<PAGE>   1
 
================================================================================
 
                    U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
 
                                  FORM 10-QSB
 
                                QUARTERLY REPORT
                        UNDER SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934
 
               FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997
 
                             COMMISSION FILE NUMBER
                                    0-22115
 
                        COMPLETE WELLNESS CENTERS, INC.
       (Exact name of small business issuer as specified in its charter)
 
<TABLE>
<S>                                                  <C>                  
           DELAWARE                                       52-1910135      
 (State or other jurisdiction                           (IRS Employer     
of incorporation or organization)                    Identification No.)  
</TABLE>
 
             725 INDEPENDENCE AVENUE, S.E., WASHINGTON, D.C. 20003
                    (Address of principal executive offices)
 
                                 (202) 543-6800
                          (Issuer's telephone number)
 
              ---------------------------------------------------
                 (FORMER NAME, FORMER ADDRESS AND FORMER FISCAL
                      YEAR, IF CHANGED SINCE LAST REPORT)
 
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
 
                             Yes X          No 
                                ---            ---

State the number of shares outstanding of each of the issuer's classes of common
equity, at September 30, 1997: 1,903,833.
 
================================================================================
<PAGE>   2
 
                     INDEX COMPLETE WELLNESS CENTERS, INC.
 
                                  FORM 10-QSB
 
                                     INDEX
 
<TABLE>
<CAPTION>
                                                                                            PAGE
                                                                                            ----
<S>        <C>                                                                              <C>
Part I.    FINANCIAL INFORMATION.........................................................     1
Item 1.    Financial Statements (Unaudited)..............................................     1
           Condensed Consolidated Balance Sheets
             September 30, 1997 and December 31, 1996....................................     1
           Condensed Consolidated Statement of Operations
             Three months ended September 30, 1997 and September 30, 1996
             Nine months ended September 30, 1997 and September 30, 1996.................     2
           Condensed Consolidated Statement of Cash Flows
             Three months ended September 30, 1997 and September 30, 1996................     3
           Notes to Condensed Consolidated Financial Statements..........................     4
Item 2.    Management's Discussion and Analysis of Financial
             Condition and Results of Operations.........................................     6
Part II.   OTHER INFORMATION.............................................................    10
Signatures
</TABLE>
<PAGE>   3
 
                                     PART I
 
                             FINANCIAL INFORMATION
 
ITEM 1:  FINANCIAL STATEMENTS
 
                COMPLETE WELLNESS CENTERS, INC. AND SUBSIDIARIES
 
                     CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
                                                                               
                                                                     SEPTEMBER 30,  DECEMBER 31,
                                                                        1997            1996
                                                                     -----------    ------------
                                                                     (UNAUDITED)       (NOTE)
 
<S>                                                                  <C>            <C>
                                             ASSETS
Cash and equivalents..............................................   $   993,224    $    298,509
Patient receivables, net of allowance for doubtful accounts
  of $1,335,951 and $143,422......................................     1,282,723         540,444
Management fees receivables.......................................     1,857,655           --
Other assets......................................................       204,877          43,232
Deposits..........................................................       159,524           --
Deferred tax assets...............................................        47,010          15,487
                                                                      ----------      ----------
Total current assets..............................................     4,545,013         897,672
Furniture and equipment, net......................................       492,416         215,615
                                                                      ----------      ----------
Total assets......................................................   $ 5,037,429    $  1,113,287
                                                                      ==========      ==========
                              LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
  Accounts payable and accrued expenses...........................   $   909,039    $    412,725
  Accrued wages...................................................         7,288          91,000
  Accrued management fee..........................................     2,180,552         442,646
  Accrued interest................................................         4,251          52,010
Deferred Tax Liability............................................        59,455          23,728
  Notes payable...................................................       159,697       1,098,000
                                                                      ----------      ----------
Total current liabilities.........................................     3,320,282       2,120,109
Convertible note payable..........................................        25,000          25,000
Minority interest.................................................        41,703           --
Stockholders' equity:
  Preferred Stock, $.01 par value per share, 2,000,000 authorized
     of which 1,500 are designated Series A, 12% Cumulative
     Convertible Preferred, 1,350 shares issued and outstanding at
     December 31, 1996............................................          --                14
  Common Stock, $.0001665 par value per share, 10,000,000 shares
     authorized, 1,903,833 shares and 714,967 shares issued and
     outstanding at September 30, 1997 and December 31, 1996......           317             119
  Additional capital..............................................     4,824,652         156,027
  Accumulated deficit.............................................    (3,174,525)     (1,187,982)
                                                                      ----------      ----------
Total stockholders' equity (deficit)..............................     1,650,444      (1,031,822)
                                                                      ----------      ----------
Total liabilities and stockholders' equity (deficit)..............   $ 5,037,429    $  1,113,287
                                                                      ==========      ==========
</TABLE>
 
Note: The balance sheet at December 31, 1996 has been extracted from the audited
financial statements at that date.
 
           See notes to condensed consolidated financial statements.
 
                                        1
<PAGE>   4

 
                COMPLETE WELLNESS CENTERS, INC. AND SUBSIDIARIES
 
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
                                                    THREE MONTHS ENDED           NINE MONTHS ENDED
                                                      SEPTEMBER 30,                 SEPTEMBER 30,
                                                --------------------------    --------------------------
                                                   1997           1996           1997           1996
                                                -----------    -----------    -----------    -----------
                                                (UNAUDITED)    (UNAUDITED)    (UNAUDITED)    (UNAUDITED)
 
<S>                                             <C>           <C>             <C>            <C>
Operating revenue:
  Patient revenue............................   $ 1,088,564     $ 553,100     $ 2,902,511    $   869,122
  Management services income.................     1,330,267         4,160       2,321,022          4,160
  Other Income...............................        65,535                        65,535
                                                 ----------    ----------      ----------     ----------
                                                  2,484,366       557,260       5,289,068        873,282
Direct expenses:
  Salary and consulting costs................       873,488       128,006       1,975,420        249,293
  Management fees............................     1,329,597       305,900       2,571,362        438,948
  Rent.......................................        45,771        92,857         156,506        160,988
  Advertising and marketing..................        21,314        26,306          74,199         36,828
  Bad debt expense...........................       305,782        26,608         778,926         61,608
                                                 ----------    ----------      ----------     ----------
Total direct expenses........................     2,575,952       579,677       5,556,413        947,665
General and administrative...................       682,280       335,117       1,711,561        546,162
Depreciation and amortization................        18,203        10,591          54,506         24,598
                                                 ----------    ----------      ----------     ----------
Operating deficit............................      (792,069)     (368,125)     (2,033,412)      (645,143)
Interest expense.............................         3,366        22,312          28,235         24,229
Interest income..............................        35,229         4,059          82,599          4,663
Minority interest............................        17,961        (8,457)         23,812        143,759
                                                 ----------    ----------      ----------     ----------
Net loss before income taxes.................      (742,245)    $(394,835)     (1,955,236)      (520,950)
Income taxes.................................        27,103                        31,307
                                                 ----------    ----------      ----------     ----------
Net loss after income taxes..................   $  (769,348)    $(394,835)    $(1,986,543)   $  (520,950)
                                                                                              ==========
Net loss per share data (Note C)
  Net loss per share and common equivalent
     shares..................................   $     (0.50)    $   (0.32)    $     (1.13)   $     (0.43)
                                                                                              ==========
  Weighted average number of common and
     common equivalent shares outstanding....     1,540,744     1,221,639       1,765,533      1,221,639
                                                                                              ==========
Pro forma net loss per share data (Note C)
  Net loss per share and common equivalent
     shares..................................   $     (0.50)    $   (0.32)    $     (1.11)   $     (0.43)
                                                                                              ==========
  Weighted average number of common and
     common equivalent shares outstanding....     1,540,744     1,221,639       1,791,168      1,221,639
                                                                                              ==========
</TABLE>
 
           See notes to condensed consolidated financial statements.
 
                                        2
<PAGE>   5
 
                COMPLETE WELLNESS CENTERS, INC. AND SUBSIDIARIES
 
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                                           NINE MONTHS ENDED
                                                                             SEPTEMBER 30,
                                                                      ---------------------------
                                                                         1997            1996
                                                                      -----------     -----------
                                                                      (UNAUDITED)     (UNAUDITED)
 
<S>                                                                   <C>             <C>
OPERATING ACTIVITIES
Net loss...........................................................   $(1,986,543)    $  (520,950)
Adjustments to reconcile net loss to net cash used in operating
  activities:
  Minority interest................................................       (41,703)       (143,759)
  Depreciation and amortization....................................        54,506          24,598
  Amortization of debt discount....................................         2,000           1,960
  Recognition of granting of non-qualified stock options...........        18,964           4,988
  Provision of bad debts...........................................       778,926          70,000
  Provision for deferred taxes.....................................       (31,523)          --  
  Changes in operating assets and liabilities:
     Patient receivables...........................................    (1,481,204)       (640,390)
     Management Fee Receivable.....................................    (1,857,655)          --  
     Advances to officers and other current assets.................      (281,210)        (35,259)
     Inventory.....................................................       (39,960)          --
     Current tax liability.........................................        35,727           --
     Accounts payable and other current liabilities................     2,262,790         534,160
                                                                        ---------        --------
Net cash used in operating activities:.............................    (2,566,885)       (704,652)
INVESTING ACTIVITIES:
Purchase of equipment..............................................      (332,223)       (184,362)
                                                                        ---------        --------
Net cash used in investing activities:.............................      (332,233)       (184,362)
FINANCING ACTIVITIES:
Payment of bridge notes............................................    (1,100,000)      1,100,000
Proceeds (payments) from notes payable.............................        25,198           --
Proceeds from the sale of common stock.............................     4,686,060              18
Proceeds from exercising of stock options..........................       (17,435)          1,455
Proceeds from the sale of equity in Complete Wellness Centers,
  LLC..............................................................         --            446,000
Investment of minority shareholders in CWIPA.......................        50,000           --
Investment in Smokenders...........................................       (50,000)          --
                                                                        ---------       ---------
Net cash provided by financing activities:.........................     3,593,823       1,547,473
                                                                        ---------       --------- 
Net increase in cash and cash equivalents..........................       694,715         658,459
Cash and cash equivalents at beginning of year.....................       298,509          63,834
                                                                        ---------       ---------
Cash and cash equivalents at end of year...........................   $   993,224     $   722,293
                                                                        =========       =========
</TABLE>
 
           See notes to condensed consolidated financial statements.
 
                                        3
<PAGE>   6
                COMPLETE WELLNESS CENTERS, INC. AND SUBSIDIARIES

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

                               September 30, 1997

Note A - Basis of Presentation

         The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting principles
for interim financial information and the instructions to Form 10-QSB and
Article 10 of Regulation S-X. The financial statement information was derived
from unaudited financial statements unless indicated otherwise. Accordingly,
they do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements.

         In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included. Operating results for the nine month period ended September 30, 1997
are not necessarily indicative of the results that may be expected for the year
ending December 31, 1997.

         The accompanying unaudited condensed consolidated financial statements
should be read in conjunction with the Company's audited financial statements
included in the Company's 10-KSB dated December 31, 1996. The Company was
incorporated under the laws of the State of Delaware in November 1994. The
Company develops multi-disciplinary medical centers and furnishes certain
support services to such facilities.

Note B - Initial Public Offering

         On February 24, 1997, the Company successfully completed an initial
public offering of 1,000,000 shares of common stock and 1,000,000 redeemable
common stock purchase warrants from which it received net proceeds, after giving
effect to the underwriting discount and non-accountable expenses, of
approximately $5,281,000. The offering proceeds were received by the Company in
February 1997. In addition, the Company incurred approximately $595,000 in
transaction costs in connection with the offering.

         On March 20, 1997, the underwriter exercised 36,776 redeemable common
stock purchase warrants from a possible 150,000 included in the over-allotment
option. After giving effect to the underwriting discount, the Company received
approximately $3,200 in March 1997.

Note C - Net Loss Per Share

         The Company's net loss per share calculations are based upon the
weighted average number of shares of Common Stock outstanding. During the second
and third quarters 1996 the Company issued 110,000 and 37,667 shares of common
stock. An additional 1,145,800 shares of common stock were issued on February
19, 1997 in connection with the Company's initial public offering and conversion
of preferred stock to common stock. Pursuant to the

                                       4
<PAGE>   7


requirements of the Securities and Exchange Commission (SEC) staff accounting
bulletin No. 83, options to purchase Common Stock issued at prices below the
initial public offering price during the twelve months immediately preceding the
initial filing of the registration statement related to the initial public
offering have been included in the computation of net loss per share as if they
were outstanding for all periods presented prior to the initial public offering
(using the treasury method assuming repurchase of common stock at the estimated
initial public offering price). Other shares issuable upon the exercise of stock
options or conversion of redeemable convertible preferred stock have been
excluded from the computation because the effect of their inclusion would be
anti-dilutive. Subsequent to the Company's initial public offering, options
under the treasury stock method are included to the extent they are dilutive.
Weighted average shares used to calculate the pro forma net loss per share
differs from the weighted average on a historical basis due primarily to the
inclusion of the shares of Common Stock resulting from the assumed conversion at
the beginning of the applicable period of the Series A Convertible Preferred
Stock.

Note D - New Subsidiaries

         During May 1997, the Company incorporated three new wholly owned
subsidiaries, Complete Wellness Research Institute, Inc. (CWRI) and Complete
Wellness Education, Inc. (CWEI), both Delaware corporations; and Complete
Billing, Inc. (CBI), a Florida corporation. The results of operations of these
companies are included in the Company's September 30, 1997 consolidated
financial statements. During the three months and nine months ended September
30, 1997, CWRI had a net loss of $16,928 and $39,492, respectively, CWEI had no
operating activity and CBI had a net loss of $1,045 and $11,174, respectively.
The net losses are primarily related to start up expenses not capitalized.

         During May 1997, the Company entered into an agreement to become the
majority shareholder of a new Delaware corporation, Complete Wellness
Independent Physicians Association, Inc. (CWIPA). In accordance with the
agreement, the Company acquired 86.67% of the common stock of CWIPA in return
for $50,000 of initial capital and a commitment to provide up to $850,000 in
additional working capital or guarantees. Approximately $276,000 of the
additional working capital was provided through September 1997. The remaining
13.33% ownership is held by the management of CWIPA. Management of CWIPA is
subject to employment agreements that provide them salary, annual bonuses equal
to 10% of CWIPA annual pretax income and a stock option plan with 3,500 CWIPA
shares. During the three months and nine months ended September 30, 1997, CWIPA
had net losses of $130,571 and $ 174,555, respectively, of which the Company's
share is $112,609 and $150,743, respectively. The financial statements of CWIPA
are consolidated with those of the Company.

During July 1997 a subsidiary of the Company acquired all of the operating
assets and business of Oxford Health Plan's Smokenders program for $50,000. The
subsidiary, Complete Wellness Smoking Cessation, Inc. (Smokenders) also agreed
to pay Oxford Health Plan a royalty of 5% on gross revenues for a 10 year
period. In forming Smokenders, the Company contributed $50,000 cash and a
commitment to provide working capital as needed in an amount not to exceed
$198,000 in return for 88.23% of the common stock. Robert J. Mrazek, the CEO of
Smokenders and a director of the Company is to contribute $22,000 in promissory
notes in return for 11.77% of the common stock. The promissory notes from Mr.
Mrazek will accrue interest at 8%. Unpaid interest and principal on the
promissory notes will be payable no later than September 30, 2000. Under the
terms of Mr. Mrazeks' employment agreement, he will be granted options to
purchase up to an additional 13.23% ownership of Smokenders, subject to certain
time vesting. If the options are exercised, it will result in Mr. Mrazek holding
25% ownership of Smokenders. The exercise price of the options are $ .01 per
share, vesting 50% on August 1, 1998 and 1999. The financial statements of
Smokenders are consolidated with those of the Company. During the three months
ended September 30, 1997 Smokenders had net losses of $41,063 all of which were
recognized by the Company.

On September 22, 1997, the Company signed a letter of intent with Nutri/System,
L.P. to acquire a national network of 147 weight management centers and RxPress,
Inc. a mail order pharmacy. The acquisition is subject to signing of a
definitive agreement, the completion of due diligence, approval by both boards,
and the Company obtaining necessary financing for the completion of the
acquisition. In anticipation of a definitive agreement, the Company placed a
deposit with Nutri/System, L.P. in the amount of $150,000 and received an
exclusive right to acquire a minimum of seven 

                                       5
<PAGE>   8

centers, of the Company's choice, currently owned by Nutri/System, L.P. for one
dollar each in the event this acquisition is not consummated; otherwise, the
deposit will be applied to the final acquisition.

Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations

General

         Statements included in this "Management's Discussion and Analysis of
Financial Condition and Results of Operations" Section, and in other sections of
this Report and in prior and future filings by the Company with the Securities
and Exchange Commission, in the Company's prior and future press releases and in
oral statements made with the approval of an authorized executive which are not
historical or current facts are "forward-looking statements" made pursuant to
the safe harbor provisions of the Private Securities Litigation Reform Act of
1995 and are subject to certain risks and uncertainties that could cause actual
results to differ materially from those presently anticipated or projected. The
Company wishes to caution readers not to place undue reliance on any such
forward-looking statements, which speak only as of the date made. There are
important risk factors that in some cases have affected and in the future could
affect the Company's actual results and could cause the Company's actual
financial and operating performance to differ materially from that expressed in
any forward-looking statement. The following discussion and analysis should be
read in conjunction with the Financial Statements and notes appearing elsewhere
in this report.

         The Company was established in November 1994. From its inception until
March 1995, the Company raised funds privately and developed the corporate
infrastructure, protocols, policies and procedures required to commence its plan
to develop multi-disciplinary medical clinics. In March 1995, the Company formed
Complete Wellness Centers, LLC ("CWC, LLC") as a vehicle for raising capital
needed to open medical clinics. The Company is the managing member of CWC, LLC,
has a 1% equity interest and has obtained irrevocable and permanent voting
proxies from the holders of a majority of ownership interests in CWC, LLC. The
Company consolidates the financial statements of CWC, LLC in its financial
statements due to its unilateral, perpetual and non-temporary control. In July
1995, CWC, LLC purchased selected assets of a chiropractic practice for the
purpose of establishing the Company's first medical clinic. This clinic is a
wholly owned subsidiary of CWC, LLC.

         Throughout 1996, CWC, LLC established affiliations with an additional
six chiropractic practices using a strategy whereby CWC, LLC forms a medical
entity and enters into a long term management agreement with the entity to
provide certain administrative and management services. CWC, LLC employs the
affiliated chiropractor and one or more medical doctors and subcontracts the
daily operations of the medical clinic to the chiropractors' management company.
At December 31, 1996, CWC, LLC had seven medical clinics in operation. During
the first quarter of 1997, CWC, LLC closed one clinic. During the second quarter
of 1997 CWC, LLC agreed to close an additional clinic as the result of the
retirement of the affiliated chiropractor.

         In addition to the clinics owned by CWC, LLC, the Company has directly
formed 22 medical corporations with similar affiliation contracts for an
additional 23 clinics, of which 20 are in operation September 30, 1997. The
operations of all owned medical corporations are included in the consolidated
financial statements of the company.

         In locations were corporate ownership of medical clinics is prohibited
by law, the Company provides similar administrative and management services for
a fee to professional corporations owned by physician(s). These professional
corporations provide similar services to patients and operate in a similar
fashion to the medical corporations owned by the Company. As of September 30,
1997 the Company had 44 of such management service contracts in operation.

         During May 1997, the Company incorporated three new wholly owned
subsidiaries. Complete Wellness Research Institute, Inc. (CWRI) and Complete
Wellness Education, Inc. (CWEI), are Delaware corporations; and Complete
Billing, Inc. (CBI), is a Florida corporation. Two of the three companies
started operations in May 1997. CWEI has not yet begun operations. CWRI
provides clinic research and studies to pharmaceutical, vitamin, natural
product and medical device manufactures' within the Company's network of
clinics. CWEI, through its consortium of nationally recognized doctors and
authors, will


                                       6
<PAGE>   9

provide education and wellness articles and periodicals to national
publications and publishers. CBI is a healthcare billing company, which provides
services to medical and chiropractic clinics, both inside the Company's clinic
network and to unaffiliated doctors. Included in the Company's September 30,
1997 consolidated financial statements are the results of operations of these
companies.

         Also, during May 1997 the Company entered into an agreement to become
the majority shareholder of a new company, Complete Wellness Independent
Physicians Association, Inc. (CWIPA), a Delaware corporation. The Company holds
an 86.67% stake in CWIPA, with 13.33% ownership held by the management of CWIPA.
CWIPA plans to build a network of primary, specialty, hospital and ancillary
healthcare providers, including the Company's network of clinics, to attract
managed care contracts, Medicare, Medicaid and federal and state government
contracts and self funded corporation contracts. CWIPA began developing its
provider network in June 1997. It is anticipated that CWIPA will be ready to
enter into contracts to provide access to it's network in 1998. Included in the
Company's September 30, 1997 consolidated financial statements are the results
of operations of this company, with effect given to the 13.33% minority
interest.

         During July 1997 a subsidiary of the Company acquired all of the
operating assets and business of Oxford Health Plan's Smokenders program for
$50,000. The subsidiary, Complete Wellness Smoking Cessation, Inc. (Smokenders)
also agreed to pay Oxford Health Plan a royalty of 5% on gross revenues for a 10
year period. In forming Smokenders the Company contributed $50,000 cash and a
commitment to provide working capital as needed in an amount not to exceed
$198,000 in return for 88.23% of the common stock. Robert J. Mrazek, the CEO of
Smokenders and a director of the Company is to contribute $22,000 in promissory
notes in return for 11.77% of the common stock. The promissory notes from Mr.
Mrazek will accrue interest at 8%. Unpaid interest and principle on the
promissory notes will be payable no later than September 30, 2000. Smokenders
plans to market its smoking cessation behavioral modification program to
corporations, federal and state government agencies and individuals as well as
seek strategic alliances with pharmaceutical companies to develop an adjunct
product for nicotine replacement therapies. Additionally, the Smokenders program
will be offered in the Company's medical clinics. Smokenders started operations
in August 1997. Included in the Company's September 30, 1997 consolidated
financial statements are the results of operations of this company.

         On September 22, 1997, the Company signed a letter of intent with
Nutri/System, L.P. to acquire a national network of 147 weight management
centers and RxPress, Inc. a mail order pharmacy. The acquisition is subject to
signing of a definitive agreement, the completion of due diligence, approval by
both boards, and the Company obtaining necessary financing for the completion of
the acquisition. In anticipation of a definitive agreement, the Company placed a
deposit with Nutri/System, L.P. in the amount of $150,000 and received an
exclusive right to acquire a minimum of seven centers, of the Company's choice,
currently owned by Nutri/System, L.P. for one dollar each in the event this
acquisition is not consummated; otherwise, the deposit will be applied to the
final acquisition.

Results from Operations

Three and Nine Months Ended September 30, 1997 Compared to Three and Nine months
ended September 30, 1996

Revenue. During the three and nine months ended September 30, 1997 the Company
had total revenue of $2,484,366 and $5,289,068, respectively, as compared to
$554,260 and $873,282 for the three and nine months ended September 30, 1996,
respectively. The increase of $1,930,106 for the three month period was due
primarily to the net addition of twenty owned medical clinics and forty four
managed clinics after June 1996. The increase of $4,415,786 for the nine month
period was due to the net addition of twenty owned medical clinics and forty
three managed clinics after September 1996.

Salary and Consulting Costs. During the three and nine months ended September
30, 1997, the Company incurred salary and consulting costs of $873,488 and
$1,975,420, respectively as compared to $128,006 and $249,293 for the three and
nine months ended September 30, 1996, respectively. The increase of $745,482 for
the three month period was due to an increase in the costs resulting from the
hiring of additional employees in the administrative capacity at 


                                       7
<PAGE>   10

the corporate headquarters and the medical capacity at the clinics and salary
costs at the various subsidiaries. The increase of $1,726,127 for the nine month
period was due to commencement of normal salaries for certain executive officers
who served without salary until February of 1997 and the hiring of additional
employees in the administrative capacity at the corporate headquarters and the
medical capacity at the clinics and salary costs at the various subsidiaries.

Management Fees. During the three and nine months ended September 30, 1997, the
Company incurred management fees of $1,329,597 and $2,571,362, respectively, as
compared to $305,900 and $438,948 for the three and nine months ended September
30, 1996, respectively. These are fees that are paid to the affiliated
chiropractors' management companies for managing the day-to-day operations of
the Integrated Medical Centers. The increase of $1,023,697 for the three month
period was due primarily to the net addition of twenty owned medical clinics and
forty four managed clinics after June 1996. The increase of $2,132,414 for the
nine month period was due primarily to the net addition of twenty owned medical
clinics and forty three managed clinics after September 1996.

Rent. During the three and nine months ended September 30, 1997, the Company
incurred rent expense of $45,771 and $156,506, respectively, as compared to
$92,857 and $160,988 for the three and nine months ended September 30, 1996,
respectively. Rent consists of amounts incurred for office space and certain
equipment by the Company at the medical clinics. Rent for space and equipment
for the medical clinics is paid when the accounts receivable of the medical
clinic are collected by the medical clinic. The decrease of $47,086 for the
three month period was due primarily to a change in the contract terms and a
change in the calculation of space and equipment rent. The decrease of $4,482
for the nine month period was primarily due to the effects of contract terms and
rent calculations as mentioned above.

Advertising and Marketing. During the three and nine months ended September 30,
1997, the Company incurred advertising and marketing expenses of $21,314 and
$74,199, respectively, as compared to $26,306 and $36,828 for the three and nine
months ended September 30, 1996, respectively. The decrease of $4,992 for the
three month period was due primarily less aggressive advertising and promotion
in the quarter. The increase of $37,371 for the nine month period was
attributable to additional national advertising for marketing and clinic
recruitment purposes during the first half of 1997.

Bad Debt Expense. During the three and nine months ended September 30, 1997, the
Company incurred bad debt expense of $305,782 and $778,926, respectively, as
compared to $26,608 and $61,608 for the three and nine months ended September
30, 1996, respectively. The Company has adopted a policy of fully reserving all
accounts receivable not collected within 90 days. The increase of $279,174 for
the three month period was due to an increase related to reserves for doubtful
accounts.  The increase of $717,318 for the nine month period was due
to an increase in reserves for doubtful accounts.

General and Administrative. During the three and nine months ended September 30,
1997, the Company incurred general and administrative expenses of $682,280 and
$1,711,561, respectively, as compared to $335,117 and $546,162 for the three and
nine months ended September 30, 1996, respectively. The increase of $347,163 for
the three month period was due primarily to the net addition of twenty owned
medical clinics and forty four managed clinics after June 1996 and consists of
an increase of (i) $7,709 in insurance costs, (ii) $165,786 in professional
fees, (iii) $26,989 in travel and entertainment costs (iv) $100,078 in various
costs such as automobile, telephone, postage and printing and reproduction, and
(v) $122,790 in costs associated with subsidiary operations. The increase of
$1,165,399 for the nine month period was due primarily to the net addition of
twenty owned medical clinics and forty three managed clinics after September
1996 and consists of an increase of (i) $125,633 in insurance costs, (ii)
$293,646 in professional fees, (iii) $103,264 in travel and entertainment costs
(iv) $243,076 in various costs such as automobile, telephone, postage and
printing and reproduction, and (v) $122,790 in costs associated with subsidiary
operations.

Depreciation and Amortization. During the three and nine months ended September
30, 1997, the Company recognized depreciation and amortization expense of
$18,203 and $54,506, respectively, as compared to $10,591 and $24,598 for the
three and nine months ended September 30, 1996, respectively. The increase of
$7,612 for the three month period and $29,908 for the nine month period resulted
from the addition of fixed assets, primarily computer equipment, with
depreciable lives of five years or less.

                                       8
<PAGE>   11


Interest Income. During the three and nine months ended September 30, 1997, the
Company had interest income of $35,229 and $82,599, respectively, as compared to
$4,059 and $4,663 for the three and nine months ended September 30, 1996,
respectively. The increase of $31,170 for the three month period and $77,936 for
the nine month period resulted from the investment of funds as a result of the
Company's Initial Public Offering in a series of short term securities.

Interest Expense. During the three and nine months ended September 30, 1997, the
Company had interest expense of $3,366 and $28,235, respectively, as compared to
$22,312 and $24,229 for the three and nine months ended September 30, 1996,
respectively. The decrease of $18,946 for the three month period resulted from
the retirement of the bridge financing loan repaid in February 1997. The
increase of $4,006 for the nine month period resulted from the bridge financing
loan and amortization of loan discount on that loan.

Liquidity and Capital Resources

         The Company has experienced net losses, negative cash flow from
operations and an accumulated deficit each month since its inception. For the
three and nine months ended September 30, 1997 the Company had incurred net
losses of $769,348 and $1,986,543 respectively, as compared to $394,835 and
$520,950 for the three and nine months ended September 30, 1996, respectively.
At September 30, 1997, the Company had working capital of $1,224,731 and an
accumulated deficit of $3,174,525. Net cash used in operations for the three and
nine months ended September 30, 1997 was $1,011,216 and $2,566,885,
respectively, as compared to $391,222 and $704,652 for the three and nine months
ended September 30, 1996, respectively. Negative cash flow for each period was
attributable to net losses in such periods and increases in accounts receivable
net of accounts payable and other current liabilities. For the three and nine
months ended September 30, 1997, the Company used $163,248 and $332,223,
respectively, as compared to $42,041 and $184,362 for the three and nine months
ended September 30, 1996, respectively, for purchases of equipment.

         On February 24, 1997, the Company successfully completed an initial
public offering of its equity securities. Net proceeds to the Company after
expenses of the Offering were $4,965,000. Of the net proceeds, the Company
repaid approximately $1,100,000 of principal and $24,000 of interest to secured
lenders who participated in a bridge financings in July and August 1996.
Additionally, $121,000 of the proceeds was used to pay accrued salaries.

         The Company intends to develop no fewer than 20 additional medical
clinics by December 31, 1997. The average cost to the Company to develop a
medical clinic is approximately $10,000. The Company is financing its expansion
strategy with a portion of the net proceeds of the offering.

         CWC, LLC experienced negative cash flow for the nine months ended
September 30, 1997 of approximately $80,000. The cash flow shortfall was offset
by advances from the Company for the nine months then ended. Two of the seven
clinics developed under CWC, LLC have closed. At September 30, 1997, CWC, LLC
has negative equity of approximately $327,000 and a deficit in working capital
of approximately $563,331. To the extent that the five remaining medical clinics
do not provide sufficient cash flow to meet the short term needs of CWC, LLC,
the Company, at this time, intends to continue to provide cash advances.

         Under the shareholders agreement for CWIPA, the Company provided
funding for start up costs of approximately $81,000 in the quarter ended
September 30, 1997. A commitment remains for funding of an additional $739,000
through March 31, 1998. The acquisitions and the planned development of the
Smokenders program through the next twelve months is expected to require
additional cash needs of approximately $170,000. The acquisition of the
Nutri/System, L.P. weight management centers and RxPress, Inc. mail order
pharmacy is expected to require the Company to obtain additional financing
arrangements. The Company is currently evaluating various options and sources of
capital to fund these expansion efforts and does not currently anticipate
funding these activities from operations or existing cash resources.

                                       9
<PAGE>   12



                           PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

         None

ITEM 2.  CHANGES IN SECURITIES

         Not applicable

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

         Not applicable

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         Not applicable

ITEM 5.  OTHER INFORMATION

         Not applicable

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         Not applicable

                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.

Date: November 14, 1997               Complete Wellness Centers, Inc.


                                      By:  /s/ E. Eugene Sharer

                                      E. Eugene Sharer - President and
                                           Chief Financial Officer