<PAGE>
================================================================================


                       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, 2002

                                       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         (I.R.S. EMPLOYER
 INCORPORATION OR ORGANIZATION)          INDUSTRIAL             IDENTIFICATION
                                     CLASSIFICATION CODE             NUMBER)
                                          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: 5,358,284 shares of common
stock as of August 8, 2002.

================================================================================
<PAGE>
                             STUDENT ADVANTAGE, INC.
                                    FORM 10-Q
                       FOR THE QUARTER ENDED JUNE 30, 2002

                                      INDEX

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

  ITEM 1.           FINANCIAL STATEMENTS
                    Consolidated Balance Sheets as of  June 30, 2002 (Unaudited) and December 31, 2001

                    Consolidated Statements of Operations for the six months ended  June 30, 2002 (Unaudited) and 2001
                    (Unaudited)

                    Consolidated Statements of Cash Flows for the six months
                    ended June 30, 2002 (Unaudited) and 2001 (Unaudited)

                    Notes to Consolidated Financial Statements (Unaudited)

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

  ITEM 3.           QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

  PART II.          OTHER INFORMATION

  ITEM 2.           CHANGES IN SECURITIES AND USE OF PROCEEDS

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

  ITEM 6.           EXHIBITS AND REPORTS ON FORMS 8-K

  SIGNATURES

  STATEMENT PURSUANT TO 18 U.S.C. SECTION 1350

  EXHIBIT INDEX
</TABLE>

<PAGE>

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,
                                                                                                          2002              2001
                                                                                                        ---------       -----------
                                                                                                       (unaudited)
                                                     ASSETS
Current assets
<S>                                                                                                     <C>             <C>
    Cash and cash equivalents .....................................................................     $   1,538         $   5,093
    Restricted cash ...............................................................................           603               667
    Accounts receivable (net of reserves of $641 and $737 at
       June 30, 2002, and December 31, 2001, respectively) ........................................         3,060             6,163
    Inventory .....................................................................................         6,297             1,863
    Prepaid expenses and other current assets .....................................................         4,352             3,109
                                                                                                        ---------         ---------
       Total current assets .......................................................................        15,850            16,895
    Notes receivable ..............................................................................         4,378             4,378
    Property and equipment, net ...................................................................         9,420            12,033
    Intangible and other assets, net ..............................................................        24,536            24,825
                                                                                                        ---------         ---------
       Total assets ...............................................................................     $  54,184         $  58,131
                                                                                                        =========         =========

                                      LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
    Accounts payable ..............................................................................     $   5,075         $   5,196
    Accrued compensation ..........................................................................         1,818             2,517
    Current borrowings under revolving lines of credit ............................................         7,010             2,500
    Other accrued expenses ........................................................................        10,217            11,056
    Deferred revenue ..............................................................................         4,985             3,521
    Current obligation under capital lease ........................................................         1,356             1,368
                                                                                                        ---------         ---------
       Total current liabilities ..................................................................        30,461            26,158
                                                                                                        ---------         ---------

    Deferred gain .................................................................................           534               534
    Other accrued expenses ........................................................................         2,119             4,188
    Deferred revenue ..............................................................................         1,833                --
    Warrants payable ..............................................................................         2,533             1,996
    Long-term borrowings under revolving lines of credit ..........................................         2,500             2,500
    Notes payable .................................................................................         5,000            10,200
    Long-term obligation under capital lease ......................................................           146               764
                                                                                                        ---------         ---------
       Total long-term obligations ................................................................        14,665            20,182
                                                                                                        ---------         ---------
       Total liabilities ..........................................................................        45,126            46,340
                                                                                                        ---------         ---------

Stockholders' equity
    Preferred stock, $0.01 par value, 5,000,000 shares authorized, no shares issued and outstanding            --                --
    Common stock, $0.01 par value; authorized: 150,000,000 shares; issued and outstanding:
    5,346,872 and 4,753,125 at June 30, 2002 and December 31, 2001, respectively ..................           536               476
    Additional paid-in capital ....................................................................       123,465           120,298
    Accumulated deficit ...........................................................................      (114,893)         (108,884)
    Notes receivable from stockholders ............................................................           (50)              (50)
    Deferred compensation .........................................................................            --               (49)
                                                                                                        ---------         ---------
       Total stockholders' equity .................................................................         9,058            11,791
                                                                                                        ---------         ---------
       Total liabilities and stockholders' equity .................................................     $  54,184         $  58,131
                                                                                                        =========         =========
</TABLE>

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

<PAGE>

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

<TABLE>
<CAPTION>
                                                                                   THREE MONTHS ENDED          SIX MONTHS ENDED
                                                                                        JUNE 30,                   JUNE 30,
                                                                                   2002          2001          2002          2001
                                                                                 --------      --------      --------      --------
<S>                                                                              <C>           <C>           <C>           <C>
Revenue
    Student services .......................................................     $ 12,927      $ 10,416      $ 21,598      $ 19,454
    Corporate and university solutions .....................................        1,353         3,145         2,829         7,315
                                                                                 --------      --------      --------      --------
         Total revenue .....................................................       14,280        13,561        24,427        26,769

Costs and expenses
    Cost of student services revenue (including
       stock-based compensation of $0 and $5 for
       the three months ended June 30, 2002 and 2001,
       respectively, and $2 and $10 for the six months
       ended June 30, 2002 and 2001, respectively.) ........................        4,797         2,831         7,505         4,641
    Cost of corporate and university solutions revenue
       (including stock-based compensation of $0
       and $5 for the three months ended June 30, 2002
       and 2001, respectively, and $2 and $10 for the
       six months ended June 30, 2002 and 2001, respectively.) .............          818         1,571         1,856         4,008
    Product development (including stock-based compensation
       of $0 and $23 for the three months ended June 30,
       2002 and 2001, respectively, and $8 and $46 for
       the six months ended
       June 30, 2002 and 2001, respectively.) ..............................        1,628         4,757         3,752        10,580
    Sales and marketing (including stock-based compensation
       of $0 and $79 for the three months ended June 30,
       2002 and 2001, respectively, and $27 and $158 for
       the six months ended June 30, 2002 and 2001,
       respectively.) ......................................................        6,581         6,480        11,927        12,529
    General and administrative (including stock-based
       compensation of $0 and $28 for the three
       months ended June 30, 2002 and 2001, respectively,
       and $10 and $56 for the six months ended June 30,
       2002 and 2001, respectively.) .......................................        2,702         2,908         6,614         5,736
    Depreciation and amortization ..........................................        2,482         3,628         4,422         6,340
                                                                                 --------      --------      --------      --------

         Total costs and expenses ..........................................       19,008        22,175        36,076        43,834
                                                                                 --------      --------      --------      --------

Loss from operations .......................................................       (4,728)       (8,614)      (11,649)      (17,065)

Realized gain on sale ......................................................        6,953            --         6,953            --
Equity interest in Edu.com net loss ........................................           --            --            --          (495)
Interest and other income (expense) ........................................         (673)          222        (1,313)          152
                                                                                 --------      --------      --------      --------

Net income (loss) ..........................................................     $  1,552      $ (8,392)     $ (6,009)     $(17,408)
                                                                                 ========      ========      ========      ========

Basic net income (loss) per share ..........................................     $   0.31      $  (1.84)     $  (1.23)     $  (4.21)
                                                                                 ========      ========      ========      ========

Shares used in computing basic net income (loss) per share .................        5,018         4,551         4,887         4,137
                                                                                 ========      ========      ========      ========

Fully diluted net income (loss) per share ..................................     $   0.30      $  (1.84)     $  (1.23)     $  (4.21)
                                                                                 ========      ========      ========      ========

Shares used in computing fully diluted net income (loss) per share .........        5,102         4,551         4,887         4,137
                                                                                 ========      ========      ========      ========
</TABLE>

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

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

<TABLE>
<CAPTION>
                                                                                                              FOR THE SIX MONTHS
                                                                                                                 ENDED JUNE 30,
                                                                                                              2002           2001
                                                                                                            --------       --------
<S>                                                                                                         <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net loss ........................................................................................      $ (6,009)      $(17,408)
     Adjustments to reconcile net loss to net cash used in operating activities:
        Depreciation .................................................................................         3,537          2,878
        Amortization of intangible assets ............................................................           885          3,462
        Net gain on sale of business .................................................................        (6,953)            --
        Equity interest in Edu.com net loss ..........................................................            --            495
        Reserve for allowances and bad debts .........................................................           195            495
        Compensation expense relating to issuance of equity ..........................................            49            280
        Exchange of notes receivable for assets sold .................................................            --           (504)
        Amortization of marketing expense associated with common stock warrant .......................            --            888
        Changes in current assets and liabilities, net of effects of acquisitions:
            Accounts and notes receivable ............................................................         3,199         (2,430)
            Prepaid expenses and other current assets ................................................        (1,243)           628
            Inventory ................................................................................        (4,434)           377
            Accounts payable .........................................................................          (121)        (4,485)
            Accrued compensation .....................................................................          (699)           181
            Other accrued expenses ...................................................................        (2,371)         2,399
            Deferred revenue .........................................................................         3,297          1,094
                                                                                                            --------       --------
            Net cash used in operating activities ....................................................       (10,668)       (11,650)
                                                                                                            --------       --------
CASH FLOWS FROM INVESTING ACTIVITIES:
     Purchases of fixed assets .......................................................................          (917)        (1,302)
     Proceeds from sale of business ..................................................................         6,500             --
     Acquisition of business for cash and common stock ...............................................            --         (9,331)
                                                                                                            --------       --------
            Net cash provided by (used in) investing activities ......................................         5,583        (10,633)
                                                                                                            --------       --------
CASH FLOWS FROM FINANCING ACTIVITIES:
     Decrease in restricted cash .....................................................................            64             --
     Proceeds from issuance of stock .................................................................         2,725          9,800
     Proceeds from exercise of common stock options, warrants and employee stock purchase plan .......            61             21
     Repayment of capital lease obligations ..........................................................          (630)          (677)
     Proceeds of revolving lines of credit, net ......................................................         4,510             11
     Repayment of note payable .......................................................................        (5,200)        (1,011)
     Proceeds of notes payable .......................................................................            --         10,000
                                                                                                            --------       --------
            Net cash provided by financing activities ................................................         1,530         18,144
                                                                                                            --------       --------
Decrease in cash and cash equivalents ................................................................        (3,555)        (4,139)
Cash and cash equivalents, beginning of period .......................................................         5,093         12,762
                                                                                                            --------       --------
Cash and cash equivalents, end of period .............................................................      $  1,538       $  8,623
                                                                                                            ========       ========

Cash paid during the period for interest .............................................................      $    602       $    183
                                                                                                            ========       ========
</TABLE>

                 The accompanying notes are an integral part of
                    these consolidated financial statements.
<PAGE>
                             STUDENT ADVANTAGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE 1 - THE COMPANY

     Student Advantage, Inc. is an integrated media and commerce company focused
on the higher education market. We work in partnership with more than 1,000
colleges and universities, student organizations and alumni associations, and
more than 15,000 participating business locations to develop products and
services that enable students to make less expensive and more convenient
purchases on and around campus. Our exclusive university and business
relationships allow us to sell campus specific products and services and
licensed collegiate sports memorabilia directly to parents, students and alumni.

     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, the Company's revenue was derived primarily from annual
membership fees. Since that time, the Company has expanded its product and
service offerings through internal growth as well as acquisitions.

     Student Advantage is subject to the risks and uncertainties common to
growing companies, including reliance on certain customers, dependence on growth
and commercial acceptance of the internet, dependence on principal products and
services and third-party technology, activities of competitors, dependence on
key personnel such as Raymond V. Sozzi, Jr., the Company's President and Chief
Executive Officer, and limited operating history.

     The Company has experienced substantial net losses since its inception and,
as of June 30, 2002, had an accumulated deficit of $114.9 million. Such losses
and accumulated deficit resulted primarily from significant costs incurred in
the development of the Company's products and services and the establishment of
the Company's infrastructure. The Company has taken significant steps through
the restructuring that it announced in October 2001 to reduce operating costs
for 2002. The Company currently anticipates that its available cash resources,
together with cash expected to be provided from operations, based upon an
anticipated increase in revenue for the remainder of 2002 and the first two
quarters of 2003, will be sufficient to meet its anticipated needs for working
capital, capital expenditures and debt payments for at least the next 12 months.
For purposes of evaluating cash resources during the next 12 months, the Company
has assumed that it will not be required to repay any amounts under its credit
facility with Reservoir Capital other than two payments of $1.25 million each on
August 1, 2002 and September 1, 2002. As of August 14, 2002, the Company had not
made the August 1, 2002 payment. As of August 14, 2002, the Company is engaged
in discussions with Reservoir Capital Partners regarding an amendment to the
loan agreement. The Company agreed with Reservoir Capital Partners that our
obligation to make payments under the credit facility would be suspended until
the Company receives notice from Reservoir Capital Partners that it is
terminating the discussions. If Reservoir Capital Partners terminates the
discussions, the Company could be required to repay the full outstanding
indebtedness at that time. On May 6, 2002, the Company amended its agreement
with Reservoir Capital to eliminate the call option on June 25, 2002, revised
the maturity date of the loan to July 1, 2003 and provided that the lenders'
right to require the Company to purchase the warrants held by the Lenders may
not be exercised before July 1, 2003 or upon the earlier acceleration of the
loan. The Company's expectations regarding available cash resources during the
next 12 months are also based on the continued availability of the $5.0 million
revolving loan facility at Bank of America and significant reductions in the net
cash loss that the Company expects to incur for the remainder
<PAGE>

of 2002 and the first six months of 2003. If the Company's revenue and expense
projections do not materialize as anticipated or if the Company is otherwise
required to repay the amounts outstanding under the Company's credit facility
with Reservoir Capital, the Company will be required to obtain additional
financing. Failure to generate sufficient revenues, obtain additional capital or
financing if needed, or reduce certain discretionary spending if necessary,
could have a material adverse effect on the Company's ability to achieve its
intended business objectives.

      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, 2001.

UNAUDITED INTERIM FINANCIAL INFORMATION

      The unaudited interim consolidated financial statements of Student
Advantage for the six months ended June 30, 2002 and 2001, respectively,
included herein have been prepared in accordance with accounting principles
generally accepted in the United States for interim financial information and
with the instructions from 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 accounting principles generally
accepted in the United States 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, 2002, and the results of its operations for the
three and six month periods ended June 30, 2002 and 2001, respectively, and its
cash flows for the six month period ended June 30, 2002. The results for the
three and six month periods ended June 30, 2002 are not necessarily indicative
of the expected results for the full fiscal year or any future period.

NOTE 2 - COMPUTATION OF UNAUDITED NET INCOME (LOSS) PER SHARE (1, 2, 3, 4)

                      (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                           THREE MONTHS ENDED                SIX MONTHS ENDED
                                                                                  JUNE 30,                      JUNE 30,
                                                                         2002              2001          2002               2001
                                                                      ----------        ----------    ----------         ----------
<S>                                                                   <C>               <C>           <C>                <C>
BASIC AND DILUTED NET INCOME (LOSS) PER SHARE:

Net income (loss) ...............................................     $    1,552        $   (8,392)   $   (6,009)        $  (17,408)
                                                                      ==========        ==========    ==========         ==========

Basic weighted average common shares outstanding  (2), (3) ......          5,018             4,551         4,887              4,137
                                                                      ==========        ==========    ==========         ==========

Basic net income (loss) per share ...............................     $     0.31        $    (1.84)   $    (1.23)        $    (4.21)
                                                                      ==========        ==========    ==========         ==========

Fully diluted weighted average common shares outstanding (2), (3)          5,102             4,551         4,887              4,137
                                                                      ==========        ==========    ==========         ==========

Fully diluted net income (loss) per share .......................     $     0.30        $    (1.84)   $    (1.23)        $    (4.21)
                                                                      ==========        ==========    ==========         ==========
</TABLE>

(1)   Net income (loss) per share is computed under SFAS No. 128, "Earnings Per
      Share". Basic net income (loss) per share is computed using the weighted
      average number of shares.

(2)   For all periods, except for the three month period ended June 30, 2002,
      diluted net income (loss) per share does not differ from basic net income
      (loss) per share since potential common shares from exercise of stock
      options and warrants are anti-dilutive. For the three month period ended
      June 30, 2002, fully diluted net income (loss) per share assumes the
      exercise of all outstanding dilutive stock options and warrants.

(3)   All share and per share amounts reflect the Company's one-for-ten reverse
      stock split which was effective on June 28, 2002.

(4)   As of June 30, 2002, Student Advantage had reserved 243,794 shares of its
      common stock for the exercise of various
<PAGE>

      options with exercise prices ranging from $1.70 to $222.50 per share. As
      of June 30, 2002, Student Advantage had reserved 640,585 shares of its
      common stock for the exercise of various warrants with exercise prices
      ranging from $.10 to $110.80 per share.

NOTE 3 - RECENT ACCOUNTING PRONOUNCEMENTS

      In July 2001, the FASB issued SFAS No. 141, "Business Combinations" and
SFAS No. 142, "Goodwill and Other Intangible Assets." 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. SFAS No. 142 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. In accordance with SFAS
142, the Company discontinued the amortization of goodwill effective January 1,
2002. A reconciliation of previously reported net income and earnings per share,
to the amounts adjusted for the exclusion of goodwill, follows (in thousands,
except per share amounts). These amounts are adjusted for each of the periods
included in this Forms 10-Q.

<TABLE>
<CAPTION>
                                                               THREE MONTHS ENDED JUNE 30,              SIX MONTHS ENDED JUNE 30,
                                                              -----------------------------          ------------------------------
                                                                 2002               2001                2002                2001
                                                              ----------         ----------          ----------          ----------
<S>                                                           <C>                <C>                 <C>                 <C>
Reported net income (loss) ..........................         $    1,552         $   (8,392)         $   (6,009)         $  (17,408)
 Add: Goodwill amortization .........................                 --              1,495                  --               2,564
                                                              ----------         ----------          ----------          ----------
Adjusted net income (loss) ..........................         $    1,552         $   (6,897)         $   (6,009)         $  (14,844)

Basic earnings (loss) per share:
 Reported earnings (loss) per share .................         $     0.31         $    (1.84)         $    (1.23)         $    (4.21)
 Add: Goodwill amortization .........................                 --               0.33                  --                0.62
                                                              ----------         ----------          ----------          ----------
Adjusted basic earnings (loss) per share ............         $     0.31         $    (1.51)         $    (1.23)         $    (3.59)

Diluted earnings (loss) per share:
 Reported earnings (loss) per share .................         $     0.30         $    (1.84)         $    (1.23)         $    (4.21)
 Add: Goodwill amortization .........................                 --               0.33                  --                0.62
                                                              ----------         ----------          ----------          ----------
Adjusted diluted earnings (loss) per share ..........         $     0.30         $    (1.51)         $    (1.23)         $    (3.59)
</TABLE>

NOTE 4 - RELATED PARTY TRANSACTIONS

      Effective May 15, 2000, the Company 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 the Company and one of its officers and equity holders is a
member of the Company's Board of Directors. Under the agreement, TPR paid 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 website.
In addition, TPR provided discounts as part of the Student Advantage Membership
Program and marketed the discount to high school, college and university
students. Additionally, under the agreement the Company paid TPR a fee in
exchange for exclusive advertising sales responsibilities for the review.com
website. The agreement expired on March 31, 2002. The Company recorded revenues
of $0.2 million and $0.6 million and expenses of $0.2 million and $0.7 million
related to this agreement during the six months ended June 30, 2002 and 2001,
respectively. Additionally, the Company recorded revenue and expenses of
approximately $0.2 million and $0.3 million, respectively, related to additional
work performed by both parties for the six month period ended June 30, 2002.

      During the six month period ended June 30, 2002, Raymond V. Sozzi, Jr.,
our Chairman and CEO, advanced an aggregate of $0.5 million to the Company, all
of which was repaid during the six month period ended June 30, 2002. There were
no advances for the six month period ended June 30, 2001.

<PAGE>

NOTE 5 - BORROWINGS

      In February 2002, our subsidiary, OCM Direct and its two subsidiaries,
CarePackages, Inc. and Collegiate Carpets, Inc., entered into a revolving loan
agreement with Bank of America providing for a $5.0 million loan facility. The
interest rate under the facility is LIBOR plus 2.5 percent and the facility is
secured by all of the assets of OCM Direct and its two subsidiaries. The Company
provided an unsecured guaranty of the obligations of its three subsidiaries to
Bank of America. The maturity date of the loan is January 31, 2003, provided
that OCM Direct is required to repay all amounts outstanding under the loan for
a period of 30 consecutive days between August 1 and October 1, 2002. At June
30, 2002, the principal amount of borrowings was approx. $4.5 million. As of
August 9, 2002, the principal amount under this facility had been repaid.

     On May 6, 2002, the Company amended its Loan and Warrant Agreements with
Reservoir Capital Partners and its two affiliate senior lenders (collectively
the "Lenders") to provide that the maturity date of the loan will be July 1,
2003 instead of June 14, 2004. The Company also agreed to pay the Lenders $5.2
million on May 14, 2002, $1.25 million on or before August 1, 2002 and $1.25
million on or before September 1, 2002. Additionally, the amendment changed the
number of shares subject to the Term Warrants issued to the Lenders, which
become exercisable on June 25, 2002 and June 25, 2003, originally set at 50,000
shares, as specified in the Warrant Agreement, such that the number of shares is
initially zero but will increase by an aggregate of 4,167 shares for each month
after the warrants become exercisable that the outstanding balance of the term
loan is $10.0 million, or a pro rata portion of the 4,167 shares if less than
the $10.0 million is outstanding. The amendment also modified further certain
provisions with the Lenders to: reduce the aggregate of $0.4 million in fees
otherwise due on April 15, 2002 to $0.2 million due on July 31, waive the
financial covenants under the Loan Agreement, capitalize certain revolving loan
interest payments and provided that the Lenders' right to require the Company to
purchase the warrants held by the Lenders may not be exercised before July 1,
2003 (absent a loan acceleration). As of August 14, 2002, the Company had not
made the August 1, 2002 payment. As of August 14, 2002, the Company is engaged
in discussions with Reservoir Capital Partners regarding an amendment to the
loan agreement. The Company agreed with Reservoir Capital Partners that our
obligation to make payments under the credit facility would be suspended, as of
July 30, 2002, until the Company receives notice from Reservoir Capital Partners
that it is terminating the discussions. If Reservoir Capital Partners terminates
discussions, the Company could be required to repay all outstanding indebtedness
at that time.

      In accordance with the terms of the Reservoir Loan and Warrant Agreements,
as amended, for the quarter ended June 30, 2002, the warrants issued to the
Lenders become exercisable for an additional 10,748 shares of common stock at an
exercise price of $0.10 per share based on the outstanding balance of the Loans.
As of June 30, 2002, the Company valued the warrants issued at the full
put-right value of $0.3 million, which is higher than the fair value of the
warrants. This amount has been recorded as a deferred financing cost included in
other assets in the accompanying balance sheet and is being 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 to market
the value of these warrants at each reporting period and record the warrants at
the higher of the put right value or the fair value.

      All share and per share amounts in this Note 5 have been adjusted to
reflect the one-for-ten reverse split of the Common Stock effected on June 28,
2002.

NOTE 6 - OTHER EVENTS

      Effective April 1, 2002, the Company entered into a two year Sales Agency
Agreement with a third party, whereby the Company appointed the third party as
the primary, non-exclusive agent for the purpose of selling the media assets of
the Company. Under the agreement, the Company received $4.9 million as an agent
fee and will be making quarterly payments in base consideration of work done to
the third party of $0.4 million and additional commission payments based on
media revenues over the two year term of the agreement. Under certain
circumstances, including the sale of College Club assets, the Company may be
required to provide the third party $3.0 to $3.5 million from any proceeds. Per
the agreement, this amount is reduced for every dollar that the Company pays the
third party during the course of the agreement. Accordingly, the company
deferred the $4.9 million fee it received and is recognizing it over the two
year term of the agreement as appropriate.

      On April 26, 2002, the Company received a letter from the Nasdaq National
Market indicating that its common stock had not maintained a minimum closing bid
price of $1.00 over the previous thirty consecutive trading days. Under
applicable Nasdaq rules, the Company's common stock could have been de-listed
from the Nasdaq National Market if the closing bid price of its common stock was
not at or above $1.00 for ten consecutive trading days before July 25, 2002. On
June 28, 2002, the shareholders of the company approved a one-for-ten reverse
split of the Company's common stock. As of July 25, 2002, the Company was
notified by Nasdaq that it had regained compliance with the minimum bid price
requirement for continued inclusion on the Nasdaq National Market. As of June
30, 2002, the Company was not in compliance with the Nasdaq National Market
minimum requirement of $4.0 million in net tangible assets or $10.0 million in
stockholder's equity (See Note 7).

      On May 6, 2002, the Company issued 360,000 shares of Student Advantage
common stock to three investors for an aggregate purchase price of $2.7 million.
These investors, in the aggregate, have the right, exercisable at any time prior
to November 1, 2002, to purchase an additional 45,000 shares of common stock for
a purchase price of $7.50 per share and an additional 45,000 shares of common
stock with a purchase price of $10.00 per share. As of June 30, 2002 no
additional shares have been issued.

      Effective May 8, 2002, Student Advantage sold the assets relating to its
SA Marketing Group product line to Triple Dot, Inc., a subsidiary of Alloy,
Inc., for a cash payment of $6.5 million (subject to working capital
adjustments) and an opportunity to earn up to an additional $1.5 million based
on the performance of certain pending proposals. At the same time, the parties

<PAGE>

entered into a non-compete agreement under which Student Advantage agreed to
certain restrictions regarding its events and promotions activities until
November 2005. In addition, the parties entered into a marketing services
agreement providing for payments by Student Advantage to Alloy of $2.1 million.
For the three month period ended June 30, 2002, the Company recorded a gain of
$7.0 million from the sale of the SA Marketing Group assets.

      On June 26, 2002, the Company issued 200,000 shares of Student Advantage
common stock to former shareholders of OCM Direct, Inc. as final payment for the
acquisition OCM Direct. The shares were valued at the previous days close price
of $2.20 per share or $0.4 million and recorded as additional goodwill related
to the OCM acquisition.

      All share and per share amounts in this Note 6 have been adjusted to
reflect the one-for-ten reverse split of the Common Stock effected on June 28,
2002.

NOTE 7 - SUBSEQUENT EVENTS

      As of June 30, 2002, the Company was not in compliance with the Nasdaq
minimum requirement of $4.0 million in net tangible assets or $10.0 million in
stockholders' equity. In July 2002, the Company reached settlement of certain
restructuring and other liabilities at less than their carried amounts, which
the company expects will result in a nonrecurring credit to operations and thus
an increase to stockholders' equity of $1.0 million in the third quarter. The
Company expects that the impact of this credit on stockholders' equity as of
June 30, 2002 would result in a pro forma amount of $10.1 million. At the
request of Nasdaq and to meet our continuing listing requirements, the following
unaudited pro forma balance sheet summarizes the impact of the settlements as if
they had occurred on June 30, 2002. The effects of the settlements in the
following pro forma unaudited consolidated balance sheet as of June 30, 2002 are
to decrease other accrued expenses by $1.0 million and increase stockholders'
equity by $1.0 million.
<PAGE>

                            STUDENT ADVANTAGE, INC.
                      PRO FORMA CONSOLIDATED BALANCE SHEET
                       (IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
                                                                                                            JUNE 30,
                                                                                                              2002
                                                                                                           ---------
                                                                                                           (Pro forma)
                                                                                                           (unaudited)
                                                    ASSETS
<S>                                                                                                        <C>
Current assets
    Cash and cash equivalents .....................................................................        $   1,538
    Restricted cash ...............................................................................              603
    Accounts receivable (net of reserves of $641 at  June 30, 2002) ...............................            3,060
    Inventory .....................................................................................            6,297
    Prepaid expenses and other current assets .....................................................            4,352
                                                                                                           ---------
       Total current assets .......................................................................           15,850
    Notes receivable ..............................................................................            4,378
    Property and equipment, net ...................................................................            9,420
    Intangible and other assets, net ..............................................................           24,536
                                                                                                           ---------
       Total assets ...............................................................................        $  54,184
                                                                                                           =========

                                     LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
    Accounts payable ..............................................................................        $   5,075
    Accrued compensation ..........................................................................            1,818
    Current borrowings under revolving lines of credit ............................................            7,010
    Other accrued expenses ........................................................................            9,217
    Deferred revenue ..............................................................................            4,985
    Current obligation under capital lease ........................................................            1,356
                                                                                                           ---------
       Total current liabilities ..................................................................           29,461
                                                                                                           ---------

    Deferred gain .................................................................................              534
    Other accrued expenses ........................................................................            2,119
    Deferred revenue ..............................................................................            1,833
    Warrants payable ..............................................................................            2,533
    Long-term borrowings under revolving lines of credit ..........................................            2,500
    Notes payable .................................................................................            5,000
    Long-term obligation under capital lease ......................................................              146
                                                                                                           ---------
       Total long-term obligations ................................................................           14,665
                                                                                                           ---------
       Total liabilities ..........................................................................           44,126
                                                                                                           ---------

Stockholders' equity
    Preferred stock, $0.01 par value, 5,000,000 shares authorized, no shares issued and outstanding               --
    Common stock, $0.01 par value; authorized: 150,000,000 shares; issued and outstanding:
    5,346,872 and 4,753,125 at June 30, 2002 and December 31, 2001, respectively ..................              536
    Additional paid-in capital ....................................................................          123,465
    Accumulated deficit ...........................................................................         (113,893)
    Notes receivable from stockholders ............................................................              (50)
    Deferred compensation .........................................................................               --
                                                                                                           ---------
       Total stockholders' equity .................................................................           10,058
                                                                                                           ---------
       Total liabilities and stockholders' equity .................................................        $  54,184
                                                                                                           =========
</TABLE>

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

<PAGE>

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-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, Inc. is an integrated media and commerce company
focused on the higher education market. We work in partnership with colleges and
universities and in cooperation with local and national businesses to develop
products and services that enable students to make less expensive and more
convenient purchases on and around campus. We report our revenue in two
categories: student services revenue and corporate and university solutions
revenue.

      We reach consumers offline through Student Advantage Campus Services,
which includes the Student Advantage Membership Program, SA Cash Programs and
OCM Direct, and online through our highly trafficked websites
studentadvantage.com, CollegeClub.com and our Official College Sports Network
("OCSN"). The Student Advantage Membership Program is a national fee-based
membership program that provides its student members with exclusive benefits
including ongoing discounts on products and services currently offered by more
than 15,000 participating business locations. Discounts are made available to
students both through our studentadvantage.com website and at sponsors' retail
locations and are heavily promoted at our CollegeClub.com website. OCM Direct 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 and their parents. The SA Cash Programs enable
students to use their college ID cards as a method of payment (stored-value
card) for off-campus dining, shopping and other purchasing needs. OCSN is the
largest, most trafficked network on the web devoted exclusively to college
sports, providing online brand management and content delivery to more than 120
top schools and athletic conferences.

      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 1998 and an
additional $0.2 million in 1999, which were offset by reductions of $0.3, $0.7
and $0.2 million, during 1999, 2000 and 2001, respectively, due to stock option
cancellations as a result of employee terminations. Of the remaining $3.2
million deferred, the full amount had been amortized to expense as of March 31,
2002, of which $1.1, $0.8, $0.5 million and $49,000 was recorded as an expense
in 1999, 2000, 2001 and the first six months of 2002 respectively. The stock
based compensation charges have been included in the individual operating
expense line items in the financial statements.

CRITICAL ACCOUNTING POLICIES

      The discussion and analysis of our financial condition and results of
operations are based upon our consolidated financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States. The preparation of these financial statements requires us to make
estimates and judgments that affect the reported amount of assets, liabilities,
revenues and expenses. Actual results may differ from these estimates under
different assumptions or conditions.

      Critical accounting policies are defined as those that are reflective of
significant judgments and uncertainties, and potentially result in materially
different results under different assumptions and conditions. We believe that
our critical accounting polices are those described below.

Accounts Receivable Securitization

      The Company accounts for the securitization of accounts receivable in
accordance with SFAS No. 140, "Accounting for Transfers and Servicing of
Financial Assets and Extinguishment of Liabilities." At the time the receivables
are sold, the

<PAGE>

balances are removed from the Consolidated Balance Sheet. Costs associated with
the sale of receivables, primarily related to interest and administrative costs,
are included in general and administrative expense in the Consolidated
Statements of Operations. During the six month period ended June 30, 2002, the
Company entered into an agreement with a financial institution to sell an
undivided interest in certain trade accounts receivable. Proceeds from the sale
of certain receivables during the six month period ended June 30, 2002 were
approximately $3.9 million. Costs associated with the sale of receivables,
primarily related to the interest and administrative fees were $0.1 million and
are included in general and administrative expenses in the Consolidated
Statements of Operations. As of July 9, 2002, all trade accounts receivable
related to this agreement had been collected and remitted per the agreement.

Revenue Recognition

      We report revenues in two categories: student services revenue and
corporate and university solutions revenue. Student services revenue is
attributable to the parts of our business that are primarily focused on
providing goods and services to students, their parents and alumni. The Company
derives student services revenue from commerce, subscription and advertising.
Commerce revenue is primarily derived from transaction-based revenue earned for
reselling products and services, processing stored value transactions and
acquiring student customers on behalf of other businesses. To date, commerce
revenue has primarily consisted of revenue that we receive from the sale of
residence hall linens and related accessories, care packages and diploma frames
through direct mail marketing, fees from SA Cash transactions and e-commerce
revenue from our network of websites. Commerce revenue is recognized upon the
completion of the related contractual obligations. Subscription revenue is
derived from membership fees related to enrolling students in the Student
Advantage Membership Program. Memberships are distributed in several ways. We
sell memberships directly to students and parents of students for an annual
membership fee; we distribute memberships at no cost to certain qualified
students and we sell memberships to certain of our corporate partners for resale
to students at their retail locations. 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. Advertising revenue consists
primarily of fees for banner advertisements and sponsorships on our network of
websites. Website advertising revenue is recognized as the related impressions
are displayed, provided that no significant obligations remain and collection of
the related receivable is reasonably assured. Certain advertising arrangements
include guarantees of a minimum number of impressions. For arrangements with
guarantees, revenue is recognized based upon the lesser of: (1) ratable
recognition over the period the advertising is displayed, provided that no
significant Company obligations remain and collection of the receivable is
reasonably assured, or (2) a pro-rata portion of contract revenue based upon
impressions delivered relative to minimum guaranteed impressions to be
delivered.

      Corporate and university solutions revenue is attributable to the parts of
our business that are primarily focused on providing goods and services to
corporations and universities and is made up of marketing services revenue from
corporate clients and licensing, management and consulting fees from
universities. Marketing services revenue is derived primarily from providing
tailored event management and execution services to businesses seeking to market
their products and services to college students. This revenue is recognized upon
the completion of the related contractual obligations. Fees from marketing
services are recognized as the related services are rendered, provided that no
significant obligations remain and collection of the related receivable is
reasonably assured. Payments received in advance of revenue being earned are
recorded as deferred revenue.

      In accordance with the EITF Issue No. 99-17 "Accounting for Advertising
Barter Transactions," the Company has appropriately recorded barter revenue and
expense based upon the fair value of the advertising surrendered in the
transaction. Fair value is established by reference to comparable cash
transactions during the six-month period preceding the barter transaction.
Generally, barter transactions involve exchanges of banner advertising. For the
six months ended June 30, 2002 and 2001, the Company recorded $2.1 and $2.8
million of barter revenue and $2.1 and $2.8 million of barter expense recorded
as sales and marketing expense, respectively.

      In accordance with Staff Accounting Bulletin No. 101 "Revenue Recognition
in Financial Statements" and EITF Issue No. 99-19 "Reporting Revenue Gross as a
Principal versus Net," the Company has evaluated its revenue and determined that
it is being reported in accordance with the guidance. The Company has recorded
certain of its commerce revenue at gross as the Company is considered the
primary obligor in the transaction.

Intangible and Other Assets

      Intangible assets include the excess of the purchase price over
identifiable tangible net assets acquired in acquisitions. Such assets

<PAGE>

include goodwill, completed technology, workforce, customer lists, non-compete
agreements, websites and other intangible assets, which generally are being
amortized on a straight-line basis over their estimated economic lives ranging
from two to fifteen years. Accumulated amortization was $12.0 and $11.1 million
at June 30, 2002 and December 31, 2001, respectively. The Company periodically
evaluates its intangible assets for potential impairment. As a result of the
application of SFAS 142 in 2002, the Company stopped amortizing the remaining
goodwill related to the acquisitions of OCM Direct and College Club in the first
quarter of 2002.

Long-Lived Assets

      The Company assesses the realizability of long-lived assets in accordance
with SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived
Assets." The Company reviews its long-lived assets for impairment if events and
circumstances indicate the carrying amount of an asset may not be recoverable.
The Company evaluates the realizability of its long-lived assets based on
profitability and cash flow expectations for the related asset. As a result of
its review, the Company recorded asset impairment charges of $1.9 million for
the year ended December 31, 2001. There were no impairments for the six month
period ended June 30, 2002.

Warrants

      In accordance with the terms of the Reservoir Loan and Warrant Agreements,
as amended, for the quarter ended June 30, 2002, the warrants issued to the
Lenders become exercisable for an additional 10,748 shares of common stock at an
exercise price of $0.10 per share based on the outstanding balance of the loans.
As of June 30, 2002, the Company valued the warrants issued at the full
put-right value of $0.3 million, which is higher than the fair value of the
warrants. This amount has been recorded as a deferred financing cost included in
other assets in the accompanying balance sheet and is being 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 to market
the value of these warrants at each reporting period and record the warrants at
the higher of the put right value or the fair value.

RESULTS OF OPERATIONS

Comparison of Quarter Ended June 30, 2002 with Quarter Ended June 30, 2001

      Revenue. Total revenues increased to $14.3 million for the second quarter
of 2002 from $13.6 million for the second quarter of 2001, due to increases in
student services revenue of $2.5 million, which were offset by the decrease in
corporate and university solutions revenue of $1.8 million.

      Student Services Revenue. Student services revenue increased to $12.9
million in the quarter of 2002 from $10.4 million in the second quarter of 2001.
The increase in student services revenue was primarily due to the revenue from
OCM

<PAGE>

Direct, our direct mail business, which we acquired in June 2001. The increase
was partially offset by the sale of the eStudentLoan and Rail Connection
businesses in 2001 and decreased online advertising on our network of web sites.

      Corporate and University Solutions Revenue. Corporate and university
solutions revenue decreased to $1.4 million in the second quarter of 2002 from
$3.1 million in the second quarter of 2001. The decrease in revenue was
primarily due to the sale of our Voice FX business on December 31, 2001, and the
sale of our SA Marketing Group business on May 8, 2002. The decrease was also as
the result of a reduction in marketing spending by several of our corporate
customers. The reduction in marketing spending is attributed to the continued
overall slow-down in the economy and more specifically, the advertising and
marketing sectors.

      For the three month period ended June 30, 2001, there were no individual
customers that accounted for a significant portion of revenue. General Motors
accounted for 24% of total revenue and 31% of student services revenue in three
month period ended June 30, 2001.

      Cost of Student Services Revenue. Cost of student services revenue
consists of the costs associated with subscription, commerce and advertising
revenue. Subscription costs consist of the costs associated with the
fulfillment of membership subscriptions and customer service. Commerce costs
include costs of goods paid to third parties in connection with selling products
and personnel-related costs associated with acquiring customers for the Company
and our corporate clients. Advertising costs consist primarily of royalties paid
to colleges and universities 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 $4.8 million in the second quarter of 2002 from $2.8
million in the second quarter of 2001. The increase was primarily due to an
increase in commerce costs consisting of cost of goods paid to third parties in
connection with selling products related to OCM Direct, our direct mail
business, which we acquired in June 2001.

      Cost of Corporate and University Solutions Revenue. Cost of corporate and
university solutions revenue consists primarily of the costs of marketing
services and the costs of acquiring customers on behalf of our corporate
clients. Marketing services costs primarily include the direct and indirect
costs associated with planning and implementing events and promotions. Cost of
corporate and university solutions revenue decreased to $0.8 million in the
first quarter of 2002 from $1.6 million in the first quarter of 2001, consistent
with decreases in revenues for marketing services, decreases in revenues due to
the sale of our Voice FX business on December 31, 2001 and the May 2002 sale of
our SA Marketing Group business.

      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, the SA Cash Program and our network of web sites. Product
development expenses decreased to $1.6 million in the second quarter of 2002
from $4.8 million in the second quarter of 2001. The decrease was primarily due
to the sale of our eStudentLoan and Voice FX businesses in the fourth quarter of
2001, the sale of our SA Marketing Group business in May 2002, the reduction in
number of employees engaged in product development in the fourth quarter of 2001
and our overall continued reduction in technology spending.

      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 $6.6 million in the quarter of 2002 from $6.5
million in the second quarter of 2001. The increase was primarily due to
additional sales and marketing expenses associated with the OCM Direct business
which was acquired in June 2001 and the increase in overall revenue quarter over
quarter. The increase was partially offset by decreases related to a non-cash
expense for television advertising recorded in the second quarter of 2001, the
sale of our Voice FX business on December 31, 2001 and the sale of our SA
Marketing Group business in May 2002.

      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 decreased to $2.7 million in the second quarter of
2002 from $2.9 million in the second quarter of 2001. The decrease was primarily
due to continued efforts to reduce operating expenses, the sale of our Voice FX
business on December 31, 2001 and the sale of our SA Marketing Group business on
May 8, 2002. The decrease was partially offset by the general and administrative
costs associated with OCM Direct, which was acquired in June 2001.

<PAGE>

      Depreciation and Amortization. Depreciation expense increased to $1.8
million in the second quarter of 2002 from $1.5 million in the quarter of 2001
primarily as a result of our acquisition of OCM Direct in June 2001.
Amortization expense decreased to $0.7 million in the second quarter of 2002
from $2.1 million in the second quarter of 2001 as a result of the application
of SFAS 142 in 2002. In accordance with SFAS 142, the Company is continuing to
amortize the value of acquired customer contracts, customer lists, technical
intangibles and trademarks attributable to the acquisition of OCM Direct and
College Club. The remaining goodwill attributable to OCM Direct and College Club
will not be amortized, but will be subject to an impairment tests.

      Realized Gain on Sale. Effective May 8, 2002, Student Advantage sold the
assets relating to its SA Marketing Group business to Triple Dot, Inc., a
subsidiary of Alloy, Inc., for a cash payment of $6.5 million (subject to
working capital adjustments) and an opportunity to earn up to an additional $1.5
million based on the performance of certain pending proposals. For the three
month period ended June 30, 2002, the Company recorded a gain of $7.0 million
from the sale of the SA Marketing Group assets.

      Interest Expense, Net. Interest expense, net, includes interest income
from cash balances and interest expense related to the Company's financing
obligations. Interest expense was $0.7 million in the second quarter of 2002
compared to of $0.2 million of interest income in the second quarter of 2001.
The increase in expense was a result of interest related to the term loan and
the revolving loan entered into by the Company with Reservoir Capital in June
2001, the warrants issued in connection with those loans and the $5.0 million
revolving loan facility entered into by OCM Direct in February 2002. At June 30,
2002, the principal balances on these loans were $5.0 million, $5.0 million and
$4.5 million, respectively.

      Comparison of Six Months Ended June 30, 2002 with Six Months Ended June
30, 2001

      Revenue. Total revenues decreased to $24.4 million for the first six
months of 2002 from $26.8 million for the first six months of 2001 due to a
decrease in corporate and university solutions revenue of $4.5 million which was
offset in part by an increase in student services revenue of $2.1 million.

      Student Services Revenue. Student services revenue increased to $21.6
million in the first six months of 2002 from $19.5 million in the first six
months of 2001. The increase in revenue was primarily due to revenue from OCM
Direct, our direct mail business, which we acquired in June 2001. The increase
was partially offset by the one time recognition of $1.0 million in revenue
related to Edu.com in the first quarter of 2001, to the divestitures of
eStudentLoan and Rail Connection in 2001 and decreased online advertising on our
network of web sites.

      Corporate and University Solutions Revenue. Corporate and university
solutions revenue decreased to $2.8 million in the first six months of 2002 from
$7.3 million in the first six months of 2001. The decrease in revenue was
primarily due to the sale of our Voice FX business on December 31, 2001, the
sale of our SA Marketing Group business on May 8, 2002 and the reduction in fees
related to the restructuring of the AT&T agreement under which we did not earn
any fees from AT&T after August 31, 2001. The decrease was also as the result of
a reduction in marketing spending by several of our corporate customers. The
reduction in marketing spending is attributed to the continued overall slow-down
in the economy and more specifically, the advertising and marketing sectors.

      For the six month period ended June 30, 2002 there were no individual
customers that accounted for a significant portion of revenue. For the six month
period ended June 30, 2001, General Motors Corp., Capital One and AT&T accounted
for 23%, 18% and 13% of total revenue, respectively. We do not expect to earn
significant revenues from Capital One in the future as the services provided to
Capital One were provided by our Voice FX business, which was sold on December
31, 2001. We do not expect to earn significant revenues from AT&T in the future.

      Cost of Student Services Revenue. Cost of student services revenue
increased to $7.5 million in the first six months of 2002 from $4.6 million in
the first six months of 2001. The increase was primarily due to an increase in
commerce costs consisting of cost of goods paid to third parties in connection
with selling products related to OCM Direct, our direct mail business, which we
acquired in June 2001.

      Cost of Corporate and University Solutions Revenue. Cost of corporate and
university solutions revenue decreased to $1.9 million in the first six months
of 2002 from $4.0 million in the first six months of 2001, consistent with
decreases in

<PAGE>

revenues for marketing services, decreases in revenues due to the sale of our
Voice FX business on December 31, 2001 and the May 2002 sale of our SA Marketing
Group business.

      Product Development. Product development expenses decreased to $3.8
million in the first six months of 2002 from $10.6 million in the first six
months of 2001. The decrease was primarily due to the sale of our eStudentLoan
and Voice FX businesses in the fourth quarter of 2001, the sale of our SA
Marketing Group business on May 2002, the impact of the reduction in number of
employees engaged in product development in the fourth quarter of 2001 and our
overall continued reduction in technology spending.

      Sales and Marketing. Sales and marketing expenses decreased to $11.9
million in the first six months of 2002 from $12.5 million in the first six
months of 2001. The decrease was related to a non-cash expense for television
advertising recorded in the second quarter of 2001, the sale of our Voice FX
business on December 31, 2001 and the sale of our SA Marketing Group business in
May 2002. The decrease was partially offset by additional sales and marketing
expenses associated with the OCM Direct business which was acquired in June
2001.

      General and Administrative. General and administrative expenses increased
to $6.6 million in the first six months of 2002 from $5.7 million in the first
six months of 2001. The increase was primarily due to general and administrative
costs associated with OCM Direct, which was acquired in June 2001, and offset by
decreases related to the sale of our Voice FX business on December 31, 2001, and
the sale of our SA Marketing Group business on May 8, 2002.

      Depreciation and Amortization. Depreciation expense increased to $3.5
million in the first six months of 2002 from $2.9 million in the first six
months of 2001 primarily as a result of our acquisition of OCM Direct in June
2001. Amortization expense decreased to $0.9 million in the first six months of
2002 from $3.4 million in the first six months of 2001 as a result of the
application of SFAS 142 in 2002. In accordance with SFAS 142, the Company is
continuing to amortize the value of acquired customer contracts, customer lists,
technical intangibles and trademarks attributable to the acquisition of OCM
Direct and College Club. The remaining goodwill attributable to OCM Direct and
College Club will not be amortized, but will be subject to an impairment tests.

      Realized Gain on Sale. Effective May 8, 2002, Student Advantage sold the
assets relating to its SA Marketing Group business to Triple Dot, Inc., a
subsidiary of Alloy, Inc., for a cash payment of $6.5 million (subject to
working capital adjustments) and an opportunity to earn up to an additional $1.5
million based on the performance of certain pending proposals. For the six month
period ended June 30, 2002, the Company recorded a gain of $7.0 million.

      Equity Interest in Edu.com. In the second quarter of 2001, we purchased
substantially all of the assets of Edu.com, Inc. Prior to the acquisition, we
held a minority interest in Edu.com, which was accounted for under the cost
method of accounting. The resulting treatment of the additional investment in
the second quarter of 2001 was 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, we retroactively restated
our investment in Edu.com on the equity method of accounting and recorded its
ownership percentage of Edu.com's net loss. As a result of applying the equity
method to the Edu.com investment, we recorded an equity interest in Edu.com's
net loss of $0.5 million for the six months ended June 30, 2001.

      Interest Expense, Net. Interest expense was $1.3 million in the first six
months of 2002 compared to of $0.2 million of interest income in the second
quarter of 2001. The increase in expense was a result of interest related to the
term loan and the revolving loan entered into by the Company with Reservoir
Capital in June 2001, the warrants issued in connection with those loans and the
$5.0 million revolving loan facility entered into by OCM Direct in February
2002. At June 30, 2002, the principal balances on these loans were $5.0 million,
$5.0 million and $4.5 million, respectively.

LIQUIDITY AND CAPITAL RESOURCES

      Since our inception, we have financed our operations primarily through the
private placement and public offering of securities, cash from operations,
borrowings under our term loan, credit facilities, loans from equity holders,
sales of accounts receivable and dispositions of businesses. In May 2001, we
completed a private placement of equity securities to new and existing investors
and received $9.8 million in net proceeds. In June 2001, we received $14.5
million in net proceeds from a

<PAGE>
$10.0 million term loan and a $5.0 million revolving credit facility provided by
entities affiliated with Reservoir Capital Partners, who we refer to
collectively as Reservoir Capital. In February 2002, our subsidiary, OCM Direct
and its subsidiaries, entered into a revolving loan agreement with Bank of
America providing for a $5.0 million loan facility. In May 2002, we completed a
private placement of equity securities to new and existing investors and
received $2.7 million in net proceeds. During the six month period ended June
30, 2002, Raymond V. Sozzi, Jr., our Chairman and CEO, advanced an aggregate of
$0.5 million to the Company, all of which was repaid during the six month period
ended June 30, 2002.

      As of June 30, 2002 the Company had cash and cash equivalents of $1.5
million. In addition to the Company's cash and cash equivalents, the Company had
restricted cash of $0.6 million at June 30, 2002. The Company's restricted cash
amounts are related to cash that is held by our third party credit card
processor and amounts held in escrow pursuant to the terms of acquisition
agreements we entered into relating to the sale of certain of our assets and
businesses.

      Net cash used for operating activities was $10.7 million for the six
months ended June 30, 2002, a decrease of $1.0 million compared to net cash used
for operating activities of $11.7 million for the six months ended June 30,
2001. Net cash used for operating activities in the six months ended June 30,
2002 was primarily a result of a net loss of $6.0 million, a net gain on sale of
business of $7.0 million, an increase in inventory of $4.4 million and a
decrease in accrued expenses of $2.4 million. The net loss was partially offset
by depreciation and amortization of $4.4 million, a decrease in accounts
receivable of $3.2 million and an increase in deferred revenue of $3.3 million.

      Net cash provided by investing activities was $5.6 million for the six
months ended June 30, 2002, an increase of $16.2 million compared to net cash
used for investing activities of $10.6 million for the six months ended June 30,
2001. Net cash provided by investing activities in the six months ended June 30,
2002 was a result of the proceeds received for the sale of the SA Marketing
Group business in May 2002, partially offset by purchases of fixed assets. Net
cash used in the first six months of 2001 was due the acquisition of OCM Direct
in June 2001 and purchases of fixed assets.

      Net cash provided by financing activities was $1.5 million for the six
months ended June 30, 2002, a decrease of $16.6 million compared to net cash
provided by financing activities of $18.1 million for the six months ended June
30, 2001. The net cash provided by financing activities in the six months ended
June 30, 2002 were primarily the result of the net proceeds of $4.5 million from
the revolving credit facility with Bank of America and $2.7 million from the
sale of 360,000 shares of common stock in a private placement in May 2002,
partially offset by the repayment of $5.2 million of our obligations to
Reservoir Capital. The net cash provided by financing activities in the six
months ended June 30, 2001 was primarily related to the sale of 500,000 shares
of common stock in a private placement and the net proceeds from the debt
financing with Reservoir Capital.

      As of August 13, 2002, the outstanding principal balance under our credit
facility with Reservoir Capital was $10.0 million. The terms of our credit
facility with Reservoir Capital, as amended through May 6, 2002, require that we
make payments of $5.2 million on or before May 14, 2002, $1.25 million before
August 1, 2002 and $1.25 million before September 1, 2002. The May 6, 2002
amendment changed the maturity date of the credit facility from June 2004 to
July 1, 2003, eliminated the Lender's option to terminate the credit facility
and require repayment by January 1, 2003 and provided that the Lenders' right to
require us to purchase certain warrants held by the lenders may not be exercised
before July 1, 2003 (absent a loan acceleration). We also modified the
agreements with Reservoir Capital to reduce the aggregate of $0.4 million in
fees otherwise due on April 15, 2002 to $0.2 million due on July 31, 2002, waive
the financial covenants under the Loan Agreement and capitalized certain
revolving loan interest payments. As of August 14, 2002, we had made the May 14,
2002 payment of $5.2 million but had not made the August 1, 2002 payment of
$1.25 million or the July 31, 2002 payment of $0.2 million. We have agreed with
the lenders to defer the payments and are currently in discussion with the
lenders to determine an amended payment schedule.

      The credit facility with Reservoir Capital is secured by substantially all
of our assets and all of the assets of our subsidiaries other than OCM Direct
and its subsidiaries. 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 us pay such interest, in which
case, we may choose to pay the accrued interest in cash or in shares of our
common stock (provided that the option to pay 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 we elect to pay interest in

<PAGE>

common stock, 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. We
also pay annual facility and commitment fees equal to 2.5% of the amounts
borrowed. The credit facility requires that we and our subsidiaries comply with
certain affirmative and negative covenants, including limitations on the
incurrence of additional indebtedness and mandatory prepayments in the event
that we complete equity financings or asset dispositions.

      In February 2002, our subsidiary, OCM Direct, and its subsidiaries,
CarePackages and Collegiate Carpets, entered into a revolving loan agreement
with Bank of America providing for a $5.0 million loan facility. The interest
rate under the facility is LIBOR plus 2.5 percent, and the facility is secured
by all of the assets of OCM Direct and its two subsidiaries. Student Advantage
provided an unsecured guaranty of the obligations of OCM Direct and its
subsidiaries to Bank of America. The maturity date of the loan is January 31,
2003, provided that OCM Direct is required to repay all amounts outstanding
under the loan for a period of 30 consecutive days between August 1 and October
31, 2002. As of August 14, 2002, the principal amount outstanding under the
revolving loan facility was zero.

      We have experienced substantial net losses since our inception
and, as of June 30, 2002, had an accumulated deficit of $114.9 million. Such
losses and accumulated deficit resulted primarily from significant costs
incurred in the development of our products and services and the
establishment of our infrastructure. We have taken significant steps
through the restructuring that it announced in October 2001 to reduce operating
costs for 2002. We currently anticipate that our available cash resources,
together with cash expected to be provided from operations, based upon an
anticipated increase in revenue for the remainder of 2002 and the first two
quarters of 2003, will be sufficient to meet our anticipated needs for working
capital and capital expenditures for at least the next 12 months. For purposes
of evaluating cash resources during the next 12 months, we have assumed that we
will not be required to repay any amounts under our credit facility with
Reservoir Capital other than two payments of $1.25 million each in
August 2002 and September 2002. Our expectations regarding available cash
resources during the next 12 months are also based on the continued
availability of OCM Direct's $5.0 million revolving loan facility with Bank of
America and significant reductions in the net cash loss that we expect to incur
for the remainder of 2002 and the first six months of 2003. We have also
assumed that we will not be required to repay any amounts under the Bank of
America revolving loan facility when it is scheduled to terminate in January
2003.

     Under the terms of our credit facility with Reservoir Capital Partners, we
are required to make periodic interest payments over the borrowing period, to
make payments of $1.25 million by August 1, 2002 and again on September 1, 2002,
and to repay the total outstanding principal balance on July 1, 2003. As of
August 14, 2002 we had not made certain payments of accrued interest or the
$1.25 million payment due on August 1, 2002. However, we are engaged in
discussions with Reservoir Capital Partners regarding an amendment to the loan
agreement. We agreed with Reservoir Capital Partners that our obligation to make
payments under the credit facility would be suspended until we received notice
from Reservoir Capital Partners that it is terminating our discussions. If
Reservoir Capital Partners terminates our discussions, we could be required to
repay our entire outstanding indebtedness at such time. If we are required to
repay our entire outstanding indebtedness under the Reservoir Capital Partners
credit facility, we will be required to obtain additional financing. If
Reservoir Capital partners accelerates the entire indebtedness and we fail to
make such payment, Reservoir Capital partners may seek to exercise its rights as
a secured lender. In addition, if Reservoir Capital Partners were to accelerate
the loan, Bank of America could terminate the availability of OCM Direct's $5.0
million revolving loan facility.

        If our revenue and expense projections do not materialize as
anticipated or if we are otherwise required to repay the amounts outstanding
under the credit facility with Reservoir Capital Partners, we will be required
to obtain additional financing. Failure to generate sufficient revenues, obtain
additional capital or financing if needed, or reduce certain discretionary
spending if necessary, could have a material adverse effect on our assets,
properties, operations and our ability to achieve our intended business
objectives.

      We may also pursue acquisitions. Any significant acquisitions by us may
require additional equity or debt financing to fund the purchase price, if paid
in cash. To the extent that we finance our requirements through the issuance of
additional equity securities, any such issuance would result in dilution to the
interests of our stockholders. Furthermore, to the extent that we incur
indebtedness in connection with financing activities, we will be subject to all
of the risks associated with incurring substantial indebtedness, including the
risk that interest rates may fluctuate and cash flow may be insufficient to pay
principal and interest on any such indebtedness. We have no current arrangements
with respect to, or sources of, additional financing. There can be no assurance
that any additional financing will be available to us on acceptable terms, if at
all.

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 to date. We incurred net losses of $28.7 million in 2000, $35.8 million
in 2001 and $6.0 million in the first six months of 2002. As of June 30, 2002,
our accumulated deficit was $114.9 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 may need
to further reduce our expenses in order to achieve and maintain profitability.
We may not be able to reduce our expenses without affecting our ability to
generate revenues, consummate transactions or achieve and sustain profitability.

<PAGE>
     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 MAY NEED ADDITIONAL CAPITAL, AND THE FUTURE FUNDING OF THESE CAPITAL NEEDS IS
UNCERTAIN.

     We require substantial working capital to fund our business. Due in part to
the spending patterns of students and universities and our need to acquire
inventory for our OCM Direct business, we experience seasonal variations in our
receipts and expenditures of cash. Our loan agreement with Reservoir Capital
Partners requires payments of $1.25 million to be made in August and September
of 2002, and the full amount of the loan to be repaid on July 1, 2003. As of
August 14, 2002, we had not made certain payments of accrued interest or the
$1.25 million payment due on August 1, 2002. However, we are engaged in
discussions with Reservoir Capital Partners regarding an amendment to the loan
agreement. We agreed with Reservoir Capital Partners that our obligation to make
payments under the credit facility would be suspended until we received notice
from Reservoir Capital Partners that it is terminating our discussions. If
Reservoir Capital Partners terminates our discussions, we could be required to
repay our entire outstanding indebtedness at such time. We have experienced and
expect to continue to experience periodic cash demands that exceed our cash flow
and may require additional external financing through credit facilities, sale of
debt or equity securities or by obtaining other financing facilities to support
our operations. We have also borrowed funds from Raymond V. Sozzi, Jr., our
Chief Executive Officer, from time to time to meet certain obligations. In
addition, we will require additional equity or debt financing to fund the
purchase price, to the extent payable in cash, for any future significant
acquisitions. We have entered into factoring arrangements with a third party
with respect to certain of our accounts receivable, which has enabled us to
accelerate the receipt of cash for these accounts receivable. If we are not able
to secure factoring arrangements in the future, our financial condition could be
adversely affected. Our loan agreement with Reservoir Capital Partners imposes
significant restrictions on our ability to raise funds through the sale of
equity, make investments and acquisitions, obtain other financing, and realize
proceeds from sales of business units or equity financings.

     In addition, additional funds raised through the issuance of equity
securities or securities convertible into stock may have negative effects on our
stockholders, such as a:

     -     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.

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

     -     make required payments to our secured lenders,

     -     maintain, develop or enhance our offerings or presence in existing
           markets,

     -     penetrate new markets or take advantage of future opportunities, or

     -     respond to competitive pressures.

WE HAVE TAKEN ON A MATERIAL AMOUNT OF INDEBTEDNESS.

     We incurred material indebtedness in connection with the acquisition of OCM
Direct in June 2001 under the terms of the loan agreement we entered into with
Reservoir Capital Partners and two affiliated entities, who we refer to
collectively as Reservoir Capital Partners. As of August 13, 2002, we had $10.0
million of outstanding principal indebtedness under the loan agreement which is
secured by a lien on all of our assets other than assets owned by our
subsidiary, OCM Direct. The loan agreement imposes significant restrictions on
our ability to raise funds through the sale of equity, make investments and
acquisitions, obtain other financing, and realize proceeds from sales of
business units. Under the terms of the loan agreement, we are required to make
periodic interest payments over the borrowing period to make payments of
$1.25 million by August 1, 2002 and again on September 1, 2002, and to pay the
total outstanding principal balance on July 1, 2003. As of August 14, 2002, we
had not made the payment due on August 1, 2002. However, we are engaged in
discussions with Reservoir Capital Partners regarding an amendment to the loan
agreement. We agreed with Reservoir Capital Partners that our obligation to make
payments under the credit facility would be suspended until we received notice
from Reservoir Capital Partners that it is terminating our discussions. If
Reservoir Capital Partners terminates our discussions, we would be required to
repay our entire outstanding indebtedness at such time. We have agreed with
Reservoir Capital to defer the missed payment and are currently in discussion
with Reservoir Capital to determine an amended payment schedule.
<PAGE>

      In February 2002, OCM Direct and its two subsidiaries entered into a loan
and security agreement with Bank of America providing for a secured revolving
loan of up to $5.0 million, which is guaranteed on an unsecured basis by Student
Advantage. The maturity date of the loan is January 31, 2003, provided that OCM
Direct is required to repay all amounts outstanding under the loan for a period
of 30 days between August 1 and October 31, 2002. As of August 9, 2002, the
principal amount under this facility had been repaid.

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

      -     our ability to obtain additional financing for any future
            acquisitions, working capital, capital expenditures or other
            purposes maybe 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 other factors, many of which are beyond our control. Our ability to meet our
debt service and other obligations and our ability to re-borrow under revolving
credit facilities may depend in significant part on the extent to which we can
successfully implement 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.

WE MAY FACE CHALLENGES MAINTAINING OUR NASDAQ NATIONAL MARKET LISTING.

      We may not presently satisfy certain of the requirements for continued
listing on the Nasdaq National Market, including at least $10.0 million of
stockholders' equity, $5.0 million market value of our public float and 400
stockholders who own 100 shares of stock. In addition, even though we are
currently in compliance with the Nasdaq National Market requirement for minimum
closing bid price, we may not be able to maintain such compliance in the future.

      If our common stock were delisted from the Nasdaq National Market, among
other things, this could result in a number of negative implications, including
reduced liquidity in our common stock as a result of the loss of market
efficiencies associated with the Nasdaq National Market as well as the potential
loss of confidence by suppliers, customers and employees, the loss of analyst
coverage and institutional investor interest, fewer business development
opportunities and greater difficulty in obtaining financing. There can be no
assurance that we will be able to maintain our listing on the Nasdaq National
Market.

      In the event our common stock is delisted from the Nasdaq National Market,
we are not currently in compliance with the initial listing requirements for the
Nasdaq SmallCap Market and, therefore and absent a waiver of certain listing
requirements, we will likely seek to list our stock on the so-called "Pink
Sheets." This would make it more difficult for an investor to dispose of, or
obtain accurate quotations as to the market value of, our stock. This delisting
may negatively impact the value of our stock as stocks trading on the
over-the-counter market are typically less liquid and trade with larger
variations between the bid and ask price. In addition, there are additional
sales practice requirements on broker-dealers who sell such securities, such as
determining the suitability of the purchaser and receiving the purchaser's
written consent to the transaction prior to sale. If the trading price of our
stock is below $5.00 per share, trading in the common stock would also be
subject to certain other securities laws requirements, which require additional
disclosure by broker-dealers in connection with any trades involving a stock
defined as a "penny stock," such as delivery of a disclosure schedule explaining
the penny stock market and the risks associated therewith. The additional
burdens imposed upon broker-dealers by such requirements may discourage
broker-dealers from effecting transactions in our stock, which could severely
limit the market price and liquidity of our stock.

GENERAL MARKET CONDITIONS COULD ADVERSELY AFFECT OUR BUSINESS.

      We believe that general economic conditions and the financial difficulties
that many companies have experienced have caused a slowdown in consumer and
business spending and in companies' budgets for marketing services and have
reduced the perceived urgency by companies to begin or to continue marketing
initiatives. As a result, our current customers may cancel or delay spending on
marketing and other initiatives and there may be a decrease in demand for our
services from potential customers. If companies continue to delay or reduce
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. Moreover, the current market conditions have


                                       21
<PAGE>

decreased the demand for online advertising, and have put downward pressure on
the cost per thousand impressions which we can charge for such advertising and
have increased the likelihood that, despite our best efforts and written
agreements supporting such efforts, certain of our customers may be unable to
pay for such advertising service we have provided to them.

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. 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,

      -     generate or raise sufficient capital to operate and expand our
            business,

      -     implement our business model,

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

      -     introduce new and enhanced web and offline products, content, and
            services and avail ourselves of current opportunities, and

      -     respond to current opportunities, competitive developments and
            market conditions.

      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.

WE MAY NOT SUCCESSFULLY IMPLEMENT OUR BUSINESS STRATEGY.

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

            - maintain our network of university-endorsed relationships as our
      primary access point to students, their parents and alumni for delivery of
      our Membership, SA Cash and OCM Direct products and services, and our
      online Official College Sports Network website,

            - maintain our network of corporate sponsors,

            - continue to aggressively build the Student Advantage brand,

            - continue to increase our student reach and grow the number of paid
      participants in our Membership Program through OCM Direct sales, online
      membership sales, corporate sponsored distributions, and university and
      college sales, and

            - continue to establish our network of websites as part of our
      integrated approach for delivering our products and services, including
      licensed college sports products, member registration and renewal,
      information regarding national and local sponsors, and customer service.

      We are 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, our direct mail customers, our
SA Cash university partners and our Official College Sports Network university
partners. A failure to acquire or maintain alliances and relationships with
colleges and universities could have a material adverse effect on our business.

      We are also dependent upon our sponsors, both national and local, to
provide our members and SA Cash participants with discounts on their products
and services. However, 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.


                                       22
<PAGE>

      We may encounter difficulties in establishing or maintaining our network
of web sites. Several companies that provide content to our web sites have
discontinued operations or filed for bankruptcy protection. We may be forced to
procure services from other suppliers, and cannot assure you that we will be
able to do so in a timely and cost-effective manner, and may be required to
alter certain of our offerings to reflect such events. In addition, our members
and customers may perceive our web sites to be lacking certain content or
attributes due to the failure of certain business partners. Finally, we cannot
guarantee that Internet users will maintain interest in our network of websites.
A decline in membership or usage of our network of websites would decrease
revenue.

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 and SA Cash 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 websites
that sell online advertising.

      During the second quarter of 2001, AT&T completed its obligation to
purchase Student Advantage memberships in bulk. In prior periods, the majority
of student memberships were obtained through AT&T or other corporate partners'
promotional offers of Student Advantage memberships. These promotional offers
typically included a free one-year membership in the Student Advantage
Membership Program. Our corporate partners 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 direct sales 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 have experienced and
anticipate continuing to experience a decline in the overall number of
memberships sold through bulk sale arrangements, although we expect that this
decline will be partially offset by an increase in the number of individual
memberships sold at a higher per unit price. The inability to successfully
develop this marketing model or the related sales channels could have a
materially adverse effect on the business and our ability to attract and retain
corporate partners. It is difficult for us to project future levels of
subscription, transaction-related and advertising revenues and profits.

A LIMITED NUMBER OF CUSTOMERS CURRENTLY ACCOUNT FOR A SIGNIFICANT PERCENTAGE OF
OUR TOTAL REVENUES.

      In the past, a limited number of customers have accounted for a
significant percentage of our total revenues. In the first six months of 2002,
there was no single customer that accounted for a significant portion of total
revenue. In 2001, three customers, in the aggregate, accounted for approximately
23% of our total revenue. While we anticipate that revenue from this limited
number of customers will decline as a percentage of total revenues, a limited
number of customers may 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. In addition, many of our customers
have slowed their payment cycles, and because a substantial portion of our
revenue is generated from a limited number of customers, the non-payment or late
payment of amounts due from customers could have a material adverse effect on
our business, financial condition and results of operations.

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. Recent proposed and enacted
laws may restrict how companies can market products and services to 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.
This sometimes makes it difficult for us to gain access to college and
university students, as we have been denied access to certain college and
university campuses in the past.

OUR ABILITY TO EXECUTE ON OUR SUPPLY CHAIN MANAGEMENT PLAN IN OUR DIRECT
MARKETING BUSINESS IS DEPENDENT UP ON 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


                                       23
<PAGE>

successfully procure adequate 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 STATUS UNDER STATE AND FEDERAL FINANCIAL SERVICES REGULATION IS UNCLEAR.
VIOLATION OF ANY PRESENT OR FUTURE REGULATION COULD EXPOSE US TO LIABILITY,
FORCE US TO CHANGE OUR BUSINESS PRACTICE OR FORCE US TO CEASE OR ALTER OUR
OFFERINGS.

      Our SA Cash offerings involve an industry potentially subject to
government regulation. In the future, we might be subjected to federal or state
banking laws or regulations. If we are deemed to be in violation of any current
or future regulations, we could be exposed to financial liability or forced to
change our business practices or offerings. As a result, we could face
significant legal fees, delays in extending our product offerings, a curtailing
of current or contemplated offerings and damage to our reputation that could
adversely affect our financial results.

One or more governmental agencies that regulate or monitor banks or other types
of providers of electronic commerce services, including the Office of the
Comptroller of the Currency and the Federal Reserve Board, may conclude that,
under its statutes and licensing requirements, we are engaged in an unauthorized
banking business. In that event, we might be subject to monetary penalties and
adverse publicity and might be required to cease doing business with residents
of those states. A number of states have enacted legislation regulating check
sellers, money transmitters or service providers as banks. This uncertainty
regarding the scope and application of these regulations has slowed our ability
to market our offerings. Such liability or changes could have a material adverse
effect on our business, results of operations and financial condition. Even if
we are not forced to change our business practices, we could be required to
obtain licenses or regulatory approvals that could cause us to incur substantial
costs.

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 each academic term.
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
and because 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 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 revenue is
recognized during the third quarter. The revenue on these sales is generally
recognized when the products are shipped to our customers. These seasonal
factors could have a material adverse effect on our business, financial
condition and results of operations.

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 renew the membership subscription. Our revenue growth
is highly dependent upon our ability to market the value of our Membership
Program 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. Through our direct mail business, a
disproportionate 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. A failure to acquire new members, renew current members or to
predict customer demand in our direct mail business could have a material
adverse effect on our business.

WE FACE SIGNIFICANT COMPETITION, WHICH COULD ADVERSELY AFFECT OUR BUSINESS.

            - 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; and

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


                                       24
<PAGE>

      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 in the foreseeable
future. To the extent such proliferation occurs, it could have a material
adverse effect on the demand for membership programs.

      Competition for online users and advertisers is intense and is expected to
increase over time as 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 websites
dedicated to college students as well as high-traffic websites sponsored by
companies such as AOL Time Warner, CBS, Disney, Terra Lycos, Microsoft, MTV and
Yahoo!

      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 websites. As a result, 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.

      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.

      In May 2002, we sold our SA Marketing Group business to Triple Dot, a
subsidiary of Alloy. In connection with the sale, we agreed not to compete in
certain events and promotions businesses until November 2005. This restriction
on our ability to compete may prevent as from taking advantage of available
business opportunities in the future, which could hinder our ability to gain new
corporate sponsors, build the Student Advantage brand and increase the number of
members in our Membership Program.

WE MAY UNDERTAKE ADDITIONAL ACQUISITIONS OR DIVESTITURES THAT MAY LIMIT OUR
ABILITY TO MANAGE AND MAINTAIN OUR BUSINESS AND MAY BE DIFFICULT TO INTEGRATE
INTO OUR BUSINESS.

      From January 1, 1999 to date, we acquired fifteen businesses and, since
January 1, 2000, have sold four others. In the future, we may undertake
additional acquisitions and sales of certain businesses or operations. These
transactions involve a number of risks, including:

      -     diversion of management attention and transaction costs associated
            in negotiating and closing the transaction;

      -     under-performance of an acquired business relative to our
            expectations;

      -     inability to retain the customers, management, key personnel and
            other employees of the acquired business;

      -     inability to establish uniform standards, controls, procedures and
            policies;

      -     inability to fully utilize all intellectual property of the acquired
            company;

      -     exposure to legal claims for activities and obligations of the
            acquired business arising from events occurring prior to the
            acquisition; and

      -     inability to realize the benefits of divestitures and collect monies
            owed to us.

      Integrating the operations of an acquired business can be a complex
process that requires integration of service personnel, sales and marketing
groups, technological infrastructure and service offerings, and coordination of
our development efforts. Customer satisfaction or performance problems with an
acquired business could affect our reputation as a whole. If we are unable to
effectively fully manage these risks in connection with our acquisitions or
dispositions, our business, operating results and financial condition could be
adversely affected.

WE MUST MANAGE OUR GROWTH AND CONSOLIDATION SUCCESSFULLY, INCLUDING THE
INTEGRATION OF ACQUIRED COMPANIES, IN ORDER TO


                                       25
<PAGE>
ACHIEVE OUR DESIRED RESULTS.

      We have experienced dramatic growth in personnel in recent years and
expect to continue to hire additional personnel in selected areas. We also
reduced our workforce in 2001 to decrease our costs and create greater
operational efficiency. This growth and consolidation requires significant time
and resource commitments. Further, as a result of our acquisitions,
approximately 68% of our employees are based outside of our Boston headquarters.
If we are unable to effectively manage a large and geographically dispersed
group of employees, anticipate our future growth or manage our consolidations
effectively, our business will be adversely 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 high. 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 and 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
Hosting.com in Boston, Massachusetts and Navisite in Andover, Massachusetts and
San Jose, California. Fire, floods, earthquakes, power loss (whether through
brown-outs or the like) or distribution issues, telecommunications failures,
break-ins, acts of terrorism, and similar events could damage these systems.
Computer viruses, electronic break-ins or other similar disruptive problems
could also adversely affect our websites. Our business could be adversely
affected if our systems were affected by any of these occurrences. At least one
of our system providers has filed for bankruptcy protection, which could limit
our ability to exercise certain rights under our agreement with that party, and
has caused us to divert internal resources to address contingency plans. 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 a formal disaster recovery plan. Our
network of websites must accommodate a high volume of traffic and deliver
frequently updated information. Our websites 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 websites
as not functioning properly and therefore cause them to use another website or
other methods to obtain information.

      In addition, our users depend on Internet service providers, online
service providers and other website operators for access to our network of
websites. 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 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 MAY BE SUED FOR INFORMATION RETRIEVED FROM THE INTERNET.


                                       26
<PAGE>

      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 websites or in
our publications or 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 us to indemnification claims in the event
copyright holders assert their rights, and a request for indemnification for
legal fees incurred is pending. We could also be subjected to claims based upon
the content that is accessible from our network of websites through links to
other websites or through content and materials that may be posted by members in
chat rooms or bulletin boards including those located on the CollegeClub.com
website. 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
EMAIL OR SPAM.

      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 efforts to block Spam 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
websites, including CollegeClub.com.

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

      We collect and our network of websites captures information regarding our
members and users in order to provide information to them, enable them to access
the services offered on our websites, 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 websites.

      Our network of websites 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 our
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. 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 website will decline, which would reduce our
ability to generate revenue through the affected website.

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


                                       27
<PAGE>

      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 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 INDUSTRIES

      Rapidly changing technologies, frequent new product and service
introductions and evolving industry standards characterize our market. 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 claims or counterclaims could be time-consuming, result
in costly litigation, diversion of management's attention, require us to
redesign our products or marketing strategies or require us to enter into
royalty or licensing agreements, any of which could have a material adverse
effect on 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.

CERTAIN CURRENT STOCKHOLDERS OWN A LARGE PERCENTAGE OF OUR VOTING STOCK

      As of July 31, 2002, our executive officers, directors and affiliated
entities, together own approximately 35% 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


                                       28
<PAGE>
      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.

      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.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

      The Company 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 6, 2002, the Company issued 360,000 shares of Student Advantage
common stock to three investors for an aggregate purchase price of $2.7 million.
These investors, in the aggregate, have the right, exercisable at any time prior
to November 1, 2002, to purchase an additional 45,000 shares of common stock for
a purchase price of $7.50 per share and an additional 45,000 shares of common
stock with a purchase price of $10.00 per share. The securities were issued to
the investors under the exemption 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 26, 2002, the Company issued 200,000 shares of Student Advantage
common stock to former shareholders of OCM Direct, Inc. as final payment under
the June 2001 acquisition agreement. The shares were valued at the previous days
close price of $2.20 per share or $0.4 million and recorded as additional
goodwill related to the OCM acquisition. The securities were issued to the
investors under the exemption from registration set forth in Section 4(2) of the
Securities Act of 1933, as amended. No underwriters were involved in such
transaction.

      All share and per share amounts in this Item 2 have been adjusted to
reflect the one-for-ten reverse split of the Common Stock effected on June 28,
2002.

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

On May 16, 2002, the following proposals were voted on at the Annual Meeting of
Stockholders:

<TABLE>
<CAPTION>
PROPOSAL                                     FOR    AGAINST/WITHHELD   ABSTAIN

<S>                                       <C>           <C>             <C>
1. To elect William S. Kaiser as a Class  34,806,673    78,972          --
III director to serve for a three year
term expiring at the Annual Meeting
following the fiscal year ended December
31, 2004.

2. To elect Marc J. Turtletaub as a       34,623,697   261,948          --
Class III director to serve for a three
year term expiring at the Annual Meeting
following the fiscal year ended December
31, 2004.
</TABLE>


                                       29
<PAGE>

<TABLE>
<S>                                          <C>        <C>          <C>
3. To approve an amendment to the
Company's 1999 Employee Stock Purchase
Plan increasing the number of shares of   34,802,571    67,407       15,667
Common Stock issuable under the Plan
from 450,000 shares to 1,000,000 shares
(prior to giving effect to the
one-for-ten reverse split subsequently
adopted) and the continuance of the
Plan, as amended.
</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: John Connolly,
John S. Katzman, Raymond V. Sozzi, Jr., and Charles F. Young.

On June 28, 2002, the following proposal was voted on at a Special Meeting of
Stockholders:

1. To approve an amendment to the               For    Against/Withheld  Abstain
Company's Amended and Restated Certificate
of Incorporation to effect a one-for-ten    35,326,723      770,168       1,051
reverse split of the Company's issued and
outstanding Common Stock:

All share amounts and vote counts in this Item 4 are prior to giving effect to
the one-for-ten reverse split of the Common Stock effected on June 28, 2002.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

      (a) Exhibits

3.1  Certificate of Amendment of Amended and Restated Certificate of
Incorporation of Student Advantage, Inc. and the Registrant's Amended and
Restated Certificate of Incorporation.

10.1 Amendment No. 5 to Loan Agreement and Amendment to Warrant Agreement, dated
as of May 6, 2002, among the Registrant, the subsidiaries of the Registrant and
Reservoir Capital Partners, L.P., Reservoir Capital Associates, L.P. and
Reservoir Capital Master Fund, L.P. (amending the Loan Agreement by and among
the Registrant, the subsidiaries of the Registrant, and Reservoir Capital
Partners, L.P., Reservoir Capital Associates, L.P. and Reservoir Capital Master
Fund, L.P.). Incorporated herein by reference as filed on form 10-Q for the
period ending March 31, 2002.

10.2 Transition Services and General Release Agreement effective as of May 20,
2002 by and between the Registrant and Kenneth S. Goldman.

10.3 Stock Purchase Agreement dated May 6, 2002 by and between the Registrant
and Richard Bianchina, Jr.

10.4 Registration Rights Agreement dated May 6, 2002 by and between the
Registrant and Richard Bianchina, Jr.

10.5 Stock Purchase Agreement dated May 7, 2002 by and between the Registrant
and Pentagram Partners, LP.

10.6 Registration Rights Agreement dated May 7, 2002 by and between the
Registrant and Pentagram Partners, LP.

10.7 Stock Purchase Agreement dated May 7, 2002 by and between the Registrant
and Marc Turtletaub.

10.8 Registration Rights Agreement dated May 7, 2002 by and between the
Registrant and Marc Turtletaub.

      (b) Reports on Form 8-K

The Company filed a Current Report on Form 8-K dated June 20, 2002 with the
Securities and Exchange Commission on June 20, 2002 reporting the adoption of
Statement of Financial Accounting Standards No. 142, "Goodwill and Other
Intangible Assets".

The Company filed a Current Report on Form 8-K dated June 27, 2002 with the
Securities and Exchange Commission on June 27, 2002 reporting a change in
certifying accountant.


                                       30
<PAGE>

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, 2002              By: /s/ Kenneth S. Goldman
                                    --------------------------------------------
                                    Kenneth S. Goldman,
                                    Executive Vice President,
                                    Chief Financial Officer and Treasurer
                                    (Principal Financial and Accounting Officer)





                  STATEMENT PURSUANT TO 18 U.S.C. Section 1350

      Pursuant to 18 U.S.C. Section 1350, each of the undersigned certifies that
this Quarterly Report on Form 10-Q for the period ended June 30, 2002 fully
complies with the requirements of Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 and that the information contained in this report fairly
presents, in all material respects, the financial condition and results of
operations of Student Advantage, Inc.


Dated: August 14, 2002              By: /s/ Raymond V. Sozzi, Jr.
                                    --------------------------------------------
                                    Raymond V. Sozzi, Jr.
                                    President and Chief Executive Officer


Dated: August 14, 2002              By: /s/ Kenneth S. Goldman
                                    --------------------------------------------
                                    Kenneth S. Goldman
                                    Executive Vice President,
                                    Chief Financial Officer and Treasurer
                                    (Principal Financial and Accounting Officer)