<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 March 31, 2003

                                       OR

| |   TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

For the transition period from _______ to ___________

                          Commission File No. 0 - 26173

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

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

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

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

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

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

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes |X| No | |

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes | | No |X|.

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: 5,374,019 shares of common
stock as of May 12, 2003.

                                 ---------------
<PAGE>
                             STUDENT ADVANTAGE, INC.
                                    FORM 10-Q
                      FOR THE QUARTER ENDED MARCH 31, 2003

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

                                      INDEX

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

ITEM 1.     FINANCIAL STATEMENTS
            Consolidated Balance Sheets as of March 31, 2003 (Unaudited)
            and December 31, 2002                                              3

            Consolidated Statements of Operations for the three months
            ended March 31, 2003 (Unaudited) and 2002 (Unaudited)              4

            Consolidated Statements of Cash Flows for the three months
            ended March 31, 2003 (Unaudited) and 2002 (Unaudited)              5

            Notes to Consolidated Financial Statements (Unaudited)             6

ITEM 2.     MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
            AND RESULTS OF OPERATIONS                                         10

ITEM 3.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK        25

ITEM 4.     CONTROLS AND PROCEDURES                                           25

PART II.    OTHER INFORMATION                                                 26

ITEM 6.     EXHIBITS AND REPORTS ON FORMS 8-K                                 26

SIGNATURES                                                                    27

CERTIFICATIONS                                                                28

EXHIBIT INDEX                                                                 30
</TABLE>


                                   2
<PAGE>
PART 1. FINANCIAL INFORMATION.

ITEM 1. FINANCIAL STATEMENTS.

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

<TABLE>
<CAPTION>
                                                        MARCH 31,     DECEMBER 31,
                                                          2003            2002
                                                      ------------    ------------
                                                      (unaudited)
<S>                                                   <C>             <C>
                                     ASSETS

Current assets
    Cash and cash equivalents .....................   $      1,733    $      2,758
    Restricted cash ...............................            515             515
    Accounts receivable (net of reserves
      of $268 and $268 at March 31, 2003,
      and December 31, 2002, respectively) ........          2,297           2,948
    Inventory (finished goods) ....................          2,472           1,424
    Prepaid expenses ..............................          1,432           1,991
    Other current assets ..........................            610             557
                                                      ------------    ------------
        Total current assets ......................          9,059          10,193
    Notes receivable ..............................          4,128           4,156
    Property and equipment, net ...................          4,063           5,345
    Goodwill ......................................         16,843          16,843
    Intangible and other assets, net ..............          1,218           1,952
                                                      ------------    ------------
        Total assets ..............................   $     35,311    $     38,489
                                                      ============    ============

                      LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities
    Notes payable .................................   $     13,000    $     12,500
    Related party note payable ....................          3,500           3,500
    Borrowings under revolving line of credit .....          3,640           1,670
    Accounts payable ..............................          3,207           5,270
    Accrued compensation ..........................          1,041           1,355
    Other accrued expenses ........................          6,200           5,870
    Deferred revenue and other advances ...........          6,650           8,280
    Current obligation under capital lease ........             80             102
                                                      ------------    ------------
        Total current liabilities .................         37,318          38,547
                                                      ------------    ------------

    Deferred gain .................................            534             534
    Other long-term accrued expenses ..............            136             153
    Notes payable .................................             --              --
    Long-term obligation under capital lease ......             97             108
                                                      ------------    ------------
        Total long-term obligations ...............            767             795
                                                      ------------    ------------
        Total liabilities .........................         38,085          39,342
                                                      ------------    ------------
Commitments and Contingencies (see Note 7)

Stockholders' deficit
    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: 5,362,607 and 5,362,607
       at March 31, 2003 and December 31, 2002,
       respectively ...............................            536             536
    Additional paid-in capital ....................        123,477         123,475
    Accumulated deficit ...........................       (126,737)       (124,814)
    Notes receivable from stockholders ............            (50)            (50)
                                                      ------------    ------------
        Total stockholders' deficit ...............         (2,774)           (853)
                                                      ------------    ------------
        Total liabilities and stockholders' deficit   $     35,311    $     38,489
                                                      ============    ============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.

                                   3
<PAGE>
                             STUDENT ADVANTAGE, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                 THREE MONTHS ENDED
                                                                      MARCH 31,
                                                                  2003        2002
                                                                --------    --------
<S>                                                             <C>         <C>
Revenue
    Student services ........................................   $  5,131    $  8,671
    Corporate and university solutions ......................        665       1,476
                                                                --------    --------
         Total revenue ......................................      5,796      10,147

Costs and expenses
    Cost of student services revenue ........................      2,145       2,709
    Cost of corporate and university solutions revenue ......         --       1,038
    Product development .....................................      1,703       2,123
    Sales and marketing .....................................      4,092       5,346
    General and administrative ..............................      2,079       3,912
    Depreciation and amortization ...........................      2,027       1,940
                                                                --------    --------

         Total costs and expenses ...........................     12,046      17,068
                                                                --------    --------

Loss from operations ........................................     (6,250)     (6,921)

Realized gain on sale of assets .............................      4,338          --
Interest and other expense ..................................        (11)       (640)
                                                                --------    --------

Net loss ....................................................   $ (1,923)   $ (7,561)
                                                                ========    ========

Basic and diluted net loss per share ........................   $  (0.36)   $  (1.59)
                                                                ========    ========
Shares used in computing basic and diluted net loss per share      5,363       4,756
                                                                ========    ========
</TABLE>

----------
*     All share and per share items have been adjusted to reflect the one-for
      ten reverse split of the common stock effected on June 28, 2002

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


                                   4
<PAGE>
                              STUDENT ADVANTAGE, INC.
                       CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (IN THOUSANDS)
                                    (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                      FOR THE THREE MONTHS
                                                                                         ENDED MARCH 31,
                                                                                        2003        2002
                                                                                      --------    --------
<S>                                                                                   <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net loss ......................................................................   $ (1,923)   $ (7,561)
    Adjustments to reconcile net loss to net cash used in operating activities:
       Depreciation ...............................................................      1,293       1,780
       Amortization of intangible assets ..........................................        734         160
       Realized gain on sale of assets ............................................     (4,338)         --
       Reserve for allowances and bad debts .......................................         --         200
       Compensation expense relating to issuance of equity ........................         --          49
       Changes in current assets and liabilities, net of effects of acquisitions:
         Accounts and notes receivable ............................................        651       2,731
         Prepaid expenses and other current assets ................................        367         363
         Inventory ................................................................     (1,093)     (1,484)
         Accounts payable .........................................................     (2,054)       (450)
         Accrued compensation .....................................................       (314)       (137)
         Other accrued expenses ...................................................        531      (1,682)
         Deferred revenue .........................................................     (1,630)     (1,213)
                                                                                      --------    --------
         Net cash used in operating activities ....................................     (7,776)     (7,244)
                                                                                      --------    --------
CASH FLOWS FROM INVESTING ACTIVITIES:
    Purchases of fixed assets .....................................................        (67)       (378)
    Proceeds from sale of assets, net of $119 cash sold ...........................      4,381          --
                                                                                      --------    --------
         Net cash provided by (used in) investing activities ......................      4,314        (378)
                                                                                      --------    --------
CASH FLOWS FROM FINANCING ACTIVITIES:
    Increase in restricted cash ...................................................         --        (985)
    Proceeds from other financing obligations .....................................         --         950
    Proceeds from exercise of common stock options and employee stock purchase plan         --          12
    Repayment of capital lease obligations ........................................        (33)       (477)
    Proceeds of revolving lines of credit, net ....................................      1,970       4,730
    Repayment of note payable .....................................................     (1,500)         --
    Proceeds of notes payable .....................................................      2,000          --
                                                                                      --------    --------
         Net cash provided by financing activities ................................      2,437       4,230
                                                                                      --------    --------
Decrease in cash and cash equivalents .............................................     (1,025)     (3,392)
Cash and cash equivalents, beginning of period ....................................      2,758       5,093
                                                                                      --------    --------
Cash and cash equivalents, end of period ..........................................   $  1,733    $  1,701
                                                                                      ========    ========
Cash paid during the period for interest ..........................................   $     63    $    426
                                                                                      ========    ========
</TABLE>

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


                                   5
<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. The Company works with hundreds of
colleges, universities and campus organizations, and more than 15,000
participating national and local business locations to develop products and
services that enable students to make purchases less expensively and more
conveniently on and around campus.

      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. However,
despite the expansion of products and service offerings, the Company operates as
one reporting segment.

      The Company 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 March 31, 2003, had an accumulated deficit of $126.7 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. As of the filing of the Company's
annual report on Form 10-K for the year ended December 31, 2002, certain factors
raised concerns about the Company's ability to continue as a going concern. The
Company has taken significant steps through the sale of its SA Cash product
line, in February 2003, for proceeds of $4.5 million, and the sale of the assets
of its OCM Direct subsidiary in early May 2003 for cash proceeds of $15.6
million and $1.8 million in settlement of intercompany obligations and the
amendment of the terms of its outstanding indebtedness in May 2003, enabling the
Company to significantly reduce its outstanding debt obligations and to
restructure the remainder of its debt obligations. The Company's operating and
financing plan for the remainder of 2003, assumes that it will be able to
achieve significant reduction in net cash loss for the remainder of 2003 and
into 2004. However, if the Company's revenue and expense projections do not
materialize as anticipated, the Company will be required to obtain additional
financing. Failure to generate sufficient revenues, reduce certain discretionary
spending and obtain additional capital or financing, if needed, would have a
material adverse effect on the Company's ability to achieve its intended
business objectives. With the proceeds of the sales of its SA Cash product line
and the assets of its OCM Direct subsidiary, the related reduction of its debt
obligations and restructuring of its remaining debt, the Company believes that
it has sufficient cash resources for at least the next 12 months.

      All share and per share items in these Notes to the Consolidated Financial
Statements have been adjusted to reflect the one-for-ten reverse split of the
Company's Common Stock effected on June 28, 2002.

      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/A for the year ended December 31, 2002.

UNAUDITED INTERIM FINANCIAL INFORMATION

      The unaudited interim consolidated financial statements of Student
Advantage for the three months ended March 31, 2003 and 2002, 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 March 31, 2003, and the results of its operations and
its cash flows for the three months ended March 31, 2003 and 2002. The results
for the three months ended March 31, 2003 are not necessarily indicative of the
expected results for the full fiscal year or any future period due to the
seasonal nature of the Company's Student Advantage Membership Program revenue
cycle.


                                       6
<PAGE>
NOTE 2 - COMPUTATION OF UNAUDITED NET LOSS PER SHARE (1, 2, 3, 4)

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

<TABLE>
<CAPTION>
                                                                         THREE MONTHS ENDED
                                                                              MARCH 31,
                                                                          2003        2002
                                                                        --------    --------
<S>                                                                     <C>         <C>
Basic and diluted net loss per share:

Net loss ............................................................   $ (1,923)   $ (7,561)
                                                                        ========    ========
Basic and diluted weighted average common shares outstanding (2), (3)      5,363       4,756
                                                                        ========    ========
Basic and diluted net loss per share ................................   $  (0.36)   $  (1.59)
                                                                        ========    ========
</TABLE>

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

(2)   For all periods, diluted net loss per share does not differ from basic net
      loss per share since potential common shares from exercise of stock
      options and warrants are anti-dilutive.

(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 March 31, 2003, Student Advantage had reserved 312,133 shares of its
      common stock for the exercise of various options with exercise prices
      ranging from $0.04 to $162.50 per share. As of March 31, 2003, Student
      Advantage had reserved 326,750 shares of its common stock for the exercise
      of various warrants with exercise prices ranging from $10.00 to $110.80
      per share.

NOTE 3 - STOCK COMPENSATION

      In December 2002, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 148, "Accounting for Stock-Based
Compensation- Transition and Disclosure - amendment of SFAS 123," "SFAS 148."
SFAS 148 amends Statement of Financial Accounting Standards No. 123, "Accounting
for Stock-Based Compensation," "SFAS 123" to provide alternative methods of
transition for a voluntary change to the fair value based method of accounting
for stock-based compensation. In addition, this statement amends the disclosure
requirements for SFAS 123, to require prominent disclosure in both annual and
interim financial statements about the method of accounting for stock-based
employee compensation and the effect of the method used on reported results. The
Company has elected to continue to account for stock-based compensation using
the intrinsic value method prescribed by Accounting Principles Board Opinion No.
25, "Accounting for Stock Issued to Employees," "APB 25," and related
interpretations. Accordingly, compensation cost for stock options and restricted
stock awards is measured as the excess, if any, of the quoted market price of
our stock at the date of the grant over the exercise price an employee must pay
to acquire the stock. The Company has adopted the annual disclosure provisions
of SFAS 148 in our financial statements for the year ended December 31, 2002 and
has adopted the interim disclosure provisions in our financial statements for
the quarter ended March 31, 2003. Had compensation cost for the Company's option
grants been determined based on the fair value at the date of grant consistent
with the method prescribed by SFAS No. 123, the Company's net loss and net loss
per share would have increased to the pro forma amounts indicated below:

<TABLE>
<CAPTION>
                                                                      FOR THE QUARTER ENDED MARCH 31,
                                                                     2003                        2002
                                                                   --------                    --------
                                                                   (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                                                <C>                         <C>
Net loss:
      As reported .............................................    $ (1,923)                   $ (7,561)
      Add:    Stock-based employee compensation expense
              included in reported net loss, net of related tax
              effects .........................................          --                          49

      Deduct: Total stock-based employee compensation
              determined under fair value based method for all
              awards, net of related tax effects ..............        (482)                       (768)
                                                                   --------                    --------
      Pro forma net loss ......................................      (2,405)                     (8,280)

Basic and diluted net loss per share:
      As reported .............................................    $  (0.36)                   $  (1.59)
      Pro forma ...............................................       (0.45)                      (1.74)
</TABLE>


                                       7
<PAGE>

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 was a
member of the Company's Board of Directors until December 31, 2002 and is
currently a guarantor on the Company's debt obligation with Reservoir Capital.
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 expenses of $0.2 million
related to this agreement during the quarter ended March 31, 2002. Additionally,
the Company recorded revenue of $0.1 million and expenses of $0.1 million
related to additional work performed by both parties for the quarter ended March
31, 2002. No revenue and expenses were recorded related to this agreement for
the quarter ended March 31, 2003.

      On September 30, 2002, the Company entered into a $3.5 million loan
agreement with Scholar, Inc., an entity formed by Raymond V. Sozzi, Jr., the
Company's President and Chief Executive Officer, Atlas II, L.P. and certain
other stockholders. The loan is referred to as the Scholar loan, and, as of
March 31, 2003, had an interest rate of 8% per annum and a maturity date of July
1, 2003, and otherwise had the same terms as the Reservoir Capital credit
facility. (See Note 5)

NOTE 5 - BORROWINGS

      On June 25, 2001, the Company entered into a loan agreement (the "Loan
Agreement") by and among the Company, the subsidiaries of the Company and
Reservoir Capital Partners, L.P., Reservoir Capital Associates, L.P. and
Reservoir Capital Master Fund, L.P. (collectively the "Reservoir Lenders")
providing for the establishment of credit facility in the aggregate principal
amount of up to $15.0 million, consisting of a $10.0 million term loan and a
$5.0 million revolving loan. The Company borrowed $10.0 million in the form of a
term loan and $5.0 million in the form of a revolving loan, and used
substantially all of these proceeds to pay the cash portion of the purchase
price for the acquisition and existing debt of OCM Direct (formerly OCM
Enterprises), Inc. The remainder of the proceeds from the credit facility were
used for working capital and general corporate purposes of the Company. The
credit facility is secured by a lien against substantially all of the assets of
the Company, and is guaranteed by all the Company's subsidiaries (excluding OCM
Direct and its subsidiaries), which guarantees are also secured, excluding OCM
Direct and its subsidiaries. From time to time the terms of the credit facility
have been amended.

      In February 2002, the Company's 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, which is referred to as the OCM loan. The interest rate under the OCM
loan 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
original maturity date of the loan was January 31, 2003, however, in January
2003, Bank of America extended the maturity date and borrowing period of the
loan to April 30, 2003. As of March 31, 2003, the outstanding principal balance
under the OCM loan was $3.6 million. In early May 2003, in connection with
the Company's sale of substantially all of the assets of OCM Direct to Alloy,
Inc., Alloy assumed substantially all of the liabilities of OCM Direct and its
subsidiaries, including its obligations under the OCM loan with Bank of America;
provided, however, that OCM Direct and its subsidiaries will remain subject to
certain terms of the loan agreement through May 31, 2003 or such earlier date
selected by Bank of America. If an event of default occurs under the loan
agreement during this period and Bank of America is unable to obtain full
payment of the outstanding balance from Alloy, Bank of America may seek payment
from OCM Direct and its subsidiaries of the remaining amount outstanding. The
Company's guarantee of the loan was terminated as of May 1, 2003 and Alloy has
secured the loan with a $2.5 million letter of credit.

      As noted above, on September 30, 2002, the Company agreed to borrow $3.5
million from Scholar, Inc., an entity formed by the Company's President and
Chief Executive Officer, an affiliate of Atlas II, L.P. and certain other of its
stockholders. The loan is referred to as the Scholar loan, and, as of March 31,
2003 had an annual interest rate of 8% and a maturity date of July 1, 2003 and
otherwise had the same terms as the Reservoir credit facility. As of March 31,
2003, $3.6 million was outstanding under the Scholar Loan. Effective April 30,
2003, the Company amended its loan agreement with Scholar, Inc. to provide for a
payment of $1.2 million of the principal outstanding under the Scholar loan upon
the consummation of the sale of substantially all the assets of the Company's
OCM Direct subsidiary to Alloy, Inc. In addition, Scholar


                                       8
<PAGE>
agreed to extend the maturity date of the loan from July 1, 2003 to January 31,
2005, to set the interest rate at 10% per annum beginning May 1, 2003 and
require quarterly payments of interest beginning September 30, 2003. After
payment of the $1.2 million, on May 6, 2003, in accordance with the terms of the
amendment, the outstanding principal amount under the Scholar loan is $2.3
million.

      On December 30, 2002, the Reservoir Lenders agreed to reduce the total
indebtedness to them from approximately $15.7 million to $9.5 million in
exchange for a guarantee by Mr. John Katzman, a member of the Company's Board of
Directors who resigned at the time the amendment was consummated. In addition,
the Reservoir Lenders agreed to lend the Company an additional $2.0 million. In
exchange for his guarantee, the Company agreed to pay Mr. Katzman a $1.0 million
fee payable at the time of certain loan repayments. As of December 31, 2002, the
debt obligations to the Reservoir Lenders and Mr. Katzman carried an annual
interest rate of 12% and required payments of $3.5 million on January 31, 2003,
$4.0 million on March 31, 2003 and the remaining balance on the July 1, 2003
loan maturity date. In accordance with SFAS 15 "Accounting by Debtors and
Creditors Regarding Troubled Debt Restructuring," the Company recorded the $3.0
million gain on forgiveness of debt net of expenses, including $0.5 million of
anticipated interest expense based on the payment schedule, remaining deferred
financing costs of $1.8 million, and the $1.0 million guarantee fee paid to Mr.
Katzman. As of March 31, 2003, $13.0 million was outstanding under the Reservoir
credit facility.

      On January 31, 2003, the Reservoir Lenders and Mr. Katzman agreed to
reduce the $3.5 million payment due on January 31, 2003 to $1.5 million, which
payment was made on that date.

      On each of March 14, 2003, March 31, 2003, April 14, 2003 and April 28,
2003, the terms of the Reservoir Capital credit facility were further amended.
On March 14, 2003, the Reservoir Lenders agreed to lend the Company an
additional $0.5 million. On March 31, 2003, Reservoir Capital agreed to lend the
Company an additional $1.5 million and agreed to change the date on which the
Company is required to repay $4.0 million of borrowings under the loan agreement
from March 31, 2003 to April 14, 2003. On April 14, 2003, the repayment date for
the $4.0 million was amended to become April 28, 2003. On April 28, 2003, the
repayment date for the $4.0 million was amended to become May 2, 2003.

      Effective April 30, 2003, the Company amended its loan agreement with the
Reservoir Lenders and John Katzman, to provide for a payment of $7.8 million of
the principal amount outstanding under the Reservoir credit facility upon the
consummation of the sale of substantially all the assets of the Company's OCM
Direct subsidiary to Alloy, Inc. Payment of the funds was made by Alloy, Inc. on
May 5, 2003. In addition, the Reservoir Lenders and Mr. Katzman agreed to extend
the maturity date of their loans from July 1, 2003 to January 31, 2005, to set
the interest rate at 10% per annum beginning May 1, 2003 and require quarterly
payments of interest beginning September 30, 2003. The Reservoir Lenders and Mr.
Katzman also agreed to waive all accrued and unpaid interest under the loan
through April 30, 2003. In addition, the Company agreed to pay a fee of $0.1
million on December 31, 2003 and June 30, 2004 if any of the loans are
outstanding as of such date. After payment of the $7.8 million in accordance
with the terms of the amendment, the outstanding principal amount under the
Reservoir credit facility is $5.2 million as of May 6, 2003.

      As of March 31, 2003 and December 31, 2002, the Company had total
borrowings outstanding of $20.7 and $18.2 million, respectively.

NOTE 6 - OTHER EVENTS

      On February 12, 2003, the Company received notification from the Nasdaq
Listing Qualifications Panel stating that the Panel determined to delist our
common stock from The Nasdaq National Market. The Panel based its decision on
the Company's inability to meet the requirements for continued listing on the
Nasdaq National Market or the Nasdaq SmallCap Market. The Company's common stock
commenced trading on the OTC Bulletin Board on February 13, 2003.

      On February 3, 2003, the Company completed the sale of certain assets of
its SA Cash brand to Blackboard Inc. for aggregate consideration of $4.5 million
in cash. As part of the agreement, the Company will become the exclusive
provider of membership and rewards programs to Blackboard's client base. In the
connection with the SA Cash sale, the Company agreed that it would not


                                       9
<PAGE>
compete with Blackboard in the SA Cash business other than in connection with
schools operating on the Diebold payments platform until January 2010. In
addition, Blackboard and the Company entered into a limited licensing agreement
whereby it will continue to offer the SA Cash product line to a set of
designated colleges and universities.

      In early May 2003, the Company completed the sale of substantially all
the assets of its OCM Direct subsidiary to Alloy Inc., for cash consideration of
$15.6 million and $1.8 million as settlement of the intercompany balance between
OCM Direct and the Company and the amendment of the terms of its outstanding
indebtedness to Bank of America. In connection with the sale, the Company agreed
not to compete with Alloy in the business of selling diploma frames, carpets,
residence hall linens and related dorm accessories as well as care packages and
related sampling programs except as currently done through the Company's
websites and membership program, until May 2007.

7. COMMITMENTS AND CONTINGENCIES

Legal Proceedings

      The Company is from time to time subject to legal proceedings and claims
that arise in the normal course of its business. In the opinion of management,
the amount of ultimate liability with respect to these actions will not have a
material adverse effect on the Company's financial position or results of
operations.

      In November 2002, the Company was named as a defendant in a lawsuit filed
against it and General Motors by Richard M. Kipperman, Liquidating Trustee of
the bankruptcy estate of CollegeClub.com, Inc., Campus24, Inc. and
CollegeStudent.com, Inc., in the U.S. Bankruptcy Court for the Southern District
of California. The suit seeks damages of $2.25 million and interest and costs
relating to payments received by the Company under an agreement with General
Motors that the Company acquired from CollegeClub.com. The trustee alleges that
the payments were earned by CollegeClub.com prior to the Company's acquisition
of the agreement and were not sold to the Company as part of the agreement. The
Company believes that the trustee's allegations are factually incorrect and are
inconsistent with the terms of the acquisition agreement with CollegeClub.com
and intends to defend the matter vigorously. If, however, the Company is found
to have significant liability to the liquidating trustee or incurs significant
costs in connection with the litigation, its financial condition and liquidity
would suffer significant harm.

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

      Student Advantage has included in this filing certain "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995 concerning Student Advantage's business, operations and financial
condition. The words or phrases "can be", "expects", "may affect", "may depend",
"believes", "estimate", "project" and similar words and phrases are intended to
identify such forward-looking statements. Such forward-looking statements are
subject to various known and unknown risks and uncertainties and Student
Advantage cautions you that any forward-looking information provided by or on
behalf of Student Advantage is not a guarantee of future performance. Actual
results could differ materially from those anticipated in such forward-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 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 our Student Advantage Membership
Program, 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
national and local business locations. Discounts are made available to students
both through our studentadvantage.com website and at sponsors' retail and online
locations. 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 135 schools and athletic conferences. Until January 2003,
we also reached our consumers through our SA Cash programs. 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 purchase needs. In
January 2003, we sold the portion of our assets relating to our SA


                                       10
<PAGE>
Cash brand to Blackboard, Inc. In connection with the sale, we entered into a
limited licensing agreement with Blackboard under which we will continue to
offer the SA Cash product line to a set of designated colleges and universities,
but otherwise will not compete with Blackboard in the SA Cash business other
than in connection with schools operating on the Diebold payments platform until
January 2010. We do not anticipate that the SA Cash product will be a
significant source of revenue in the future. In early May 2003, we sold
substantially all the assets of our OCM Direct subsidiary to Alloy, Inc. OCM
Direct was our direct mail marketing business and provided college and
university-endorsed products to students and their parents. In connection with
the sale, we agreed not to compete with Alloy in the business of selling diploma
frames, carpets, residence hall linens and related dorm accessories as well as
care packages and related sampling programs except as currently done through the
Company's websites and membership program until May 2007.

      Beginning in the second quarter of fiscal 2003, we will present the
results of our OCM Direct subsidiary as a discontinued operation. For the three
months ended March 31, 2003 and 2002, OCM Direct had revenues of $1.2 million
and $1.5 million and a net loss of $3.6 million and $2.8 million, respectively.

      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.

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.

      On an on-going basis management evaluates its estimates and judgments,
including those related to revenue recognition, bad debts, intangible assets,
contingencies and litigation. Management bases its estimates on historical
experience and on various other factors that are believed to be reasonable under
the circumstances, the results of which form the basis for making judgments
about the carrying values of assets and liabilities that are not readily
apparent from other sources. However, results may differ from these estimates
under different assumptions or conditions. Critical accounting policies are
those that are reflective of significant judgments and uncertainties, and could
potentially result in materially different results under different assumptions
and conditions. Our most critical accounting polices are described below.

Accounts Receivable

      We evaluate the collectibility of our accounts receivable based on a
combination of factors. In circumstances where we become aware of a specific
customer's inability to meet its financial obligations to us, such as a
bankruptcy filing or a substantial down-grading of a customer's credit rating,
we record a specific reserve to reduce our net receivable to the amount we
reasonably expect to collect. We also record reserves for bad debts based on the
length of time our receivables are past due, the payment history of our
individual customers and the current financial condition of our customers based
on obtainable data and historical payment and loss trends. Our allowance for
doubtful accounts was $0.3 million and $0.3 million at March 31, 2003 and
December 31, 2002, respectively. Uncertainties affecting our estimates include
future industry and economic trends and the related impact on the financial
condition of our customers, as well as the ability of our customers to generate
cash flows sufficient to pay us amounts due. If circumstances change, such as
higher than expected defaults or an unexpected material adverse change in a
customer's ability to meet its financial obligations to us, our estimates of the
recoverability of the receivables due us could be reduced by a material amount.

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 focused primarily on providing goods
and services to students, their parents and alumni. We derive student services
revenue from commerce, subscription and advertising. Commerce revenue is derived
primarily 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 included
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.
Subscription revenue is recognized ratably from the date of subscription to the
end of the annual membership period. 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 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


                                       11
<PAGE>
period the advertising is displayed, provided that no significant Company
obligations remain and collection of the receivable is 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 focused primarily on providing goods and services to universities
and consists of licensing, management and consulting fees from universities.
This revenue is recognized upon the completion of the related contractual
obligations. 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," we have 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 three months ended March 31, 2002, we
recorded $1.1 million of barter revenue and $1.1 million of barter expense
recorded as sales and marketing expense. For the three months ended March 31,
2003, we did not record any barter revenue or expense.

      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," we have evaluated our revenue and determined that it is
being reported in accordance with the guidance. We have recorded certain of our
commerce revenue at gross, as we are considered the primary obligor in the
transaction.

      In November 2001, the Emerging Issues Task Force concluded its discussions
on EITF Issue 01-9, "Accounting for Consideration Given by a Vendor to a
Customer (Including a Reseller of the Vendor's Products)." This guidance
requires that an entity account for consideration given to a customer as a
reduction of revenue unless it can demonstrate an identifiable benefit that can
be sufficiently separable from the sale of the products or services to the
customer, and can reasonably estimate the fair value of the benefit identified.
We adopted EITF Issue 01-9 effective January 1, 2002. In accordance with EITF
01-9, we have offset amortization of consideration given to certain vendors
against revenue (for the three months ended March 31, 2003, this approximated
$0.4 million). While consideration given and received by us are carried at the
gross value of the amounts on the balance sheet, any revenue recognized is
reflected on a net basis in the accompanying statement of operations.

Goodwill and other intangible assets

Intangible assets include the excess of the purchase price over identifiable
tangible net assets acquired in acquisitions. Such assets include goodwill,
completed technology, workforce, customer lists, non-compete agreements,
websites and other intangible assets, which are being amortized on a
straight-line basis over their estimated economic lives ranging from two to
fifteen years. As a result of the application of SFAS 142 in 2002, we stopped
amortizing the remaining goodwill related to the acquisition of OCM Direct in
the first quarter of 2002. We are continuing to amortize the remaining value of
our intangible assets related to completed technology, workforce, customer
lists, non-compete agreements and contracts. We periodically evaluate our
intangible assets for potential impairment. Accumulated amortization was $13.8
million and $13.1 million at March 31, 2003 and March 31, 2002, respectively.

      The Company completed an analysis to assess the carrying value of the
remaining goodwill amounts as of December 31, 2002 and determined there was no
impairment.

                                       12
<PAGE>

RESULTS OF OPERATIONS

Comparison of Quarter Ended March 31, 2003 with Quarter Ended March 31, 2002

      Revenue. Total revenues decreased to $5.8 million for the first quarter of
2003 from $10.1 million for the first quarter of 2002, due to decreases in
student services revenue of $3.5 million and decrease in corporate and
university solutions revenue of $0.8 million.

      Student Services Revenue. Student services revenue decreased to $5.1
million in the first quarter of from $8.7 million in the first quarter of 2002.
The decrease in student services revenue was primarily due to a reduction in
barter revenue of $1.1 million, a reduction in the amount of revenue related to
our contract with General Motors, which expires in May 2003, and the sale of
substantially all assets of our SA Cash brand on February 1, 2003. Additionally,
advertising revenue from our network of web sites decreased primarily as a
result of a decrease in online advertising on CollegeClub.com.

      Corporate and University Solutions Revenue. Corporate and university
solutions revenue decreased to $0.7 million in the first quarter of 2003 from
$1.5 million in the first quarter of 2002. The decrease in revenue was primarily
due to the sale of certain assets of our SA Marketing Group brand on May 8,
2002, and partially offset by increases in our licensing fees from universities.

      For the three month period ended March 31, 2003, there were no individual
customers that accounted for more than 10% of total revenue. For the three month
period ended March 31, 2002, General Motors accounted for 17% of total revenue
and 20% of student services revenue.

      Cost of Student Services Revenue. Cost of student services revenue
consists of the costs associated with subscription, commerce and advertising
revenue. Subscription costs consists of the costs associated with the
fulfillment of membership subscriptions and customer service. Commerce costs
include costs of goods paid to partners in connection with selling products and
personnel-related costs associated with acquiring customers for the Company.
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 parties' web sites. Cost of student services revenue decreased
to $2.1 million in the first quarter of 2003 from $2.7 million in the first
quarter of 2002. The decrease was due to a decrease in direct costs related to
the administration of the General Motors contract, which expires in May 2003,
and the sale of substantially all the assets of our SA Cash brand, consistent
with the decrease in the related revenue.


                                       13
<PAGE>
      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 zero in the first
quarter of 2003 from $1.0 million in the first quarter of 2002, consistent with
the sale of our SA Marketing Group assets on May 8, 2002, which constituted our
only cost of sales against our corporate and university solutions revenue.

      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 remainder of our SA Cash Program and our network of web
sites. Product development expenses decreased to $1.7 million in the first
quarter of 2003 from $2.1 million in the first quarter of 2002. The decrease was
primarily due to the sale of substantially all the assets of our SA Cash brand
in February 2003, the reduction in number of employees engaged in product
development in the first quarter of 2003 and a general 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 decreased to $4.1 million in the first quarter of 2003 from
$5.3 million in the first quarter of 2002. The decrease was primarily related to
a reduction in barter expense of $1.1 million and the sale of our SA Marketing
Group assets 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 $2.1 million in the first quarter of
2003 from $3.9 million in the first quarter of 2002. The decrease was primarily
due to a significant reduction in the number of employees engaged in the general
and administrative functions.

      Depreciation and Amortization. Depreciation expense decreased to $1.3
million in the first quarter of 2003 from $1.7 million in the first quarter of
2002, primarily due to decreased capital expenditures in 2002. Amortization
expense increased to $0.7 million in the first quarter of 2003 from $0.2 million
in the first quarter of 2002 . In accordance with SFAS 142, we are 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 will not be
amortized, but will continue to be subject to an impairment test.

      Realized Gain on Sale of Assets. On February 3, 2003, we completed the
sale of certain assets of our SA Cash brand to Blackboard Inc. for a cash
payment of $4.5 million and a net gain of $4.3 million.

      Interest and Other Income (Expense), Net. Interest expense, net, includes
interest income from cash balances and interest expense related to the Company's
financing obligations. Interest expense was $11,000 in the first quarter of 2003
compared to $0.6 million of interest expense in the first quarter of 2002. The
decrease in interest expense was a result of the December 31, 2002 debt
restructuring with our lenders. In accordance with SFAS 15 "Accounting by
Debtors and Creditors Regarding Troubled Debt Restructuring", we recorded the
anticipated total interest expense over the remaining term of the debt as of
December 31, 2002. Accordingly, no interest expense was recorded for the three
month period ended March 31, 2003.

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. Our liquidity needs
arise primarily from our operating losses, our working capital requirements,
debt service on the indebtedness to the Reservoir Lenders, which we refer to as
the Reservoir credit facility and debt service on the Scholar loan incurred by
us in September 2002. In addition, we expect to have additional liquidity needs
in January 2005, as a result of required repayments of the Reservoir credit
facility, the Scholar loan and the guarantee fee to Mr. Katzman. We paid $1.5
million to the Reservoir Lenders on January 31, 2003 and borrowed an additional
$2.0 million as of March 31, 2003. As of March 31, 2003 we had $20.7 million of
total indebtedness, consisting of $13.5 million in principal borrowings and
interest under the Reservoir credit facility, $3.6 million in principal
borrowings and interest under the Scholar loan and $3.6 million in borrowings
under the OCM loan.


                                       14
<PAGE>

      As of March 31, 2003, we had cash and cash equivalents of $1.7 million. In
addition, we had restricted cash of $0.5 million at March 31, 2003, which
represents amounts 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.

      Net cash used for operating activities was $7.8 million for the three
months ended March 31, 2003, an increase of $0.5 million compared to net cash
used for operating activities of $7.2 million for the three months ended March
31, 2002. Net cash used for operating activities in the three months ended March
31, 2003 was primarily a result of a net loss of $1.9 million, a net gain on
sale of assets of $4.3 million, an increase in inventory of $1.1 million, a
decrease in accounts payable of $2.1 million, and a decrease in deferred revenue
of $1.6 million. The net loss was partially offset by depreciation and
amortization of $2.0 million and a decrease in accounts and notes receivable of
$0.7 million.

      Net cash provided by investing activities was $4.3 million for the three
months ended March 31, 2003. Net cash used for investing activities was $0.4
million for the three months ended March 31, 2002. Net cash provided by
investing activities in the three months ended March 31, 2003 was primarily a
result of the proceeds received for the sale of the SA Cash assets in February
2003, which was partially offset by purchases of fixed assets. Net cash used in
the first three months of 2002 was due to purchases of fixed assets.

      Net cash provided by financing activities was $2.4 million and $4.2
million for the three months ended March 31, 2003 and 2002, respectively. The
net cash provided by financing activities in the three months ended March 31,
2003 was primarily the result of borrowings of $2.0 million under the Reservoir
credit facility and $2.0 million under the Bank of America line of credit, which
were partially offset by the repayment of $1.5 million under the Reservoir
Capital credit facility. The net cash provided by financing activities in the
three months ended March 31, 2002 was primarily related to borrowings of $4.7
million under the Bank of America line

      On September 30, 2002, we agreed to borrow $3.5 million from Scholar,
Inc., an entity formed by Raymond V. Sozzi, Jr., our President and Chief
Executive Officer, an affiliate of Atlas II, L.P. and certain other of our
stockholders. The loan is referred to as the Scholar loan, and, as of March 31,
2003, had an interest rate of 8% per annum, and a maturity date of July 1, 2003
and otherwise had the same terms as the Reservoir Capital credit facility.

      As of March 31, 2003, we had $13.5 million of total indebtedness under the
Reservoir Capital credit facility, which is secured by substantially all of our
assets and all of the assets of our subsidiaries other than OCM Direct and its
subsidiaries. On December 30, 2002, Reservoir Capital agreed to reduce our total
indebtedness to them from approximately $15.7 million to $9.5 million in
exchange for a guarantee from Mr. John Katzman, a member of our Board of
Directors who resigned at the time the amendment was consummated. In exchange
for his guarantee, we agreed to pay Mr. Katzman a $1.0 million fee payable at
the time of certain loan repayments. In addition, Reservoir Capital agreed to
lend us an additional $2.0 million, which was not secured by Mr. Katzman's
guarantee. On January 31, 2003, Reservoir Capital agreed to reduce the $3.5
million payment due on January 31, 2003 to $1.5 million.

      Effective April 30, 2003, we amended our loan agreement with the Reservoir
Lenders, Scholar, Inc. and John Katzman, (together with Scholar, Inc. and the
Reservoir Lenders, the "Lenders") to provide for payments of $7.8 million of the
principal amount outstanding under the credit facility and $1.2 million of the
principal outstanding under the Scholar loan upon the consummation of the sale
of substantially all the assets of the our OCM Direct subsidiary to Alloy, Inc.
In addition, the Reservoir Lenders agreed to extend the maturity date of the
loan from July 1, 2003 to January 31, 2005, to set the interest rate at 10% per
annum beginning May 1, 2003 and will require quarterly payments of interest
beginning September 30, 2003. The Reservoir Lenders and Mr. Katzman also agreed
to waive all accrued and unpaid interest under the loan through April 30, 2003.
In addition, we agreed to pay a fee of $0.1 million on December 31, 2003 and
June 30, 2004 if any of the loans are outstanding as of such date. After payment
of the $9.0 million on May 6, 2003,


                                       15
<PAGE>
in accordance with the terms of the amendment, the outstanding principal amounts
under the credit facility and the Scholar loan are $5.2 million and $2.3
million, respectively. In early May 2003, in connection with our sale of
substantially all of the assets of OCM Direct to Alloy, Inc., Alloy assumed
substantially all of the liabilities of OCM Direct, including its obligations
under the OCM loan with Bank of America; provided, however, OCM Direct and its
subsidiaries will remain subject to certain terms of the loan agreement through
May 31, 2003 or such earlier date selected by Bank of America. If an event of
default occurs under the loan agreement during this period and Bank of America
is unable to obtain full payment of the outstanding balance from Alloy, Bank of
America may seek payment from OCM Direct and its subsidiaries for the remaining
amount outstanding. Our guarantee of the loan was terminated as of May 1, 2003
and Alloy has secured the loan with a $2.5 million letter of credit.

      We have experienced substantial net losses since our inception and, as of
March 31, 2003, had an accumulated deficit of $126.7 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 also experienced a reduction in revenue and an increase
in net losses as a result of the economic downturn, in particular, the downturn
in the media and advertising sector, and due to the sale of various assets.
During 2002, we continued to reduce our operating costs, in continuation of the
restructuring that we announced in October 2001 and plan to further reduce
operating costs in 2003. Our cash requirements for debt service, primarily the
repayment of debt, and continued operations are substantial and our available
resources may not be sufficient to fund such obligations, requiring us to obtain
additional financing.

      We believe that our available cash resources, inclusive of the proceeds of
the sale of OCM Direct in early May 2003, are sufficient to meet our obligations
under the Reservoir Capital and Scholar loans for the next 12 months, which
consist of quarterly interest payments starting September 30, 2003. However, if
we are unable to realize an anticipated increase in revenue for the remainder of
2003 and cost savings through significant reductions in our net cash loss, we
may be required to obtain additional financing. There can be no assurance that
new or additional sources of financing will be available or will be available
upon terms acceptable to us. 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. As
of the filing of the Company's annual report on Form 10-K for the year ended
December 31, 2002, these and other factors raised concerns about our ability to
continue as a going concern. With the proceeds of the sales of our SA Cash
product line and the assets of our OCM Direct subsidiary, the related reduction
of our debt obligations and restructuring of our remaining debt, we believe
that we have sufficient cash resources for at least the next 12 months.

      CERTAIN 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 $15.9 million and $35.8 million in
2002 and 2001, respectively, and a net loss of $1.9 million for the first three
months of 2003. As of March 31, 2003, our accumulated deficit was $126.7
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. We cannot assure you that we
will achieve sufficient revenue for profitability. We have experienced a
reduction in revenue and an increase in net losses in connection with the
economic downturn and, in particular, the downturn in the media and advertising
sector and due to the sales of various assets. Even if we do achieve


                                       16
<PAGE>
profitability, we cannot assure you that we can sustain or increase
profitability on a quarterly or annual basis in the future. If revenue grows
more slowly than we anticipate, or if operating expenses exceed our expectations
or cannot be adjusted accordingly, our business, results of operations and
financial condition will be materially and adversely affected.

WE HAVE INCURRED A SUBSTANTIAL AMOUNT OF DEBT AND MAY NEED ADDITIONAL CAPITAL,
AND THE FUTURE FUNDING OF OUR CAPITAL NEEDS IS UNCERTAIN.

      We require substantial working capital to fund our business and service
our outstanding debt obligation. As of March 31, 2003, we had $20.7 million of
total indebtedness, consisting of $13.5 million in principal borrowings and
interest under the Reservoir Capital credit facility, $3.6 million in principal
borrowings and interest under the Scholar loan and $3.6 million in principal
borrowings and interest under the OCM loan. In early May 2003, in connection
with our sale of substantially all of the assets of OCM Direct to Alloy, Inc.,
Alloy assumed substantially all of the liabilities of OCM Direct, including its
obligations under the OCM loan with Bank of America; provided, however, OCM
Direct and its subsidiaries will remain subject to certain terms of the loan
agreement through May 31, 2003 or such earlier date selected by Bank of America.
If an event of default occurs under the loan agreement during this period and
Bank of America is unable to obtain full payment of the outstanding balance from
Alloy, Bank of America may seek payment from OCM Direct and its subsidiaries for
the remaining amount outstanding. The Company's guarantee of the loan was
terminated as of May 1, 2003 and Alloy has secured the loan with a $2.5 million
letter of credit. Effective April 30, 2003, we amended our loan agreement with
our Reservoir Lenders to provide for payments of $7.8 million of the principal
amount outstanding under the credit facility and $1.2 million of the principal
outstanding under the Scholar loan upon the consummation of the sale of
substantially all the assets of the our OCM Direct subsidiary to Alloy, Inc. The
Reservoir Lenders also agreed to extend the maturity date of the loan from July
1, 2003 to January 31, 2005, to set the interest rate at 10% per annum beginning
May 1, 2003 and require quarterly payments of interest beginning September 30,
2003. After payment of the $9.0 million on May 6, 2003, in accordance with the
terms of the amendment, the outstanding principal amounts under the Reservoir
credit facility and the Scholar loan are $5.2 million and $2.3 million,
respectively.

      Our ability to continue as a going concern is dependent on our ability to
make required payments on our loans in a timely manner and to fund our
operations until we can generate sufficient revenue to sustain our operations.
If we are not able to do so, our business will be materially adversely affected
and we may not be able to continue as a going concern.

      Due in part to the spending patterns of students and universities we
experience seasonal variations in our receipts and expenditures of cash. Failure
to generate sufficient revenues, obtain additional capital or financing, and
reduce certain discretionary spending would have a material adverse effect on
our assets, properties, operations and our ability to achieve our intended
business objectives.

      Based on our current expectations, we will be required to raise additional
financing and sell additional assets in order to repay our outstanding
indebtedness as it comes due beginning on January 31, 2005 and we cannot assure
you that we will be able to do so. Our loan agreement with Reservoir Capital
imposes significant restrictions on our ability to raise funds through the sale
of equity, make investments and acquisitions, restructure our operations, obtain
other financing and realize proceeds from sales of assets or equity financings.
In addition, 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.

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

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

      -     we will remain subject to covenants imposed by our lenders which
            restrict our ability to make investments and acquisitions, obtain
            other financing, and realize proceeds from sales of assets;

      -     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.


                                       17
<PAGE>
      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. We have experienced a
reduction in revenue and increase in net losses as a result of the economic
downturn and, in particular, the downturn in the media and advertising sector.
Our ability to meet our debt service and other obligations 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.

OUR INDEPENDENT AUDITORS HAVE EXPRESSED A GOING CONCERN MODIFICATION IN THEIR
AUDIT REPORT.

      The report of Ernst & Young LLP, our current independent auditors, with
respect to our financial statements and the related notes for the year ended
December 31, 2002, indicates that, at the date of their report, we had suffered
recurring losses from operations and that our current cash position raised
substantial doubt about our ability to continue as a going concern. Our
financial statements do not include any adjustments that might result from this
uncertainty.

OUR COMMON STOCK HAS BEEN DELISTED FROM THE NASDAQ NATIONAL MARKET.

      On February 12, 2003, we received notification from the Nasdaq Listing
Qualifications Panel stating that the Panel determined to delist our common
stock from The Nasdaq National Market. The Panel based its decision on our
inability to meet the requirements for continued listing on the Nasdaq National
Market or the Nasdaq SmallCap Market. Our common stock commenced trading on the
OTC Bulletin Board on February 13, 2003.

      The delisting 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
institutional investor interest, fewer business development opportunities and
greater difficulty in obtaining financing.

      In addition, the delisting may 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. While the trading price of our
stock is below $5.00 per share, trading in the common stock is also 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 with it. 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. In addition, recent acts of terrorism and subsequent geopolitical
uncertainties have materially and adversely affected travel and tourism
spending, and as a result our revenues for student-related travel services have
been adversely affected. 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 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 services we have provided to them.

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

      Our industry has been the subject 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,


                                       18
<PAGE>
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.

      In November 2002, we were named as a defendant in a lawsuit filed against
us and General Motors by Richard M. Kipperman, Liquidating Trustee of the
bankruptcy estate of CollegeClub.com, Inc., Campus24, Inc. and
CollegeStudent.com, Inc., in the U.S. Bankruptcy Court for the Southern District
of California. The suit seeks damages of $2.25 million and interest and costs
relating to payments received by us under an agreement with General Motors that
we acquired from CollegeClub.com. The trustee alleges that the payments were
earned by CollegeClub.com prior to our acquisition of the agreement and were not
sold to us as part of the agreement. We believe that the trustee's allegations
are factually incorrect and are inconsistent with the terms of the acquisition
agreement with CollegeClub.com and intend to defend the matter vigorously. If,
however, we are found to have significant liability to the liquidating trustee
or incur significant costs in connection with the litigation, our financial
condition and liquidity would suffer significant harm.

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 program 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 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


                                       19
<PAGE>
members, our direct mail customers, our remaining 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. 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. Our strategy includes using
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 model through our corporate partners,
the Student Advantage network of websites, 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 HAVE HISTORICALLY ACCOUNTED 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 three months of 2003,
there was no single customer that accounted for more than 10% of total revenue.
In 2002, two customers, in the aggregate, accounted for approximately 22% 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 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.


                                       20
<PAGE>
Our remaining 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. Starting in 2003, all memberships expire on thirteenth month after
issuance. 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. 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 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. 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.

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

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

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

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


                                       21
<PAGE>
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.

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 six others. In the future, we may undertake
additional acquisitions and sales of certain businesses or operations. These
transactions involve a number of risks, including:

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

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

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

      4.    inability to establish uniform standards, controls, procedures and
            policies;

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

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

      7.    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 IN ORDER TO ACHIEVE OUR
DESIRED RESULTS.

      In previous years we experienced dramatic growth in personnel and expect
to continue to hire additional personnel in selected areas. We reduced our
workforce in 2001 and 2002 to decrease our costs and create greater operational
efficiency. Ongoing growth and consolidation requires significant time and
resource commitments. Further, as a result in part of our acquisitions,
approximately 65% 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 have recently experienced losses in or changes in
our management team, including in IT, HR, legal, marketing and finance and our
chief operating officer. 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.


                                       22
<PAGE>
      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. We have
recently experienced losses or changes in our IT, HR, legal, marketing and
finance executives and in our chief operating officer. 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
Navisite, Inc. in Andover, Massachusetts and Cable & Wireless in Irvine,
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. 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. Our recent
reductions in our technology staff may make it more difficult for us to react to
these threats 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.

      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.


                                       23
<PAGE>
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 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 and our recent reductions in our technology staff may make
it more difficult to respond to these challenges.

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


                                       24
<PAGE>
      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 May 12, 2003, our executive officers, directors and affiliated
entities, together own approximately 49% of our outstanding common stock.
Therefore, these stockholders are able to significantly influence all matters
requiring stockholder approval and, thereby, our management and affairs. Matters
that typically require stockholder approval include: election of directors,
merger or consolidation, and sale of substantially all of our assets. This
concentration of ownership may delay, deter or prevent acts that would result in
a change of control, which in turn could reduce the market price of our common
stock.

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

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

OUR CHARTER DOCUMENTS MAY INHIBIT A TAKEOVER.

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

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

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

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

      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.

ITEM 4. CONTROLS AND PROCEDURES

      a)    Evaluation of disclosure controls and procedures. Based on their
            evaluation of the Company's disclosure controls and procedures (as
            defined in Rules 13a-14(c) and 15d-14(c) under the Securities
            Exchange Act of 1934) as of a date within 90 days of the filing date
            of this Quarterly Report on Form 10-Q, the Company's chief executive
            officer and chief financial officer have concluded that the
            Company's disclosure controls and procedures are designed to ensure
            that information


                                       25
<PAGE>
            required to be disclosed by the Company in the reports that it files
            or submits under the Exchange Act is recorded, processed, summarized
            and reported within the time periods specified in the SEC's rules
            and forms and are operating in an effective manner.

      b)    Changes in internal controls. There were no significant changes in
            the Company's internal controls or in other factors that could
            significantly affect these controls subsequent to the date of their
            most recent evaluation.

PART II. OTHER INFORMATION.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

      a) Exhibits

10.1. Amendment No. 9 to Loan Agreement, dated as of March 31, 2002, among the
Registrant, the subsidiaries of the Registrant, Scholar, Inc. 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 to the Registrant's Current Report on Form 8-K dated April
4, 2003 and filed on April 4, 2003).

10.2. Amendment No. 10 to Loan Agreement, dated as of April 30, 2002, among the
Registrant, the subsidiaries of the Registrant, Scholar, Inc. 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.).

10.3. First Amendment to Revolving Line of Credit Loan Agreement and Security
Agreement, dated as of January 24, 2003, among OCM Direct, Inc., Collegiate
Carpets, Inc. and CarePackages, Inc., the Registrant and Bank of America, N.A.
(amending the Loan Agreement and Security Agreement by and among OCM Direct,
Inc., CarePackages, Inc., Collegiate Carpets, Inc. and Bank of America, N.A.).

10.4. Second Amendment to Revolving Line of Credit Loan Agreement and Security
Agreement, dated April 25, 2003, among OCM Direct, Inc., Collegiate Carpets,
Inc. and CarePackages, Inc., the Registrant and Bank of America, N.A. (amending
the Loan Agreement and Security Agreement by and among OCM Direct, Inc.,
CarePackages, Inc., Collegiate Carpets, Inc. and Bank of America, N.A.).

10.5. Third Amendment to Revolving Line of Credit Loan Agreement and Security
Agreement, dated May 1, 2003, among OCM Direct, Inc., Collegiate Carpets, Inc.
and CarePackages, Inc., the Registrant and Bank of America, N.A. (amending the
Loan Agreement and Security Agreement by and among OCM Direct, Inc.,
CarePackages, Inc., Collegiate Carpets, Inc. and Bank of America, N.A.).

99.1 Certifications pursuant to 18 U.S.C. Section 1350.

      b) Reports on Form 8-K

      The Company filed a Current Report on Form 8-K dated February 2, 2003 with
the Securities and Exchange Commission on February 2, 2003 reporting an
amendment to its loan agreement with Reservoir Capital Partners and the
guarantee by John Katzman of its obligations under the loan agreement.

      The Company filed a Current Report on Form 8-K dated February 3, 2003 with
the Securities and Exchange Commission on February 10, 2003 reporting the sale
of the assets related to its SA Cash business to Blackboard, Inc. and an
amendment to its loan agreement with Reservoir Capital Partners.

      The Company filed a Current Report on Form 8-K dated February 11, 2003
with the Securities and Exchange Commission on February 13, 2003 reporting the
receipt of a delisting notification from the Nasdaq regarding the listing of the
Company's Common Stock on the Nasdaq National Market.

      The Company filed a Current Report on Form 8-K dated March 14, 2003 with
the Securities and Exchange Commission on March 19, 2003 reporting an amendment
to its loan agreement with Reservoir Capital Partners.


                                       26
<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: May 15, 2003              By: /s/ Sevim M. Perry
                                 -----------------------------------------------
                                 Sevim M. Perry
                                 Chief Financial Officer and Assistant Treasurer
                                 (Principal Financial and Accounting Officer)


                                       27
<PAGE>
                                 CERTIFICATIONS

I, Raymond V. Sozzi, Jr., certify that:

      1.    I have reviewed this quarterly report on Form 10-Q of Student
            Advantage, Inc.;

      2.    Based on my knowledge, this quarterly report does not contain any
            untrue statement of a material fact or omit to state a material fact
            necessary to make the statements made, in light of the circumstances
            under which such statements were made, not misleading with respect
            to the period covered by this quarterly report;

      3.    Based on my knowledge, the financial statements, and other financial
            information included in this quarterly report, fairly present in all
            material respects the financial condition, results of operations and
            cash flows of the registrant as of, and for, the periods presented
            in this quarterly report;

      4.    The registrant's other certifying officers and I are responsible for
            establishing and maintaining disclosure controls and procedures (as
            defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
            and we have:

            a)    designed such disclosure controls and procedures to ensure
                  that material information relating to the registrant,
                  including its consolidated subsidiaries, is made known to us
                  by others within those entities, particularly during the
                  period in which this quarterly report is being prepared;

            b)    evaluated the effectiveness of the registrant's disclosure
                  controls and procedures as of a date within 90 days prior to
                  the filing date of this quarterly report (the "Evaluation
                  Date"); and

            c)    presented in this quarterly report our conclusions about the
                  effectiveness of the disclosure controls and procedures based
                  on our evaluation as of the Evaluation Date;

      5.    The registrant's other certifying officers and I have disclosed,
            based on our most recent evaluation, to the registrant's auditors
            and the audit committee of registrant's board of directors (or
            persons performing the equivalent function):

            a)    all significant deficiencies in the design or operation of
                  internal controls which could adversely affect the
                  registrant's ability to record, process, summarize and report
                  financial data and have identified for the registrant's
                  auditors any material weaknesses in internal controls; and

            b)    any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the
                  registrant's internal controls; and

      6.    The registrant's other certifying officers and I have indicated in
            this quarterly report whether or not there were significant changes
            in internal controls or in other factors that could significantly
            affect internal controls subsequent to the date of our most recent
            evaluation, including any corrective actions with regard to
            significant deficiencies and material weaknesses.


Dated: May 15, 2003                     /s/ Raymond V. Sozzi, Jr.
                                        ----------------------------------------
                                        Raymond V. Sozzi, Jr.
                                        Chairman of the Board of Directors,
                                        President and Chief Executive Officer


                                       28
<PAGE>
                                 CERTIFICATIONS

I, Sevim M. Perry, certify that:

      1.    I have reviewed this quarterly report on Form 10-Q of Student
            Advantage, Inc.;

      2.    Based on my knowledge, this quarterly report does not contain any
            untrue statement of a material fact or omit to state a material fact
            necessary to make the statements made, in light of the circumstances
            under which such statements were made, not misleading with respect
            to the period covered by this quarterly report;

      3.    Based on my knowledge, the financial statements, and other financial
            information included in this quarterly report, fairly present in all
            material respects the financial condition, results of operations and
            cash flows of the registrant as of, and for, the periods presented
            in this quarterly report;

      4.    The registrant's other certifying officers and I are responsible for
            establishing and maintaining disclosure controls and procedures (as
            defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
            and we have:

            a)    designed such disclosure controls and procedures to ensure
                  that material information relating to the registrant,
                  including its consolidated subsidiaries, is made known to us
                  by others within those entities, particularly during the
                  period in which this quarterly report is being prepared;

            b)    evaluated the effectiveness of the registrant's disclosure
                  controls and procedures as of a date within 90 days prior to
                  the filing date of this quarterly report (the "Evaluation
                  Date"); and

            c)    presented in this quarterly report our conclusions about the
                  effectiveness of the disclosure controls and procedures based
                  on our evaluation as of the Evaluation Date;

      5.    The registrant's other certifying officers and I have disclosed,
            based on our most recent evaluation, to the registrant's auditors
            and the audit committee of registrant's board of directors (or
            persons performing the equivalent function):

            a)    all significant deficiencies in the design or operation of
                  internal controls which could adversely affect the
                  registrant's ability to record, process, summarize and report
                  financial data and have identified for the registrant's
                  auditors any material weaknesses in internal controls; and

            b)    any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the
                  registrant's internal controls; and

      6.    The registrant's other certifying officers and I have indicated in
            this quarterly report whether or not there were significant changes
            in internal controls or in other factors that could significantly
            affect internal controls subsequent to the date of our most recent
            evaluation, including any corrective actions with regard to
            significant deficiencies and material weaknesses.


Dated: May 15, 2003              /s/ Sevim M. Perry
                                 -----------------------------------------------
                                 Sevim M. Perry
                                 Chief Financial Officer and Assistant Treasurer


                                       29