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Complete Wellness Subsidiary Awarded Contract From Humana Health Plans of Florida Initially Generating Between $19-$22 Million in Annualized Revenues.


Complete Wellness Centers, Inc. Announces Termination of Optimum Health

Services ("OHS") Rights Offering

November 9, 1998 - Complete Wellness Centers, Inc. ("CWC"), the largest nationwide organization of integrated medical centers, announced today that its 86.67% owned subsidiary Optimum Health Services, Inc. ("OHS") has entered into a medical management services agreement, subject to financing, with Humana Health Plans of Florida, Inc., an HMO with more than 120,000 covered lives in Tampa Bay. This agreement entails covered lives that are assigned to providers contracted through the OHS network. Under this agreement, OHS will offer its traditional network of providers to Humana's HMO enrollees in Florida. OHS of Florida, Inc. is an integrated delivery system with over 3,000 such provider locations. OHS develops networks for both traditional and alternative healthcare practitioners.

Jason Patchen, President & CEO of OHS, stated, "We are extremely pleased about partnering with one of the nation's premier healthcare plans to deliver superior healthcare services to their membership. We expect to begin the contract on December 1st managing more than 5,000 Medicare and commercial lives and additional potential Medicaid lives in the future in the Tampa Bay area of Florida. That number is likely to increase significantly over the next several months. Initially, we expect to generate between $19 and $22 million in annualized revenues under this agreement."

Separately, the Company announced that it has modified its plan to spin-off OHS, with a rights offering, to CWC shareholders of record as of May 13, 1998. In connection with that spin-off, the Company has withdrawn the registration statement that was filed with the Securities and Exchange Commission relating to a proposed rights offering of OHS common stock.

On or before November 20th, CWC is, however, proceeding with a spin-off of OHS to OHS management for consideration of its investment of approximately $1 million, in the form of 266,736 OHS common stock purchase warrants exercisable at $0.01 per share through November 2, 2008. The warrants cannot be exercised prior to one year nor in an amount such that the underlying common stock would represent greater than 49% of Optimum. If such warrants were exercisable immediately, CWC would hold a beneficial interest in OHS representing 90.2% of the current issued and outstanding shares. Effective with the spin-off, OHS' operations will be reported by CWC as discontinued operations.

Tom McMillen, Chairman & CEO of CWC, commented, "OHS' partnership with Humana offers potential for great value for our shareholders and providers. We are pleased with this development. As envisioned, OHS and CWC will continue to work closely together. We have an inter- operating agreement in place and CWC will continue to have one seat on OHS' three member Board. This move will minimize CWC's risk going forward as Optimum pursues additional higher risk managed care contracts. But as warrant holders, CWC and its shareholders will still retain the ability to participate in OHS' success through a significant equity stake in Optimum."

Complete Wellness Centers, Inc., a multi-disciplinary physician practice management company, now manages 85 Complete Wellness Medical Centers, all of which provide both traditional and alternative healthcare services. The Company also owns weight-loss centers, which were acquired last year from Nutri/System, L.P. The Company's common stock and warrants trade on the NASDAQ Small Cap market under the symbols, CMWL and CMWLW, respectively.

The Company, from time to time, may discuss forward-looking information. This press release contains forward-looking statements which are estimates by the Company's management. Such statements are subject to various risks and uncertainties that may be beyond the Company's control, and may cause results to differ from management's current expectations and should not be relied upon by the investors in the Company. Prospective investors may contact Michael Brigante, Chief Financial Officer of the Company, to obtain copies of the prospectuses which include certain information about the offerings.
COPYRIGHT 1998 Business Wire
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1998, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Publication:Business Wire
Geographic Code:1USA
Date:Nov 9, 1998
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