of the NASD and the rules and regulations of the SEC, we have agreed to pay the representative for bona fide services rendered a commission equal to 5% of the exercise
price for each warrant exercised more than one year after the date of this prospectus if the exercise was solicited by the underwriters. In addition to soliciting, either orally or in writing, the
exercise of the warrants, the representative's services may also include disseminating information, either orally or in writing, to warrantholders about us or the market for our securities, and
assisting in the processing of the exercise of warrants. No compensation will be paid to the representative upon the exercise of the warrants if: </FONT></P>

<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>the
market price of the underlying shares of common stock is lower than the exercise price;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>the
holder of the warrants has not confirmed in writing that the underwriters solicited her exercise;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>the
warrants are held in a discretionary account;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>the
warrants are exercised in an unsolicited transaction; or
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>the
arrangement to pay the commission is not disclosed in the prospectus provided to warrantholders at the time of exercise. </FONT></DD></DL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>38</FONT></P>

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<UL>
<UL>
</UL>
</UL>
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NAME="page_do1189_1_39"> </A> </FONT></P>

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<P><FONT SIZE=2><B>Regulatory Restrictions on Purchase of Shares  </B></FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Rules of the SEC may limit the ability of the underwriters to bid for or purchase shares before the distribution of the shares is completed. However, the
underwriters may engage in the following activities in accordance with the rules: </FONT></P>

<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2><I>Stabilizing Transactions</I></FONT><FONT SIZE=2>. The underwriters may make bids or purchases for the purpose of pegging, fixing or maintaining the
price of our securities, so long as stabilizing bids do not exceed a specified maximum.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2><I>Over-Allotments and Syndicate Coverage Transactions</I></FONT><FONT SIZE=2>. The underwriters may create a short position in our
securities by selling more of our securities than are set forth on the cover page of this prospectus. If the underwriters create a short position during the offering, the representative may engage in
syndicate covering transactions by purchasing our securities in the open market. The representative may also elect to reduce any short position by exercising all or part of the
over-allotment option.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2><I>Penalty Bids</I></FONT><FONT SIZE=2>. If the representative sells shares in the open market in a stabilizing transaction or syndicate coverage
transaction, it may reclaim a selling concession from the underwriters and selling group members who sold those securities as part of this offering. </FONT></DD></DL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stabilization
and syndicate covering transactions may cause the price of the securities to be higher than they would be in the absence of these transactions. The imposition of a penalty
bid might also have an effect on the prices of the securities if it discourages resales of the securities. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Neither
we nor the underwriters makes any representation or prediction as to the effect that the transactions described above may have on the prices of the securities. These transactions
may occur on the OTC Bulletin Board, in the over-the-counter market or on any
trading market. If any of these transactions are commenced, they may be discontinued without notice at any time. </FONT></P>


<P><FONT SIZE=2><B>Other Terms  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have granted the representative the right to have its designee present at all meetings of our board of directors for a period of five years from the date of
this prospectus. The designee will be entitled to the same notices and communications sent by us to our directors and to attend directors' meetings, but will not have voting rights. The representative
has not named a designee as of the date of this prospectus. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Although
they are not obligated to do so, the underwriters may introduce us to potential target businesses or assist us in raising additional capital, as needs may arise in the future.
We are not under any contractual obligation to engage the underwriters to provide any services for us after completion of this offering, but if we do, we may pay the underwriters a finder's fee or
other compensation. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
have agreed to indemnify the underwriters against some liabilities, including civil liabilities under the Securities Act, or to contribute to payments the underwriters may be required
to make in this respect. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All
of our existing stockholders have agreed that, until March&nbsp;18, 2006, they will not negotiate with or engage any investment banking firm or underwriter other than
EarlyBirdCapital,&nbsp;Inc. with respect to any public financing for any company with a business plan similar to ours with which they are affiliated. During the five-year period
following the date of this prospectus, EarlyBirdCapital,&nbsp;Inc. has been granted the right to purchase for its account or to sell for the account of our existing stockholders and their affiliates
any of our securities sold by them pursuant to Rule&nbsp;144 under the Securities Act. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>39</FONT></P>

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NAME="do1189_legal_matters"> </A>
<A NAME="toc_do1189_1"> </A>
<BR></FONT><FONT SIZE=2><B>Legal Matters    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The validity of the securities offered in this prospectus are being passed upon for us by Klehr, Harrison, Harvey, Branzburg&nbsp;&amp; Ellers LLP, Philadelphia,
Pennsylvania. Graubard Miller, New York, New York, is acting as counsel for the underwriters in this offering. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="do1189_experts"> </A>
<A NAME="toc_do1189_2"> </A>
<BR></FONT><FONT SIZE=2><B>Experts    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The financial statements included in this prospectus and in the registration statement have been audited by BDO Seidman, LLP, independent certified public
accountants, to the extent and for the period set forth in their report appearing elsewhere in this prospectus and in the registration statement. The financial statements and the report of BDO
Seidman, LLP are included in reliance upon their report given upon the authority of BDO Seidman, LLP as experts in auditing and accounting. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="do1189_where_you_can_find_additional_information"> </A>
<A NAME="toc_do1189_3"> </A>
<BR></FONT><FONT SIZE=2><B>Where You Can Find Additional Information    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have filed with the SEC a registration statement on Form&nbsp;S-1, which includes exhibits, schedules and amendments, under the Securities Act,
with respect to this offering of our securities. Although this prospectus, which forms a part of the registration statement, contains all material information included in the registration statement,
parts of the registration statement have been omitted as permitted by rules and regulations of the SEC. We refer you to the registration statement and its exhibits for further information about us,
our securities and this offering. The registration statement and its exhibits, as well as our other reports filed with the SEC, can be inspected and copied at the SEC's public reference room at 450
Fifth Street, N.W., Washington, D.C. 20549-1004. The public may obtain information about the operation of the public reference room by calling the SEC at
1-800-SEC-0330. In addition, the SEC maintains a web site at http://www.sec.gov which contains the Form&nbsp;S-1 and other reports, proxy and
information statements and information regarding issuers that file electronically with the SEC. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>40</FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="fa1189_millstream_acquisition_corpora__mil04215"> </A>
<A NAME="toc_fa1189_1"> </A>
<BR></FONT><FONT SIZE=2><B>MILLSTREAM ACQUISITION CORPORATION<BR>  (a corporation in the development stage)    <BR>    <BR>    Index to Financial Statements    <BR>    </B></FONT></P>

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<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Report of Independent Certified Public Accountants</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>F-2</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Financial statements</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="82%"><FONT SIZE=2>Balance sheet</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>F-3</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="82%"><FONT SIZE=2>Statement of cash flows</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>F-4</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Notes to financial statements</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>F-5 &#150; F-6</FONT></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER"><FONT SIZE=2>F-1</FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="fb1189_report_of_independent_certified_public_accountants"> </A>
<A NAME="toc_fb1189_1"> </A>
<BR></FONT><FONT SIZE=2><B>REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS    <BR>    </B></FONT></P>

<P><FONT SIZE=2>Millstream
Acquisition Corporation<BR>
Wayne, Pennsylvania </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
have audited the accompanying balance sheet of Millstream Acquisition Corporation (a corporation in the development stage) as of April&nbsp;30, 2003, and the related statement of
cash flows for the period April&nbsp;11, 2003 (inception) to April&nbsp;30, 2003. These financial statements are the responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Millstream Acquisition Corporation as of April&nbsp;30,
2003, and the results of its cash flows for the period April&nbsp;11, 2003 (inception) to April&nbsp;30, 2003 in conformity with accounting principles generally accepted in the United States of
America. </FONT></P>

<P><FONT SIZE=2>/s/&nbsp;&nbsp;</FONT><FONT
SIZE=2>BDO SEIDMAN, LLP</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;<BR>
Philadelphia, Pennsylvania<BR>
May&nbsp;1, 2003 </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>F-2</FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2><A
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<A NAME="toc_fc1189_1"> </A>
<BR></FONT><FONT SIZE=2><B>MILLSTREAM ACQUISITION CORPORATION<BR>  (a corporation in the development)<BR>  <BR>    BALANCE SHEET    <BR>    </B></FONT></P>

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<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>April&nbsp;30,<BR>
2003</B></FONT><HR NOSHADE></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2><B>ASSETS</B></FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>Cash</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>60,039</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2><BR><FONT SIZE=2><B>LIABILITIES AND STOCKHOLDERS' EQUITY</B></FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="10%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2><B>Note payable,</B></FONT><FONT SIZE=2> stockholder (Note 3)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>35,000</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2><B>Commitment</B></FONT><FONT SIZE=2> (Note 4)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2><BR><FONT SIZE=2><B>Stockholders' equity</B></FONT><FONT SIZE=2> (Notes 1, 2 and 5)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="10%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="83%"><FONT SIZE=2>Preferred stock, $.0001 par value Authorized 1,000,000 shares; none issued (Note 5)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="83%"><FONT SIZE=2>Common stock, $.0001 par value Authorized 20,000,000 shares; issued and outstanding 750,000 shares</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>75</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="83%"><FONT SIZE=2>Additional paid-in capital</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>24,944</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2><BR><FONT SIZE=2><B>Total stockholders' equity</B></FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2><BR>
25,039</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2><BR><FONT SIZE=2><B>Total liabilities and stockholders' equity</B></FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2><BR>
60,039</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER"><FONT SIZE=2>See
accompanying notes to financial statements. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>F-3</FONT></P>

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NAME="page_fe1189_1_4"> </A> </FONT></P>

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NAME="fe1189_millstream_acquisition_corpora__mil03740"> </A>
<A NAME="toc_fe1189_1"> </A>
<BR></FONT><FONT SIZE=2><B>MILLSTREAM ACQUISITION CORPORATION<BR>  (a corporation in the development)<BR>  <BR>    STATEMENT OF CASH FLOWS    <BR>    </B></FONT></P>

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<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH COLSPAN=4 ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>April&nbsp;11, 2003 (inception)<BR>
to<BR>
April&nbsp;30, 2003</B></FONT><HR NOSHADE></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=4><FONT SIZE=2><B>Cash flows from financing activities</B></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD COLSPAN=3><FONT SIZE=2>Proceeds from note payable, stockholder</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT"><FONT SIZE=2>35,000</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD COLSPAN=3><FONT SIZE=2>Proceeds from sale of 750,000 shares of common stock to initial stockholders at an average of $.0334 per share</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT"><FONT SIZE=2>25,039</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=4><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="2%">&nbsp;</TD>
<TD WIDTH="70%"><BR><FONT SIZE=2><B>Net cash provided by financing activities</B></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT"><FONT SIZE=2><BR>
60,039</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=4><BR><FONT SIZE=2><B>Cash at beginning of period</B></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT"><FONT SIZE=2><BR>
&#151;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=4><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=4><BR><FONT SIZE=2><B>Cash at end of period</B></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>$</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT"><FONT SIZE=2><BR>
60,039</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=4><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER"><FONT SIZE=2>See
accompanying notes to financial statements. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>F-4</FONT></P>

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<A NAME="toc_fg1189_1"> </A>
<BR></FONT><FONT SIZE=2><B>MILLSTREAM ACQUISITION CORPORATION<BR>  (a corporation in the development stage)    <BR>    <BR>    NOTES TO FINANCIAL STATEMENTS    <BR>    </B></FONT></P>

<P><FONT SIZE=2><B>1.&nbsp;&nbsp;&nbsp;&nbsp;Organization and Business Operations  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Millstream Acquisition Corporation ("Company") was incorporated in Delaware on April 11, 2003 as a Specified Purpose Acquisition Company&#153;, the
objective of which is to acquire an operating business in an industry not yet determined. The Company's initial stockholders purchased 750,000 common shares, $.0001 par value, for $25,039 on April 14,
2003. At April 30, 2003, the Company had not yet commenced any operations and, accordingly, a statement of operations has not been presented. All activity through April 30, 2003 relates to the
Company's formation. The Company has selected December 31, as its fiscal year-end. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company's ability to commence operations is contingent upon obtaining adequate financial resources through a proposed public offering ("Proposed Offering") which is discussed in Note
2. The Company's management has broad discretion with respect to the specific application of the net proceeds of this Proposed Offering, although substantially all of the net proceeds of this Proposed
Offering are intended to be generally applied toward consummating a business combination with an operating business in an industry yet to be determined ("Business Combination"). Furthermore, there is
no assurance that the Company will be able to successfully effect a Business Combination. Upon the closing of the Proposed Offering, at least ninety percent (90%) of the net proceeds, after payment of
certain amounts to the underwriter, will be held in a trust account ("Trust Fund") and invested in government securities until the earlier of (i) the consummation of its first Business Combination or
(ii) liquidation of the Company. The remaining proceeds may be used to pay for business, legal and accounting due diligence on prospective acquisitions and continuing general and administrative
expenses. The Company, after signing a definitive agreement for the acquisition of a target business, will submit such transaction for stockholder approval. In the event that stockholders owning 20%
or more of the outstanding stock excluding, for this purpose, those persons who were stockholders prior to the Proposed Offering, vote against the Business Combination, the Business Combination will
not be consummated. All of the Company's stockholders prior to the Proposed Offering, including all of the officers and directors of the Company ("Initial Stockholders"), have agreed to vote their
750,000 founding shares of common stock in accordance with the vote of the majority in interest of all other
stockholders of the Company ("Public Stockholders") with respect to any Business Combination. After consummation of the Company's first Business Combination, all of these voting safeguards will no
longer be applicable. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;With
respect to the first Business Combination which is approved and consummated, any Public Stockholder who voted against the Business Combination may demand that the Company redeem his
shares. The per share redemption price will equal the amount in the Trust Fund as of the record date for determination of stockholders entitled to vote on the Business Combination divided by the
number of shares of common stock held by Public Stockholders at the consummation of the Proposed Offering. Accordingly, Public Stockholders holding 19.99% of the aggregate number of shares owned by
all Public Stockholders may seek redemption of their shares in the event of a Business Combination. Such Public Stockholders are entitled to receive their per share interest in the Trust Fund computed
without regard to the shares held by Initial Stockholders. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company's Certificate of Incorporation provides for mandatory liquidation of the Company, without stockholder approval, in the event that the Company does not consummate a Business
Combination within 18 months from the date of the consummation of the Proposed Offering, or 24 months from the consummation of the Proposed Offering 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 </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>F-5</FONT></P>

<HR NOSHADE>
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<BR>

<P><FONT SIZE=2>available
for distribution (including Trust Fund assets) will be less than the initial public offering price per share in the Proposed Offering (assuming no value is attributed to the Warrants
contained in the Units to be offered in the Proposed Offering discussed in Note 2). </FONT></P>


<P><FONT SIZE=2><B>2.&nbsp;&nbsp;&nbsp;&nbsp;Proposed Public Offering  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Proposed Offering calls for the Company to offer for public sale up to 3,000,000 units ("Units"). 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 will entitle 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 one year from the effective date of the Proposed Offering and expiring four years from the
date of the prospectus. 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 20 consecutive trading days ending on the third day prior to date on which notice of redemption is given. </FONT></P>

<P><FONT SIZE=2><B>3.&nbsp;&nbsp;&nbsp;&nbsp;Note Payable, Stockholder  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company issued a $35,000 unsecured promissory note to a stockholder on April 28, 2003. The note is non-interest bearing and is payable on the earlier of May
1, 2004 or the consummation of the Company's initial public offering. </FONT></P>

<P><FONT SIZE=2><B>4.&nbsp;&nbsp;&nbsp;&nbsp;Commitment  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company presently occupies office space provided by an affiliate of an Initial Stockholder. Such affiliate has agreed that, until the acquisition of a target
business by the Company, it will make 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 such affiliate $7,500 per month for such services commencing on the effective date of the Proposed Offering. </FONT></P>

<P><FONT SIZE=2><B>5.&nbsp;&nbsp;&nbsp;&nbsp;Preferred Stock  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company is authorized to issue 1,000,000 shares of preferred stock with such designations, voting and other rights and preferences as may be determined from
time to time by the Board of Directors. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>F-6</FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>Until&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2003, all dealers that effect transactions in these securities, whether or not participating in
this offering, may be
required to deliver a prospectus. This is in addition to the dealers' obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No dealer, salesperson or any other person is authorized to give any information or make any representations in connection with this offering other than those
contained in this prospectus and, if given or made, the information or representations must not be relied upon as having been authorized by us. This prospectus does not constitute an offer to sell or
a solicitation of an offer to buy any security other than the securities offered by this prospectus, or an offer to sell or a solicitation of an offer to buy any securities by anyone in any
jurisdiction in which the offer or solicitation is not authorized or is unlawful. The delivery of this prospectus will not, under any circumstances, create any implication that the information is
correct as of any time subsequent to the date of this prospectus. </FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2><B>TABLE OF CONTENTS  </B></FONT></P>

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<DIV ALIGN="CENTER"><TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="93%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="5%" ALIGN="CENTER"><FONT SIZE=1><B>Page</B></FONT><HR NOSHADE></TH>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="93%"><FONT SIZE=2>Prospectus Summary</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>1</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="93%"><FONT SIZE=2>Summary Financial Data</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>6</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="93%"><FONT SIZE=2>Risk Factors</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>7</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="93%"><FONT SIZE=2>Forward Looking Statements</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>13</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="93%"><FONT SIZE=2>Use of Proceeds</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>14</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="93%"><FONT SIZE=2>Dilution</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>16</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="93%"><FONT SIZE=2>Capitalization</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>17</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="93%"><FONT SIZE=2>Management's Discussion and Analysis of Financial Condition and Results of Operations</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>18</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="93%"><FONT SIZE=2>Proposed Business</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>18</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="93%"><FONT SIZE=2>Management</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>27</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="93%"><FONT SIZE=2>Principal Stockholders</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>30</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="93%"><FONT SIZE=2>Certain Transactions</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>32</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="93%"><FONT SIZE=2>Description Of Securities</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>33</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="93%"><FONT SIZE=2>Underwriting</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>37</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="93%"><FONT SIZE=2>Legal Matters</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>40</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="93%"><FONT SIZE=2>Experts</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>40</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="93%"><FONT SIZE=2>Where You Can Find Additional Information</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>40</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="93%"><FONT SIZE=2>Index to Financial Statements</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>F-1</FONT></TD>
</TR>
</TABLE></DIV>
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<P ALIGN="CENTER"><FONT SIZE=4><B>$18,000,000  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=5><B>Millstream Acquisition Corporation  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=4><B>3,000,000 Units  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=4><B> PROSPECTUS  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=5><B>EarlyBirdCapital,&nbsp;Inc.  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2003 </FONT></P>

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NAME="page_ja1189_1_1"> </A> </FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="ja1189_part_ii_information_not_required_in_prospectus"> </A>
<A NAME="toc_ja1189_1"> </A>
<BR></FONT><FONT SIZE=2><B>PART II<BR>  <BR>    INFORMATION NOT REQUIRED IN PROSPECTUS    <BR>    </B></FONT></P>

<P><FONT SIZE=2><B>Item 13.&nbsp;&nbsp;&nbsp;&nbsp;Other Expenses of Issuance and Distribution.  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The estimated expenses payable by us in connection with the offering described in this registration statement (other than the underwriting discount and
commissions and the Representative's non-accountable expense allowance) will be as follows: </FONT></P>

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<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>SEC Registration Fee</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=2>4,868.56</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>NASD filing fee</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=2>6,518.01</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>Printing and engraving expenses</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=2>25,000.00</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>Accounting fees and expenses</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=2>20,000.00</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>Legal fees and expenses (including blue sky services and expenses)</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=2>100,000.00</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>Miscellaneous</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=2>8,613.43</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="3%">&nbsp;</TD>
<TD WIDTH="72%"><FONT SIZE=2>Total</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=2>165,000.00</FONT></TD>
</TR>
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<P><FONT SIZE=2><B>Item 14.&nbsp;&nbsp;&nbsp;&nbsp;Indemnification of Directors and Officers.  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our certificate of incorporation provides that all directors, officers, employees and agents of the registrant shall be entitled to be indemnified by us to the
fullest extent permitted by Section&nbsp;145 of the Delaware General Corporation Law. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;145
of the Delaware General Corporation Law concerning indemnification of officers, directors, employees and agents is set forth below. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"Section&nbsp;145.
Indemnification of officers, directors, employees and agents; insurance. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;A
corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that the person is or was a director, officer,
employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or
proceeding if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe the person's conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of
nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which the person reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that the person's conduct was unlawful. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;A
corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit
by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving
at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by the person in connection with the defense or settlement of such action or suit if the person acted in good faith and in a manner the person reasonably believed to
be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged
to be liable to the corporation unless and </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>II-1</FONT></P>

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<P><FONT SIZE=2>only
to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;To
the extent that a present or former director or officer of a corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding
referred to in subsections (a)&nbsp;and (b)&nbsp;of this section, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by such person in connection therewith. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;Any
indemnification under subsections (a)&nbsp;and (b)&nbsp;of this section (unless ordered by a court) shall be made by the corporation only as authorized in the
specific case upon a determination that indemnification of the present or former director, officer, employee or agent is proper in the circumstances because the person has met the applicable standard
of conduct set forth in subsections (a)&nbsp;and (b)&nbsp;of this section. Such determination shall be made, with respect to a person who is a director or officer at the time of such
determination, (1)&nbsp;by a majority vote of the directors who are not parties to such action, suit or proceeding, even though less than a quorum, or (2)&nbsp;by a committee of such directors
designated by majority vote of such directors, even though less than a quorum, or (3)&nbsp;if there are no such directors, or if such directors so direct, by independent legal counsel in a written
opinion, or (4)&nbsp;by the stockholders. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;Expenses
(including attorneys' fees) incurred by an officer or director in defending any civil, criminal, administrative or investigative action, suit or proceeding may
be paid by the corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it
shall ultimately be determined that such person is not entitled to be indemnified by the corporation as authorized in this section. Such expenses (including attorneys' fees) incurred by former
directors and officers or other employees and agents may be so paid upon such terms and conditions, if any, as the corporation deems appropriate. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;The
indemnification and advancement of expenses provided by, or granted pursuant to, the other subsections of this section shall not be deemed exclusive of any other
rights to which those seeking indemnification or advancement of expenses may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in
such person's official capacity and as to action in another capacity while holding such office. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;A
corporation shall have power to purchase and maintain insurance on behalf of any person who is or was director, officer, employee or agent of the corporation, or is or
was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted
against such person and incurred by such person in any such capacity, or arising out of such person's status as such, whether or not the corporation would have the power to indemnify such person
against such liability under this section. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;For
purposes of this section, references to "the corporation" shall include, in addition to the resulting corporation, any constituent corporation (including any
constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and
employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a
director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under this section with respect to the resulting or
surviving corporation as such person would have with respect to such constituent corporation if its separate existence had continued. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;For
purposes of this section, references to "other enterprises" shall include employee benefit plans; references to "fines" shall include any excise taxes assessed on a
person with respect to any employee benefit plan; and references to "serving at the request of the corporation" shall include any </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>II-2</FONT></P>

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<P><FONT SIZE=2>service
as a director, officer, employee or agent of the corporation which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit
plan, its participants or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee
benefit plan shall be deemed to have acted in a manner "not opposed to the best interests of the corporation" as referred to in this section. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;&nbsp;&nbsp;&nbsp;The
indemnification and advancement of expenses provided by, or granted pursuant to, this section shall, unless otherwise provided when authorized or ratified, continue
as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)&nbsp;&nbsp;&nbsp;The
Court of Chancery is hereby vested with exclusive jurisdiction to hear and determine all actions for advancement of expenses or indemnification brought under this
section or under any bylaw, agreement, vote of stockholders or disinterested directors, or otherwise. The Court of Chancery may summarily determine a corporation's obligation to advance expenses
(including attorneys' fees)." </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Insofar
as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers, and controlling persons pursuant to the foregoing provisions, or
otherwise, we have been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment of expenses incurred or paid by a director, officer or controlling person in a successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to the court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Paragraph&nbsp;B
of Article Eighth of our certificate of incorporation provides: </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"The
Corporation, to the full extent permitted by Section&nbsp;145 of the GCL, as amended from time to time, shall indemnify all persons whom it may indemnify pursuant thereto.
Expenses (including attorneys' fees) incurred by an officer or director in defending any civil, criminal, administrative, or investigative action, suit or proceeding for which such officer or director
may be entitled to indemnification hereunder shall be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of
such director or officer to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the Corporation as authorized hereby." </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant
to the Underwriting Agreement filed as Exhibit&nbsp;1.1 to this Registration Statement, we have agreed to indemnify the Underwriter and the Underwriter has agreed to indemnify
us against certain civil liabilities that may be incurred in connection with this offering, including certain liabilities under the Securities Act. </FONT></P>

<P><FONT SIZE=2><B>Item 15.&nbsp;&nbsp;&nbsp;&nbsp;Recent Sales of Unregistered Securities.  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;During
the past three years, we sold the following shares of common stock without registration under the Securities Act: </FONT></P>

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<TR VALIGN="BOTTOM">
<TH WIDTH="80%" ALIGN="LEFT"><FONT SIZE=1><B>Stockholders<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="17%" ALIGN="CENTER"><FONT SIZE=1><B>Number of Shares</B></FONT><HR NOSHADE></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="80%"><FONT SIZE=2>Arthur Spector</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT"><FONT SIZE=2>360,000</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="80%"><FONT SIZE=2>Spector Family Trust</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT"><FONT SIZE=2>180,000</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="80%"><FONT SIZE=2>Dr. Heinz C. Schimmelbusch</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT"><FONT SIZE=2>150,000</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="80%"><FONT SIZE=2>Robert E. Keith, Jr.</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT"><FONT SIZE=2>20,000</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="80%"><FONT SIZE=2>Don K. Rice</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT"><FONT SIZE=2>20,000</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="80%"><FONT SIZE=2>J. Brian O'Neill</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT"><FONT SIZE=2>20,000</FONT></TD>
</TR>
</TABLE></DIV>
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<P ALIGN="CENTER"><FONT SIZE=2>II-3</FONT></P>

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<A NAME="page_ja1189_1_4"> </A>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Such
shares were issued in April&nbsp;2003 in connection with our organization pursuant to the exemption from registration contained in Section&nbsp;4(2) of the
Securities Act. Of these shares, the 360,000 shares issued to Mr.&nbsp;Spector were sold at a purchase price of approximately $.06944 per share. The other shares issued to the individuals and entity
listed above were sold at purchase prices of $0.0001 per share. </FONT></P>

<P><FONT SIZE=2><B>Item 16.&nbsp;&nbsp;&nbsp;&nbsp;Exhibits and Financial Statement Schedules.  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;The
following exhibits are filed as part of this Registration Statement: </FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="9%" ALIGN="CENTER"><FONT SIZE=1><B>Exhibit No.</B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="88%" ALIGN="CENTER"><FONT SIZE=1><B>Description</B></FONT><HR NOSHADE></TH>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>1.1</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2>Form of Underwriting Agreement.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>1.2</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2>Form of Selected Dealers Agreement.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>3.1</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2>Amended and Restated Certificate of Incorporation.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>3.2</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2>By-laws.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>4.1*</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2>Specimen Common Stock Certificate.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>4.2</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2>Specimen Warrant Certificate.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>4.3</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2>Form of Unit Purchase Option to be granted to Representative.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>4.4</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2>Form of Warrant Agreement between Continental Stock Transfer&nbsp;&amp; Trust Company and the Registrant.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>5.1</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2>Form of opinion of Klehr, Harrison, Harvey, Branzburg&nbsp;&amp; Ellers LLP.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>10.1</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2>Letter Agreement among the Registrant, EarlyBirdCapital,&nbsp;Inc. and Arthur Spector (without schedules).</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>10.2</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2>Letter Agreement among the Registrant, EarlyBirdCapital,&nbsp;Inc. and Dr.&nbsp;Heinz C. Schimmelbusch (without schedules).</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>10.3</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2>Letter Agreement among the Registrant, EarlyBirdCapital,&nbsp;Inc. and The Spector Family Trust (without schedules).</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>10.4</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2>Letter Agreement among the Registrant, EarlyBirdCapital,&nbsp;Inc. and J. Brian O'Neill (without schedules).</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>10.5</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2>Form of Letter Agreement among the Registrant, EarlyBirdCapital,&nbsp;Inc. and each of Robert E. Keith and Don K. Rice (without schedules).</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>10.6*</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2>Form of Investment Management Trust Agreement between&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and
Registrant.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>10.7</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2>Form of Stock Escrow Agreement between the Registrant, Continental Stock Transfer&nbsp;&amp; Trust Company and the Initial Stockholders.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>10.8</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2>Form of Letter Agreement between 400 Building LLC and Registrant regarding administrative support.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>10.9</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2>Promissory Note, dated April&nbsp;28, 2003, in the principal amount of $35,000 issued to Arthur Spector.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>23.1</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2>Consent of BDO Seidman, LLP.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>23.2</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2>Consent of Klehr, Harrison, Harvey, Branzburg&nbsp;&amp; Ellers LLP (included in Exhibit&nbsp;5.1).</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>24</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2>Power of Attorney (included on signature page of this Registration Statement).</FONT></TD>
</TR>
</TABLE>
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<HR NOSHADE ALIGN="LEFT" WIDTH="120">
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>*</FONT></DT><DD><FONT SIZE=2>To
be filed by amendment. </FONT></DD></DL>
<P ALIGN="CENTER"><FONT SIZE=2>II-4</FONT></P>

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<P><FONT SIZE=2><B>Item 17.&nbsp;&nbsp;&nbsp;&nbsp;Undertakings.  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;The
undersigned registrant hereby undertakes: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;To
file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
include any prospectus required by Section&nbsp;10(a)(3) of the Securities Act of 1933; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the Commission pursuant to Rule&nbsp;424(b) if, in the aggregate, the changes in volume and price represent no more than 20&nbsp;percent
change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii.&nbsp;&nbsp;&nbsp;&nbsp;To
include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such
information in the registration statement. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;That,
for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial </FONT><FONT SIZE=2><I>bona
fide</I></FONT><FONT SIZE=2> offering thereof. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)&nbsp;&nbsp;To
remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the
offering. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;The
undersigned hereby undertakes to provide to the underwriter at the closing specified in the underwriting agreements, certificates in such denominations and
registered in such names as required by the underwriter to permit prompt delivery to each purchaser. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by
a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with
the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>II-5</FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="page_jc1189_1_6"> </A> </FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="jc1189_signatures"> </A>
<A NAME="toc_jc1189_1"> </A>
<BR></FONT><FONT SIZE=2><B>SIGNATURES    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New York, on the 19<SUP>th</SUP> day of May, 2003. </FONT></P>

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<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD WIDTH="45%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2><BR>
MILLSTREAM ACQUISITION CORPORATION</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="45%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="45%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="45%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2>By:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="45%"><FONT SIZE=2>/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>ARTHUR SPECTOR</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Arthur Spector<BR>
Chairman of the Board, Chief Executive Officer and President (principal financial and accounting officer)<BR></FONT>
</TD>
</TR>
</TABLE>
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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="jc1189_power_of_attorney"> </A>
<A NAME="toc_jc1189_2"> </A>
<BR></FONT><FONT SIZE=2><B>POWER OF ATTORNEY    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Arthur Spector his true and lawful
attorney-in-fact, with full power of substitution and resubstitution for him and in his name, place and stead, in any and all capacities to sign any and all amendments
including post-effective amendments to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and
Exchange
Commission, hereby ratifying and confirming all that said attorney-in-fact or his substitute, each acting alone, may lawfully do or cause to be done by virtue thereof. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant
to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated. </FONT></P>

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<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="45%" ALIGN="CENTER"><FONT SIZE=1><B>Name<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="33%" ALIGN="CENTER"><FONT SIZE=1><B>Position</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="18%" ALIGN="CENTER"><FONT SIZE=1><B>Date</B></FONT><HR NOSHADE></TH>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="45%" ALIGN="CENTER" VALIGN="TOP"><BR><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="45%" ALIGN="CENTER"><FONT SIZE=2>/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>ARTHUR SPECTOR</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Arthur Spector</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="33%"><FONT SIZE=2>Chairman of the Board, Chief Executive Officer and President (principal financial and accounting officer)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT"><FONT SIZE=2>May 19, 2003</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="45%" ALIGN="CENTER" VALIGN="TOP"><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>ROBERT E. KEITH, JR.</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Robert E. Keith, Jr.</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP"><FONT SIZE=2><BR>
Director</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2><BR>
May 19, 2003</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="45%" ALIGN="CENTER" VALIGN="TOP"><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>DON K. RICE</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Don K. Rice</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP"><FONT SIZE=2><BR>
Director</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2><BR>
May 19, 2003</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="45%" ALIGN="CENTER" VALIGN="TOP"><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>HEINZ C. SCHIMMELBUSCH</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Dr. Heinz C. Schimmelbusch</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="33%" VALIGN="TOP"><FONT SIZE=2><BR>
Director</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="18%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2><BR>
May 19, 2003</FONT></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER"><FONT SIZE=2>II-6</FONT></P>

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<BR>
<P><br><A NAME="03PHI1189_1">QuickLinks</A><br></P><!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_ca1189_1">Preliminary Prospectus Subject to Completion, May 19, 2003</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_ca1189_2">$18,000,000 MILLSTREAM ACQUISITION CORPORATION 3,000,000 units</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_cc1189_1">State Blue Sky Information</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_cc1189_2">Table Of Contents</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_cg1189_1">Prospectus Summary</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_da1189_1">Risk Factors</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_de1189_1">Forward Looking Statements</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_de1189_2">Use of Proceeds</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_dg1189_1">Dilution</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_dg1189_2">Capitalization</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_dg1189_3">Management's Discussion and Analysis of Financial Condition and Results of Operations</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_dg1189_4">Proposed Business</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_dk1189_1">Management</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_dk1189_2">Principal Stockholders</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_dm1189_1">Certain Transactions</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_dm1189_2">Description Of Securities</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_dm1189_3">Underwriting</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_do1189_1">Legal Matters</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_do1189_2">Experts</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_do1189_3">Where You Can Find Additional Information</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_fa1189_1">MILLSTREAM ACQUISITION CORPORATION (a corporation in the development stage) Index to Financial Statements</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_fb1189_1">REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_fc1189_1">MILLSTREAM ACQUISITION CORPORATION (a corporation in the development) BALANCE SHEET</A></FONT><BR>

<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_fe1189_1">MILLSTREAM ACQUISITION CORPORATION (a corporation in the development) STATEMENT OF CASH FLOWS</A></FONT><BR>

<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_fg1189_1">MILLSTREAM ACQUISITION CORPORATION (a corporation in the development stage) NOTES TO FINANCIAL STATEMENTS</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_ja1189_1">PART II INFORMATION NOT REQUIRED IN PROSPECTUS</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_jc1189_1">SIGNATURES</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_jc1189_2">POWER OF ATTORNEY</A></FONT><BR>
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As filed with the Securities and Exchange Commission on May 19, 2003
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
MILLSTREAM ACQUISITION CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of
incorporation or organization)
6770
(Primary Standard Industrial
Classification Code Number)
06-1688360
(I.R.S. Employer Identification
Number)
435 Devon Park Drive, Building 400
Wayne, Pennsylvania 19087
(610) 293-2511
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
Arthur Spector
435 Devon Park Drive, Building 400
Wayne, Pennsylvania 19087
(610) 293-2511
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies
to:
David Alan Miller, Esq.
Graubard Miller
600 Third Avenue
New York, New York 10016
(212) 818-8800
(212) 818-8881 — Facsimile
Barry J. Siegel, Esq.
Klehr, Harrison, Harvey, Branzburg & Ellers LLP
260 South Broad Street, Suite 400
Philadelphia, Pennsylvania 19102
(215) 568-6060
(215) 568-6603 — Facsimile
Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this
registration statement.
If
any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following
box.
ý
If
this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities
Act registration statement number of the earlier
effective registration statement for the same offering.
o
If
this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same offering.
o
If
this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same offering.
o
If
delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box.
o
CALCULATION OF REGISTRATION FEE
Title of each Class of
Security being registered
Amount being
Registered
Proposed
Maximum
Offering Price Per
Share(1)
Proposed
Maximum
Aggregate Offering
Price(1)
Amount of
Registration
Fee
Units, each consisting of one share of Common Stock, $.0001 par value, and two Warrants (2)
3,450,000 Units
$
6.00
$
20,700,000
$
1,674.63
Shares of Common Stock included as part of the Units(2)
3,450,000 Shares
—
—
—(3
)
Warrants included as part of the Units(2)
6,900,000 Warrants
—
—
—(3
)
Shares of Common Stock underlying the Warrants included in the Units(4)
6,900,000 Shares
$
5.00
$
34,500,000
$
2,791.05
Underwriter's Unit Purchase Option
1
$
100
$
100
—(3
)
Units underlying the Underwriter's Unit Purchase Option ("Underwriter's Units")(4)
300,000 Units
$
6.60
$
1,980,000
$
160.18
Shares of Common Stock included as part of the Underwriter's Units(4)
300,000 Shares
—
—
—(3
)
Warrants included as part of the Underwriter's Units(4)
600,000 Warrants
—
—
—(3
)
Shares of Common Stock underlying the Warrants included in the Underwriter's Units(4)
600,000 Shares
$
5.00
$
3,000,000
$
242.70
Total
$
60,180,100
$
4,868.56
(1)
Estimated
solely for the purpose of calculating the registration fee.
(2)
Includes
450,000 Units and 450,000 shares of Common Stock and 900,000 Warrants underlying such Units which may be issued on exercise of a 45-day option granted to the
Underwriter to cover over-allotments, if any.
(3)
No
fee pursuant to Rule 457(g).
(4)
Pursuant
to Rule 416, there are also being registered such indeterminable additional securities as may be issued as a result of the anti-dilution provisions.
The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective
date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may
determine.
The information in this prospectus is not complete and may be changed. We may not sell these securities until the
registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities
in any state where the offer or sale is not permitted.
Preliminary Prospectus
Subject to Completion, May 19, 2003
PROSPECTUS
$18,000,000
MILLSTREAM ACQUISITION CORPORATION
3,000,000 units
Millstream Acquisition Corporation is a newly organized Specified Purchase Acquisition Company™, or SPAC™. This is an
initial public offering of our securities. Each unit consists of:
•
one
share of our common stock; and
•
two
warrants.
Each
warrant entitles the holder to purchase one share of our common stock at a price of $5.00. Each warrant will become exercisable on the later of our completion of a business
combination or                , 2004
[one year from the date of this prospectus]
, and will expire on
                , 2007
[four years from the date of this prospectus]
, or earlier upon redemption.
We
have granted the underwriters a 45-day option to purchase up to 450,000 additional units solely to cover any over-allotments, if any.
There
is presently no public market for our units, common stock or warrants.
Investing in our securities involves a high degree of risk. See "Risk Factors" beginning on page 7 of this prospectus for a discussion of information that should
be considered in connection with an investment in our securities.
Neither
the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or
complete. Any representation to the contrary is a criminal offense.
Public
offering price
Underwriting
discount and
commissions
Proceeds,
before
expenses, to us
Per unit
$
6.00
$
0.42
$
5.58
Total
$
18,000,000
$
1,260,000
$
16,740,000
Of
the net proceeds we receive from this offering, $15,300,000 ($5.10 per unit) will be deposited into trust.
EarlyBirdCapital, Inc.
on behalf of the underwriters, expects to deliver our securities to purchasers on or about                        , 2003.
EarlyBirdCapital, Inc.
, 2003.
State Blue Sky Information
We will only offer and sell the units for retail sales in Delaware, the District of Columbia, Florida, Hawaii, Illinois, Maryland, New York and Rhode Island.
Additionally, we believe that the units, upon completion of this offering, and the common stock and warrants comprising the units, once they become separately transferable, will be eligible for sale
on a secondary market basis in each those states and in Colorado, Illinois, Kentucky, Massachusetts, Pennsylvania, Tennessee, Washington and Wisconsin. If you are not an institutional investor, you
may purchase our securities in this offering or in any subsequent trading market which may develop only in the jurisdictions described above.
Table Of Contents
Page
Prospectus Summary
1
Summary Financial Data
6
Risk Factors
7
Forward Looking Statements
13
Use of Proceeds
14
Dilution
16
Capitalization
17
Management's Discussion and Analysis of Financial Condition and Results of Operations
18
Proposed Business
18
Management
27
Principal Stockholders
30
Certain Transactions
32
Description Of Securities
33
Underwriting
37
Legal Matters
40
Experts
40
Where You Can Find Additional Information
40
Index to Financial Statements
F-1
You should rely only on the information contained or incorporated by reference in this prospectus. We have not authorized anyone to provide you with different
information. We are not making an offer of these securities in any jurisdiction where the offer is not permitted. You should not assume that the
information in this prospectus is accurate as of any date other than the date on the front of this prospectus.
"SPAC" and "Specified Purpose Acquisition Company" are service marks of EarlyBirdCapital.com, Inc., the parent of
EarlyBirdCapital, Inc.
i
Prospectus Summary
This summary highlights certain information appearing elsewhere in this prospectus. This summary is not complete and does not contain all
of the information that you should consider before purchasing our securities. Unless otherwise stated in this prospectus, references to "we," "us" or "our" refer to Millstream Acquisition Corporation.
Unless we tell you otherwise, the information in this prospectus assumes that the underwriters will not exercise their over-allotment option.
We
are a blank check company known as a Specified Purpose Acquisition Company, or a SPAC. We were organized under the laws of the State of Delaware on April 11, 2003. We were
formed to effect a merger, capital stock exchange, asset acquisition or other similar business combination with a currently unidentified operating business with significant growth potential. To date,
our efforts have been limited to organizational activities. The implementation of our business plan is wholly contingent upon the successful sale of the units offered by this prospectus.
Our
efforts in identifying a prospective target business will not be limited to a particular industry. Instead, we intend to focus on various industries where changes in industrial
technology provide particular opportunities for growth. Innovative industrial technologies have given small and medium-sized companies the ability not only to compete with larger organizations, but to
leapfrog existing products, processes and services and establish new market leadership. We believe that companies with these types of innovations obtain a competitive edge and the opportunity for
rapid and sustainable growth. Innovations of this nature occur frequently in chemicals and other material sciences, energy, medical products and manufacturing processes.
We
believe that certain key trends create favorable circumstances for our acquisition of a target business. As a result of current market conditions, many privately held companies have
been shut off from the public marketplace. Additionally, as the economy has slowed, many companies are attempting to divest non-core assets and divisions and valuations have decreased
significantly. As a result, we believe that there are substantial opportunities to effect attractive acquisitions and that, as a well-financed public entity possessing broad investment and
acquisition expertise, we are well positioned to identify target acquisitions and to effect a business combination.
To
effect a business combination, we intend to use:
•
cash
derived from the proceeds of this offering,
•
our
capital stock,
•
debt,
or
•
a
combination of cash, capital stock and debt.
We
believe that the skills and expertise of our officers and directors, their collective access to acquisition opportunities and ideas, their contacts, and their transactional expertise
will enable us to successfully identify and effect an acquisition. These individuals will play a key role in identifying and evaluating prospective acquisition candidates, selecting the target
business, and structuring, negotiating and consummating its acquisition. Our officers and directors are:
Arthur
Spector, our chairman of the board, chief executive officer and president, has extensive experience in mergers and acquisitions and managing private equity funds.
Mr. Spector served as chairman of the board, chief executive officer and president of Information Systems Acquisition Corp., a SPAC that completed an initial public offering in 1993 which
raised gross proceeds of approximately $13.8 million and merged with Neoware Systems, Inc., a manufacturer of sophisticated computer appliances and related software. He is also a
managing director of the general partner and management company of Safeguard International Fund L.P., a private equity fund that makes controlling investments in industrial companies.
1
Robert
E. Keith, Jr., a director of ours, is a managing director of the management companies of TL Ventures, a group of private equity funds that invest in companies in the internet,
software, information technology, communications and life science industries. Mr. Keith is also a co-founder of EnerTech Capital Partners and EnerTech Capital Partners II, venture
capital funds that invest in technology and service companies related to energy, communications and the broader utilities marketplace.
Don
K. Rice, a director of ours, is the managing partner of Rice Sangalis Toole & Wilson, which he co-founded in 1989 and which manages a group of funds that invest
primarily in subordinated debt of middle market companies in diverse industries. He was previously president and chief executive officer of First Texas Merchant Banking Group, a firm which provided
mezzanine financing, and a vice president of PruCapital, Inc., an investment subsidiary of The Prudential Insurance Company of America.
Dr. Heinz
C. Schimmelbusch, a director of ours, is a managing director of the general partner and management company of Safeguard International Fund L.P. He is also chairman of
the board and chief executive officer of Timminco Limited, a publicly held Canadian company that manufactures and supplies magnesium products and chief executive officer of Metallurg, Inc., a
specialty metals company. He is also chairman and chief executive officer of Allied Resource Corporation, a global technology and engineering company.
For
a more complete description of the background and business experience of our officers and directors, see the section entitled "Management" below.
Our
offices are located at 435 Devon Park Drive, Building 400, Wayne, Pennsylvania 19087, and our telephone number is (610) 293-2511.
The Offering
Securities offered:
3,000,000 units, at $6.00 per unit, each unit consisting of:
•
one share of common stock; and
•
two warrants.
The units may begin trading on the date of this prospectus. Each of the common stock and warrants may trade separately on the 90th day after the date of this prospectus unless EarlyBirdCapital, Inc. determines that an
earlier date is acceptable. The common stock and warrants may be traded separately only if we file with the SEC an audited balance sheet reflecting our receipt of the proceeds of this offering. We expect to file an audited balance sheet upon the
consummation of this offering.
Common stock:
Number outstanding before this offering
750,000 shares
Number to be outstanding after this offering
3,750,000 shares
Warrants:
Number outstanding before this offering
0
2
Number to be outstanding after this offering
6,000,000 warrants
Exercisability
Each warrant is exercisable into one share of common stock.
Exercise price
$5.00
Exercise period
The warrants will become exercisable on the later of:
•
the completion of a business combination with a target business, or
•
[            ], 2004
[one year from the date of this prospectus],
and will expire at 5:00 p.m., New York City time, on [            ], 2007; [four years from the date of this prospectus] or earlier upon redemption.
Redemption
We may redeem the outstanding warrants:
•
in whole and not in part,
•
at a price of $.01 per warrant at any time after the warrants become exercisable,
•
upon a minimum of 30 days' prior written notice of redemption, and
•
if and only if the last sales price of our common stock equals or exceeds $8.50 per share for the 20 consecutive trading days ending three business days before we send the notice of redemption.
Proposed OTC Bulletin Board symbols for our:
Units
[MSACU]
Common stock
[MSAC]
Warrants
[MSACW]
Offering proceeds to be held in trust:
$15,300,000 of the proceeds of this offering ($5.10 per unit) will be placed in a trust fund. These proceeds will not be released until the earlier of the completion of a business combination or our liquidation. Therefore,
unless and until a business combination is consummated, the proceeds held in the trust fund will not be available for our use for any expenses related to this offering or expenses which we may incur related to the investigation and selection of a
target business and the negotiation of an agreement to acquire a target business. These expenses may be paid prior to a business combination only from the net proceeds of this offering not held in the trust fund (approximately $735,000).
3
Since none of the warrants may be exercised until after the consummation of a business combination and, thus, after the proceeds of the trust fund have been disbursed, the warrant exercise price will be paid directly to
us.
Stockholders must approve business combination:
We will seek stockholder approval before we effect any business combination, even if the nature of the acquisition would not ordinarily require stockholder approval under applicable state law. We will not
effect a business combination if:
•
stockholders purchasing shares in this offering or in the open market following this offering, i.e., public stockholders, who own at least a majority of our shares, vote against the transaction; or
•
public stockholders owning 20% or more of the shares sold in this offering exercise their conversion rights (described below).
Conversion rights for stockholders voting to reject a business combination:
Each public stockholder presented with the right to vote on a business combination may, if she votes "no," demand that her stock be converted into her pro rata share of the trust fund if the business
combination is approved and completed. Any public stockholder who converts her stock into her share of the trust fund still has the right to exercise the warrants that she received as part of the units.
Voting rights and restrictions for our existing stockholders:
In connection with the vote required for any business combination, all of our existing stockholders, including all of our officers and directors, have agreed to vote the shares of common stock owned by them
immediately before this offering in accordance with the vote of the public stockholders owning a majority of our outstanding shares. Any shares included in units purchased in this offering or purchased following this offering in the open market by
any of our existing stockholders, officers and directors will not be similarly restricted. Our existing stockholders, officers and directors may vote all of their shares in any manner they determine, in their sole discretion, with respect to any
other items that come before a vote of our stockholders.
Liquidation if no business combination:
We will dissolve and distribute only to our public stockholders the amount in our trust fund plus any remaining net assets, if we do not effect a business combination within:
4
•
18 months after the completion of this offering, or
•
24 months after the completion of this offering if either a letter of intent, an agreement in principle or a definitive agreement relating to a prospective business combination was entered into before the end of the 18
month period.
All of our existing stockholders, including all of our officers and directors, have waived the liquidation rights described above with respect to the shares they own before this offering. However, we will treat any shares
included in units and any other shares purchased following this offering in the open market which are acquired by our stockholders, officers and directors in the same manner as shares owned by public stockholders.
A public stockholder shall be entitled to receive funds from the trust fund only in the event of a liquidation or if she seeks to convert her shares into cash in connection with a business combination which she voted
against and which is actually consummated. In no other circumstances shall a public stockholder have any right or interest of any kind to or in the trust fund.
Escrow of management shares:
All of our existing stockholders, including all of our officers and directors, have placed the shares they own before this offering into an escrow account. Subject to certain limited exceptions, these shares will not be
released from escrow until [            ], 2006
[three years from the date of this prospectus].
Risks
In making your decision on whether to invest in our securities, you should take into account not only the backgrounds and expertise of our management team, but
also the special risks we face as a blank check company including that:
•
We
may be forced to liquidate before a business combination is effected. If this occurs, our public stockholders will receive less than what they paid for their securities
in this offering because of expenses we will incur.
•
We
have not currently selected a particular industry or any target business with which to complete a business combination. Investors are therefore unable to determine the
merits or risks of the industry or business in which we may ultimately operate.
•
We
may need to issue shares of common stock or preferred stock to complete a business combination which would dilute the equity interests of our public stockholders.
•
Our
key personnel will not be required to remain associated in any way with the target business following a business combination. Although we will closely examine the
management of a prospective target business in evaluating the desirability of effecting a business combination, we cannot assure you that our evaluation will prove correct.
5
•
You
will not be entitled to protections normally afforded to investors of blank check companies.
You
should carefully consider all of the risks set forth in the section entitled "Risk Factors" beginning on page 7 of this prospectus.
Summary Financial Data
The following table summarizes the relevant financial data for our business and should be read with our financial statements, which are included in this
prospectus. We have not had any significant operations to date, so only balance sheet date is presented.
April 30, 2003
Actual
As Adjusted
Balance Sheet Data:
Working capital
$
25,039
$
16,060,039
Total assets
$
60,039
$
16,060,039
Total liabilities
$
35,000
—
Value of common stock which may be converted to cash ($5.10 per share)
—
$
3,059,995
Stockholders' equity
$
25,039
$
13,000,044
The
as adjusted information gives effect to the sale of the units we are offering and the application of the estimated net proceeds from their sale.
The
working capital and total assets amounts include $15,300,000 being held in the trust fund, which will be available to us only upon the consummation of a business combination within
the time period described in this prospectus. If a business combination is not so consummated, we will be dissolved and the proceeds held in the trust fund will be distributed to our public
stockholders.
If
we effect a business combination, the conversion rights granted to our public stockholders may result in the conversion into cash of up to approximately 19.99% of the 3,000,000 shares
sold in this offering, or 599,999 shares of common stock, at an initial per-share conversion price of $5.10, without taking into account interest earned on the trust fund. The actual
per-share conversion price will be equal to:
•
the
amount in the trust fund as of the record date for the determination of stockholders entitled to vote on the business combination (initially $5.10) plus any interest
accrued through the record date,
•
divided
by the number of shares of common stock sold in the offering.
6
Risk Factors
An investment in our securities involves a high degree of risk. You should consider carefully the risks described below, together with the
other information contained in this prospectus before making a decision to invest in our units.
We are a development stage company with no operating history and very limited resources and will be unable to continue our existence if we do not raise funds in this
offering.
We
are a recently incorporated development stage company with no operating results to date. Therefore, our ability to begin operations is dependent upon obtaining financing through the
public offering of our securities. Since we do not have an operating history, you will have no basis upon which to evaluate our ability to achieve our business objective, which is to acquire an
operating business. We have not conducted any discussions and we have no plans, arrangements or understandings, with any prospective acquisition candidates. We will not generate any revenues (other
than interest income on the proceeds of this offering) until, at the earliest, after the consummation of a business combination.
If we are forced to liquidate before a business combination, our public stockholders will receive less than $6.00 per share upon distribution of the trust fund and our warrants
will expire worthless.
If
we are unable to complete a business combination and are forced to liquidate our assets, the per-share liquidation distribution will be less than $6.00 because of the
expenses of this offering, our general and administrative expenses and the anticipated costs of seeking a business combination. Furthermore, there will be no distribution with respect to our
outstanding warrants and, accordingly, the warrants will expire worthless if we liquidate before the completion of a business combination.
A third party claim could reduce the proceeds held in trust.
Our
placing of funds in trust may not protect those funds from third party claims against us. The proceeds held in trust could be subject to claims which could take priority over the
claims of our public stockholders. We cannot assure you that the per-share liquidation price will not be less than $5.10, plus interest, due to claims of creditors. If we liquidate before
the completion of a business combination, Arthur Spector, our chairman of the board, chief executive officer and president, and Dr. Heinz C. Schimmelbusch, a director of ours, will be
personally liable under certain circumstances to ensure that the proceeds in the trust fund are not reduced by the claims of various vendors or other entities that are owed money by us for services
rendered or products sold to us. However, we cannot assure you that these individuals could satisfy those obligations.
Since we have not currently selected a particular industry or any target business with which to complete a business combination, we are unable to currently ascertain the merits
or risks of the industry or business in which we may ultimately operate.
We
may consummate a business combination with a company in any industry we choose and are not limited to any particular industry or type of business. Accordingly, there is no current
basis for prospective investors to evaluate the possible merits or risks of the particular industry in which we may ultimately operate or the target business which we may ultimately acquire. To the
extent we complete a business combination with a financially unstable company or an entity in its development stage, we may be affected by numerous risks inherent in the business operations of those
entities. If we complete a business combination with an entity in an industry characterized by a high level of risk, we may be affected by the currently unascertainable risks of that industry.
Although our management will endeavor to evaluate the risks inherent in a particular industry or target business, we cannot assure you that we will properly ascertain or assess all of the significant
risk factors. We also cannot assure you that an investment in our units will not ultimately prove to be less favorable to investors in this offering than a direct investment, if an opportunity were
available, in a target business.
7
We may issue shares of our common stock and preferred stock to complete a business combination, which would reduce the equity interest of our stockholders and likely cause a
change in control of our ownership.
Our
certificate of incorporation authorizes the issuance of up to 20,000,000 shares of common stock, par value $.0001 per share, and 1,000,000 shares of preferred stock, par value $.0001
per share. Upon completion of this offering (assuming no exercise of the underwriters' over-allotment option), there will be 9,350,000 authorized but unissued shares of our common stock
available for issuance (after appropriate reservation for the issuance of shares upon full exercise of our outstanding warrants and the representative's purchase option) and the full 1,000,000 shares
of preferred stock available for issuance. Although we have no commitments as of the date of this offering to issue our securities, we will, in all likelihood, issue a substantial number of additional
shares of our common stock or preferred stock, or a combination of common and preferred stock, to complete a business
combination. The issuance of additional shares of our common stock or any number of shares of our preferred stock may:
•
significantly
reduce the equity interest of our stockholders;
•
likely
cause a change in control if a substantial number of our shares of common stock are issued, which may affect, among other things, our ability to use our net operating
loss carry forwards, if any, and most likely also result in the resignation or removal of our present officers and directors; and
•
adversely
affect prevailing market prices for our common stock.
It is likely that our current officers and directors will resign upon consummation of a business combination and we will have only limited ability to evaluate the management of
the target business.
Our
ability to successfully effect a business combination will be totally dependent upon the efforts of our key personnel. The future role of our key personnel in the target business,
however, cannot presently be ascertained. Although it is possible that some of our key personnel will remain associated in various capacities with the target business following a business combination,
it is likely that the management of the target business at the time of the business combination will remain in place. Although we intend to closely scrutinize the management of a prospective target
business in connection with evaluating the desirability of effecting a business combination, there can be no assurance that our assessment of management will prove to be correct.
Since our officers and directors may allocate their time to other businesses, a conflict of interest may arise as to which business they present a viable acquisition
opportunity.
Our
officers and directors are not required to commit their full time to our affairs, which may result in a conflict of interest in allocating their time between our operations and other
businesses. Some of these persons are now, and may in the future become, affiliated with entities, including other "blank check" companies, engaged in business activities similar to those intended to
be conducted by us. Our officers and directors may become aware of business opportunities which may be appropriate for presentation to us as well as the other entities with which they may be
affiliated. Accordingly, they may have conflicts of interest in determining to which entity a particular business opportunity should be presented. We cannot assure you that these conflicts will be
resolved in our favor.
All of our directors and officers own shares of our securities which will not participate in liquidation distributions and therefore they may have a conflict of interest in
determining whether a particular target business is appropriate for a business combination.
All
of our directors and officers own stock in our company, but have waived their right to receive distributions upon liquidation. Additionally, Arthur Spector has indicated that he (and
certain of his affiliates) intends to purchase warrants in the open market. The shares and warrants owned by our
8
directors
and officers will be worthless if we do not consummate a business combination. The personal and financial interests of our directors and officers may influence their motivation in
identifying and selecting a target business and completing a business combination timely. Consequently, our directors' and officers' discretion in identifying and selecting a suitable target business
may result in a conflict of interest when determining whether the terms, conditions and timing of a particular business combination are appropriate and in our stockholders' best interest.
You will not be entitled to protections normally afforded to investors of blank check companies.
Since
the net proceeds of this offering are intended to be used to complete a business combination with a target business that has not been identified, we may be deemed to be a "blank
check" company under the United States securities laws. However, since we will have net tangible assets in excess of $5,000,000 upon the successful completion of this offering and our units are being
offered at an initial price of $6.00 per unit, we are exempt from rules promulgated by the SEC to protect investors of blank check companies such as Rule 419 described below under the section
"Comparison to offerings of blank check companies". Accordingly, investors will not be afforded the benefits or protections of those rules.
If our common stock becomes subject to the SEC's penny stock rules, broker-dealers may experience difficulty in completing customer transactions and trading activity in our
securities may be adversely affected.
If
at any time we have net tangible assets of $5,000,000 or less and our common stock has a market price per share of less than $5.00, transactions in our common stock may be subject to
certain rules under the Securities Exchange Act of 1934. Under these rules, broker-dealers who recommend such securities to persons other than institutional accredited investors:
•
must
make a special written suitability determination for the purchaser;
•
receive
the purchaser's written agreement to a transaction prior to sale;
•
provide
the purchaser with risk disclosure documents which identify certain risks associated with investing in "penny stocks" and which describe the market for these "penny
stocks" as well as a purchaser's legal remedies; and
•
obtain
a signed and dated acknowledgment from the purchaser demonstrating that the purchaser has actually received the required risk disclosure document before a transaction
in a "penny stock" can be completed.
If
our common stock becomes subject to these rules, broker-dealers may find it difficult to effectuate customer transactions and trading activity in our securities may be adversely
affected. As a result, the market price of our securities may be depressed, and you may find it more difficult to dispose of our securities.
It is probable that we will only be able to complete one business combination, which will cause us to be solely dependent on a single business and a limited number of products
or services.
The
net proceeds from this offering will provide us with only approximately $16,035,000 which we will use to complete a business combination. Consequently, it is probable that we will
have the ability to complete only a single business combination. Accordingly, the prospects for our success may be:
•
solely
dependent upon the performance of a single business, or
•
dependent
upon the development or market acceptance of a single or limited number of products, processes or services.
9
In
this case, we will not be able to diversify our operations or benefit from the possible spreading of risks or offsetting of losses, unlike other entities which may have the resources to complete
several business combinations in different industries or different areas of a single industry.
There is significant competition for business combination opportunities and we are at a disadvantage because of our limited resources.
We
expect to encounter intense competition from other entities having a business objective similar to ours, including venture capital funds, leveraged buyout funds and operating
businesses competing for acquisitions. Many of these entities are well established and have extensive experience in identifying and effecting business combinations directly or through affiliates. Many
of these competitors possess greater technical, human and other resources than we do and our financial resources will be relatively limited when contrasted with those of many of these competitors.
While we believe that there are numerous potential target businesses that we could acquire with the net proceeds of this offering, our ability to compete in acquiring certain sizable target businesses
will be limited by our available financial resources. This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses. Further, the obligation
we have to seek stockholder approval of a business combination may delay the consummation of a transaction; our obligation to convert into cash the shares of common stock held by public stockholders
in certain instances may reduce the resources available for a business combination; and our outstanding warrants, and the future dilution they potentially represent, may not be viewed favorably by
certain target businesses. Any of these obligations may place us at a competitive disadvantage in successfully negotiating a business combination.
We may be unable to obtain additional financing, if required, to complete a business combination or to fund the operations and growth of the target business, which could compel
us to restructure the transaction or abandon a particular business combination.
Although
we believe that the net proceeds of this offering will be sufficient to allow us to consummate a business combination, inasmuch as we have not yet identified any prospective
target business, we cannot ascertain the capital requirements for any particular transaction. If the net proceeds of this offering prove to be insufficient, either because of the size of the business
combination or the depletion of the available net proceeds in search of a target business, or because we become obligated to convert into cash a significant number of shares from dissenting
stockholders, we will be required to seek additional financing. We cannot assure you that such financing would be available on acceptable terms, if at all. To the extent that additional financing
proves to be unavailable when needed to consummate a particular business combination, we would be compelled to restructure the transaction or abandon that particular business combination and seek an
alternative target business candidate. In addition, if we consummate a business combination, we may require additional financing to fund the operations or growth of the target business. The failure to
secure additional financing could have a material adverse effect on the continued development or growth of the target business. None of our officers, directors or stockholders is required to provide
any financing to us in connection with or after a business combination.
10
Our existing stockholders, including our officers and directors, control a substantial interest in us and thus may influence certain actions requiring stockholder vote.
Upon consummation of our offering, our existing stockholders (including all of our officers and directors) will collectively own 20% of our issued and outstanding
shares of common stock (assuming they do not purchase units in this offering). Our board of directors is divided into two classes, each of which will generally serve for a term of two years with only
one class of directors being elected in each year. It is unlikely that there will be an annual meeting of stockholders to elect new directors prior to the consummation of a business combination, in
which case all of the current directors will continue in office at least until the consummation of the business combination. If there is an annual meeting, as a consequence of our "staggered" board of
directors, only a minority of the board of directors will be considered for election and our existing stockholders, because of their ownership position, will have considerable influence regarding the
outcome. Accordingly, our existing stockholders will continue to exert control at least until the consummation of a business combination. In addition, our existing stockholders and their affiliates
and relatives are not prohibited from purchasing units in this offering or shares in the aftermarket. If they do, we cannot assure you that our existing stockholders will not have considerable
influence upon the vote in connection with a business combination.
If holders of a majority of shares of our common stock do not approve a business combination or holders of 20% or more of the shares exercise their conversion rights, we will
not be able to complete a business combination.
We will seek approval by our stockholders before we complete any business combination. We will not complete a business combination if:
•
public
stockholders purchasing shares in this offering or in the open market following this offering, who own at least a majority of those shares, vote against the
transaction; or
•
public
stockholders owning 20% or more of the shares sold in this offering exercise their conversion rights.
In
connection with the vote required for any business combination, all of our existing stockholders, including all of our officers and directors, have agreed to vote the shares of common stock owned
by them immediately before this offering in accordance with the vote of the public stockholders owning a majority of the shares of our outstanding common stock. Even though management may believe that
a business combination may be in our best interests, they will be unable to complete the business combination unless the above requirements are met.
Our existing stockholders paid a nominal amount for their shares and, accordingly, you will experience immediate and substantial dilution from the purchase of our common stock.
The difference between the public offering price per share of our common stock and the pro forma net tangible book value per share of our common stock after this
offering constitutes the dilution to you and the other investors in this offering. The fact that our existing stockholders acquired their shares of common stock at a nominal price has significantly
contributed to this dilution. Assuming the offering is completed, you and the other new investors will incur an immediate and substantial dilution of approximately $1.87 per share (the difference
between the pro forma net tangible book value per share of $4.13, and the initial offering price of $6.00 per unit).
Our outstanding warrants may have an adverse effect on the market price of common stock and make it more difficult to effect a business combination.
In connection with this offering, as part of the units, we will be issuing warrants to purchase 6,000,000 shares of common stock. We will also issue an option to
purchase 300,000 units to the
11
representative
of the underwriters. To the extent we issue shares of common stock to effect a business combination, the potential for the issuance of substantial numbers of additional shares upon
exercise of these warrants and options could make it more difficult to effectuate a business combination or increase the cost of the target business (in terms of number of shares required to be
issued). Additionally, the sale, or even the possibility of sale, of the shares underlying the warrants and options could have an adverse effect on the market price for our securities or on our
ability to obtain future public financing. If and to the extent these options are exercised, you may experience dilution to your holdings.
If you are not an institutional investor, you may purchase our securities in this offering only if you reside within certain states and may engage in resale transactions only
in those states or within other jurisdictions.
We have applied to register our securities, or have obtained or will seek to obtain an exemption from registration, in Delaware, the District of Columbia,
Florida, Hawaii, Illinois, Maryland, New York and Rhode Island. If you are not an institutional investor, you must be a resident of these jurisdictions to purchase our securities in the offering. In
order to prevent resale transactions in violation of states' securities laws, you may engage in resale transactions only in these states and in other jurisdictions in which an applicable exemption is
available or a blue sky application has been filed and accepted. This restriction on resale may limit your ability to resell the securities purchased in this offering and may impact the price of our
securities.
We intend to have our securities quoted on the OTC Bulletin Board, which will limit the liquidity and price of our securities more than if our securities were quoted or listed
on the Nasdaq stock market or a national exchange.
Our securities will be traded in the over-the-counter market. It is anticipated that they will be quoted on the OTC Bulletin Board, an
NASD-sponsored and operated inter-dealer automated quotation system for equity securities not included in the Nasdaq Stock Market. Quotation of our securities on the OTC Bulletin Board
will limit the liquidity and price of our securities more than if our securities were quoted or listed on The Nasdaq Stock Market or a national exchange.
The proposed replacement of the OTC Bulletin Board with the Bulletin Board Exchange may adversely affect the liquidity of our securities.
The OTC Bulletin Board is anticipated to be phased out and replaced by the Bulletin Board Exchange in June 2004. The Bulletin Board Exchange will not
permit "blank check" companies, such as ours, to be quoted. Accordingly, if we have not consummated a business combination by the time the OTC Bulletin Board is replaced by the Bulletin Board
Exchange, any market in our securities may be reflected only in the Pink Sheets published by the Pink Sheets LLC (formerly the National Quotation Bureau). The liquidity and stock price of our
securities in the secondary market may be adversely affected, and we cannot assure you that a public market for our securities would develop or be sustainable, if we are quoted only on the Pink
Sheets.
The lead underwriter in the offering will not make a market for our securities which could adversely affect the liquidity and price of our securities.
EarlyBirdCapital, Inc., the lead underwriter in this offering, does not make a market in securities and will not be making a market in our securities.
Following the completion of this offering, we believe certain broker-dealers other than EarlyBirdCapital will be making a market in our securities. EarlyBirdCapital not acting as a market maker for
our securities may adversely impact the liquidity of our securities.
12
If we are deemed to be an investment company, we may be required to institute burdensome compliance requirements and our activities may be restricted, which may make it
difficult for us to complete a business combination
If we are deemed to be an investment company under the Investment Company Act of 1940, our activities may be restricted, including:
•
restrictions
on the nature of our investments; and
•
restrictions
on the issuance of securities,
which
may make it difficult for us to complete a business combination.
In
addition, we may have imposed upon us burdensome requirements, including:
•
registration
as an investment company;
•
adoption
of a specific form of corporate structure; and
•
reporting,
record keeping, voting, proxy and disclosure requirements and other rules and regulations.
Compliance
with these additional regulatory burdens would require additional expense that we have not allotted for.
Forward Looking Statements
This prospectus contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 relating to, among other
things, our business strategy and anticipated business combination. We identify forward-looking statements in this prospectus using words such as the following statements, the negative of those
statements and other similar statements:
"believes"
"predicts"
"should"
"estimate"
"intends"
"may"
"contemplates"
"plans"
"will"
"anticipates"
"expects"
"would"
"could"
These statements are based on our beliefs as well as assumptions we made using information currently available to us. Because these statements reflect our current views
concerning future events as they relate to us, these statements involve risks, uncertainties and assumptions which may be significantly more adverse than the results or expectations discussed in the
forward-looking statements.
13
Use of Proceeds
We estimate that the net proceeds of this offering, after deducting offering expenses and underwriting discounts, will be $16,035,000, or $18,465,000 if the
underwriters' over-allotment option is exercised in full.
We
intend to allocate the net proceeds as follows:
•
$15,300,000,
or $17,730,000 if the underwriters' over-allotment option is exercised in full, will be placed in a trust fund maintained
by                        ,
                        , New York, New York, as trustee. The proceeds will not be released from the trust fund until the earlier
of the completion of a business combination or our liquidation.
•
The
net proceeds not held in the trust fund, approximately $735,000, whether or not the underwriters' over-allotment option is exercised in full, will be used
for:
•
due
diligence investigations of prospective acquisition candidates;
•
legal,
accounting and other expenses attendant to the due diligence investigations and to structuring, negotiating and consummating a business combination;
•
legal
and accounting fees relating to our obligation to file periodic reports, proxy statements and other informational material with the SEC; and
•
payment
to 400 Building LLC, an affiliate of our president, of a monthly fee of $7,500 for general and administrative expenses.
To
the extent that our capital stock is used in whole or in part as consideration to effect a business combination, the proceeds held in the trust fund as well as any other net proceeds
not expended will be used to finance the operations of the target business.
Arthur
Spector, our chairman of the board, chief executive officer and president, has advanced to us approximately $35,000 for payment of a portion of our expenses of this offering.
These advances will be repaid out of the gross proceeds of this offering.
The
net proceeds of this offering not held in the trust fund and not immediately required for the purposes set forth above will be invested in general debt obligations of the United
States Government or other high-quality, short-term interest-bearing investments;
provided, however
, that we will attempt to
invest the net proceeds in a manner which does not result in us being deemed to be an investment company under the Investment Company Act. The interest income derived from investment of these net
proceeds during this period will be used to defray our general and administrative expenses, as well as costs relating to compliance with securities laws and regulations, including associated
professional fees, until a business combination is completed.
We
believe that, upon consummation of this offering, we will have sufficient available funds to operate for at least the next 24 months, assuming that a business combination is
not consummated during that time.
Commencing
on the effective date of this prospectus through the consummation of the acquisition of the target business, we will pay 400 Building LLC, an affiliate of Arthur Spector, our
chairman of the board, chief executive officer and president, an administrative fee of $7,500 per month for providing us with office space, utilities and certain office and secretarial services. Other
than this $7,500 per month administrative fee, no compensation of any kind (including finders and consulting fees) will be paid to any of our existing stockholders, or any of their affiliates, for
services rendered to us prior to or in connection with the consummation of the business combination;
provided, however
, that these persons shall be
entitled to receive, upon consummation of a business combination, commissions for monies raised by them for us in connection with the business combination (if permitted under
14
applicable
law), at rates which are no less favorable to us than those which we would pay to unaffiliated third parties. In addition, our existing stockholders will receive reimbursement for any
out-of-pocket expenses incurred by them in connection with activities on our behalf. Since the role of present management after a business combination is uncertain, we have no
ability to determine what remuneration, if any, will be paid to those persons after a business combination.
Our
public stockholders will be entitled to receive funds from the trust fund only in the event of our liquidation or if they were to seek to convert their shares into cash in connection
with a business combination which they voted against and which we actually consummate. In no other circumstances will a public stockholder have any right or interest of any kind to or in the trust
fund.
15
Dilution
The difference between the public offering price per share of common stock, assuming no value is attributed to the warrants included in the units, and the pro
forma net tangible book value per share of our common stock after this offering constitutes the dilution to investors in this offering. Net tangible book value per share is determined by dividing our
net tangible book value, which is our total tangible assets less total liabilities (including the value of common stock which may be converted into cash), by the number of outstanding shares of our
common stock.
At
April 30, 2003, our net tangible book value was $25,039, or approximately $.03 per share of common stock. After giving effect to the sale of 3,000,000 shares of common stock
included in the units, and the deduction of underwriting discounts and estimated expenses of this offering, our pro forma net tangible book value (as decreased by the value of 599,999 shares of common
stock which may be converted into cash) at April 30, 2003 would have been $13,000,044 or $4.13 per share, representing an immediate increase in net tangible book value of $4.10 per share to the
existing stockholders and an immediate dilution of $1.87 per share or 31.2% to new investors not exercising their conversion rights.
The
following table illustrates the dilution to the new investors on a per-share basis, assuming no value is attributed to the warrants included in the units:
Public offering price
$
6.00
Net tangible book value before this offering
$
.03
Increase attributable to new investors
$
4.10
Pro forma net tangible book value after this offering
$
4.13
Dilution to new investors
$
1.87
Our
pro forma net tangible book value after this offering has been reduced by $3,059,995 because if we effect a business combination, the conversion rights to the public stockholders may
result in the conversion into cash of up to approximately 19.99% of the aggregate number of the shares sold in this offering at a per-share conversion price equal to the amount in the
trust fund as of the record date for the determination of stockholders entitled to vote on the business combination, inclusive of any interest, divided by the number of shares sold in this offering.
The
following table sets forth information with respect to our existing stockholders and the new investors:
Shares Purchased
Total Consideration
Average Price
Per Share
Number
Percentage
Amount
Percentage
Existing stockholders
750,000
20
%
$
25,039
0.1
%
$
0.03
New investors
3,000,000
80
%
$
18,000,000
99.9
%
$
6.00
3,750,000
100
%
$
18,025,039
100.0
%
16
Capitalization
The following table sets forth our capitalization at April 30, 2003 and as adjusted to give effect to the sale of our units and the application of the
estimated net proceeds derived from the sale of our units:
April 30, 2003
Actual
As Adjusted
Common stock, $.0001 par value, -0- and 599,999 shares which are subject to possible conversion, shares at conversion value
$
—
$
3,059,995
Stockholders' equity:
Preferred stock, $.0001 par value, 1,000,000 shares authorized; none issued or outstanding
—
—
Common stock, $.0001 par value, 20,000,000 shares authorized; 750,000 shares issued and outstanding; 3,150,001 shares issued and outstanding (excluding 599,999 shares subject to possible conversion), as
adjusted
$
75
$
315
Additional paid-in capital
24,964
12,999,729
Total stockholders' equity:
25,039
13,000,044
Total capitalization
$
25,039
$
16,060,039
If
we consummate a business combination, the conversion rights afforded to our public stockholders may result in the conversion into cash of up to approximately 19.99% of the aggregate
number of shares sold in this offering at a per-share conversion price equal to the amount in the
trust fund as of the record date for determination of stockholders entitled to vote on the business combination, inclusive of any interest thereon, divided by the number of shares sold in this
offering.
17
Management's Discussion and Analysis
of Financial Condition and Results of Operations
We were formed on April 11, 2003, to serve as a vehicle to effect a merger, capital stock exchange, asset acquisition or other similar business combination
with a currently unidentified operating business which we believe has significant growth potential. We intend to utilize cash derived from the proceeds of this offering, our capital stock, debt or a
combination of cash, capital stock and debt, in effecting a business combination.
We
have neither engaged in any operations nor generated any revenues to date. Our entire activity since inception has been to prepare for our proposed fundraising through an offering of
our equity securities.
We
estimate that the net proceeds from the sale of the units, after deducting offering expenses and underwriting discounts, will be approximately $16,035,000, or $18,465,000 if the
underwriters' over-allotment option is exercised in full. We will use substantially all of the net proceeds of this offering to acquire a target business, including identifying and
evaluating prospective acquisition candidates, selecting the target business, and structuring, negotiating and consummating the business combination. To the extent that our capital stock is used in
whole or in part as consideration to effect a business combination, the proceeds held in the trust fund as well as any other net proceeds not expended will be used to finance the operations of the
target business. We believe that, upon consummation of this offering, we will have sufficient available funds to operate for at least the next 24 months, assuming that a business combination is
not consummated during that time. We do not believe we will need to raise additional funds following this offering in order to meet the expenditures required for operating our business. However, we
may need to raise additional funds if it is required to consummate a business combination that is presented to us.
We
are obligated, commencing on the date of this prospectus, 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 expenses. In addition, on April 28, 2003, Mr. Spector advanced $35,000 to us, on a non-interest bearing basis, for
payment on our behalf of offering expenses. We intend to repay this loan out of the proceeds of this offering.
Proposed Business
Introduction
We are a recently organized SPAC, formed to serve as a vehicle for the acquisition of a target business which we believe has significant growth potential. We are
not presently engaged in, and we will not engage in, any substantive commercial business for an indefinite period of time following this offering. We intend to utilize cash derived from the proceeds
of this offering, our capital stock, debt or a combination of these in effecting a business combination. Our management has broad discretion with respect to the specific application of the net
proceeds of this offering and, as a result, this offering can be characterized as a blank check offering. While we may seek to effect business combinations with more than one target business, we will
probably have the ability, as a result of our limited resources, to effect only a single business combination.
Current trends
As a result of the decline in the United States equity markets over the past two years, many privately held companies have been shut off from the public
marketplace. Additionally, as the economy has slowed, many companies are attempting to divest non-core assets and divisions and valuations of these assets and divisions have decreased
significantly. Due to these factors, we believe that there are substantial opportunities to effect attractive acquisitions and that, as a well-financed public entity
18
possessing
broad investment and acquisition expertise, we are well positioned to identify target acquisitions and to effect a business combination to take advantage of these current trends.
Effecting a business combination
General
Although substantially all of the net proceeds of this offering are intended to be generally applied toward effecting a business combination as described in this
prospectus, the proceeds are not otherwise being designated for any more specific purposes. Accordingly, prospective investors will invest in us without an opportunity to evaluate the specific merits
or risks of any one or more business combinations. A business combination may involve the acquisition of, or merger with, a company which does not need substantial additional capital but which desires
to establish a public trading market for its shares, while avoiding what it may deem to be adverse consequences of undertaking a public offering itself. These include time delays, significant expense,
loss of voting control and compliance with various Federal and state securities laws. In the alternative, a business combination may involve a company which may be financially unstable or in its early
stages of development or growth.
We have not identified a target business or target industry
Our efforts in identifying a prospective target business will not be limited to a particular industry and we may ultimately acquire a business in any industry we
deem appropriate. Instead, we intend to focus on various industries where changes in industrial technology provide particular opportunities for growth. Innovative industrial technologies have given
small and medium-sized companies the ability not only to compete with larger organizations, but to leapfrog existing products, processes and services and establish new market leadership. We believe
that companies with these types of innovations obtain a competitive edge and the opportunity for rapid and sustainable growth. Innovations of this nature occur frequently in chemicals and other
material sciences, energy, medical products and manufacturing processes. To date, we have not selected any target business on which to concentrate our search for a business combination. Accordingly,
there is no basis for investors in this offering to evaluate the possible merits or risks of the target business or the particular industry in which we may ultimately operate. To the extent we effect
a business combination with a financially unstable company or an entity in its early stage of development or growth, including entities without established records of sales or earnings, we may be
affected by numerous risks inherent in the business and operations of financially unstable and early stage or potential emerging growth companies. In addition, to the extent that we effect a business
combination with an entity in an industry characterized by a high level of risk, we may be affected by the currently unascertainable risks of that industry. An extremely high level of risk frequently
characterizes many industries which experience rapid growth. In addition, although our management will endeavor to evaluate the risks inherent in a particular industry or target business, we cannot
assure you that we will properly ascertain or assess all significant risk factors.
Sources of target businesses
We anticipate that target business candidates will be brought to our attention from various unaffiliated sources, including securities broker-dealers, investment
bankers, venture capitalists, bankers and other members of the financial community, who may present solicited or unsolicited proposals. Our officers and directors and their affiliates may also bring
to our attention target business candidates. While we do not presently anticipate engaging the services of professional firms that specialize in business acquisitions on any formal basis, we may
engage these firms in the future, in which event we may pay a finder's fee or other compensation. In no event, however, will we pay any of our existing officers, directors or stockholders or any
entity with which they are affiliated any finder's fee or other compensation for services rendered to us prior to or in connection with the consummation of a business combination. However, they shall
be entitled to receive, upon consummation of a business
19
combination,
commissions for monies raised by them for us in connection with the business combination (if permitted under applicable law), at rates which are no less favorable to us than those which
we would pay to unaffiliated third parties.
Selection of a target business and structuring of a business combination
Our management will have virtually unrestricted flexibility in identifying and selecting a prospective target business. In evaluating a prospective target
business, our management will consider, among other factors, the following:
•
financial
condition and results of operation;
•
growth
potential;
•
experience
and skill of management and availability of additional personnel;
•
capital
requirements;
•
competitive
position;
•
stage
of development of the products, processes or services;
•
degree
of current or potential market acceptance of the products, processes or services;
•
proprietary
features and degree of intellectual property or other protection of the products, processes or services;
•
regulatory
environment of the industry; and
•
costs
associated with effecting the business combination.
These
criteria are not intended to be exhaustive. Any evaluation relating to the merits of a particular business combination will be based, to the extent relevant, on the above factors
as well as other considerations deemed relevant by our management in effecting a business combination consistent with our business objective. In evaluating a prospective target business, we will
conduct an extensive due diligence review which will encompass, among other things, meetings with incumbent management and inspection of facilities, as well as review of financial and other
information which will be made available to us.
We
will endeavor to structure a business combination so as to achieve the most favorable tax treatment to us, the target business and both companies' stockholders. We cannot assure you,
however, that the Internal Revenue Service or appropriate state tax authority will agree with our tax treatment of the business combination.
The
time and costs required to select and evaluate a target business and to structure and complete the business combination cannot presently be ascertained with any degree of certainty.
Any costs incurred with respect to the identification and evaluation of a prospective target business with which a business
combination is not ultimately completed will result in a loss to us and reduce the amount of capital available to otherwise complete a business combination.
Probable lack of business diversification
Since our initial business combination will be made with the net proceeds of this offering, it is probable that we will have the ability to effect only a single
business combination. Accordingly, the prospects for our success may be entirely dependent upon the future performance of a single business. Unlike other entities which may have the resources to
complete several business combinations of entities operating in multiple industries or multiple areas of a single industry, it is probable that we will not have the resources to diversify our
operations or benefit from the possible spreading of risks or
20
offsetting
of losses. By consummating a business combination with only a single entity, our lack of diversification may
•
subject
us to numerous economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact upon the particular industry in which we
may operate subsequent to a business combination, and
•
result
in our dependency upon the development or market acceptance of a single or limited number of products, processes or services.
Limited ability to evaluate the target business' management
Although we intend to closely scrutinize the management of a prospective target business when evaluating the desirability of effecting a business combination, we
cannot assure you that our assessment of the target business' management will prove to be correct. In addition, we cannot assure you that the future management will have the necessary skills,
qualifications or abilities to manage a public company intending to embark on a program of business development. Furthermore, the future role of our directors, if any, in the target business cannot
presently be stated with any certainty. While it is possible that one or more of our directors will remain associated in some capacity with us following a business combination, it is unlikely that any
of them will devote their full efforts to our
affairs subsequent to a business combination. Moreover, we cannot assure you that our directors will have significant experience or knowledge relating to the operations of the particular target
business.
Following
a business combination, we may seek to recruit additional managers to supplement the incumbent management of the target business. We cannot assure you that we will have the
ability to recruit additional managers, or that additional managers will have the requisite skills, knowledge or experience necessary to enhance the incumbent management.
Opportunity for stockholder approval of business combination
Prior to the completion of a business combination, we will submit the transaction to our stockholders for approval, even if the nature of the acquisition is such
as would not ordinarily require stockholder approval under applicable state law. In connection with seeking stockholder approval of a business combination, we will furnish our stockholders with proxy
solicitation materials prepared in accordance with the Securities Exchange Act of 1934, which, among other matters, will include a description of the operations of the target business and audited
historical financial statements of the business.
In
connection with the vote required for any business combination, all of our existing stockholders, including all of our officers and directors, have agreed to vote their respective
shares of common stock owned by them immediately prior to this offering in accordance with the vote of the public stockholders owning a majority of the shares of our outstanding common stock. This
voting arrangement shall not apply to shares included in units purchased in this offering or purchased following this offering in the open market by any of our existing stockholders, officers and
directors. We will proceed with the business combination only if the public stockholders, who own at least a majority of the shares of common stock sold in this offering, vote in favor of the business
combination and public stockholders owning less than 20% of the shares sold in this offering exercise their conversion rights.
21
Conversion rights
At the time we seek stockholder approval of any business combination, we will offer each public stockholder the right to have her shares of common stock converted
to cash if she votes against the business combination and the business combination is approved and completed. The actual per-share conversion price will be equal to the amount in the trust
fund, inclusive of any interest, as of the record date for determination of stockholders entitled to vote on the business combination, divided by the number of shares sold in this offering. Without
taking into any account interest earned on the trust fund, the initial per-share conversion price would be $5.10, or $0.90 less than the per-unit offering price of $6.00. An
eligible stockholder may request conversion at any time after the mailing to our stockholders of the proxy statement and prior to the vote taken with respect to a proposed business combination at a
meeting held for that purpose, but the request will not be granted unless the stockholder votes against the business combination and the business combination is approved and completed. Any request for
conversion, once made, may be withdrawn at any time up to the date of the meeting. It is anticipated that the funds to be distributed to stockholders entitled to convert their shares who elect
conversion will be distributed promptly after completion of a business combination. Any public stockholder who converts her stock into her share of the trust fund still has the right to exercise the
warrants that she received as part of the units. We will not complete any business combination if public stockholders, owning 20% or more of the shares sold in this offering, exercise their conversion
rights.
Liquidation if no business combination
If we do not complete a business combination within 18 months after the completion of this offering, or within 24 months if the extension criteria
described below have been satisfied, we will be dissolved and will distribute to all of our public stockholders, in proportion to their respective equity interests, an aggregate sum equal to the
amount in the trust fund, inclusive of any interest, plus any remaining net assets. Our existing stockholders have waived their rights to participate in any liquidation distribution with respect to
shares of common stock owned by them immediately prior to this offering. There will be no distribution from the trust fund with respect to our warrants.
If
we were to expend all of the net proceeds of this offering, other than the proceeds deposited in the trust fund, and without taking into account interest, if any, earned on the trust
fund, the initial per-share liquidation price would be $5.10, or $0.90 less than the per-unit offering price of $6.00. The proceeds deposited in the trust fund could, however,
become subject to the
claims of our creditors which could be prior to the claims of our public stockholders. We cannot assure you that the actual per-share liquidation price will not be less than $5.10, plus
interest, due to claims of creditors. If we liquidate prior to the consummation of a business combination, Arthur Spector, our chairman of the board, chief executive officer and president, and
Dr. Heinz Schimmelbusch, a director of ours, will be personally liable under certain circumstances to pay various debts or obligations to vendors or other entities that are owed money by us for
services rendered or products sold to us on our behalf in excess of the net proceeds of this offering not held in the trust account. We cannot assure you, however, that they would be able to satisfy
those obligations.
If
we enter into either a letter of intent, an agreement in principle or a definitive agreement to complete a business combination prior to the expiration of 18 months after the
completion of this offering, but are unable to complete the business combination within the 18-month period, then we will have an additional six months in which to complete the business
combination contemplated by the letter of intent, agreement in principle or definitive agreement. If we are unable to do so by the expiration of the 24-month period from the completion of
this offering, we will then liquidate. Upon notice from us, the trustee of the trust fund will commence liquidating the investments constituting the trust fund and will turn over the proceeds to our
transfer agent for distribution to our stockholders. We
22
anticipate
that our instruction to the trustee would be given promptly after the expiration of the applicable 18-month or 24-month period.
Our
public stockholders shall be entitled to receive funds from the trust fund only in the event of our liquidation or if the stockholders seek to convert their respective shares into
cash upon a business combination which the stockholder voted against and which is actually completed by us. In no other circumstances shall a stockholder have any right or interest of any kind to or
in the trust fund.
Competition
In identifying, evaluating and selecting a target business, we expect to encounter intense competition from other entities having a business objective similar to
ours. Many of these entities are well established and have extensive experience identifying and effecting business combinations directly or through affiliates. Many of these competitors possess
greater technical, human and other resources than us and our financial resources will be relatively limited when contrasted with those of many of these competitors. While we believe there are numerous
potential target businesses that we could acquire with the net proceeds of this offering, our ability to compete in acquiring certain sizable target businesses will be limited by our available
financial resources. This inherent competitive limitation gives others an advantage in pursuing the acquisition of a target business. Further:
•
our
obligation to seek stockholder approval of a business combination may delay the completion of a transaction;
•
our
obligation to convert into cash shares of common stock held by our public stockholders in certain instances may reduce the resources available to us for a business
combination; and
•
our
outstanding warrants, and the future dilution they potentially represent, may not be viewed favorable by certain target businesses.
Any
of these obligations may place us at a competitive disadvantage in successfully negotiating a business combination. Our management believes, however, that our status as a public entity and
potential access to the United States public equity markets may give us a competitive advantage over privately-held entities having a similar business objective as us in acquiring a target
business with significant growth potential on favorable terms.
If
we succeed in effecting a business combination, there will be, in all likelihood, intense competition from competitors of the target business. In particular, certain industries which
experience rapid growth frequently attract an increasingly larger number of competitors, including competitors with increasingly greater financial, marketing, technical and other resources than the
initial competitors in the industry. The degree of competition characterizing the industry of any prospective target business cannot presently be ascertained. We cannot assure you that, subsequent to
a business combination, we will have the resources to compete effectively, especially to the extent that the target business is in a high-growth industry.
Facilities
We maintain our executive offices at 435 Devon Park Drive, Building 400, Wayne, Pennsylvania 19087. The cost for this space is included in the $7,500
per-month fee 400 Building LLC charges us for general and administrative services. We believe, based on rents and fees for similar services in the Philadelphia metropolitan area, that the
fee charged by 400 Building LLC is at least as favorable as we could have obtained from an unaffiliated person. We consider our current office space adequate for our current operations.
23
Employees
We have four directors and one officer. These individuals intend to devote only as much time as they deem necessary to our affairs. We do not intend to have any
full time employees prior to the consummation of a business combination.
Periodic Reporting and Audited Financial Statements
We have registered our securities under the Securities Exchange Act of 1934, as amended, and have reporting obligations, including the requirement that we file
annual and quarterly reports with the SEC. In accordance with the requirements of the Securities Exchange Act of 1934, our annual reports will contain financial statements audited and reported on by
our independent accountants.
We
will not acquire a target business if audited financial statements cannot be obtained for the target business. Additionally, our management will provide stockholders with audited
financial statements, prepared in accordance with generally accepted accounting principles, of the prospective target business as part of the proxy solicitation materials sent to stockholders to
assist them in assessing the target business. Our management believes that the requirement of having available audited financial statements for the target business will not materially limit the pool
of potential target businesses available for acquisition.
Comparison to offerings of blank check companies
The following table compares and contrasts the terms of our offering and the terms of an offering of blank check companies under Rule 419 promulgated by
the SEC assuming that the gross proceeds, underwriting discounts and underwriting expenses for the Rule 419 offering are the same as this offering and that the underwriters will not exercise
their over-allotment option. None of the terms under a Rule 419 offering will apply to this offering.
Terms of Our Offering
Terms Under a Rule 419 Offering
Escrow of offering proceeds
$15,300,000 of the net offering proceeds will be deposited into a trust fund maintained by            .
$14,580,000 of the offering proceeds would be required to be deposited into either an escrow account with an insured depositary institution or in a separate bank account established by a broker-dealer in which the broker-dealer acts as trustee for
persons having the beneficial interests in the account.
Investment of net proceeds
Proceeds will be invested in U.S. government securities or other high-quality, short term interest-bearing investments.
Proceeds could be invested only in specified securities such as a money market fund meeting conditions of the Investment Company Act of 1940 or in securities that are direct obligations of, or obligations guaranteed as to principal or interest by,
the United States.
24
Trading of securities issued
The units may commence trading immediately on the date of this prospectus. The common stock and warrants comprising the units will begin to trade separately on the 90th day after the date of this prospectus unless EarlyBirdCapital, Inc. informs us of
its decision to allow earlier separate trading, provided we have filed with the SEC an audited balance sheet reflecting our receipt of the proceeds of this offering.
No trading of the units or the underlying common stock and warrants would be permitted until the completion of a business combination. During this period, the securities would be held in the escrow or trust account.
Exercise of the warrants
The warrants cannot be exercised until the later of the completion of a business combination or one year from the date of this prospectus, and, accordingly, will only be exercised after the trust fund has been terminated and distributed.
The warrants could be exercised prior to the completion of a business combination, but securities received and cash paid in connection with the exercise would be deposited in the escrow or trust account.
Election to remain an investor
We will give our stockholders the opportunity to vote on the business combination. In connection with seeking stockholder approval, we will send each stockholder a proxy statement containing information required by the SEC. A stockholder following
the procedures described in this prospectus is given the right to convert his or her shares into his or her pro rata share of the trust fund. However, a stockholder who does not follow these procedures or a stockholder who does not take any action
would not be entitled to the return of any funds.
A prospectus containing information required by the SEC would be sent to each investor. Each investor would be given the opportunity to notify the company whether she elects to remain a stockholder of the company. The notification would have to be in
writing within a specified period. If the company has not received the notification by the end of the period, funds and interest or dividends, if any, held in the trust or escrow account would be returned to the stockholder.
25
Business combination deadline
A business combination must occur within 18 months after the completion of this offering or within 24 months after the completion of this offering if a letter of intent or definitive agreement relating to a prospective business combination was
entered into prior to the end of the 18-month period.
If an acquisition has not been consummated within 18 months after the effective date of the initial registration statement, funds held in the trust or escrow account would be returned to investors.
Release of funds
The proceeds held in the trust account will not be released until the earlier of the completion of a business combination or our liquidation upon failure to effect a business combination within the allotted time.
The proceeds held in the escrow account would not be released until the earlier of the completion of a business combination or the failure to effect a business combination within the allotted time.
26
Management
Directors and Executive Officers
Our
current directors and executive officers are as follows:
Name
Age
Position
Arthur Spector
62
Chairman of the Board, Chief Executive Officer and President
Robert E. Keith, Jr.
61
Director
Don K. Rice
54
Director
Dr. Heinz C. Schimmelbusch
58
Director
Arthur Spector
has been our chairman of the board, chief executive officer and president since our inception. From March 1995 to
October 2002, Mr. Spector served as chairman of the board of Neoware Systems, Inc., a manufacturer of sophisticated computer appliances and related software, and from
May 1996 until June 1997, he also served as its president and chief executive officer. Neoware Systems was originally known as Information Systems Acquisition Corp., a SPAC with an
objective to acquire an operating business in the information systems industry. Information Systems Acquisition Corp. was formed in 1992 and from its inception until it merged with a subsidiary of
Neoware Systems, Mr. Spector was its chairman of the board, president and chief executive officer. In this role, Mr. Spector directed the completion of a public offering which raised
gross proceeds of approximately $13.8 million. Mr. Spector has also served as a director of Docucorp International, a public document automation company, since 1997. Mr. Spector
received a B.S. from the Wharton School of Finance at the University of Pennsylvania and a J.D. from The University of Pennsylvania Law School.
Mr. Spector
has extensive experience in mergers and acquisitions and managing private equity funds. Since 1997, he has served as managing director of the general partner and of
the management company of Safeguard International Fund L.P., a private equity fund investing primarily in controlling positions in industrial companies in North American and Europe. From 1995
to 1996, Mr. Spector served as director of acquisitions of Safeguard Scientifics, Inc., a public company that owns controlling interests in and operates numerous private companies. From
1997 to 1998, Mr. Spector served as a managing director of TL Ventures LLC, a fund management company organized to manage the day-to-day operations of
several of the TL Ventures funds which invest in companies in the internet, software, information technology, communications and life science industries.
Robert E. Keith, Jr.
has been a member of our board of directors since our inception. Since 1988, Mr. Keith has been
a managing director of TL Ventures, L.P., its predecessor entity and related entities that serve as the management companies for several of the TL Ventures funds. He has served as
president of Technology Leaders Management, Inc., a private equity capital management company, since 1991 and as its chief executive officer since 1996. Since October 2001,
Mr. Keith has served as chairman of the board of directors of Safeguard Scientifics and served as its vice chairman from February 1999 through September 2001. He was also a member
of the office of the chief executive of Safeguard Scientifics from April 2001 through October 2001. Mr. Keith is also the chairman of the management companies for, and a senior
advisor to and co-founder of, EnerTech Capital Partners and EnerTech Capital Partners II, venture capital funds that invest in technology and service companies related to energy,
communications and the broader utilities marketplace. Since 1996, Mr. Keith has served as a director of Internet Capital Group, Inc., a public company that provides software solutions
and related services to businesses, and served as its chairman of the board from 1996 through December 2001. Mr. Keith received a B.A. from Amherst College and J.D. from Temple
University.
27
Don K. Rice
has been a member of our board of directors since our inception. Mr. Rice is the managing partner of Rice Sangalis
Toole & Wilson, a privately held firm that through limited partnerships invests primarily in the subordinated debt of middle market companies located throughout the United States, which he
co-founded in 1989. Prior to forming Rice, Sangalis Toole &
Wilson, Mr. Rice was president and chief executive officer of First Texas Merchant Banking Group, a firm which provided mezzanine financing, and a vice president of PruCapital, Inc., an
investment subsidiary of The Prudential Insurance Company of America. Mr. Rice received a B.B.A. and M.B.A. from the University of Texas.
Dr. Heinz C. Schimmelbusch
has been a member of our board of directors since our inception. Since 1997, he has served as managing
director of the general partner and of the management company of Safeguard International. Since April 2003, Dr. Schimmelbusch has served as chairman of the board and chief executive
officer of Timminco Limited, a publicly held Canadian company that manufactures and supplies magnesium products. Since July 1998, Dr. Schimmelbusch has served as chairman of the board
and a director of Metallurg, Inc., a producer and supplier of specialty metals, and has served as its chief executive officer since November 2002. He has also served as president, chief
executive officer and a director of Metallurg Holdings, Inc., Metallurg, Inc.'s parent company, since July 1998. Dr. Schimmelbusch is also chairman and chief executive
officer of Allied Resource Corporation, a global technology and engineering group. Dr. Schimmelbusch also served as a member of the Presidency of the Federation of German Industries (BDI) in
Cologne, Germany and chairman of its Environmental Committee and a member of the Presidency of the International Chamber of Commerce (ICC) in Paris, France. He also chaired the International Advisory
Committee of the Austrian Chancellor for which he was awarded the Golden Cross of Honor for services to the Republic of Austria. Dr. Schimmelbusch received a B.A., M.A. and Ph.D. in economics
from the University of Tubingen, Germany.
Our
board of directors is divided into two classes with only one class of directors being elected in each year and each class surviving a two-year term. The term of office of
the first class of directors, consisting of Dr. Heinz Schimmelbusch and Robert E. Keith Jr., will expire at our next annual meeting of stockholders. The term of office of the second class of
directors, consisting of Arthur Spector and Don K. Rice, will expire at the following annual meeting.
Our
board of directors established an audit committee comprised of Messrs. Keith and Rice, with Mr. Keith acting as the chairman. Our audit committee appoints, retains,
sets compensation of, and supervises our independent accountants, reviews the results and scope of the audit and other accounting related services and reviews our accounting practices and systems of
internal accounting and disclosure controls.
Executive Compensation
No executive officer has received any cash compensation for services rendered. Commencing on the effective date of this prospectus through the acquisition of a
target business, we will pay 400 Building LLC a fee of $7,500 per month for providing us with office space and certain office and secretarial services. Other than this $7,500 per-month
fee, no compensation of any kind, including finders and consulting fees, will be paid to any of our existing stockholders, or any of their respective affiliates, for services rendered prior to or in
connection with a business combination. However, those persons shall be entitled to receive, upon consummation of a business combination, commissions for monies raised by them for us in connection
with the business combination, at rates which are no less favorable to us than those which we would pay to unaffiliated third parties. In addition, our existing stockholders will be reimbursed for any
out-of-pocket expenses incurred in connection with activities on our behalf. There is no limit on the amount of these out-of-pocket expenses and there
will be no review of the reasonableness of the expenses by anyone other than our board of directors, which includes persons who may seek reimbursement.
28
Conflicts of Interest
Potential investors should be aware of the following potential conflicts of interest:
•
None
of our officers and directors are required to commit their full time to our affairs and, accordingly, they may have conflicts of interest in allocating management time
among various business activities.
•
In
the course of their other business activities, our officers and directors may become aware of investment and business opportunities which may be appropriate for
presentation to us as well as the other entities with which they are affiliated. They may have conflicts of interest in determining to which entity a particular business opportunity should be
presented.
•
Our
officers and directors may in the future become affiliated with entities, including other blank check companies, engaged in business activities similar to those intended
to be conducted by us.
•
Since
our directors own shares of our common stock which will be released from escrow only if a business combination is successfully completed, our board may have a conflict
of interest in determining whether a particular target business is appropriate to effect a business combination. The personal and financial interests of our directors and officers may influence their
motivation in identifying and selecting a target business, completing a business combination timely and securing the release of their stock.
In
general, officers and directors of a corporation incorporated under the laws of the State of Delaware are required to present business opportunities to a corporation if:
•
the
corporation could financially undertake the opportunity;
•
the
opportunity is within the corporation's line of business; and
•
it
would not be fair to the corporation and its stockholders for the opportunity not to be brought to the attention of the corporation.
Accordingly,
as a result of multiple business affiliations, our officers and directors may have similar legal obligations relating to presenting business opportunities meeting the
above-listed criteria to multiple entities. In addition, conflicts of interest may arise when our board evaluates a particular business opportunity with respect to the above-listed criteria. We cannot
assure you that any of the above mentioned conflicts will be resolved in our favor.
In
order to minimize potential conflicts of interest which may arise from multiple corporate affiliations, each of our officers and directors has agreed in principle, until the earlier
of a business combination, our liquidation or such time as he ceases to be an officer or director, to present to us for our consideration, prior to presentation to any other entity, any business
opportunity which may reasonably be required to be presented to us under Delaware law, subject to any pre-existing fiduciary obligations he might have or new fiduciary obligations related
to or affiliated with entities to whom he has pre-existing fiduciary obligations, including, but not limited to, fiduciary obligations to next generation, follow-on or
successor entities to any entities to which the individual has pre-existing obligations.
In
connection with the vote required for any business combination, all of our existing stockholders, including all of our officers and directors, have agreed to vote their respective
shares of common stock which were owned prior to this offering in accordance with the vote of the public stockholders owning a majority of the shares of our outstanding common stock. In addition, they
have agreed to waive their respective rights to participate in any liquidation distribution but only with respect to those shares of common stock acquired by them prior to this offering.
29
To
further minimize potential conflicts of interest, we have agreed not to consummate a business combination with an entity which is affiliated with any of our existing stockholders
unless we obtain an opinion from an independent investment banking firm that the business combination is fair to our stockholders from a financial perspective.
Prior Involvement of Principals in Blank Check Companies
Arthur Spector is the only one of our directors and officers who has been a principal of another company that has completed an offering similar to this offering
and executed a business plan similar to our business plan. The table below provides you with information regarding this company:
Name of Blank Check Company/
Acquired Business
Date of Initial
Public Offering
Date of
business
combination
Nature
of Business
Trading Market
(Ticker Symbol)
Information Systems Acquisition Corp./
Neoware Systems, Inc.
3/25/93
3/2/95
Information systems and network computing industry
Nasdaq National Market (NWRE)
Principal Stockholders
The following table sets forth information regarding the beneficial ownership of our common stock as of April 30, 2003, and as adjusted to reflect the sale
of our common stock included in the units offered by this prospectus, by:
•
each
person known by us to be the owner of more than 5% of our outstanding shares of common stock;
•
each
of our officers and directors; and
•
all
our officers and directors as a group.
Unless
otherwise indicated, we believe that all persons named in the table have sole voting and investment power with respect to all shares of common stock beneficially owned by them.
Approximate Percentage
of Outstanding Common Stock
Name and Address of Beneficial Owner
(1)
Amount and Nature
of Beneficial
Ownership
Before Offering
After Offering
Arthur Spector
(2)
360,000
48.0
%
9.6
%
Spector Family Trust
(3)
180,000
24.0
%
4.8
%
Dr. Heinz C. Schimmelbusch
(4)
150,000
20.0
%
4.0
%
Robert E. Keith, Jr.
(4)(5)
20,000
2.7
%
*
Don K. Rice
(4)(6)
20,000
2.7
%
*
All directors and executive officers as a group (4 individuals)
550,000
73.3
%
14.7
%
*
Less
than 1%.
(1)
Unless
otherwise indicated, the business address of each of the individuals is 435 Devon Park Drive, Building 400, Wayne, Pennsylvania 19087.
(2)
Arthur
Spector is our chairman of the board, chief executive officer and president.
(3)
The
Spector Family Trust is a trust established by Mr. Spector and his wife for the benefit of his descendants. Adam B. Spector and Jeremy D. Spector, Mr. Spector's
adult sons, are co-trustees of the trust.
(4)
Each
of these individuals is a director of ours.
30
(5)
The
business address of Mr. Keith is 435 Devon Park Drive, Building 700, Wayne, Pennsylvania 19087.
(6)
The
business address of Mr. Rice is 517 Fishers Road, Bryn Mawr, Pennsylvania 19010.
Upon completion of this offering, our existing stockholders, which includes all of our officers and directors, collectively, will beneficially own
20% of the then issued and outstanding shares of our common stock. These stockholders may be able to effectively exercise control over all matters requiring approval by our stockholders, including the
election of directors and approval of significant corporate transactions other than approval of a business combination.
All
of the shares of our common stock outstanding prior to the date of this prospectus will be placed in escrow with Continental Stock Transfer & Trust Company, as escrow agent,
until the earlier of:
•
three
years following the date of this prospectus;
•
our
liquidation; or
•
the
consummation of a liquidation, merger, stock exchange or other similar transaction which results in all of our stockholders having the right to exchange their shares of
common stock for cash, securities or other property subsequent to our consummating a business combination with a target business.
During
the escrow period, the holders of these shares will not be able to sell their securities, but will retain all other rights as our stockholders, including, without limitation, the right to vote
their shares of common stock. If we are unable to effect a business combination and liquidate, none of our existing stockholders will receive any portion of the liquidation proceeds with respect to
common stock owned by them prior to the date of this prospectus.
Mr. Arthur
Spector has indicated that he (and certain of his affiliates) intends to purchase up to 1,000,000 warrants in the public marketplace after separate trading of the
warrants commences.
Messrs. Arthur
Spector, the Spector Family Trust and Heinz Schimmelbusch may be deemed to be our "parents" and "promoters," as these terms are defined under the Federal securities
laws.
31
Certain Transactions
Prior to the date of this prospectus, we issued 360,000 shares of our common stock to Arthur Spector, our chairman, chief executive officer and president, at a
purchase price of approximately $.06944 per share. We also issued a total of 370,000 shares of our common stock to the Spector Family Trust and Messrs. Schimmelbusch, Keith and Rice at a
purchase price of $0.0001 per share as set forth below:
Name
Number of Shares
Relationship to Us
Arthur Spector
360,000
Chairman of the Board, Chief Executive Officer and President
Spector Family Trust
180,000
Stockholder
Dr. Heinz C. Schimmelbusch
150,000
Director
Robert E. Keith, Jr.
20,000
Director
Don K. Rice
20,000
Director
400
Building LLC, an affiliate of Arthur Spector, our chairman of the board, chief executive officer and president, has agreed that, commencing on the effective date of this prospectus
through the acquisition
of a target business, it will make available to us a small amount of office space and certain office and secretarial services, as we may require from time to time. We have agreed to pay 400 Building
LLC $7,500 per month for these services. Arthur Spector is the sole member and sole manager of 400 Building LLC.
Mr. Spector
has made advances aggregating $35,000 to us as of the date of this prospectus to cover expenses related to this offering. The loan will be payable without interest on
the earlier of May 1, 2004 or the consummation of this offering. We intend to repay these loans from the proceeds of this offering.
We
will reimburse our officers and directors for any reasonable out-of-pocket business expenses. There is no limit on the amount of accountable
out-of-pocket expenses reimbursable by us, which will be reviewed only by our board.
Other
than the $7,500 per-month administrative fee and reimbursable out-of-pocket expenses payable to our officers and directors, no compensation or
fees of any kind, including finders and consulting fees, will be paid to any of our existing stockholders, officers or directors who owned our common stock prior to this offering, or to any of their
respective affiliates for services rendered to us prior to or with respect to the business combination. However, they shall be entitled to receive, upon completion of the business combination,
commissions for monies raised by them for us with respect to the business combination, at rates that are no less favorable to us than those which we would pay to unaffiliated third parties.
All
ongoing and future transactions between us and any of our officers and directors or their respective affiliates, will be on terms believed by us to be no less favorable than are
available from unaffiliated third parties and will require prior approval in each instance by a majority of the members of our board who do not have an interest in the transaction.
32
Description Of Securities
General
We are authorized to issue 20,000,000 shares of common stock, par value $.0001, and 1,000,000 shares of preferred stock, par value $.0001. As of the date of this
prospectus, 750,000 shares of common stock are outstanding, held of record by five persons. No shares of preferred stock are currently outstanding.
Units
Each unit consists of one share of common stock and two warrants. Each warrant entitles the holder to purchase one share of common stock. The common stock and
warrants will begin to trade separately on the 90th day after the date of this prospectus unless EarlyBirdCapital, Inc. informs us of its decision to allow earlier separate trading, provided
that in no event can the common stock and warrants be traded separately until we have filed with the SEC an audited balance sheet reflecting our receipt of the proceeds of this offering. We expect to
file this audited balance sheet upon the consummation of this offering.
Common stock
Our stockholders are entitled to one vote for each share held of record on all matters to be voted on by stockholders. In connection with the vote required for
any business combination, all of our existing stockholders, including all of our officers and directors, have agreed to vote their respective shares of common stock owned by them immediately prior to
this offering in accordance with the vote of the public stockholders owning a majority of the shares of our outstanding common stock. This voting arrangement shall not apply to shares included in
units purchased in this offering or purchased following this offering in the open market by any of our existing stockholders, officers and directors. Additionally, our existing stockholders, officers
and directors will vote all of their shares in any manner they determine, in their sole discretion, with respect to any other items that come before a vote of our stockholders.
We
will proceed with a business combination only if the public stockholders who own at least a majority of the shares of common stock sold in this offering vote in favor of the business
combination and public stockholders owning less than 20% of the shares sold in this offering exercise conversion rights discussed below.
Our
board of directors is divided into two classes, each of which will generally serve for a term of two years with only one class of directors being elected in each year. There is no
cumulative voting with respect to the election of directors, with the result that the holders of more than 50% of the shares voted for the election of directors can elect all of the directors.
Our
stockholders are entitled to receive dividends when, as and if declared by our board out of funds legally available.
If
we are forced to liquidate prior to a business combination, our public stockholders are entitled to share ratably in the trust fund, inclusive of any interest, and any net assets
remaining available for distribution to them after payment of liabilities. Our existing stockholders have agreed to waive their rights to share in any distribution with respect to common stock owned
by them prior to the offering if we are forced to liquidate.
Our
stockholders have no conversion, preemptive or other subscription rights and there are no sinking fund or redemption provisions applicable to the common stock, except that each
public stockholder has the right to have her shares of common stock converted to cash equal to her pro rata share of the trust fund if she votes against the business combination and the business
combination is
33
approved
and completed. Any public stockholder who converts her stock into her share of the trust fund still has the right to exercise the warrants that she received as part of the units.
All
of the outstanding shares of common stock are, and the shares of common stock included in the units, when issued and paid for as set forth in this prospectus, will be, fully paid and
nonassessable.
Preferred stock
Our certificate of incorporation authorizes the issuance of 1,000,000 shares of a blank check preferred stock with such designation, rights and preferences as may
be determined from time to time by our board of directors. No shares of preferred stock are being issued or registered in this offering. Accordingly, our board of directors is empowered, without
stockholder approval, to issue preferred stock with dividend, liquidation, conversion, voting or other rights which could adversely affect the voting power or other rights of the holders of common
stock, although the underwriting agreement prohibits us, prior to a business combination, from issuing preferred stock which participates in any manner in the proceeds of the trust fund, or which
votes as a class with the common stock on a business combination. We may issue some or all of the preferred stock to effect a business combination. In addition, the preferred stock could be utilized
as a method of discouraging, delaying or preventing a change in control of us. Although we do not currently intend to issue any shares of preferred stock, we cannot assure you that we will not do so
in the future.
Warrants
No warrants are currently outstanding. Each warrant entitles the registered holder to purchase one share of our common stock at a price of $5.00 per share,
subject to adjustment as discussed below, at any time commencing on the later of:
•
the
completion of a business combination; or
•
one
year from the date of this prospectus.
The
warrants will expire four years from the date of this prospectus at 5:00 p.m., New York City time.
We
may call the warrants for redemption,
•
in
whole and not in part,
•
at
a price of $.01 per warrant at any time after the warrants become exercisable,
•
upon
not less than 30 days' prior written notice of redemption to each warrantholder, and
•
if,
and only if, the reported last sale price of the common stock equals or exceeds $8.50 per share, for the 20 consecutive trading days ending on the third business day
prior to the notice of redemption to warrantholders.
The
warrants will be issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. Reference is made to the
warrant agreement, which has been filed as an exhibit to the registration statement of which this prospectus is a part, for a complete description of the terms and conditions applicable to the
warrants.
The
exercise price and number of shares of common stock issuable on exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, or our
recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuances of common stock at a price below their respective exercise prices.
The
warrants may be exercised upon surrender of the warrant certificate on or prior to the expiration date at the offices of the warrant agent, with the exercise form on the reverse side
of the warrant certificate completed and executed as indicated, accompanied by full payment of the exercise
34
price,
by certified check payable to us, for the number of warrants being exercised. The warrantholders do not have the rights or privileges of holders of common stock and any voting rights until they
exercise their warrants and receive common stock. After the issuance of shares of common stock upon exercise of the warrants, each holder will be entitled to one vote for each share held of record on
all matters to be voted on by stockholders.
No
warrants will be exercisable unless at the time of exercise a prospectus relating to common stock issuable upon exercise of the warrants is current and the common stock has been
registered or qualified or deemed to be exempt under the securities laws of the state of residence of the holder of the warrants. We have agreed to meet these conditions and to maintain a current
prospectus relating to common stock issuable upon exercise of the warrants until the expiration of the warrants, under the terms of the warrant agreement. However, we cannot assure you that we will be
able to do so. The warrants may be deprived of any value and the market for the warrants may be limited if the prospectus relating to the common stock issuable upon the exercise of the warrants is not
current or if the common stock is not qualified or exempt from qualification in the jurisdictions in which the holders of the warrants reside.
No
fractional shares will be issued upon exercise of the warrants. However, if a warrantholder exercises all warrants then owned of record by him, we will pay to the warrantholder, in
lieu of the issuance of any fractional share which is otherwise issuable to the warrantholder, an amount in cash based on the market value of the common stock on the last trading day prior to the
exercise date.
Dividends
We have not paid any dividends on our common stock to date and do not intend to pay dividends prior to the completion of a business combination. The payment of
dividends in the future will be contingent upon our revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of a business combination. The payment
of any dividends subsequent to a business combination will be within the discretion of our then board of directors. It is the present intention of our board of directors to retain all earnings, if
any, for use in our business operations and, accordingly, our board does not anticipate declaring any dividends in the foreseeable future.
Our Transfer Agent and Warrant Agent
The transfer agent for our securities and warrant agent for our warrants is Continental Stock Transfer & Trust Company, 17 Battery Place, New York, New
York 10004.
Shares Eligible for Future Sale
Upon the completion of this offering, we will have 3,750,000 shares of common stock outstanding, or 4,200,000 shares if the underwriters'
over-allotment option is exercised in full. Of these shares, the 3,000,000 shares sold in this offering, or 3,450,000 shares if the over-allotment option is exercised, will be
freely tradable without restriction or further registration under the Securities Act, except for any shares purchased by one of our affiliates within the meaning of Rule 144 under the
Securities Act. All of the remaining 750,000 shares are restricted securities under Rule 144, in that they were issued in private transactions not involving a public offering. None of those
will be eligible for sale under Rule 144 prior to April 2004. Notwithstanding this, all of those shares have been placed in escrow for a period of three years from the date of this
prospectus and will only be released prior to that date under certain limited circumstances.
35
Rule 144
In general, under Rule 144 as currently in effect, a person who has beneficially owned restricted shares of our common stock for at least one year would be
entitled to sell within any three-month period a number of shares that does not exceed the greater of either of the following:
•
1%
of the number of shares of common stock then outstanding, which will equal 37,500 shares immediately after this offering (or 42,000 if the underwriters' exercise their
over-allotment option); and
•
the
average weekly trading volume of the common stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale.
Sales
under Rule 144 are also limited by manner of sale provisions and notice requirements and to the availability of current public information about us.
Rule 144(k)
Under Rule 144(k), a person who is not deemed to have been one of our affiliates at the time of or at any time during the three months preceding a sale,
and who has beneficially owned the restricted shares proposed to be sold for at least two years, including the holding period of any prior owner other than an affiliate, is entitled to sell their
shares without complying with the manner of sale, public information, volume limitation or notice provisions of Rule 144.
36
Underwriting
In accordance with the terms and conditions contained in the underwriting agreement, we have agreed to sell to each of the underwriters named below, and each of
the underwriters, for which EarlyBirdCapital, Inc. is acting as representative, have severally, and not jointly, agreed to purchase on a firm commitment basis the number of units offered in
this offering set forth opposite their respective names below:
Underwriters
Number of Units
EarlyBirdCapital, Inc.
Total
3,000,000
A
copy of the underwriting agreement has been filed as an exhibit to the registration statement of which this prospectus forms a part.
Pricing of Securities
We have been advised by the representative that the underwriters propose to offer the units to the public at the initial offering price set forth on the cover
page of this prospectus. They may allow some dealers concessions not in excess of $      per unit and the dealers may reallow a concession not in excess of $      per unit to other
dealers. Upon completion of this offering, the offering price, the concession to selected dealers and the reallowance to other dealers may be changed by the representative.
Prior
to this offering there has been no public market for any of our securities. The public offering price of the units and the terms of the warrants were negotiated between us and the
representative. Factors considered in determining the prices and terms of the units, including the common stock and warrants underlying the units, include:
•
the
history and prospects of companies whose principal business is the acquisition of other companies;
•
prior
offerings of those companies;
•
our
prospects for acquiring an operating business at attractive values;
•
our
capital structure;
•
an
assessment of our management and their experience in identifying operating companies;
•
general
conditions of the securities markets at the time of the offering; and
•
other
factors as were deemed relevant.
However,
although these factors were considered, the determination of our offering price is more arbitrary than the pricing of securities for an operating company in a particular industry since the
underwriters are unable to compare our financial results and prospects with those of public companies operating in the same industry.
Over-Allotment Option
We have also granted to the underwriters an option, exercisable during the 45-day period commencing on the date of this prospectus, to purchase from
us at the offering price, less underwriting discounts and the non-accountable expense allowance, up to an aggregate of 450,000 additional units for the sole purpose of covering
over-allotments, if any. The underwriters may exercise that option if the underwriters sell more units than the total number set forth in the table above. If any units
37
underlying
the option are purchased, the underwriters will severally purchase shares in approximately the same proportion as set forth in the table above.
Commissions and Discounts
The following table shows the public offering price, underwriting discount to be paid by us to the underwriters and the proceeds, before expenses, to us. This
information assumes either no exercise or full exercise by the underwriters of their over-allotment option.
Per unit
With option
Without option
Public offering price
$
6.00
$
20,700,000
$
18,000,000
Discount
$
0.42
$
1,449,000
$
1,260,000
Proceeds before expenses
$
5.58
$
19,251,000
$
16,740,000
We
have agreed to pay to the representative an expense allowance on a non-accountable basis equal to 3% of the gross proceeds derived from the sale of the units offered in
this offering (including exercise of the underwriters' over-allotment option described above).
Purchase Option
We have agreed to sell to the representative, for $100, an option to purchase up to a total of 300,000 units. The units issuable upon exercise of this option are
identical to those offered by this prospectus. This option is exercisable initially at $6.60 per unit commencing on the later of the consummation of a business combination or one year from the date of
this prospectus and expiring five years from the date of this prospectus. The option may not be transferred, sold, assigned or hypothecated during the one-year period following the date of
this prospectus, except to underwriters and selected dealers and to officers and partners of the underwriters or the selected dealers. The option grants to holders demand and "piggy back" rights for
periods of five and seven years, respectively, from
the date of this prospectus with respect to the registration under the Securities Act of the securities directly and indirectly issuable upon exercise of the option. The exercise price and number of
units issuable upon exercise of the option may be adjusted in certain circumstances including in the event of a stock dividend, or our recapitalization, reorganization, merger or consolidation.
However, the option will not be adjusted for issuances of common stock at a price below its exercise price.
Warrant Solicitation Fee
We have engaged the representative, on a non-exclusive basis, as our agent for the solicitation of the exercise of the warrants. To the extent not
inconsistent with the guidelines of the NASD and the rules and regulations of the SEC, we have agreed to pay the representative for bona fide services rendered a commission equal to 5% of the exercise
price for each warrant exercised more than one year after the date of this prospectus if the exercise was solicited by the underwriters. In addition to soliciting, either orally or in writing, the
exercise of the warrants, the representative's services may also include disseminating information, either orally or in writing, to warrantholders about us or the market for our securities, and
assisting in the processing of the exercise of warrants. No compensation will be paid to the representative upon the exercise of the warrants if:
•
the
market price of the underlying shares of common stock is lower than the exercise price;
•
the
holder of the warrants has not confirmed in writing that the underwriters solicited her exercise;
•
the
warrants are held in a discretionary account;
•
the
warrants are exercised in an unsolicited transaction; or
•
the
arrangement to pay the commission is not disclosed in the prospectus provided to warrantholders at the time of exercise.
38
Regulatory Restrictions on Purchase of Shares
Rules of the SEC may limit the ability of the underwriters to bid for or purchase shares before the distribution of the shares is completed. However, the
underwriters may engage in the following activities in accordance with the rules:
•
Stabilizing Transactions
. The underwriters may make bids or purchases for the purpose of pegging, fixing or maintaining the
price of our securities, so long as stabilizing bids do not exceed a specified maximum.
•
Over-Allotments and Syndicate Coverage Transactions
. The underwriters may create a short position in our
securities by selling more of our securities than are set forth on the cover page of this prospectus. If the underwriters create a short position during the offering, the representative may engage in
syndicate covering transactions by purchasing our securities in the open market. The representative may also elect to reduce any short position by exercising all or part of the
over-allotment option.
•
Penalty Bids
. If the representative sells shares in the open market in a stabilizing transaction or syndicate coverage
transaction, it may reclaim a selling concession from the underwriters and selling group members who sold those securities as part of this offering.
Stabilization
and syndicate covering transactions may cause the price of the securities to be higher than they would be in the absence of these transactions. The imposition of a penalty
bid might also have an effect on the prices of the securities if it discourages resales of the securities.
Neither
we nor the underwriters makes any representation or prediction as to the effect that the transactions described above may have on the prices of the securities. These transactions
may occur on the OTC Bulletin Board, in the over-the-counter market or on any
trading market. If any of these transactions are commenced, they may be discontinued without notice at any time.
Other Terms
We have granted the representative the right to have its designee present at all meetings of our board of directors for a period of five years from the date of
this prospectus. The designee will be entitled to the same notices and communications sent by us to our directors and to attend directors' meetings, but will not have voting rights. The representative
has not named a designee as of the date of this prospectus.
Although
they are not obligated to do so, the underwriters may introduce us to potential target businesses or assist us in raising additional capital, as needs may arise in the future.
We are not under any contractual obligation to engage the underwriters to provide any services for us after completion of this offering, but if we do, we may pay the underwriters a finder's fee or
other compensation.
We
have agreed to indemnify the underwriters against some liabilities, including civil liabilities under the Securities Act, or to contribute to payments the underwriters may be required
to make in this respect.
All
of our existing stockholders have agreed that, until March 18, 2006, they will not negotiate with or engage any investment banking firm or underwriter other than
EarlyBirdCapital, Inc. with respect to any public financing for any company with a business plan similar to ours with which they are affiliated. During the five-year period
following the date of this prospectus, EarlyBirdCapital, Inc. has been granted the right to purchase for its account or to sell for the account of our existing stockholders and their affiliates
any of our securities sold by them pursuant to Rule 144 under the Securities Act.
39
Legal Matters
The validity of the securities offered in this prospectus are being passed upon for us by Klehr, Harrison, Harvey, Branzburg & Ellers LLP, Philadelphia,
Pennsylvania. Graubard Miller, New York, New York, is acting as counsel for the underwriters in this offering.
Experts
The financial statements included in this prospectus and in the registration statement have been audited by BDO Seidman, LLP, independent certified public
accountants, to the extent and for the period set forth in their report appearing elsewhere in this prospectus and in the registration statement. The financial statements and the report of BDO
Seidman, LLP are included in reliance upon their report given upon the authority of BDO Seidman, LLP as experts in auditing and accounting.
Where You Can Find Additional Information
We have filed with the SEC a registration statement on Form S-1, which includes exhibits, schedules and amendments, under the Securities Act,
with respect to this offering of our securities. Although this prospectus, which forms a part of the registration statement, contains all material information included in the registration statement,
parts of the registration statement have been omitted as permitted by rules and regulations of the SEC. We refer you to the registration statement and its exhibits for further information about us,
our securities and this offering. The registration statement and its exhibits, as well as our other reports filed with the SEC, can be inspected and copied at the SEC's public reference room at 450
Fifth Street, N.W., Washington, D.C. 20549-1004. The public may obtain information about the operation of the public reference room by calling the SEC at
1-800-SEC-0330. In addition, the SEC maintains a web site at http://www.sec.gov which contains the Form S-1 and other reports, proxy and
information statements and information regarding issuers that file electronically with the SEC.
40
MILLSTREAM ACQUISITION CORPORATION
(a corporation in the development stage)
Index to Financial Statements
Report of Independent Certified Public Accountants
F-2
Financial statements
Balance sheet
F-3
Statement of cash flows
F-4
Notes to financial statements
F-5 – F-6
F-1
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Millstream
Acquisition Corporation
Wayne, Pennsylvania
We
have audited the accompanying balance sheet of Millstream Acquisition Corporation (a corporation in the development stage) as of April 30, 2003, and the related statement of
cash flows for the period April 11, 2003 (inception) to April 30, 2003. These financial statements are the responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We
conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In
our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Millstream Acquisition Corporation as of April 30,
2003, and the results of its cash flows for the period April 11, 2003 (inception) to April 30, 2003 in conformity with accounting principles generally accepted in the United States of
America.
/s/
BDO SEIDMAN, LLP
Philadelphia, Pennsylvania
May 1, 2003
F-2
MILLSTREAM ACQUISITION CORPORATION
(a corporation in the development)
BALANCE SHEET
April 30,
2003
ASSETS
Cash
$
60,039
LIABILITIES AND STOCKHOLDERS' EQUITY
Note payable,
stockholder (Note 3)
$
35,000
Commitment
(Note 4)
Stockholders' equity
(Notes 1, 2 and 5)
Preferred stock, $.0001 par value Authorized 1,000,000 shares; none issued (Note 5)
—
Common stock, $.0001 par value Authorized 20,000,000 shares; issued and outstanding 750,000 shares
75
Additional paid-in capital
24,944
Total stockholders' equity
25,039
Total liabilities and stockholders' equity
$
60,039
See
accompanying notes to financial statements.
F-3
MILLSTREAM ACQUISITION CORPORATION
(a corporation in the development)
STATEMENT OF CASH FLOWS
April 11, 2003 (inception)
to
April 30, 2003
Cash flows from financing activities
Proceeds from note payable, stockholder
$
35,000
Proceeds from sale of 750,000 shares of common stock to initial stockholders at an average of $.0334 per share
25,039
Net cash provided by financing activities
60,039
Cash at beginning of period
—
Cash at end of period
$
60,039
See
accompanying notes to financial statements.
F-4
MILLSTREAM ACQUISITION CORPORATION
(a corporation in the development stage)
NOTES TO FINANCIAL STATEMENTS
1.    Organization and Business Operations
Millstream Acquisition Corporation ("Company") was incorporated in Delaware on April 11, 2003 as a Specified Purpose Acquisition Company™, the
objective of which is to acquire an operating business in an industry not yet determined. The Company's initial stockholders purchased 750,000 common shares, $.0001 par value, for $25,039 on April 14,
2003. At April 30, 2003, the Company had not yet commenced any operations and, accordingly, a statement of operations has not been presented. All activity through April 30, 2003 relates to the
Company's formation. The Company has selected December 31, as its fiscal year-end.
The
Company's ability to commence operations is contingent upon obtaining adequate financial resources through a proposed public offering ("Proposed Offering") which is discussed in Note
2. The Company's management has broad discretion with respect to the specific application of the net proceeds of this Proposed Offering, although substantially all of the net proceeds of this Proposed
Offering are intended to be generally applied toward consummating a business combination with an operating business in an industry yet to be determined ("Business Combination"). Furthermore, there is
no assurance that the Company will be able to successfully effect a Business Combination. Upon the closing of the Proposed Offering, at least ninety percent (90%) of the net proceeds, after payment of
certain amounts to the underwriter, will be held in a trust account ("Trust Fund") and invested in government securities until the earlier of (i) the consummation of its first Business Combination or
(ii) liquidation of the Company. The remaining proceeds may be used to pay for business, legal and accounting due diligence on prospective acquisitions and continuing general and administrative
expenses. The Company, after signing a definitive agreement for the acquisition of a target business, will submit such transaction for stockholder approval. In the event that stockholders owning 20%
or more of the outstanding stock excluding, for this purpose, those persons who were stockholders prior to the Proposed Offering, vote against the Business Combination, the Business Combination will
not be consummated. All of the Company's stockholders prior to the Proposed Offering, including all of the officers and directors of the Company ("Initial Stockholders"), have agreed to vote their
750,000 founding shares of common stock in accordance with the vote of the majority in interest of all other
stockholders of the Company ("Public Stockholders") with respect to any Business Combination. After consummation of the Company's first Business Combination, all of these voting safeguards will no
longer be applicable.
With
respect to the first Business Combination which is approved and consummated, any Public Stockholder who voted against the Business Combination may demand that the Company redeem his
shares. The per share redemption price will equal the amount in the Trust Fund as of the record date for determination of stockholders entitled to vote on the Business Combination divided by the
number of shares of common stock held by Public Stockholders at the consummation of the Proposed Offering. Accordingly, Public Stockholders holding 19.99% of the aggregate number of shares owned by
all Public Stockholders may seek redemption of their shares in the event of a Business Combination. Such Public Stockholders are entitled to receive their per share interest in the Trust Fund computed
without regard to the shares held by Initial Stockholders.
The
Company's Certificate of Incorporation provides for mandatory liquidation of the Company, without stockholder approval, in the event that the Company does not consummate a Business
Combination within 18 months from the date of the consummation of the Proposed Offering, or 24 months from the consummation of the Proposed Offering 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
F-5
available
for distribution (including Trust Fund assets) will be less than the initial public offering price per share in the Proposed Offering (assuming no value is attributed to the Warrants
contained in the Units to be offered in the Proposed Offering discussed in Note 2).
2.    Proposed Public Offering
The Proposed Offering calls for the Company to offer for public sale up to 3,000,000 units ("Units"). 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 will entitle 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 one year from the effective date of the Proposed Offering and expiring four years from the
date of the prospectus. 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 20 consecutive trading days ending on the third day prior to date on which notice of redemption is given.
3.    Note Payable, Stockholder
The Company issued a $35,000 unsecured promissory note to a stockholder on April 28, 2003. The note is non-interest bearing and is payable on the earlier of May
1, 2004 or the consummation of the Company's initial public offering.
4.    Commitment
The Company presently occupies office space provided by an affiliate of an Initial Stockholder. Such affiliate has agreed that, until the acquisition of a target
business by the Company, it will make 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 such affiliate $7,500 per month for such services commencing on the effective date of the Proposed Offering.
5.    Preferred Stock
The Company is authorized to issue 1,000,000 shares of preferred stock with such designations, voting and other rights and preferences as may be determined from
time to time by the Board of Directors.
F-6
Until                       , 2003, all dealers that effect transactions in these securities, whether or not participating in
this offering, may be
required to deliver a prospectus. This is in addition to the dealers' obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.
No dealer, salesperson or any other person is authorized to give any information or make any representations in connection with this offering other than those
contained in this prospectus and, if given or made, the information or representations must not be relied upon as having been authorized by us. This prospectus does not constitute an offer to sell or
a solicitation of an offer to buy any security other than the securities offered by this prospectus, or an offer to sell or a solicitation of an offer to buy any securities by anyone in any
jurisdiction in which the offer or solicitation is not authorized or is unlawful. The delivery of this prospectus will not, under any circumstances, create any implication that the information is
correct as of any time subsequent to the date of this prospectus.
TABLE OF CONTENTS
Page
Prospectus Summary
1
Summary Financial Data
6
Risk Factors
7
Forward Looking Statements
13
Use of Proceeds
14
Dilution
16
Capitalization
17
Management's Discussion and Analysis of Financial Condition and Results of Operations
18
Proposed Business
18
Management
27
Principal Stockholders
30
Certain Transactions
32
Description Of Securities
33
Underwriting
37
Legal Matters
40
Experts
40
Where You Can Find Additional Information
40
Index to Financial Statements
F-1
$18,000,000
Millstream Acquisition Corporation
3,000,000 Units
PROSPECTUS
EarlyBirdCapital, Inc.
, 2003
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13.    Other Expenses of Issuance and Distribution.
The estimated expenses payable by us in connection with the offering described in this registration statement (other than the underwriting discount and
commissions and the Representative's non-accountable expense allowance) will be as follows:
SEC Registration Fee
$
4,868.56
NASD filing fee
6,518.01
Printing and engraving expenses
25,000.00
Accounting fees and expenses
20,000.00
Legal fees and expenses (including blue sky services and expenses)
100,000.00
Miscellaneous
8,613.43
Total
$
165,000.00
Item 14.    Indemnification of Directors and Officers.
Our certificate of incorporation provides that all directors, officers, employees and agents of the registrant shall be entitled to be indemnified by us to the
fullest extent permitted by Section 145 of the Delaware General Corporation Law.
Section 145
of the Delaware General Corporation Law concerning indemnification of officers, directors, employees and agents is set forth below.
"Section 145.
Indemnification of officers, directors, employees and agents; insurance.
(a)   A
corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that the person is or was a director, officer,
employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or
proceeding if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe the person's conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of
nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which the person reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that the person's conduct was unlawful.
(b)   A
corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit
by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving
at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by the person in connection with the defense or settlement of such action or suit if the person acted in good faith and in a manner the person reasonably believed to
be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged
to be liable to the corporation unless and
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only
to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.
(c)   To
the extent that a present or former director or officer of a corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding
referred to in subsections (a) and (b) of this section, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by such person in connection therewith.
(d)   Any
indemnification under subsections (a) and (b) of this section (unless ordered by a court) shall be made by the corporation only as authorized in the
specific case upon a determination that indemnification of the present or former director, officer, employee or agent is proper in the circumstances because the person has met the applicable standard
of conduct set forth in subsections (a) and (b) of this section. Such determination shall be made, with respect to a person who is a director or officer at the time of such
determination, (1) by a majority vote of the directors who are not parties to such action, suit or proceeding, even though less than a quorum, or (2) by a committee of such directors
designated by majority vote of such directors, even though less than a quorum, or (3) if there are no such directors, or if such directors so direct, by independent legal counsel in a written
opinion, or (4) by the stockholders.
(e)   Expenses
(including attorneys' fees) incurred by an officer or director in defending any civil, criminal, administrative or investigative action, suit or proceeding may
be paid by the corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it
shall ultimately be determined that such person is not entitled to be indemnified by the corporation as authorized in this section. Such expenses (including attorneys' fees) incurred by former
directors and officers or other employees and agents may be so paid upon such terms and conditions, if any, as the corporation deems appropriate.
(f)    The
indemnification and advancement of expenses provided by, or granted pursuant to, the other subsections of this section shall not be deemed exclusive of any other
rights to which those seeking indemnification or advancement of expenses may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in
such person's official capacity and as to action in another capacity while holding such office.
(g)   A
corporation shall have power to purchase and maintain insurance on behalf of any person who is or was director, officer, employee or agent of the corporation, or is or
was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted
against such person and incurred by such person in any such capacity, or arising out of such person's status as such, whether or not the corporation would have the power to indemnify such person
against such liability under this section.
(h)   For
purposes of this section, references to "the corporation" shall include, in addition to the resulting corporation, any constituent corporation (including any
constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and
employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a
director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under this section with respect to the resulting or
surviving corporation as such person would have with respect to such constituent corporation if its separate existence had continued.
(i)    For
purposes of this section, references to "other enterprises" shall include employee benefit plans; references to "fines" shall include any excise taxes assessed on a
person with respect to any employee benefit plan; and references to "serving at the request of the corporation" shall include any
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service
as a director, officer, employee or agent of the corporation which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit
plan, its participants or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee
benefit plan shall be deemed to have acted in a manner "not opposed to the best interests of the corporation" as referred to in this section.
(j)    The
indemnification and advancement of expenses provided by, or granted pursuant to, this section shall, unless otherwise provided when authorized or ratified, continue
as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.
(k)   The
Court of Chancery is hereby vested with exclusive jurisdiction to hear and determine all actions for advancement of expenses or indemnification brought under this
section or under any bylaw, agreement, vote of stockholders or disinterested directors, or otherwise. The Court of Chancery may summarily determine a corporation's obligation to advance expenses
(including attorneys' fees)."
Insofar
as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers, and controlling persons pursuant to the foregoing provisions, or
otherwise, we have been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment of expenses incurred or paid by a director, officer or controlling person in a successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to the court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
Paragraph B
of Article Eighth of our certificate of incorporation provides:
"The
Corporation, to the full extent permitted by Section 145 of the GCL, as amended from time to time, shall indemnify all persons whom it may indemnify pursuant thereto.
Expenses (including attorneys' fees) incurred by an officer or director in defending any civil, criminal, administrative, or investigative action, suit or proceeding for which such officer or director
may be entitled to indemnification hereunder shall be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of
such director or officer to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the Corporation as authorized hereby."
Pursuant
to the Underwriting Agreement filed as Exhibit 1.1 to this Registration Statement, we have agreed to indemnify the Underwriter and the Underwriter has agreed to indemnify
us against certain civil liabilities that may be incurred in connection with this offering, including certain liabilities under the Securities Act.
Item 15.    Recent Sales of Unregistered Securities.
(a)   During
the past three years, we sold the following shares of common stock without registration under the Securities Act:
Stockholders
Number of Shares
Arthur Spector
360,000
Spector Family Trust
180,000
Dr. Heinz C. Schimmelbusch
150,000
Robert E. Keith, Jr.
20,000
Don K. Rice
20,000
J. Brian O'Neill
20,000
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Such
shares were issued in April 2003 in connection with our organization pursuant to the exemption from registration contained in Section 4(2) of the
Securities Act. Of these shares, the 360,000 shares issued to Mr. Spector were sold at a purchase price of approximately $.06944 per share. The other shares issued to the individuals and entity
listed above were sold at purchase prices of $0.0001 per share.
Item 16.    Exhibits and Financial Statement Schedules.
(a)   The
following exhibits are filed as part of this Registration Statement:
Exhibit No.
Description
1.1
Form of Underwriting Agreement.
1.2
Form of Selected Dealers Agreement.
3.1
Amended and Restated Certificate of Incorporation.
3.2
By-laws.
4.1*
Specimen Common Stock Certificate.
4.2
Specimen Warrant Certificate.
4.3
Form of Unit Purchase Option to be granted to Representative.
4.4
Form of Warrant Agreement between Continental Stock Transfer & Trust Company and the Registrant.
5.1
Form of opinion of Klehr, Harrison, Harvey, Branzburg & Ellers LLP.
10.1
Letter Agreement among the Registrant, EarlyBirdCapital, Inc. and Arthur Spector (without schedules).
10.2
Letter Agreement among the Registrant, EarlyBirdCapital, Inc. and Dr. Heinz C. Schimmelbusch (without schedules).
10.3
Letter Agreement among the Registrant, EarlyBirdCapital, Inc. and The Spector Family Trust (without schedules).
10.4
Letter Agreement among the Registrant, EarlyBirdCapital, Inc. and J. Brian O'Neill (without schedules).
10.5
Form of Letter Agreement among the Registrant, EarlyBirdCapital, Inc. and each of Robert E. Keith and Don K. Rice (without schedules).
10.6*
Form of Investment Management Trust Agreement between                        and
Registrant.
10.7
Form of Stock Escrow Agreement between the Registrant, Continental Stock Transfer & Trust Company and the Initial Stockholders.
10.8
Form of Letter Agreement between 400 Building LLC and Registrant regarding administrative support.
10.9
Promissory Note, dated April 28, 2003, in the principal amount of $35,000 issued to Arthur Spector.
23.1
Consent of BDO Seidman, LLP.
23.2
Consent of Klehr, Harrison, Harvey, Branzburg & Ellers LLP (included in Exhibit 5.1).
24
Power of Attorney (included on signature page of this Registration Statement).
*
To
be filed by amendment.
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Item 17.    Undertakings.
(a)   The
undersigned registrant hereby undertakes:
(1)  To
file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
i.      To
include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
ii.     To
reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent
change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement.
iii.    To
include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such
information in the registration statement.
(2)  That,
for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial
bona
fide
offering thereof.
(3)  To
remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the
offering.
(b)   The
undersigned hereby undertakes to provide to the underwriter at the closing specified in the underwriting agreements, certificates in such denominations and
registered in such names as required by the underwriter to permit prompt delivery to each purchaser.
(c)   Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by
a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with
the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New York, on the 19
th
day of May, 2003.
MILLSTREAM ACQUISITION CORPORATION
By:
/s/
ARTHUR SPECTOR
Arthur Spector
Chairman of the Board, Chief Executive Officer and President (principal financial and accounting officer)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Arthur Spector his true and lawful
attorney-in-fact, with full power of substitution and resubstitution for him and in his name, place and stead, in any and all capacities to sign any and all amendments
including post-effective amendments to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and
Exchange
Commission, hereby ratifying and confirming all that said attorney-in-fact or his substitute, each acting alone, may lawfully do or cause to be done by virtue thereof.
Pursuant
to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
Name
Position
Date
/s/
ARTHUR SPECTOR
Arthur Spector
Chairman of the Board, Chief Executive Officer and President (principal financial and accounting officer)
May 19, 2003
/s/
ROBERT E. KEITH, JR.
Robert E. Keith, Jr.
Director
May 19, 2003
/s/
DON K. RICE
Don K. Rice
Director
May 19, 2003
/s/
HEINZ C. SCHIMMELBUSCH
Dr. Heinz C. Schimmelbusch
Director
May 19, 2003
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QuickLinks
Preliminary Prospectus Subject to Completion, May 19, 2003
$18,000,000 MILLSTREAM ACQUISITION CORPORATION 3,000,000 units
State Blue Sky Information
Table Of Contents
Prospectus Summary
Risk Factors
Forward Looking Statements
Use of Proceeds
Dilution
Capitalization
Management's Discussion and Analysis of Financial Condition and Results of Operations
Proposed Business
Management
Principal Stockholders
Certain Transactions
Description Of Securities
Underwriting
Legal Matters
Experts
Where You Can Find Additional Information
MILLSTREAM ACQUISITION CORPORATION (a corporation in the development stage) Index to Financial Statements
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
MILLSTREAM ACQUISITION CORPORATION (a corporation in the development) BALANCE SHEET
MILLSTREAM ACQUISITION CORPORATION (a corporation in the development) STATEMENT OF CASH FLOWS
MILLSTREAM ACQUISITION CORPORATION (a corporation in the development stage) NOTES TO FINANCIAL STATEMENTS
PART II INFORMATION NOT REQUIRED IN PROSPECTUS
SIGNATURES
POWER OF ATTORNEY