<PAGE>   1

================================================================================


                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                 ---------------

                                    FORM 10-Q


[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

                  For the Quarterly Period Ended June 30, 2001

                                       OR

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

For the transition period from _______ to ___________

                          Commission File No. 0 - 26173

                             STUDENT ADVANTAGE, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<S>                                   <C>                                 <C>
          DELAWARE                               8699                           04-3263743
(STATE OR OTHER JURISDICTION OF       (PRIMARY STANDARD INDUSTRIAL           (I.R.S. EMPLOYER
 INCORPORATION OR ORGANIZATION)        CLASSIFICATION CODE NUMBER)        IDENTIFICATION NUMBER)
</TABLE>

                                 ---------------

                                280 SUMMER STREET
                           BOSTON, MASSACHUSETTS 02210
               (Address of Principal Executive Offices) (Zip Code)

                                 (617) 912-2000
              (Registrant's telephone number, including area code)

                                 --------------

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 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 ___.

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: 47,208,745 shares of common
stock as of August 7, 2001.

                                 ---------------


<PAGE>   2


                             STUDENT ADVANTAGE, INC.
                                    FORM 10-Q
                       FOR THE QUARTER ENDED JUNE 30, 2001

                                 ---------------

                                      INDEX

<TABLE>
<CAPTION>
                                                                                                         PAGE(S)
                                                                                                         -------
<S>                                                                                                      <C>
PART I.      FINANCIAL INFORMATION

ITEM 1.      FINANCIAL STATEMENTS

             Consolidated Balance Sheets at June 30, 2001 (Unaudited) and December 31, 2000                 3

             Consolidated Statement of Operations for the three and six months ended June 30, 2001
             and 2000 (Unaudited)                                                                           4

             Consolidated Statement of Cash Flows for the six months ended June 30, 2001 and 2000
             (Unaudited)                                                                                    5

             Notes to Consolidated Financial Statements (Unaudited)                                         6

ITEM 2.      MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS            9

             Factors That May Affect Results of Operations and Financial Condition                         14

ITEM 3.      QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK                                     23

PART II.     OTHER INFORMATION                                                                             23

ITEM 2.      CHANGES IN SECURITIES AND USE OF PROCEEDS                                                     23

ITEM 4.      SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                           23

ITEM 6.      EXHIBITS AND REPORTS ON FORMS 8-K                                                             23

SIGNATURES                                                                                                 24

Exhibit Index                                                                                              25
</TABLE>


                                       2
<PAGE>   3


PART 1. FINANCIAL INFORMATION.

ITEM 1. FINANCIAL STATEMENTS.


                             STUDENT ADVANTAGE, INC.
                           CONSOLIDATED BALANCE SHEETS
                        (IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
                                                                                           JUNE 30,          DECEMBER 31,
                                                                                             2001                2000
                                                                                         -----------         ------------
                                                                                         (unaudited)
<S>                                                                                      <C>                 <C>
                                     ASSETS
Current assets
  Cash and cash equivalents ....................................................          $   8,623           $  12,762
  Accounts receivable (net of reserves of $1,310 and $815 at June 30, 2001,
    and December 31, 2000, respectively) .......................................              7,161               5,982
  Inventory ....................................................................              4,620                  --
  Prepaid advertising ..........................................................              2,233               3,350
  Prepaid expenses and other current assets ....................................              1,921               1,329
                                                                                          ---------           ---------
   Total current assets ........................................................             24,558              23,423
  Property and equipment, net ..................................................             15,434              13,343
  Investment ...................................................................                 --               1,171
  Intangible and other assets, net .............................................             32,910              13,633
                                                                                          ---------           ---------
   Total assets ................................................................          $  72,902           $  51,570
                                                                                          =========           =========
                      LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable ...............................................................          $   3,834           $   3,564
Accrued compensation ...........................................................              3,021               2,840
Borrowings under revolving loan ................................................              5,000                  --
Other accrued expenses .........................................................             12,386               7,541
Deferred revenue ...............................................................              5,107               4,013
Current obligation under capital lease .........................................                771               1,208
                                                                                          ---------           ---------

   Total current liabilities ...................................................             30,119              19,166
                                                                                          ---------           ---------

Warrants payable (Note 5) ......................................................                900                  --
Notes Payable ..................................................................             10,000                  --
Long-term obligation under capital lease .......................................              2,173               1,861
                                                                                          ---------           ---------
     Total long-term obligations ...............................................             13,073               1,861
                                                                                          ---------           ---------
   Total liabilities ...........................................................             43,192              21,027
                                                                                          ---------           ---------

Stockholders' equity
Preferred stock, $0.01 par value, 5,000,000 shares authorized, 0 shares issued
and outstanding Common stock, $0.01 par value; Authorized: 150,000,000 shares;
Issued and Outstanding:
47,206,124 and 39,621,244 at June 30, 2001 and December 31, 2000, respectively                  472                 396
Additional paid-in capital .....................................................            120,277             104,058
Accumulated deficit ............................................................            (90,504)            (73,096)
Notes receivable from stockholders .............................................                (50)                (50)
Deferred compensation ..........................................................               (485)               (765)
                                                                                          ---------           ---------
     Total stockholders' equity ................................................             29,710              30,543
                                                                                          ---------           ---------
     Total liabilities and stockholders' equity ................................          $  72,902           $  51,570
                                                                                          =========           =========
</TABLE>


   The accompanying notes are an integral part of these consolidated financial
                                   statements.


                                       3
<PAGE>   4


                             STUDENT ADVANTAGE, INC.
                      CONSOLIDATED STATEMENT OF OPERATIONS
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                             THREE MONTHS ENDED               SIX MONTHS ENDED
                                                                                  JUNE 30,                        JUNE 30,
                                                                            2001            2000            2001            2000
                                                                         -----------     -----------     -----------     -----------
                                                                         (unaudited)     (unaudited)     (unaudited)     (unaudited)
<S>                                                                      <C>             <C>             <C>             <C>
Revenue
  Student Services ...................................................    $ 10,416        $  7,391        $ 19,454        $ 14,354
  Corporate and University Solutions .................................       3,145           4,172           7,315           8,351
                                                                          --------        --------        --------        --------
     Total revenue ...................................................      13,561          11,563          26,769          22,705

Costs and expenses
  Cost of student services revenue (including stock-based
     compensation of $5 and $8 for the three months ended June
     30, 2001 and 2000, respectively, and $10 and $19 for the
     six months ended June 30, 2001 and 2000, respectively.) .........       2,831           2,724           4,641           5,607
  Cost of corporate and university solutions revenue (including
    stock-based compensation of $5 and $7 for the three months
    ended June 30, 2001 and 2000, respectively, and $10 and $14
    for the six months ended June 30, 2001 and 2000, respectively.)...       1,571           2,177           4,008           4,406
  Product development (including stock-based compensation of
    $23 and $35 for the three months ended June 30, 2001 and
    2000, respectively, and $46 and $1 for the six months
    ended June 30, 2001 and 2000, respectively.) .....................       4,757           4,011          10,580           7,834
  Sales and marketing (including stock-based compensation of
    $79 and $104 for the three months ended June 30, 2001 and
    2000, respectively, and $158 and $214 for the six
    months ended June 30, 2001 and 2000, respectively.) ..............       6,480           4,524          12,529           9,310
  General and administrative (including stock-based
    compensation of $28 and $34 for the three months ended June
    30, 2001 and 2000, respectively, and $56 and $71 for the
    six months ended June 30, 2001 and 2000, respectively.) ..........       2,908           2,646           5,736           4,987
  Depreciation and amortization ......................................       3,628           1,436           6,340           2,443
                                                                          --------        --------        --------        --------

     Total costs and expenses ........................................      22,175          17,518          43,834          34,587
                                                                          --------        --------        --------        --------

Loss from operations .................................................      (8,614)         (5,955)        (17,065)        (11,882)

Equity interest in Edu.com net loss ..................................          --            (944)           (495)         (1,888)
Interest and other income ............................................         222             396             152             869
                                                                          --------        --------        --------        --------
Net loss .............................................................    $ (8,392)       $ (6,503)       $(17,408)       $(12,901)
                                                                          ========        ========        ========        ========

Basic and diluted net loss per share .................................    $  (0.18)       $  (0.18)       $  (0.42)       $  (0.36)
                                                                          ========        ========        ========        ========

Shares used in computing basic and diluted net loss per share ........      45,508          35,980          41,366          35,784
                                                                          ========        ========        ========        ========
</TABLE>


 The accompanying notes are an integral part of these consolidated financial
                                   statements.


                                       4
<PAGE>   5


                             STUDENT ADVANTAGE, INC.
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                                           FOR THE SIX MONTHS
                                                                                                             ENDED JUNE 30,
                                                                                                        2001                2000
                                                                                                     -----------        ----------
                                                                                                     (unaudited)        (unaudited)
<S>                                                                                                  <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss ...................................................................................        $(17,408)          $(12,901)
  Adjustments to reconcile net loss to net cash used in operating activities:
     Depreciation ............................................................................           2,878              1,047
     Amortization of intangible assets .......................................................           3,462              1,396
     Equity Interest in Edu.com net loss .....................................................             495              1,888
     Reserve for allowances and bad debts ....................................................             495                320
     Compensation expense relating to issuance of equity .....................................             280                430
     Exchange of notes receivable for assets sold ............................................            (504)                --
     Amortization of marketing expense associated with common stock warrant ..................             888                444
     Changes in current assets and liabilities, net of effects of acquisitions:
       Accounts and notes receivable .........................................................          (2,430)            (2,756)
       Prepaid expenses, other current assets ................................................             628                682
       Inventory .............................................................................             377                 --
       Accounts payable ......................................................................          (4,485)                67
       Accrued compensation ..................................................................             181                506
       Other accrued expenses ................................................................           2,399              1,892
       Deferred revenue ......................................................................           1,094             (3,575)
                                                                                                      --------           --------
       Net cash used in operating activities .................................................         (11,650)           (10,560)
                                                                                                      ========           ========
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of fixed assets ..................................................................          (1,302)            (1,323)
  Acquisitions of businesses for cash and common stock .......................................          (9,331)            (1,146)
  Purchases of marketable securities .........................................................              --             (8,813)
  Proceeds from sale of marketable securities ................................................              --             20,546
  Purchase of investment .....................................................................              --             (1,001)
                                                                                                      --------           --------
       Net cash provided by (used in) investing activities ...................................         (10,633)             8,263
                                                                                                      ========           ========
CASH FLOWS FROM FINANCING ACTIVITIES:
  Repayment of note from stockholder .........................................................              --                 29
  Proceeds from issuance of common stock .....................................................           9,800                 --
  Proceeds from exercise of common stock options, warrants and employee stock purchase plan...              21                325
  Repayment of capital lease obligations .....................................................            (677)                --
  Proceeds of revolving loan, net ............................................................              11              2,000
  Repayment of note payable ..................................................................          (1,011)                --
  Proceeds of notes payable ..................................................................          10,000                 --
                                                                                                      --------           --------
       Net cash provided by financing activities .............................................          18,144              2,354
                                                                                                      ========           ========
Increase (decrease) in cash ..................................................................          (4,139)                57
Cash and cash equivalents, beginning of period ...............................................          12,762             15,370
                                                                                                      --------           --------
Cash and cash equivalents, end of period .....................................................        $  8,623           $ 15,427
                                                                                                      ========           ========
</TABLE>


   The accompanying notes are an integral part of these consolidated financial
                                  statements.


                                       5
<PAGE>   6


                             STUDENT ADVANTAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE 1 - THE COMPANY

     Student Advantage is a media and commerce connection for college students
and the businesses and universities that serve them. We reach students online
through our network of web sites, including collegeclub.com and
studentadvantage.com, and offline through the Student Advantage Membership, SA
Cash Programs, and OCM Direct (formerly OCM Enterprises, Inc). The Student
Advantage Membership Program is a national fee-based membership program, with a
current community of approximately 1,750,000 student members who receive
benefits including ongoing discounts on products and services currently offered
by 15,000 participating locations. Discounts are made available to students both
through our studentadvantage.com web site and at sponsors' retail locations. OCM
Direct (formerly known as OCM Enterprises, Inc.) is a direct mail marketing
business that provides college and university endorsed products including
residence hall linens and related accessories, care packages, and diploma frames
to students. The SA Cash Program enables students to use their college ID cards
as a method of payment (stored-value card) for off-campus dining, shopping and
other purchasing needs. We also offer business-to-business marketing and events
and promotion services through SA Marketing Group and we offer information
services, internet content and data management services to colleges and
universities. Student Advantage, Inc. was incorporated in the State of Delaware
on October 20, 1998. The Company began operations in 1992 as a sole
proprietorship, converted to a general partnership in 1995, converted to a
limited liability company in 1996 and became a C Corporation in 1998. From
inception through December 1997, our revenue was derived primarily from annual
membership fees. Since that time, we have expanded our product and service
offerings through internal growth as well as acquisitions.

     Certain historical amounts in these financial statements have been restated
to reflect the acquisition of Edu.com, which has been accounted for under the
purchase method of accounting.

     These financial statements should be read in conjunction with the
consolidated financial statements and related footnotes included in our Annual
Report on Form 10-K for the year ended December 31, 2000 (as amended by Form
8-K/A, filed on June 28, 2001).

UNAUDITED INTERIM FINANCIAL INFORMATION

     The unaudited interim consolidated financial statements of Student
Advantage for the three and six months ended June 30, 2001 and 2000,
respectively, included herein have been prepared in accordance with generally
accepted accounting principles for interim financial information and with the
instructions for Form 10-Q under the Securities Exchange Act of 1934, as
amended, and Article 10 of Regulation S-X under the Securities Act of 1933, as
amended. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and regulations
relating to interim financial statements.

     In the opinion of management, the accompanying unaudited interim
consolidated financial statements reflect all adjustments, consisting only of
normal recurring adjustments, necessary to present fairly the financial position
of Student Advantage at June 30, 2001, and the results of its operations and its
cash flows for the three and six months ended June 30, 2001 and 2000,
respectively. The results for the three and six months ended June 30, 2001 are
not necessarily indicative of the expected results for the full fiscal year or
any future period. Certain prior period balances have been reclassified to
conform to the current period presentation.

NOTE 2 - COMPUTATION OF UNAUDITED NET LOSS PER SHARE AND PRO FORMA NET LOSS PER
SHARE (1)-(2)

                      (IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
                                                                  THREE MONTHS ENDED                    SIX MONTHS ENDED
                                                                       JUNE 30,                             JUNE 30,
                                                                2001             2000               2001               2000
                                                             -----------      -----------        -----------        -----------
    BASIC AND DILUTED NET LOSS PER SHARE:                    (UNAUDITED)      (UNAUDITED)        (UNAUDITED)        (UNAUDITED)

<S>                                                          <C>              <C>                <C>                <C>
    Net loss                                                  $(8,392)          $(6,503)          $(17,408)          $(12,901)
                                                              =======           =======           ========           ========

    Basic and diluted weighted average common shares           45,508            35,980             41,366             35,784
                                                              =======           =======           ========           ========
       outstanding  (3)-(4)

    Basic and diluted net loss per share                      $ (0.18)          $ (0.18)          $  (0.42)          $  (0.36)
                                                              =======           =======           ========           ========
</TABLE>

(1)  The financial statements for the three and six month periods ending June
     30, 2000 have been restated to reflect the acquisition of


                                       6
<PAGE>   7


     Edu.com, which was accounted for using the purchase method of accounting.

(2)  Net loss per share is computed under SFAS No. 128, "Earnings Per Share".
     Basic net loss per share is computed using the weighted average number of
     shares. Diluted loss per share does not differ from basic loss per share
     since potential common shares from exercise of stock options and warrants
     are anti-dilutive for all periods presented.

(3)  All outstanding options and warrants to purchase common stock (totaling
     12,408,918 and 5,747,529 at June 30, 2001 and 2000, respectively) were
     excluded from the calculation of diluted earnings per share for all periods
     presented because their inclusion would have been anti-dilutive.

(4)  As of June 30, 2001, Student Advantage had reserved 9,550,000 shares of its
     common stock for the exercise of various warrants with exercise prices
     ranging from $0.01 to $10.87.

NOTE 3 - RECENT ACCOUNTING PRONOUNCEMENTS

     In October 2000, the Emerging Issues Task Force (EITF) issued No. 00-14,
"Accounting for Certain Sales Incentives." This Issue addresses the recognition,
measurement, and income statement classification for sales incentives offered
voluntarily by a vendor without charge to customers that can be used in, or that
are exercisable by a customer as a result of, a single exchange transaction. The
EITF also issued No. 99-19, "Reporting Gross as a Principal versus Net as an
Agent." The issue addresses whether a company should report revenue based on (a)
the gross amount billed to a customer because it has earned revenue from the
sale of the goods or services or (b) the net amount retained (that is, the
amount billed to the customer less the amount paid to a supplier) because it has
earned a commission or fee. Both were effective in connection with the
implementation of Staff Accounting Bulletin 101. The application of this
bulletin has not had a material impact on Student Advantage's financial
positions or results of operations.

     In October 2000, the EITF issued 00-16, "Recognition and Measurement of
Employer Payroll Taxes on Employee Stock-Based Compensation". The issue
addresses when a liability for employee payroll taxes on employee stock
compensation should be recognized, which is on the date of the event triggering
the measurement and payment of the tax to the taxing authority (for a
nonqualified option in the United States, generally the exercise date). The
application of this issue has not had a material impact on Student Advantage's
financial position or results of operations.

     In February 2001, the EITF issued 00-19, "Determination of Whether Share
Settlement Is within the Control of the Issuer for Purposes of Applying Issue
No. 96-13". The issue addresses the accounting for contracts that are indexed
to, and potentially settled in, a company's own stock. The issue was effective
for all new contracts and contract modifications entered into after September
20, 2000. For contracts that exist on September 20, 2000, the issue should be
applied on June 30, 2001, to those contracts that remain outstanding at that
date. The application of this issue has not had a material impact on Student
Advantage's financial position or results of operations.

     In July 2001, the FASB issued SFAS No. 141, Business Combinations. SFAS No.
141, which requires all business combinations to be accounted for using the
purchase method, is effective for all business combinations initiated after June
30, 2001.

     In July 2001, the FASB issued SFAS No. 142, Goodwill and Other Intangible
Assets. This statement applies to goodwill and intangible assets acquired after
June 30, 2001, as well as to goodwill and intangible assets previously acquired.
Under this statement, goodwill and other certain intangible assets deemed to
have an infinite life will no longer be amortized. Instead, these assets will be
reviewed for impairment on a periodic basis, which may result in a non-cash
charge to earnings. This statement is effective for the Company on July 1, 2001
with respect to any acquisitions completed after June 30, 2001, and on January
1, 2002 for all other goodwill and intangible assets. Management is currently
evaluating the impact that this statement will have on the Company's financial
statements.

NOTE 4 - RELATED PARTY TRANSACTIONS

     Effective May 15, 2000, Student Advantage entered into an Affiliate and
E-Commerce Agreement with Princeton Review Publishing, LLC, and The Princeton
Review Management, LLC ("TPR"). Princeton Review Publishing, LLC is a
stockholder of Student Advantage and one of its officers and equity holders is a
member of the Company's Board of Directors. Under the agreement, TPR agreed to
pay the Company a fee to participate in the Student Advantage network by placing
the Student Advantage logo and content on The Princeton Review's review.com web
site. In addition, under the agreement, TPR will provide discounts as part of
the Student Advantage Membership Program and market the discount to high school,
college and university students. Additionally, under the


                                       7
<PAGE>   8


agreement the Company will pay TPR a fee in exchange for exclusive advertising
sales responsibilities for the review.com web site. The Company recorded revenue
of $592,500 and expense of $662,500 related to this agreement during the six
months ended June 30, 2001. Effective April 1, 2001, Student Advantage amended
and restructured its agreement with TPR. The amendment called for the
termination of the original Affiliate and E-Commerce Agreement effective March
31, 2001. In conjunction with the amendment, the parties also entered into a
Co-Marketing and Membership Agreement expiring on December 31, 2001. Under this
agreement TPR will pay the Company a fee to be the premier test partner on the
Company's collegeclub.com web site. The Company will pay TPR a fee to promote
Student Advantage and the Student Advantage Membership Program on its review.com
web site. In addition, TPR will provide discounts as part of the Student
Advantage, Membership Program and market the discount to high school, college,
and university students. Furthermore, the parties agreed to integrate content
onto each other's respective web sites.

NOTE 5 - OTHER EVENTS

     On May 1, 2001, Student Advantage issued 5 million shares of common stock
to five investors, for an aggregate purchase price of $10.0 million. We also
issued to these investors warrants to purchase an additional 2.3 million shares
of common stock, including warrants to purchase 1.5 million shares of common
stock with an exercise price of $3.00 per share and warrants to purchase 800,000
shares of common stock with an exercise price of $3.50 per share. The warrants
to purchase 800,000 shares with an exercise price of $3.50 per share are subject
to certain exercise price adjustments on certain dates based upon
volume-weighted average sales prices. An adjustment described in the preceding
sentence to the exercise price of the warrants shall not result in an adjustment
to the number of shares of common stock issuable upon exercise of the warrants.

     On May 10, 2001, Student Advantage acquired certain assets of Edu.com, a
privately held e-commerce company specializing in sales of consumer electronics,
hardware and software to students. In connection with the acquisition, we issued
90,000 shares of Student Advantage common stock and warrants to purchase 450,000
shares of common stock, half of which have an exercise price of $2.28 and half
of which have and exercise price of $3.42 and assumed certain liabilities of
Edu.com. In addition, we canceled a $1.0 million secured promissory note
previously issued to us by Edu.com in exchange for the assets securing the note.
Edu.com is entitled to additional warrants to purchase up to 1,000,000 shares of
common stock if certain financial goals are met by the end of the year. This
consideration and Student Advantage's previous investment in Edu.com has been
accounted for under the purchase method of accounting. The resulting treatment
of the additional investment be in accordance with Accounting Principles
Bulletin: The Equity Method for Accounting for Investments in Common Stock ("APB
18"), which requires the application of step accounting in accordance with
Accounting Research Bulletin 51: Consolidated Financial Statements Elimination
of Intercompany Investment ("ARB 51"). Accordingly, Student Advantage has
retroactively restated its investment in Edu.com on the equity method of
accounting and recorded its ownership percentage of Edu.com's net loss for the
years ended December 31, 1999 and 2000. As a result of applying the equity
method in Edu.com, a portion of the cost of the Company's investment has been
allocated to the equity in the net assets of Edu.com, amounting to approximately
$1,064,000, $174,000, and $495,000 for the transactions occurring in 1999, 2000
and 2001 respectively. The difference between the cost of the investment and
underlying equity in net assets has been allocated to goodwill. The goodwill is
being amortized over two years.

     On June 25, 2001, Student Advantage entered into an Agreement and Plan of
Merger (the "Agreement"), by and among the Company, Orion Acquisition Corp., a
wholly-owned subsidiary of the Company ("Orion"), OCM Enterprises, Inc. ("OCM")
and Devin A. Schain, Michael S. Schoen, Howard S. Dumhart, Jr., Paul D. Bogart
and Steven L. Matejka (the "OCM Stockholders"). Pursuant to the Agreement, OCM
was merged with and into Orion, which survived the merger and changed its name
to OCM Direct, Inc. ("OCM Direct"). The aggregate consideration paid by the
Company to the OCM Stockholders in connection with the acquisition of OCM
Enterprises was (i) $8.0 million in cash paid at the closing, (ii) 2,433,333
shares of the Company's common stock, issued at the closing, (iii) shares of
common stock to be issued not later than June 25, 2002 with a value of $1.25
million at the time of issuance based on the average of the last reported sales
prices per share of common stock over the ten trading days ending on the trading
day that is three days prior to the date of issuance, provided that the number
of shares will not be less than 208,333 or greater than 1,250,000, and (iv) in
the event that OCM Direct attains certain revenue performance goals described in
the Agreement after the closing, up to $1.5 million payable at the Company's
option in either shares of common stock or a combination of shares of common
stock and cash, with the shares of common stock valued at the time of issuance
based on the average of the last reported sales prices per share over the ten
trading days ending on the trading day that is three days prior to the date of
issuance or $1.00, whichever is greater, subject to adjustment under certain
circumstances described in the Agreement. Under certain circumstances, the
Company agreed to register with the Securities and Exchange Commission the
shares of common stock issued in connection with the acquisition of OCM
Enterprises for resale by the OCM Stockholders. We accounted for the acquisition
of OCM Direct under purchase method of accounting, and the results of operations
have been included in Student Advantage's results of operations beginning on the
acquisition date. Goodwill and other intangible assets were recorded in
connection with the acquisition of OCM Direct using best estimates for the fair
value. We intend to complete an appraisal of the goodwill and other intangibles
in the near term, and expect to adjust the valuation of these assets based on
the results of the appraisal.

     On June 25, 2001, Student Advantage entered into a Loan Agreement (the
"Loan Agreement") by and among the Company, the subsidiaries of the Company and
Reservoir Capital Partners, L.P., Reservoir Capital Associates, L.P. and
Reservoir Capital Master Fund, L.P. (collectively the "Lenders") providing for
the establishment of credit facility in the aggregate principal amount of up to


                                       8
<PAGE>   9


$15,000,000, consisting of a $10,000,000 term loan and a $5,000,000 revolving
loan. The Company borrowed $10,000,000 in the form of a term loan (the "Term
Loan") and $5,000,000 in the form of a revolving loan (the "Revolving Loan"),
and used substantially all of these proceeds to pay the cash portion of the
purchase price for the acquisition and existing debt of OCM Direct (formerly OCM
Enterprises), Inc. The remainder of the proceeds from the credit facility will
be used for working capital and general corporate purposes of the Company. The
credit facility matures in June 2004. The Lenders may call the credit facility
by giving notice to the Company prior to an anniversary date of the closing
date, in which case the obligations thereunder must be paid by the 120th day
after such anniversary date (provided that if the amounts are paid after the
90th day, additional fees are chargeable by the Lenders). In addition, the
credit facility requires mandatory prepayments in connection with certain asset
sales and equity issuances by the Company or its subsidiaries. The credit
facility is secured by a lien against substantially all of the assets of the
Company, and is guaranteed by all of the Company's subsidiaries (including OCM
Direct), which guarantees are also secured. Interest accrues under the credit
facility at 12% per annum, and interest on the term loan portion is capitalized
unless, under certain circumstances, the Lenders elect to have the Company pay
such interest, in which case, the Company may choose to pay the accrued interest
in cash or in common stock (provided that the option to pay such amount in
common stock will only be available if, after issuance of such shares of common
stock, the shares would be the subject of an effective registration statement or
could be immediately resold by the Lenders). If the common stock option is
selected, the number of shares of common stock deliverable will be determined by
dividing the amount of interest being paid by 80% of the volume weighted average
price as of the applicable term loan interest payment date. The Company will
assess the impact of beneficial conversion features if the common stock option
is selected. The credit facility also requires that the Company and its
subsidiaries comply with certain affirmative, negative and financial covenants,
which are more specifically described in the Loan Agreement.

     In connection with the transaction contemplated by the Loan Agreement,
Student Advantage entered into a Warrant Agreement, dated June 25, 2001, by and
among the Company and the Lenders (the "Warrant Agreement"), under which the
Company issued to the Lenders warrants to purchase a number of shares of common
stock based on the outstanding balance of the Term Loan and Revolving Loan. In
accordance with the Warrant Agreement, the Company issued to the Lenders (i)
warrants to purchase an aggregate of 500,000 shares of common stock, which are
exercisable immediately, (ii) warrants to purchase an aggregate of 500,000
shares of common stock, which become exercisable if the entire balance of the
Term Loan is outstanding on June 25, 2002 (or a pro rata portion of the 500,000
shares if only a portion of the Term Loan is then outstanding), and (iii)
warrants to purchase an aggregate of 500,000 shares of common stock, which
become exercisable if the entire balance of the Term Loan is outstanding on June
25, 2003 (or a pro rata portion of the 500,000 shares if only a portion of the
Term Loan is then outstanding) (collectively, the "Term Warrants"). The number
of shares subject to the Term Warrants is subject to adjustment under certain
circumstances in accordance with the terms of the Term Warrants. The Company
also issued to the Lenders warrants (the "Revolving Warrants") to purchase a
number of shares of common stock based on the outstanding balance of the
Revolving Loan. The number of shares subject to the Revolving Warrants is
initially zero and increases by an aggregate of 20,833 shares for each full
month that the entire Revolving Loan is outstanding (or a pro rata portion of
the 20,833 shares for each shorter time period or lesser outstanding balance).
The Company also agreed to issue one or more default warrants (the "Default
Warrants" and, collectively with the Term Warrants and the Revolving Warrants,
the "Warrants") to purchase shares of common stock in the event that the Company
receives a notice of an event of default under the Loan Agreement. The number of
shares subject to the Default Warrants shall initially equal the outstanding
balance of the Term Loan and Revolving Loan including capitalized interest and
accrued interest at such time divided by $1,000, and shall increase by
one-thirtieth of such amount (or pro rata portion of such amount if the balance
is reduced after the issuance of the Default Warrant) for each day that the
event of default continues. The exercise price applicable to all of the Warrants
is $.01 per share. The number of shares issuable upon exercise of the Warrants
is subject to adjustment in accordance with the terms of the Warrant Agreement
in the event that the Company issues certain additional securities at a price
per share equal to less than ninety percent of the average trading price of the
common stock over the 20 trading days preceding the date of issuance. The
Warrant Agreement also requires that the Company register with the Securities
and Exchange Commission the shares of common stock issuable upon exercise of the
Warrants or issued in respect of accrued interest for resale by the Lenders
within ninety days after the closing and use commercially reasonable efforts to
cause the registration statement to be declared effective as soon as
practicable. Under the terms of the Warrant Agreement, following payment or
acceleration of the Term Loan, reduction or termination of the revolving loan
commitment or issuance of the Default Warrants, the holders of the Warrants
shall have the right to require the Company to purchase all or a portion of the
Term Warrants, Revolving Warrants and Default Warrants, as the case may be, at a
price per share of $2.50 plus, from and after June 25, 2002, interest at a rate
equal to 27% per annum through the date of payment.

     The Company valued the warrants issued under the Warrant Agreement, using
the Black-Scholes model, at $900,000. This amount has been recorded as a
deferred financing cost included in other assets in the accompanying balance
sheet and will be recognized as interest expense over the term of the debt. In
accordance with EITF 00-19, Accounting for Derivative Financial Instruments
Indexed to, and Potentially Settled in, a Company's Own Stock, the Company will
continue to mark the value of these warrants to market at each reporting period.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.

     Student Advantage has included in this filing certain "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995 concerning Student Advantage's business, operations and financial
condition. The words or phrases "can be", "expects", "may affect", "may depend",
"believes", "estimate", "project", and similar words and phrases are intended to
identify such forward-looking statements. Such forward-looking statements are
subject to various known and unknown risks and uncertainties and Student
Advantage cautions you that any forward-looking information provided by or on
behalf of Student Advantage is not a guarantee of future performance. Actual
results could differ materially from those anticipated in such forward-


                                       9
<PAGE>   10


looking statements due to a number of factors, some of which are beyond Student
Advantage's control, in addition to those discussed in Student Advantage's other
public filings, press releases and statements by Student Advantage's management,
including those set forth below under "Factors That May Affect Future Results".
All such forward-looking statements are current only as of the date on which
such statements were made. Student Advantage does not undertake any obligation
to publicly update any forward-looking statement to reflect events or
circumstances after the date on which any such statement is made or to reflect
the occurrence of unanticipated events.

OVERVIEW

     Student Advantage is a media and commerce connection for college students
and the businesses and universities that serve them, primarily through our
leading membership program and network of web sites. We report our revenue in
two categories: student services revenue and corporate and university solutions
revenue.

     Student services revenue is attributable to the parts of our business which
are focused primarily on providing goods and services to students. Student
services revenue includes commerce, subscription and advertising revenue.
Commerce revenue includes primarily transaction-based revenues earned for
reselling products and services and acquiring student customers on behalf of
other businesses. To date, commerce revenue has included primarily revenue that
we receive from the resale of Eurail passes, fees from SA Cash transactions,
sales of residence hall linens and related accessories, care packages and
diploma frames through direct mail marketing, and e-commerce revenue from our
network of web sites. Subscription revenue is derived from membership sales.
Subscription revenue is recognized ratably from the date of subscription to the
end of the annual membership period, which ends on August 31 of each year.
Memberships are distributed in several ways. We distribute memberships at no
cost to certain qualified students. Of the memberships sold, historically almost
all have been sold to AT&T and distributed in conjunction with an AT&T calling
card. The membership cards associated with these membership sales are co-branded
and serve as both a Student Advantage membership identification card and an AT&T
calling card. We earn a fee from AT&T for these memberships. In June 2000, we
restructured our agreements with AT&T, and as of June 30, 2001, AT&T had no
further obligation to purchase memberships. For the 2000/2001 academic year,
AT&T purchased 900,000 memberships. During 2000 and the first half of 2001, AT&T
accounted for approximately 87% and 60% of subscription revenue, respectively.
We also sell memberships to certain of our corporate partners for resale to
students at their retail locations. In addition, we sell memberships directly to
students for a membership fee that is currently $20 per year plus a $2.50
shipping and handling fee. Advertising revenue consists primarily of fees for
banner advertisements and sponsorships on our network of web sites.

     Corporate and university solutions revenue is attributable to the parts of
our business which are focused primarily on providing goods and services to
corporations and universities. It includes marketing services and commerce
revenue. Marketing services revenue is derived primarily from providing tailored
marketing services to businesses seeking to market their products and services
to college students. These services include organizing and executing marketing
tours that travel to college campuses, staffing tables in college locations on
behalf of businesses and providing media planning and placement. Commerce
revenue includes primarily transaction-based revenues earned in connection with
acquiring customers on behalf of our corporate clients.

     We began operations in 1992 as a sole proprietorship, converted to a
general partnership in 1995, converted to a limited liability company in 1996
and became a C Corporation in 1998. From inception through December 1997, our
revenue was derived primarily from annual membership fees. Since that time, we
have expanded our product and service offerings through internal growth as well
as acquisitions.

     We recorded deferred compensation of $4.2 million in the year ended
December 31, 1998 and $228,000 in the first quarter of 1999, representing the
difference between the exercise price of stock options granted and the fair
market value of the underlying common stock at the date of grant. The difference
is recorded as a reduction of stockholders' equity and is being amortized over
the vesting period of the applicable stock options, typically four years. Of the
total deferred compensation amount, $771,000 and $280,000 had been amortized
during 2000 and the first half of 2001, respectively. During 2000, we reduced
the amount of deferred compensation by approximately $677,000 as a result of
cancellation of certain stock options due to the termination of certain
employees' employment with Student Advantage. The amortization of deferred
compensation is recorded as an operating expense. We currently expect to
amortize the following remaining amounts of deferred compensation as of June 30,
2001 in the periods indicated:

<TABLE>
<S>                                                         <C>
     July 1, 2001-- December 31, 2001 ............          $281,000
     January 1, 2002-- December 31, 2002..........          $202,000
     January 1, 2003-- December 31, 2003..........          $  2,000
</TABLE>


                                       10
<PAGE>   11


RESULTS OF OPERATIONS

     The financial statements for the interim period ended June 30, 2000 reflect
a change in the classification of revenue categories and the associated cost of
sales. The classifications have been changed from "Subscription" and "Other" to
"Student Services" and "Corporate and University Solutions." In addition, the
financial statements for these periods reflect a change in the presentation of
stock based compensation charges. The charges have been included in each of the
operating expense line items rather than as a separate line item. Prior year
amounts have been restated to be consistent with the current year presentation.
Certain historical amounts in these financial statements have been restated to
reflect the acquisition of Edu.com, which has been accounted for under the
purchase method of accounting.


     Comparison of Quarter Ended June 30, 2001 with Quarter Ended June 30, 2000

     Revenue. Total revenues increased to $13.6 million for the second quarter
of 2001 from $11.6 million for the second quarter of 2000, due to an increase in
student services revenues of $3.0 million which was offset in part by a decrease
in corporate and university solutions revenue of $1.0 million.

     Student Services Revenue. Student services revenue increased to $10.4
million in the second quarter of 2001 from $7.4 million in the second quarter of
2000. The increase in student services revenue was primarily due to an increase
in online advertising on our network of web sites. Online advertising increased
primarily as a result of increased advertising from CollegeClub, which we
acquired in the fourth quarter of 2000, and online campaigns provided to General
Motors Corp. Transaction-based commerce revenues also contributed to the
increase. These increases were offset, in part, by significant decreases in fees
from AT&T for acquisitions of calling card customers and for membership fees as
a result of the restructuring of the AT&T agreements in June 2000. We do not
expect to earn any fees for the acquisition of AT&T calling card customers in
future periods or any membership fees beyond August 31, 2001.

     Corporate and University Solutions Revenue. Corporate and university
solutions revenue decreased to $3.1 million in the second quarter of 2001 from
$4.2 million in the second quarter of 2000. Decreases in marketing services
revenues resulted from decreased marketing spending by several current and
potential customers. This decrease is attributed to overall slow-down in the
economy and more specifically, the advertising and marketing industry. Revenues
related to our Voice FX business decreased as a result of decreased volume in
mailings by our customers, which has a direct effect on the volume of
transactions.

     AT&T accounted for approximately 7% and 31% of total revenue in the second
quarter of 2001 and the second quarter of 2000, respectively. Additionally, AT&T
accounted for approximately 6% and 47% of student services revenue and 13% and
4% of corporate and university solutions revenue in the second quarter of 2001
and the second quarter of 2000, respectively. Revenue from AT&T in the second
quarter of 2001 decreased on both an absolute dollar value basis over revenue in
the second quarter of 2000, and on a percentage of revenue basis over revenue in
the second quarter of 2000. We expect that revenue from AT&T will continue to
decline in both absolute terms and as a percentage of total revenue in future
periods. General Motors accounted for 24% of total revenue and 31% of student
services revenue in the second quarter of 2001. One other customer, Capital One,
accounted for approximately 6% and 20% of total revenue, 0% and 3% of student
services revenue, and 28% and 51% of corporate and university solutions revenue
in the second quarter of 2001 and the second quarter of 2000, respectively.

     Cost of Student Services Revenue. Cost of student services revenue consists
of the costs associated with commerce, subscriptions, and advertising revenue.
Commerce costs include costs of goods sold owed to third parties in connection
with selling their products and personnel-related costs. Cost of subscription
revenue consists of the costs associated with the fulfillment of membership
subscriptions and customer service. Advertising costs consist primarily of
production and mailing costs for Student Advantage Magazine (SAM), royalties
paid to colleges for the use of organizational names and logos and for supplying
sports activity content for our network of web sites and fees paid to partners
in exchange for the right to place media inventory on such partners' web sites.
Cost of student services revenue increased to $2.8 million in the second quarter
of 2001 from $2.7 million in the second quarter of 2000. This increase was
primarily due to the increase in costs related to the restructured AT&T
agreement, and the cost of goods sold through the direct mail business. The
increases were partially offset by the lower costs incurred for the production
of SAM, of which no issues were published in the second quarter of 2001.

     Cost of Corporate and University Solutions Revenue. Cost of corporate and
university solutions revenue consists of the costs of marketing services and
commerce. Marketing services costs include the direct and indirect costs
associated with planning and implementing events and promotions, media placement
and other marketing services. Commerce costs include costs incurred primarily in
connection with acquiring customers on behalf of our corporate clients. Cost of
corporate and university solutions revenue decreased to $1.6 million in
the second quarter of 2001 from $2.2 million in the second quarter of 2000,
consistent with the decreases in revenues of both marketing services and the
Voice FX business.


                                       11
<PAGE>   12


     Product Development. Product development expenses consist primarily of
personnel-related and consulting costs associated with the development and
enhancement of our suite of products which includes the Student Advantage
Membership Program, our network of web sites and the SA Cash Program. Product
development expenses increased to $4.8 million in the second quarter of 2001
from $4.0 million in the second quarter of 2000. The increase is primarily due
to costs incurred in connection with the acquisition of CollegeClub in the
fourth quarter of 2000, the enhancement of our membership program and the
development of new product offerings.

     Sales and Marketing. Sales and marketing expenses consist primarily of
personnel and other costs related to our sales and marketing programs. Sales and
marketing expenses increased to $6.5 million in the second quarter of 2001 from
$4.5 million in the second quarter of 2000. The increase in sales and marketing
was due, in large part, to a non-cash expense for television advertising
relating to CollegeClub. In connection with the Lycos, Inc. marketing agreement
entered into in the third quarter of 1999, we recorded a warrant valued at $2.2
million which has been fully expensed to date, of which $666,000 was amortized
to sales and marketing expense in the second quarter of 2001 and $222,000 in the
second quarter of 2000.

     General and Administrative. General and administrative expenses consist
primarily of costs related to general corporate functions, including executive
management, finance, human resources, facilities, accounting and legal. General
and administrative expenses increased to $2.9 million in the second quarter of
2001 from $2.6 million in the second quarter of 2000. The increase in general
and administrative expenses is primarily due to higher facilities, legal,
accounting and personnel related costs related to the acquisitions  of
CollegeClub in the fourth quarter of 2000, and Edu.com and OCM Direct in the
second quarter of 2001.

     Depreciation and Amortization. Depreciation expense increased to $1.5
million in the second quarter of 2001 from $576,000 in the second quarter of
2000 primarily as a result of $8.8 million in fixed assets acquired as a result
of our acquisition of CollegeClub in the fourth quarter of 2000, and, to a
lesser extent, fixed asset purchases during the latter half of 2000 and the
first half of 2001. Amortization expense increased to $2.1 million in the second
quarter of 2001 from $860,000 in the second quarter of 2000, primarily as a
result of the acquisitions of ScholarAid, College411, substantially all of the
assets of eStudentLoan, and CollegeClub in 2000, and certain assets of Edu.com
and OCM Direct (formerly OCM Enterprises) in the second quarter of 2001.

     Interest and Other Income. Interest and other income includes interest
income from cash balances, interest expense related to Student Advantage's
financing obligations, and gain on sale of certain assets. Interest and other
income decreased to $222,000 in the second quarter of 2001 from $396,000 in the
second quarter of 2000. The decrease is a result of interest income earned on
lower average cash and cash equivalents balances during the second quarter of
2001 compared to that of the second quarter of 2000, as well as interest expense
resulting from the assumption of certain capital leases of ScholarAid and
CollegeClub in 2000, and debt related to the Purchase of OCM Direct (formerly
OCM Enterprises). These decreases were offset in part by gains on sales of
certain assets.

     Comparison of Six Months Ended June 30, 2001 with Six Months Ended June 30,
2000

     Revenue. Total revenues increased to $26.8 million for the first six months
of 2001 from $22.7 million for the first six months of 2000 due to an increase
in student services revenue of $5.1 million which was offset in part by a
decrease in corporate and university solutions revenue of $1.0 million. The
increase in student services revenue is primarily due to an increase in online
advertising on our network of web sites. Online advertising increased primarily
due to our acquisition of CollegeClub in the fourth quarter of 2000. The
decrease in corporate and university solutions revenue is primarily due to a
decrease in marketing services revenue resulted from decreased marketing
spending by several current and potential customers.

     Student Services Revenue. Student services revenue increased to $19.5
million in the first six months of 2001 from $14.4 million in the first six
months of 2000. The increase in student services revenue was primarily due to an
increase in online advertising on our network of web sites. Online advertising
increased primarily as a result of increased advertising from CollegeClub, which
we acquired in the fourth quarter of 2000, and online campaigns provided to
General Motors Corp. Transaction-based commerce revenues also contributed to the
increase. These increases were offset, in part, by significant decreases in fees
from AT&T for acquisitions of calling card customers and for membership fees as
a result of the restructuring of the AT&T agreements in June 2000. We do not
expect to earn any fees for the acquisition of AT&T calling card customers in
future periods or any membership fees beyond August 31, 2001.

     Corporate and University Solutions Revenue. Corporate and university
solutions revenue decreased to $7.3 million in the first six months of 2001 from
$8.4 million in the first six months of 2000. Decreases in marketing services
revenues resulted from decreased marketing spending by several current and
potential customers. This decrease is attributed to overall slow-down in the
economy and more specifically, the advertising and marketing industry. Revenues
related to our Voice FX business decreased as a result of decreased volume in
mailings by our customers, which has a direct effect on the volume of
transactions.

     AT&T accounted for approximately 13% and 35% of total revenue in the first
six months of 2001 and the first six months of 2000, respectively. Additionally,
AT&T accounted for approximately 11% and 52% of student services revenue and 20%
and 6% of corporate and university solutions revenue in the first half of 2001
and the first half of 2000, respectively. General Motors Corp. accounted for 23%
of total revenue and 31% of student services revenue for the first six months of
2001. One other customer, Capital One, accounted for approximately 18% of total
revenue and 20% of student services revenue for the first six months of 2001.

     Cost of Student Services Revenue. Cost of student services revenue
decreased to $4.6 million in the first six months of 2001 from $5.6 million in
the first six months of 2000. This decrease is primarily due to the lower costs
associated with revenues generated by CollegeClub and the elimination of the
costs related to Student Advantage Magazine (SAM).

     Cost of Corporate and University Solutions Revenue. Cost of corporate and
university solutions revenue decreased to $4.0 million in the first six months
of 2001 from $4.4 million in the first six months of 2000. This decrease is
primarily due to the decrease in costs consistent with the decrease in marketing
services and revenues from the Voice FX business.


                                       12
<PAGE>   13

     Product Development. Product development expenses increased to $10.6
million in the first six months of 2001 from $7.8 million in the first six
months of 2000. The increase is primarily due to costs incurred in connection
with the enhancement of our network of web sites, the development of our
customer database, development of new product offerings such as SA Cash and our
purchases of substantially all of the assets of eStudentLoan and CollegeClub
during 2000 and certain assets of Edu.com in the second quarter of 2001.

     Sales and Marketing. Sales and marketing expenses increased to $12.5
million in the first six months of 2001 from $9.3 million in the first six
months of 2000. The increase in sales and marketing expenses was due, in large
part, to increased expenditures related to the expansion of our sales force,
expanding and servicing our corporate and university base of partners, building
brand awareness, and supporting the marketing services business. In connection
with the Lycos, Inc. marketing agreement entered into in the third quarter of
1999, we recorded a warrant valued at $2.2 million. Of this amount, $888,000 and
$444,000 was amortized to sales and marketing expense in the first six months of
2001 and 2001, respectively.

     General and Administrative. General and administrative expenses increased
to $5.7 million in the first six months of 2001 from $5.0 million in the first
six months of 2000. Increases in general and administrative expenses are
primarily due to higher facilities, legal, accounting and personnel related
costs, as a result of the purchase of substantially all of the assets of
eStudentLoan and CollegeClub during 2000 and certain assets of Edu.com and OCM
Direct (formerly OCM Enterprises) in the second quarter of 2001.

     Depreciation and Amortization. Depreciation expense increased to $2.9
million in the first six months of 2001 from $1.0 million in the first six
months of 2000 primarily as a result of fixed asset purchases during the latter
part of 2000 and the first six months of 2001. Amortization expense increased to
$3.4 million in the first six months of 2001 from $1.4 million in the first six
months of 2000, primarily as a result of the acquisitions of ScholarAid,
College411, substantially all of the assets of eStudentLoan, and CollegeClub in
2000, and certain assets of Edu.com and OCM Direct (formerly OCM Enterprises)
in the second quarter of 2001.

     Interest and Other Income. Interest decreased to $152,000 in the first six
months of 2001 from $869,000 in the first six months of 2000. The decrease is a
result of interest income earned on higher average cash and cash equivalents
balances during the first six months of 2000 compared to that of the first six
months of 2001, as well as the assumption of certain capital leases of
Scholaraid and CollegeClub during 2000, and debt related to the purchase of OCM
Direct (formerly OCM Enterprises Inc.). Borrowings under a revolving loan were
$5.0 million at June 30, 2001 and $2.0 million under a line of credit at June
30, 2000. These decreases were offset in part by gains on sales of certain
assets.

LIQUIDITY AND CAPITAL RESOURCES

     Student Advantage has financed its operations primarily through the private
and public placement of securities, cash from operations, borrowings under its
credit facilities and loans from equity holders. In October 1998, Student
Advantage completed a private placement of equity securities to new investors
and received $9.9 million in net proceeds. In June 1999, Student Advantage
completed its initial public offering selling 6.0 million shares and raising
$44.6 million, net of offering costs. On July 21, 1999, an additional 900,000
shares were issued by Student Advantage as a result of the full exercise of the
underwriters' over-allotment option, resulting in additional net proceeds of
$6.7 million. In October 2000, Student Advantage completed a private placement
of equity securities to investors and received $10.0 million in gross proceeds.
Also in October 2000, we completed our acquisition of substantially all of the
assets of CollegeClub and certain of its subsidiaries and paid $8.3 million in
cash, assumed certain liabilities and issued approximately 1.3 million shares of
our common stock in connection with the acquisition.

     On May 1, 2001 Student Advantage completed a private placement of equity
securities to new and existing investors and received $10.0 million in gross
proceeds.

     On June 25, 2001, Student Advantage entered into a Loan Agreement by and
among Student Advantage, the subsidiaries of Student Advantage, and Reservoir
Capital Partners, L.P., Reservoir Capital Associates, L.P. and Reservoir Capital
Master Fund, L.P. (collectively the, "Lenders") providing for the establishment
of credit facility in the aggregate principal amount of up to $15,000,000,
consisting of a $10,000,000 Term Loan and a $5,000,000 revolving loan. On June
25, 2001, Student Advantage borrowed $10,000,000 in the form of a Term Loan and
$5,000,000 in the form of a Revolving Loan, and used a portion of these proceeds
to pay the cash portion of the purchase price for the acquisition of OCM
Enterprises (now known as OCM Direct). The remainder of the proceeds from the
credit facility, which aggregated approximately $549,000, will be used for
working capital and general corporate purposes of the Company. The credit
facility matures in June 2004, provided that the Lenders may call the credit
facility by giving notice to Student Advantage prior to an anniversary date of
the closing date, in which case the obligations thereunder must be paid by the
120th day after such anniversary date (provided that if the amounts are paid
after the 90th day, additional fees are chargeable by the Lenders). In addition,
the credit facility requires mandatory prepayments in connection with certain
asset sales and equity issuances by Student Advantage or its subsidiaries. The
credit facility is secured by a lien against substantially all of the assets of
Student Advantage, and is guaranteed by all Student Advantage subsidiaries
(including OCM Direct), which guarantees are also secured.


                                       13
<PAGE>   14


     As of June 30, 2001, Student Advantage had $8.6 million in cash and cash
equivalents.

     Net cash used in operating activities was $11.7 million for the first six
months of 2001 and $10.6 million for the first half of 2000. The net cash used
in the first six months of 2001 was primarily a result of a net loss of $17.4
million, offset by depreciation and amortization of $6.3 million.

     Net cash used in investing activities was $10.6 million for the first six
months of 2001 resulted from the purchase of fixed assets. Net cash provided by
investing activities in the first six months of 2000 was $8.3 million. The net
cash used by investing activities was due to $9.3 million related to the
acquisition of OCM Direct (formerly OCM Enterprises) and Edu.com and $1.3
million of capital expenditures.

     Net cash provided by financing activities in the first six months of 2001
of $18.1 million was primarily related to the sale of 5 million shares of common
stock in a private placement, and the net proceeds from a debt financing
consisting of a Term Loan of $10 million and a Revolving Loan of $5 million,
which was used to replace an existing line of credit used by OCM Enterprises
prior to the acquisition.

     Student Advantage has experienced substantial increases in its expenditures
consistent with growth in operations and staffing, and anticipates that this
will continue for the foreseeable future. Additionally, Student Advantage will
continue to evaluate possible investments in businesses, products and
technologies and plans to expand its web infrastructure, direct mail business,
sales and marketing programs and aggressively promote its brands. While Student
Advantage expects to continue to incur negative cash flows into the third
quarter of fiscal 2001, the Company currently anticipates that its available
cash resources, together with cash expected to be provided from operations, will
be sufficient to meet its anticipated needs for working capital and capital
expenditures for at least the next 12 months. Projections for 2001 include
significant growth in revenues. If revenue projections do not materialize as
anticipated, the Company may be required to obtain additional financing. If
additional financing is not obtained then management will take appropriate
action to manage cash resources that would include the implementation of cost
reduction measures. Management estimates that these cost reductions would
provide the necessary funding for operations at such reduced revenue levels. In
addition, any significant acquisitions by us may require additional equity or
debt financing to fund the purchase price, if paid in cash, as well as approval
by certain debt and equity holders. There can be no assurance that additional
funding will be available when required or that it will be available on terms
acceptable to us.

FACTORS THAT MAY AFFECT FUTURE RESULTS

WE HAVE EXPERIENCED LOSSES IN THE PAST AND EXPECT FUTURE LOSSES

We have not achieved profitability and have incurred significant operating
losses. We incurred net losses of $24.9 million in 2000 and $17.4 million in the
first half of 2001. As of June 30, 2001, our accumulated deficit was $90.5
million. We expect to continue to incur significant operating and capital
expenditures and, as a result, we will need to generate significant revenue to
achieve and maintain profitability.

We cannot assure you that we will achieve sufficient revenue for profitability.
Even if we do achieve profitability, we cannot assure you that we can sustain or
increase profitability on a quarterly or annual basis in the future. If revenue
grows more slowly than we anticipate, or if operating expenses exceed our
expectations or cannot be adjusted accordingly, our business, results of
operations and financial condition will be materially and adversely affected.

WE HAVE A LIMITED OPERATING HISTORY AND MAY FACE DIFFICULTIES ENCOUNTERED BY
EARLY STAGE COMPANIES IMPLEMENTING AN ONLINE AND OFFLINE STRATEGY

We have a limited operating history on which an investor can evaluate our
business. Our operations began in 1992. An investor in our common stock must
consider the risks and difficulties frequently encountered by early stage
companies implementing an online and offline strategy. These risks include,
without limitation, our possible inability to:

-    sustain historical revenue growth rates,

-    generate sufficient revenue to achieve and maintain profitability,

-    implement our business model,

-    maintain the satisfaction of our members and users, and our university and
     corporate partners,


                                       14
<PAGE>   15


-    introduce new and enhanced web and offline products, content, and services,
     and

-    respond to competitive developments.

If we do not successfully manage these risks, our business, results of
operations and financial condition will be materially adversely affected. We
cannot assure you that we will successfully address these risks or that our
business strategy will be successful.

OUR ABILITY TO GENERATE SIGNIFICANT REVENUES AND PROFITS FROM CERTAIN
ESTABLISHED AND NEW PRODUCTS AND SERVICES IS UNCERTAIN

Our business model depends in part on increasing the amount of revenues and
profits derived from certain established and new products and services. Our
ability to generate significant revenues and profits from these products and
services will depend, in part, on the implementation of our strategy to generate
significant transaction commerce and user traffic through the use of our
membership card programs, to achieve a significant presence in university and
college communities, and to develop and expand on sponsor relationships to
include revenue sharing agreements based on transaction volume. There is intense
competition among offerors of alternative payment methods, including
stored-value cards, debit card and credit cards, and among web sites that sell
online advertising.

During the second quarter of 2001, AT&T completed their obligation to purchase
Student Advantage memberships in bulk and other services under the agreement,
which expires on June 30, 2003. In prior years, the majority of student members
have opted for the AT&T or other corporate partner's promotional offer to
Student Advantage. These promotional offers have included a free one-year
membership to Student Advantage. Our corporate partners have purchased Student
Advantage memberships in bulk to fulfill these promotional offers.

We have focused our efforts to change the marketing model for the sale of
memberships from a primarily bulk sale model to a more balanced model which
includes the sale of memberships to both corporate partners in bulk and to
individuals. We expect to sell memberships under this new model through our
corporate partners, the Student Advantage network of websites, our direct mail
marketing business and other related marketing channels. We anticipate a
decrease in the overall number of memberships sold through bulk sale
arrangements to be partially offset by an increase in number of individual
memberships sold. We expect the overall revenue from membership sales to
increase as a result of the higher price point of the individual membership
versus a bulk sale membership. The inability to successfully develop this
marketing model or the related sales channels could have a materially adverse
effect on the business. It is difficult for us to project future levels of
subscription, transaction related, and advertising revenues and profits.

TO EXPAND OUR BUSINESS, WE MAY NEED ADDITIONAL CAPITAL, AND THE FUTURE FUNDING
OF THESE CAPITAL NEEDS IS UNCERTAIN

We require substantial working capital to fund our business. We may require
additional financing if capital requirements vary materially from those
currently planned.

Additional funds raised through the issuance of equity securities may have the
following negative effects on the then current common stockholders:

-    dilution in percentage of ownership in Student Advantage, and

-    the rights, preferences or privileges of the new security holders may be
     senior to those of the common stockholders.

Additional financing may not be available when needed on terms favorable to us
or at all. Our failure to raise additional funds, if needed, or secure an
additional credit facility may result in our inability to:

-    develop or enhance our services,

-    take advantage of future opportunities, or

-    respond to competitive pressures.

In addition, significant acquisitions by us will require additional equity or
debt financing to fund the purchase price, if paid in cash. There can be no
assurance that additional funding will be available when required or that it
will be available on terms acceptable to us.

WE HAVE TAKEN ON A MATERIAL AMOUNT OF INDEBTEDNESS

We incurred material indebtedness in connection with the acquisition of OCM
Direct (formerly OCM Enterprises) under the terms of the loan agreement we
entered into with Reservoir Capital Partners, Reservoir Capital Associates, and
Reservoir Capital Master Fund. As of June 30, 2001, we had $15 million of
indebtedness. The terms of the loan agreement permit us to incur additional
indebtedness, subject to certain limitations. We will be required to make
periodic interest payments over a three year period, at which time the total
outstanding principle balance will become due and payable. In addition to the
repayment terms, we will be required to meet certain financial and non-financial
covenants.


                                       15
<PAGE>   16


Our debt may have important consequences to us, including but not limited to the
following:

-   our ability to obtain additional financing for future acquisitions (if any),
    working capital, capital expenditures or other purposes may be impaired or
    any such financing may not be on terms favorable to us;

-   a substantial decrease in net operating cash flows or increase in expenses
    could make it difficult for us to meet our debt service requirements or
    force us to modify our operations or sell assets; and

-   our debt structure may place us at a competitive disadvantage and affect our
    ability to adjust rapidly to market conditions or may make us vulnerable to
    a downturn in our business or the economy generally or changing market
    conditions and regulations.

Our ability to repay or to refinance our obligations with respect to our
indebtedness will depend on our future financial and operating performance,
which, in turn, may be subject to prevailing economic and competitive conditions
and to certain financial, economic, and other factors, many of which are beyond
our control. Our ability to meet our debt service and other obligations may
depend in significant part on the extent to which we can implement successfully
our business and growth strategy. There can be no assurance that we will be able
to successfully implement our strategy or that the anticipated results of our
strategy will be realized.

A LIMITED NUMBER OF CUSTOMERS REPRESENT A SIGNIFICANT PERCENTAGE OF OUR REVENUE

A limited number of customers currently account for a significant percentage of
our total revenues. In 2000, two customers, in the aggregate, accounted for
approximately 50% of total revenues. In the first half of 2001, three customers,
in the aggregate, accounted for approximately 25% of total revenue. We expect a
limited number of customers to continue to account for a significant percentage
of total revenues in the future and we believe that we must continue to acquire
additional customers to be successful. The loss of any one of these customers,
or a material decrease in the services provided to these customers could have a
materially adverse effect on our business.

While we anticipate that revenues from this limited number of customers will
decline as a percentage of total revenues, we expect that a limited number of
customers will continue to represent a significant percentage of our total
revenues.

OUR OPERATING RESULTS DEPEND ON OUR ABILITY TO MAINTAIN AND INCREASE BUSINESS
ALLIANCES AND UNIVERSITY RELATIONSHIPS

We are dependent upon our sponsors, both national and local, to provide our
members and SA Cash participants with discounts on their products and services.
We are also dependent on maintaining college and university relationships to
market and sell our products and services. Our ability to maintain these
alliances and relationships and to develop new alliances and relationships is
critical to our ability to maintain our members, direct mail customers, and our
SA Cash university partners. A failure to acquire or maintain alliances and
relationships with colleges and universities could have a material adverse
effect on our business. In addition, our agreements with a number of our
sponsors preclude us from entering into similar arrangements with their
competitors. This restriction may prevent us in some cases from offering
attractive additional discounts to our members.

COLLEGES AND UNIVERSITIES ARE INCREASINGLY RELUCTANT TO PERMIT BUSINESSES TO
MARKET PRODUCTS AND SERVICES ON CAMPUS

Colleges and universities are becoming increasingly wary of businesses that
market products and services to their students. Many colleges and universities
are seeking to decrease or eliminate such marketing. In particular, colleges and
universities are concerned that many students have incurred substantial levels
of credit card debt. As a result, colleges and universities often attempt to
prevent credit card companies and other companies that offer credit from
marketing to their students. In the past, we have been mistaken for a credit
card company because we give students a plastic card and a unique identification
number to represent their membership, and because we participate in the issuance
by universities of a stored-value card used in conjunction with student ID cards
(SA Cash). This sometimes makes it difficult for us to gain access to college
and university students, and we have been denied access to certain college and
university campuses. To date, we have not maintained sufficient data to
determine the specific number of colleges and universities that have denied us
access to their campuses. Any inability to directly contact students on campus
or through direct mail could have a material adverse effect on our business.

OUR BUSINESS IS SUBJECT TO SEASONAL FLUCTUATIONS, WHICH MAY AFFECT OUR REVENUES
AND OPERATING RESULTS

We tend to sell most of our memberships in the beginning of the fall and winter
academic terms. All of these memberships expire on August 31 of each year.
Because the aggregate number of memberships within a school year increases as
new members are added, we recognize revenue from memberships ratably over the
period from the time of subscription until the end of our membership year, our
subscription revenue will typically be higher in the first and second quarters
than in the fourth quarter of each fiscal year. It is difficult


                                       16
<PAGE>   17


to determine how the third quarter will typically compare, since it includes two
calendar months from the end of a membership year and the first month of the
subsequent membership year. In addition, a significant portion of the direct
mail business revenues occurs during the summer months. The revenue on these
sales is generally recognized when the products are shipped to our customers.
Our limited operating history and rapid growth make it difficult for us to more
fully assess the impact of seasonal factors on our business.

OUR QUARTERLY REVENUES AND OPERATING RESULTS ARE NOT INDICATIVE OF FUTURE
PERFORMANCE AND ARE DIFFICULT TO FORECAST

In addition to the seasonal fluctuations described above, our revenues and
operating results may vary from quarter to quarter for a variety of other
reasons, such as the timing of revenues from corporate sponsors or non-recurring
revenues or charges.

You should not rely on quarter-to-quarter comparisons of our operating results
or our operating results for any particular quarter as indicative of our future
performance. It is possible that in some future periods our operating results
may be below the expectations of public market analysts and investors. In this
event, the price of our common stock might fall. A significant portion of our
revenue is derived from our membership and direct mail business. A significant
percentage of our members graduate each year and, therefore, do not renew their
memberships, furthermore, substantially all of our memberships expire annually
and require our members to re-new the membership subscription. Our revenue
growth is highly dependent upon our ability to market the value of our
membership to college students and to retain members on a yearly basis. To date,
we have not maintained sufficient data to determine the specific number of
members who renew on a yearly basis. A failure to acquire new members or renew
current members could have a material adverse effect on our business. Through
our direct mail business, a dispropertionate share of our revenue is recorded
in the second and third quarter of each calendar year as a result of the timing
of our mailings and customer demand.

GENERAL MARKET CONDITIONS COULD ADVERSELY AFFECT OUR BUSINESS

Our customers may cancel or delay spending on marketing initiatives because of
the current economic climate. Recently, many companies have experienced
financial difficulties or uncertainty, and have begun to delay spending on
marketing as a result. Furthermore, the financial difficulties that many
companies have experienced have further reduced the perceived urgency by
companies to begin or to continue marketing initiatives. A decrease in marketing
initiatives may result in a decrease of the demand for our services. If
companies continue to delay their marketing initiatives because of the current
economic climate, or for other reasons, our business, financial condition and
results of operations could be materially adversely affected.

WE MAY NOT SUCCESSFULLY IMPLEMENT OUR INTERNET STRATEGY

In order to successfully implement our Internet strategy, we must:

-    establish our network of web sites as the primary vehicle for delivery of
     our internet products and services, including member registration and
     renewal, information regarding national and local sponsors, and customer
     service,

-    expand our network of web sites to include more content and services for
     students and encourage our members to use the sites so that they become
     more attractive for advertisers, and

-    establish our network of web sites as an effective e-commerce platform.

In addition, with respect to collegeclub.com, we rely mostly on our users to
generate content that is attractive and pertinent to develop and maintain the
web site. A decline in engaging member-generated content could make
collegeclub.com and our other web sites less attractive.

Moreover, the current market conditions have decreased the demand for online
advertising, have put downward pressure on the cost per thousand impressions
("CPM") which we can charge for such advertising and have increased the
likelihood that despite our best efforts and written agreements supporting such
efforts that certain of our customers may be unable to pay for such advertising
received by them. Finally, we cannot guarantee that Internet users will maintain
interest in our network of web sites. A decline in membership or usage of our
network of web sites would decrease revenue. Our failure to successfully
implement our Internet strategy could have a material adverse effect on our
business.

WE FACE SIGNIFICANT COMPETITION, WHICH COULD ADVERSELY AFFECT OUR BUSINESS

The market for online users and advertisers on the Internet is rapidly evolving.
Competition for members, visitors, sponsors and merchants is intense and is
expected to increase over time. Barriers to entry are relatively low. We compete
for visitors, traffic, sponsors and online merchants with web directories,
search engines, content sites, online service providers and traditional media
companies. We also face competition from other companies maintaining web sites
dedicated to college students as well as high-traffic


                                       17
<PAGE>   18


web sites sponsored by companies such as AOL Time Warner, CBS, Disney,
Excite@Home, Terra Lycos, Microsoft, MTV and Yahoo!

We also compete with other companies targeting the student population, such as:

-    publishers and distributors of traditional offline media, particularly
     those targeting college students, such as campus newspapers, other print
     media, television and radio;

-    providers of payment platforms such as stored-value cards and credit cards,
     including Visa and Mastercard; and

-    vendors of college student information, merchandise, products and services
     distributed through online and offline means, including retail stores,
     direct mail and schools.

Increased competition from these and other sources could require us to respond
to competitive pressures by establishing pricing, marketing and other programs
or seeking out additional strategic alliances or acquisitions that may be less
favorable to us than we could otherwise establish or obtain.

Many of our competitors have longer operating histories, greater name
recognition, larger customer bases and significantly greater financial,
technical and marketing resources than we do. In addition, substantially all of
our current advertising customers have established collaborative relationships
with other high-traffic web sites. Our advertising customers might conclude that
other internet businesses, such as search engines, commercial online services
and sites that offer professional editorial content are more effective sites for
advertising than we are. Moreover, we may be unable to maintain either the level
of traffic on our web sites or a stable membership base, which would make our
sites less attractive than those of our competitors.

We believe that our ability to compete depends upon many factors, including the
following:

-    the market acceptance of our web sites and online services,

-    the success of our brand building and sales and marketing efforts,

-    the performance, price and reliability of services developed by us or our
     competitors,

-    the effectiveness of our customer service efforts,

-    user affinity and loyalty,

-    demographic focus,

-    critical mass of users,

-    the ability of our competitors to maintain or establish cooperative
     relationships among themselves or with strategically aligned third parties,
     and

-    the emergence of new competitors.

We believe that the principal competitive factors in attracting and retaining
sponsors and advertisers are:

-    the amount of traffic on a web site,

-    brand recognition,

-    the demographics of a site's users,

-    the ability to offer targeted audiences,

-    the average duration of user visits, and

-    cost-effectiveness.



                                       18
<PAGE>   19
OUR MEMBERSHIP PROGRAM EXPERIENCES SIGNIFICANT COMPETITION FROM OTHER MARKETING
ACTIVITIES

We compete for client marketing budget dollars with other marketing activities
and, in particular, other forms of direct marketing activities, such as direct
mail. In recent years, there have been significant advances in new forms of
direct marketing, such as the development of interactive shopping and data
collection through television, the Internet and other media. Many industry
experts predict that electronic interactive commerce, such as shopping and
information exchange through the Internet, will proliferate significantly in the
foreseeable future. To the extent such proliferation occurs, it could have a
material adverse effect on the demand for membership programs.

WE MAY BE UNABLE TO MAKE ATTRACTIVE ACQUISITIONS OR INTEGRATE ACQUIRED COMPANIES

As part of our business strategy, we plan to continue to acquire or make
investments in complementary businesses, products, services or technologies to
increase our online traffic and obtain new technologies. However, we cannot
assure you that we will be able to identify suitable acquisition or investment
candidates. Even if we do identify suitable candidates, we cannot assure you
that we will be able to make such acquisitions or investments on commercially
acceptable terms. If we buy a business, we could have difficulty in assimilating
that company's personnel, operations, products, services or technologies into
our operations. These difficulties could disrupt our ongoing business, distract
our management and employees, increase our expenses and adversely affect our
results of operations.

We have acquired several businesses. Recently we acquired certain assets of
Edu.com and we acquired OCM Direct, Inc. (formerly known as OCM Enterprises,
Inc.). Achieving the anticipated benefits of these acquisitions will depend in
part upon whether the integration of these businesses is accomplished in an
efficient, effective and timely manner. In some cases, the difficulty associated
with integrating these businesses may be increased by the necessity of
coordinating geographically separated organizations. There can be no assurance
that the anticipated benefits of these acquisitions will be achieved.

WE MAY BE UNABLE TO SUCCESSFULLY MANAGE CHANGES IN OUR BUSINESS

We have experienced a period of significant growth. This growth has placed
significant demands on our management and strains on our resources. Revenue has
increased from approximately $1.8 million in 1996 to $48.0 million in 2000 and
to $26.8 in the first half of 2001, as compared to $22.7 million in the first
half of 2000. During that same time period, we increased from fewer than 50 to
nearly 500 employees.

Our ability to manage changes in our business will depend on our ability to
continue to enhance our operating, financial and management information systems.
We cannot assure you that our personnel, systems and controls will be adequate
to support our growth, if any. If we are unable to manage change effectively,
maintain the quality of our products and services and retain key personnel, our
operating results and financial condition could be significantly affected.

OUR MANAGEMENT TEAM HAS LIMITED EXPERIENCE IN RUNNING A PUBLIC COMPANY

Our management team has had limited significant experience in a leadership role
in a public company. We cannot assure you that the management team as currently
configured will be able to continue to successfully lead a public company. The
failure of the management team to continue to adequately handle this challenge
could have a material adverse effect on our business.

WE MUST ATTRACT AND RETAIN KEY MANAGEMENT AND OTHER HIGHLY-QUALIFIED PERSONNEL
IN A COMPETITIVE LABOR MARKET

Our success depends largely upon the continued service of our executive
officers, including Raymond V. Sozzi, Jr., our president and chief executive
officer, and other key management and technical personnel, and our ability to
continue to attract, retain and motivate other qualified personnel. Competition
for such personnel is intense. We have experienced, and we expect to continue to
experience in the future, difficulty in hiring highly skilled employees with the
appropriate qualifications. Furthermore our business is labor intensive. If our
ability to assemble a qualified work force were impaired, or if we do not
succeed in attracting new personnel or retaining and motivating our current
personnel, our business could be adversely affected.

OUR SYSTEMS MAY FAIL OR EXPERIENCE A SLOWDOWN

Substantially all of our communications hardware and certain of our other
computer hardware operations are located at third-party locations such as Exodus
Communications, Inc. in Waltham, Massachusetts and Navisite in San Jose,
California. Fire, floods, earthquakes, power loss, telecommunications failures,
break-ins and similar events could damage these systems. Computer viruses,
electronic break-ins or other similar disruptive problems could also adversely
affect our web site. Our business could be adversely affected if our systems
were affected by any of these occurrences. Our insurance policies may not
adequately compensate us for any losses that may occur due to any failures or
interruptions in our systems. We do not presently have any secondary "off-site"
systems or


                                       19
<PAGE>   20


a formal disaster recovery plan, however we are developing a formal disaster
recovery program that we expect to complete in the fourth quarter of 2001.

Our network of web sites must accommodate a high volume of traffic and deliver
frequently updated information. Our web sites have in the past and may in the
future experience slower response times or decreased traffic for a variety of
reasons. These types of occurrences could cause users to perceive our web sites
as not functioning properly and therefore cause them to use another web site or
other methods to obtain information.

In addition, our users depend on Internet service providers, online service
providers and other web site operators for access to our network of web sites.
Many of them have experienced significant outages in the past, and could
experience outages, delays and other difficulties due to system failures
unrelated to our systems.

OUR ABILITY TO EXECUTE ON OUR SUPPLY CHAIN MANAGEMENT PLAN IN OUR DIRECT
MARKETING BUSINESS IS DEPENDENT UPON A LIMITED NUMBER OF SUPPLIERS THAT MAY BE
SUBJECT TO INTERNATIONAL SHIPPING OR TRADE LIMITATIONS.

Our direct marketing business requires reasonably accurate execution of our
supply chain management plan. We are dependent on third parties to supply us
with products for resale to our customers. These third party suppliers may be
subject to international shipping or trade limitations, which may impact the
timing of the delivery and/or cost of these products. If we are unable to
successfully procure accurate quantities of goods from our suppliers on a timely
basis, we may not be able to fulfill the orders of our customers. Furthermore,
if customer demand does not materialize based on our projections, it may result
in excess inventory of certain products. Either of these circumstances may have
a materially adverse effect on our business.

OUR NETWORKS MAY BE VULNERABLE TO UNAUTHORIZED ACCESS, COMPUTER VIRUSES AND
OTHER DISRUPTIVE PROBLEMS

A party who is able to circumvent our security measures could misappropriate
proprietary information or cause interruptions in our operations. Internet and
online service providers have in the past experienced, and may in the future
experience, interruptions in service as a result of the accidental or
intentional actions of Internet users, current and former employees or others.
Moreover, any well-publicized compromise of security could deter people from
using the Internet or from using it to conduct transactions that involve
transmitting confidential information. We may be required to expend significant
capital or other resources to protect against the threat of security breaches or
to alleviate problems caused by such breaches. Although we intend to continue to
implement industry-standard security measures, there can be no assurance that
the measures we implement will not be circumvented in the future. Eliminating
computer viruses and alleviating other security problems may require
interruptions, delays or cessation of service to users accessing web pages that
deliver our content and services, any of which could harm our business, our
financial condition and the results of our operations.

WE ARE DEPENDENT ON THIRD PARTIES FOR SOFTWARE, SYSTEMS AND RELATED SERVICES

We are dependent on various third parties for software, systems and related
services. For example, a third party provides warehousing, distribution,
fulfillment, mail and data processing services for us. As a result, our ability
to deliver various services to our users may be adversely affected by the
failure of these third parties to provide reliable software, systems and related
services to us.

We have in the past and may in the future experience slower response times or
delays in the processing of applications for students and the delivery of
membership identification cards to our members. Many of these delays have been
caused by third parties upon which we rely for fulfillment services. If we are
unsuccessful in providing our members with membership identification cards or
delivering products and services on a timely basis, our business may be
adversely affected.

WE MAY BE SUED FOR INFORMATION RETRIEVED FROM THE INTERNET

We may be subjected to claims for defamation, invasion of privacy, negligence,
copyright or trademark infringement, personal injury or other legal theories
relating to the information we publish on our network of web sites or in our
publications or the use of our academic search engine in the form of web
crawling or framing. These types of claims have been brought, sometimes
successfully, against online services as well as other print publications in the
past, particularly in connection with archive services. Our syndication of
content, including U-Wire content, to such archive services could expose the
Company to indemnification claims in the event copyright holders assert their
rights. We could also be subjected to claims based upon the content that is
accessible from our network of web sites through links to other web sites or
through content and materials that may be posted by members in chat rooms or
bulletin boards including those located on the collegeclub.com web site. Our
insurance may not adequately protect us against these types of claims.

WE MAY LOSE MEMBERS AND OUR REPUTATION MAY SUFFER BECAUSE OF UNSOLICITED BULK
E-MAIL OR SPAM


                                       20
<PAGE>   21


Unsolicited bulk e-mail, or spam (including the dissemination of pornographic
links), and our attempts and others' attempts to control such spam could harm
our business and our reputation, particularly with respect to collegeclub.com.
To the extent our spam-blocking efforts are not effective, our systems may
become unavailable or may suffer from reduced performance. Spam-blocking efforts
by others may also result in others blocking our members' legitimate messages.
Additionally, our reputation may be harmed if e-mail addresses with our domain
names are used in this manner. Any of these events may cause members to become
dissatisfied and discontinue their use of our network of web sites, including
collegeclub.com.

CONSUMER PROTECTION PRIVACY CONCERNS AND REGULATIONS COULD IMPAIR OUR ABILITY TO
OBTAIN AND USE INFORMATION ABOUT OUR USERS AND MAY SUBJECT US TO LITIGATION.

Our network of web sites captures information regarding our members and users in
order to provide information to them, enable them to access the services offered
on our web sites, tailor content to them or assist advertisers in targeting
their advertising campaigns to particular demographic groups. However, privacy
concerns may cause users to resist providing the personal data necessary to
support this tailoring capability. Even the perception of security and privacy
concerns, whether or not valid, may indirectly inhibit market acceptance of our
network of web sites.

Our network of web sites currently uses cookies to track demographic information
and user preferences. A cookie is information keyed to a specific server, file
pathway or directory location that is stored on a user's hard drive, possibly
without the user's knowledge, but is generally removable by the user. Germany
has imposed laws limiting the use of cookies, and a number of internet
commentators, advocates and governmental bodies in the United States and other
countries have urged the passage of laws limiting or abolishing the use of
cookies. If these laws are passed, our business, financial condition and results
of operations could be materially harmed.

Legislative or regulatory requirements may heighten privacy concerns if
businesses must notify Internet users that the data may be used by marketing
entities to direct product promotion and advertising to the user. The Federal
Trade Commission and state agencies have been investigating various Internet
companies regarding their use of personal information. In 1998, the United
States Congress enacted the Children's On-line Privacy Protection Act of 1998.
In addition, the Gramm-Leach-Bliley Act ("GLB"), which governs privacy issues
related to financial institutions, went into effect on July 1, 2001. If the
Company's programs are determined to be of a nature covered by the GLB, we may
be required to undertake certain notices to our members and users and/or modify
the membership program and other services. We depend upon collecting personal
information from our customers and the regulations promulgated under this act
have made it more difficult for us to collect personal information from some of
our customers. If third parties are able to penetrate our network security or
otherwise misappropriate our users' personal information, we could be subject to
liability. We could also be liable for claims based on unauthorized purchases
with credit card information, impersonation or other similar fraud claims. We
could also be held responsible for disclosing personal information or images,
such as our disclosing such information for unauthorized marketing purposes or
for including it in our photo gallery and web cam section on collegeclub.com.
These claims could result in litigation. In addition, we could incur additional
expenses if new regulations regarding the use of personal information are
introduced or if our privacy practices are investigated. Other countries and
political entities, such as the European Economic Community, have adopted such
legislation or regulatory requirements. If consumer privacy concerns are not
adequately addressed, our business, financial condition and results of
operations could be materially harmed. We may also be subject to additional
state and Federal banking regulations (Federal Reserve) in connection with the
introduction of some of our new products such as SA Cash or eStudentLoan.

Although we carry general liability insurance, this insurance may not be
available to cover a particular claim or may be insufficient. Additionally, our
user community on collegeclub.com exists in part because of our members'
willingness to provide information about themselves. If claims, litigation,
regulation or the acts of third parties reduce our members' willingness to share
this information or our ability to use it, the attractiveness of the web site
will decline, which would reduce our ability to generate revenue through the
affected web site.

WE MAY BE SUBJECT TO LITIGATION WHICH COULD HAVE A MATERIAL ADVERSE EFFECT UPON
OUR BUSINESS

Our industry has been the subject of substantial amounts of litigation regarding
intellectual property and contractual rights. Consequently, there can be no
assurance that third parties will not allege claims against us with respect to
current or future trademarks, advertising or marketing strategies, our
syndication of content to third parties offering archived database service,
business processes or other proprietary rights, or that we will counterclaim
against any such parties in such actions. Any such claims or counterclaims could
be time-consuming, result in costly litigation, diversion of management's
attention, require us to redesign our products or advertising/marketing
strategies or require us to enter into royalty or licensing agreements, any of
which could have a material adverse effect upon our business, results of
operations and financial condition. Such royalty or licensing agreements, if
required, may not be available on terms acceptable to us or at all.

WE MAY BE UNABLE TO RESPOND TO THE RAPID TECHNOLOGICAL CHANGE IN OUR INDUSTRY


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Our market is characterized by rapidly changing technologies, frequent new
product and service introductions and evolving industry standards. The recent
growth of the Internet and intense competition in our industry exacerbates these
market characteristics. To achieve our goals, we need to integrate effectively
the various software programs and tools required to enhance and improve our
product offerings and manage our business. Our future success will depend on our
ability to adapt to rapidly changing technologies by continually improving the
performance features and reliability of our products and services. We may
experience difficulties that could delay or prevent the successful development,
introduction or marketing of new products and services. In addition, our new
enhancements must meet the requirements of our current and prospective members
and must achieve significant market acceptance. We could also incur substantial
costs if we need to modify our service or infrastructures to adapt to these
changes or comply with new regulations.

OUR INTELLECTUAL PROPERTY RIGHTS MAY BE VIOLATED OR SUBJECT TO LITIGATION AND WE
MAY INFRINGE THE INTELLECTUAL PROPERTY RIGHTS OF OTHERS

We believe that protection of our patents, copyrights, service marks,
trademarks, trade secrets, proprietary technology and similar intellectual
property is important to the success of some of our services. We rely on the
following mechanisms to protect such intellectual property:

-    patent, trademark and copyright law,

-    trade secret protection, and

-    confidentiality agreements with employees, customers, independent
     contractors, sponsors and others.

Despite our best efforts, we cannot assure you that our intellectual property
rights will not be infringed, violated or legally imitated. Failure to protect
our intellectual property could have a material adverse effect on our business.
We have been, and may be, sued or named as a defendant in the future for
infringement of the trademark and other intellectual property rights of third
parties. Any such proceedings or claims could have a material adverse effect on
our business, financial condition and results of operations.

CERTAIN CURRENT STOCKHOLDERS OWN A LARGE PERCENTAGE OF OUR VOTING STOCK

As of August 8, 2001, our executive officers, directors and affiliated entities,
together own approximately 48% of our outstanding common stock. Therefore, these
stockholders are able to significantly influence all matters requiring
stockholder approval and, thereby, our management and affairs. Matters that
typically require stockholder approval include:

-    election of directors,

-    merger or consolidation, and

-    sale of substantially all of our assets.

This concentration of ownership may delay, deter or prevent acts that would
result in a change of control, which in turn could reduce the market price of
our common stock.

OUR STOCK PRICE COULD BE EXTREMELY VOLATILE AND MAY RESULT IN LITIGATION AGAINST
US

The stock market has experienced significant price and volume fluctuations, and
our market price has been in the past and could continue to be volatile. In the
past, following periods of volatility in the market price of a company's
securities, securities class action litigation has often been instituted.
Litigation could result in substantial costs and a diversion of management's
attention and resources.

OUR CHARTER DOCUMENTS MAY INHIBIT A TAKEOVER

Provisions in our charter and bylaws may have the effect of delaying or
preventing a change of control or changes in our management that a stockholder
might consider favorable. These provisions include, among others:

-    the division of the Board of Directors into three separate classes,

-    the right of the Board to elect a director to fill a vacancy created by the
     expansion of the Board, and

-    the requirement that a special meeting of stockholders be called by the
     Chairman of the Board, President or Board of Directors.


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<PAGE>   23

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

     Student Advantage does not believe that it has any material market risk
exposure with respect to derivative or other financial instruments.

PART II. OTHER INFORMATION.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

     On May 1, 2001, Student Advantage issued 5 million shares of common stock
to five investors, for an aggregate purchase price of $10.0 million. We also
issued to these investors warrants to purchase an additional 2.3 million shares
of common stock, including warrants to purchase 1.5 million shares of common
stock with an exercise price of $3.00 per share and warrants to purchase 800,000
shares of common stock with an exercise price of $3.50 per share. The warrants
to purchase 800,000 shares with an exercise price of $3.50 per share are subject
to certain exercise price adjustments on certain dates based upon
volume-weighted average sales prices. An adjustment described in the preceding
sentence to the exercise price of the warrants shall not result in an adjustment
to the number of shares of common stock issuable upon exercise of the warrants.
These securities were issued to the investors under the exemptions from
registration set forth in Section 4(2) of the Securities Act of 1933, as
amended. No underwriters were involved in such transaction.

     On May 10, 2001, Student Advantage acquired certain assets of Edu.com. In
connection with the acquisition, we issued 90,000 shares of Student Advantage
common stock and warrants to purchase 450,000 shares of common stock, half of
which have an exercise price of $2.28 and half of which have and exercise price
of $3.42, and assumed certain liabilities of Edu.com. In addition, we canceled a
$1.0 million secured promissory note previously issued to us by Edu.com in
exchange for the assets securing the note. Edu.com is also entitled to
additional warrants to purchase up to 1,000,000 shares of common stock if
certain financial goals are met by the end of the year. These securities were
issued to Edu.com under the exemptions from registration set forth in Section
4(2) of the Securities Act of 1933, as amended. No underwriters were involved in
such transaction.

     On June 25, 2001, Student Advantage acquired OCM Direct (formerly OCM
Enterprises, Inc.) ("OCM Direct"). The consideration paid by the Company to
Devin A. Schain, Michael S. Schoen, Howard S. Dumhart, Jr., Paul D. Bogart and
Steven L. Matejka (the "OCM Stockholders") in connection with the acquisition of
OCM Direct included (i) 2,433,333 shares of the Company's common stock, issued
at the closing, (ii) shares of common stock to be issued not later than June 25,
2002 with a value of $1.25 million at the time of issuance based on the average
of the last reported sales prices per share of common stock over the ten trading
days ending on the trading day that is three days prior to the date of issuance,
provided that the number of shares will not be less than 208,333 or greater than
1,250,000, and (iii) in the event that OCM Direct attains certain revenue
performance goals after the closing, up to $1.5 million payable at the Company's
option in either shares of common stock or a combination of shares of common
stock and cash, with the shares of common stock valued at the time of issuance
based on the average of the last reported sales prices per share over the ten
trading days ending on the trading day that is three days prior to the date of
issuance or $1.00, whichever is greater, subject to adjustment under certain
circumstances. These securities were issued to the OCM Stockholders under the
exemptions from registration set forth in Section 4(2) of the Securities Act of
1933, as amended. No underwriters were involved in such transaction.

     On June 25, 2001, Student Advantage entered into a Loan Agreement (the
"Loan Agreement") by and among the Company, the subsidiaries of the Company and
Reservoir Capital Partners, L.P., Reservoir Capital Associates, L.P. and
Reservoir Capital Master Fund, L.P. (collectively the "Lenders") providing for
the establishment of credit facility in the aggregate principal amount of up to
$15,000,000, consisting of a $10,000,000 term loan (the "Term Loan") and a
$5,000,000 revolving loan (the "Revolving Loan"). In connection with the
transactions contemplated by the Loan Agreement, Student Advantage entered into
a Warrant Agreement, dated June 25, 2001, by and among the Company and the
Lenders (the "Warrant Agreement"), under which the Company issued to the Lenders
warrants to purchase a number of shares of common stock based on the outstanding
balance of the Term Loan and Revolving Loan. In accordance with the Warrant
Agreement, the Company issued to the Lenders (i) warrants to purchase an
aggregate of 500,000 shares of common stock, which are exercisable immediately,
(ii) warrants to purchase an aggregate of 500,000 shares of common stock which
become exercisable if the entire balance of the Term Loan is outstanding on June
25, 2002 (or a pro rata portion of the 500,000 shares if only a portion of the
Term Loan is then outstanding), and (iii) warrants to purchase an aggregate of
500,000 shares of common stock, which become exercisable if the entire balance
of the Term Loan is outstanding on June 25, 2003 (or a pro rata portion of the
500,000 shares if only a portion of the Term Loan is then outstanding)
(collectively, the "Term Warrants"). The number of shares subject to the Term
Warrants is subject to adjustment under certain circumstances in accordance with
the terms of the Term Warrants. The Company also issued to the Lenders warrants
(the "Revolving Warrants") to purchase a number of shares of common stock based
on the outstanding balance of the Revolving Loans. The number of shares subject
to the Revolving Warrants is initially zero and increases by an aggregate of
20,833 shares for each full month that the entire Revolving Loan is outstanding
(or a pro rata portion of the 20,833 shares for each shorter time period or
lesser outstanding balance). The Company also agreed to issue one or more
default warrants (the "Default Warrants" and, collectively with the Term
Warrants and the Revolving Warrants, the "Warrants") to purchase shares of
common stock in the event that the Company receives a notice of an event of
default under the Loan Agreement. The number of shares subject to the Default
Warrants shall initially equal the outstanding balance of the Term Loans and
Revolving Loans including capitalized interest and accrued interest at such time
divided by $1,000, and shall increase by one-thirtieth of such amount (for pro
rata portion of such amount if the balance is reduced after the issuance of the
Default Warrant) for each day that the event of default continues. The exercise
price applicable to all of the Warrants is $.01 per share. The number of shares
issuable upon exercise of the Warrants is subject to adjustment in accordance
with the terms of the Warrant Agreement in the event that the Company issues
certain additional securities at a price per share equal to less than ninety
percent of the average trading price of the common stock over the 20 trading
days preceding the date of issuance. Under the terms of the Warrant Agreement,
following payment or acceleration of the Term Loan, reduction or termination of
the revolving loan commitment or issuance of the Default Warrants, the holders
of the Warrants shall have the right to require the Company to purchase all or a
portion of the Term Warrants, Revolving Warrants and Default Warrants, as the
case may be, at a price per share of $2.50 plus, from and after June 25, 2002,
interest at a rate equal to 27% per annum through the date of payment. These
securities were issued to the Lenders under the exemptions from registration set
forth in Section 4(2) of the Securities Act of 1933, as amended. No underwriters
were involved in such transaction.

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

     On May 21, 2001, the following proposals were voted on at the Annual
Meeting of Stockholders:

<Table>
<Caption>
                                                                      For            Against/       Abstain
Proposal                                                                             Withheld
<S>                                                                <C>              <C>               <C>
1.   To elect John M. Connolly as a Class II director
     to serve for a three year term expiring at the Annual
     Meeting following the fiscal year ended December 31, 2003.    21,031,139       1,901,559         N/A

2.   To elect Raymond V. Sozzi, Jr. as a Class II
     director to serve for a three year term expiring at the
     Annual Meeting following the fiscal year ended
     December 31, 2003.                                            21,031,139       1,901,559         N/A

3.   To approve an amendment to the
     Company's 1998 Stock Incentive Plan
     increasing the number of shares of
     Common Stock issuable under the Plan
     from 9,500,000 shares to 12,000,000
     shares and the continuance of the
     Plan, as amended.                                             15,041,338       2,416,140         13,259
</Table>

     In addition to the two directors listed above who were elected at the
meeting, the terms of the following directors continued after the meeting:
William S. Kaiser, John S. Katzman, Marc J. Turtletaub and Charles F. Young.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

     (a)  EXHIBITS

     10.1 Co-Marketing and Membership Agreement between Student Advantage, Inc.
     and The Princeton Review, dated April 2, 2001, as Amendment No. 1 dated
     August 10, 2001. **

     ** Confidential treatment requested as to certain portions, which portions
     are omitted and filed separately with the Securities and Exchange
     Commission.

     (b)  REPORTS ON FORM 8-K

     The Company filed a Current Report on Form 8-K dated April 11, 2001 with
     the Securities and Exchange Commission on April 13, 2001 reporting a change
     in certifying accountant.

     The Company filed a Current Report on Form 8-K dated May 1, 2001 with the
     Securities and Exchange Commission on May 4, 2001 reporting the closing of
     a $10,000,000 financing.

     The Company filed Amendment No. 1 to Current Report on Form 8-K/A dated May
     11, 2001 with the Securities and Exchange Commission on May 16, 2001,
     reporting an amendment to the disclosure contained in the Current Report on
     Form 8-K dated May 1, 2001 regarding the number of shares subject to
     warrants issued in the financing described therein.

     The Company filed a Current Report on Form 8-K dated May 10, 2001 with the
     Securities and Exchange Commission on May 16, 2001 reporting the
     acquisition of certain of the assets of Edu.com.

     The Company filed Amendment No. 1 to Current Report on Form 8-K/A dated May
     10, 2001 with the Securities and Exchange Commission on June 28, 2001,
     containing financial statements of Edu.com and pro forma financial
     information.


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<PAGE>   24
                                   SIGNATURES

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

                                        Student Advantage, Inc.


                                        (Registrant)


Dated: August 14, 2001                  By: /s/ Kenneth S. Goldman
                                            ------------------------------------
                                            Kenneth S. Goldman, Executive Vice
                                                 President, Chief Financial
                                                 Officer and Treasurer
                                                 (Principal Financial and
                                                   Accounting Officer)


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<PAGE>   25
                                 EXHIBIT INDEX

EXHIBIT
NUMBER        DESCRIPTION
-------       -----------

10.1          Co-Marketing and Membership Agreement




                                       25