<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 September 30, 2002

                                       OR

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

For the transition period from _______ to ___________


                          Commission File No. 0-26173


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

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

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

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


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

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

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

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: 5,358,284 shares of common
stock as of November 1, 2002.

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

<PAGE>

                             STUDENT ADVANTAGE, INC.
                                    FORM 10-Q
                    FOR THE QUARTER ENDED SEPTEMBER 30, 2002

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

                                      INDEX

                                                                       PAGE(S)
                                                                       -------

PART I.    FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS

           Consolidated Balance Sheets as of  September 30, 2002
           (Unaudited) and December 31, 2001                                3

           Consolidated Statements of Operations for the three and
           nine months ended September 30, 2002 (Unaudited)
           and 2001 (Unaudited)                                             4

           Consolidated Statements of Cash Flows for the nine months
           ended September 30, 2002 (Unaudited) and 2001 (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      27

ITEM 4.    CONTROLS AND PROCEDURES                                         27

PART II.   OTHER INFORMATION                                               27

ITEM 6.    EXHIBITS AND REPORTS ON FORMS 8-K                               27

SIGNATURES                                                                 28

CERTIFICATIONS                                                             29

EXHIBIT INDEX                                                              31


                                       2
<PAGE>

PART 1. FINANCIAL INFORMATION.

ITEM 1. FINANCIAL STATEMENTS.


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

<TABLE>
<CAPTION>
                                                                         SEPTEMBER 30,   DECEMBER 31,
                                                                            2002            2001
                                                                         -------------   ------------
                                                                          (unaudited)
<S>                                                                       <C>             <C>
                                          ASSETS
Current assets
  Cash and cash equivalents ...........................................   $   5,223       $   5,093
  Restricted cash......................................................         514             667
  Accounts receivable (net of reserves of $711 and $737
    at September 30, 2002, and December 31, 2001, respectively)........       2,194           6,163
  Inventory............................................................       3,422           1,863
  Prepaid expenses and other current assets............................       7,586           3,109
                                                                          ---------       ---------
  Total current assets.................................................      18,939          16,895
  Notes receivable.....................................................       4,268           4,378
  Property and equipment, net..........................................       6,823          12,033
  Intangible and other assets, net.....................................      19,528          24,825
                                                                          ---------       ---------
    Total assets.......................................................   $  49,558       $  58,131
                                                                          =========       =========

                           LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
  Accounts payable.....................................................   $   7,014       $   5,196
  Current borrowings under revolving lines of credit...................       5,000           2,500
  Notes payable........................................................      12,600              --
  Accrued compensation.................................................       1,480           2,517
  Other accrued expenses...............................................       7,646          11,056
  Deferred revenue.....................................................       7,576           3,521
  Current obligation under capital lease...............................         461           1,368
                                                                          ---------       ---------
    Total current liabilities..........................................      41,777          26,158
                                                                          ---------       ---------

  Other long-term accrued expenses.....................................         170           4,188
  Deferred revenue.....................................................       1,763             534
  Warrants payable.....................................................          --           1,996
  Long-term borrowings under revolving lines of credit.................          --           2,500
  Notes payable........................................................          --          10,200
  Long-term obligation under capital lease.............................         120             764
                                                                          ---------       ---------
    Total long-term obligations........................................       2,053          20,182
                                                                          ---------       ---------
    Total liabilities..................................................      43,830          46,340
                                                                          ---------       ---------

Stockholders' equity
  Preferred stock, $0.01 par value, 5,000,000 shares authorized,
    no shares issued and outstanding...................................          --              --
  Common stock, $0.01 par value; authorized: 150,000,000 shares;
    issued and outstanding:
  5,358,284 and 4,753,125 at September 30, 2002 and December 31, 2001,
    respectively.......................................................         536             476
  Additional paid-in capital...........................................     123,465         120,298
  Accumulated deficit..................................................    (118,223)       (108,884)
  Notes receivable from stockholders...................................         (50)            (50)
  Deferred compensation................................................          --             (49)
                                                                          ---------       ---------
    Total stockholders' equity.........................................       5,728          11,791
                                                                          ---------       ---------
    Total liabilities and stockholders' equity.........................   $  49,558       $  58,131
                                                                          =========       =========
</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            NINE MONTHS ENDED
                                                                        SEPTEMBER 30,                 SEPTEMBER 30,
                                                                     2002          2001            2002           2001
                                                                   --------       --------       --------       --------
<S>                                                                <C>            <C>            <C>            <C>
Revenue
  Student services..............................................   $ 19,253       $ 20,104       $ 40,851       $ 39,558
  Corporate and university solutions............................        844          2,835          3,673         10,150
                                                                   --------       --------       --------       --------
     Total revenue..............................................     20,097         22,939         44,524         49,708

Costs and expenses
  Cost of student services revenue..............................      7,947          7,185         15,452         11,826
  Cost of corporate and university solutions revenue............        236          1,330          2,092          5,338
  Product development...........................................      1,895          3,796          5,647         14,376
  Sales and marketing...........................................      6,774          9,540         18,701         22,069
  General and administrative....................................      2,460          2,892          9,074          8,628
  Depreciation and amortization.................................      2,414          3,940          6,836         10,280
                                                                   --------       --------       --------       --------
     Total costs and expenses...................................     21,726         28,683         57,802         72,517
                                                                   --------       --------       --------       --------

Loss from operations............................................     (1,629)        (5,744)       (13,278)       (22,809)
Realized gain (loss) on sale of assets..........................       (421)            --          6,532             --
Equity interest in Edu.com net loss.............................         --             --             --           (495)
Interest and other expense......................................     (1,280)          (569)        (2,593)          (417)
                                                                   --------       --------       --------       --------

Net loss........................................................   $ (3,330)      $ (6,313)      $ (9,339)      $(23,721)
                                                                   ========       ========       ========       ========
Basic and diluted net loss per share............................   $  (0.62)      $  (1.34)      $  (1.85)      $  (5.46)
                                                                   ========       ========       ========       ========
Shares used in computing basic and diluted net loss per share...      5,347          4,721          5,040          4,345
                                                                   ========       ========       ========       ========

</TABLE>


  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 NINE MONTHS
                                                                     ENDED SEPTEMBER 30,
                                                                      2002          2001
                                                                    -------       --------
<S>                                                                 <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss.......................................................   $(9,339)      $(23,721)
  Adjustments to reconcile net loss to net cash used in
    operating activities:
    Depreciation.................................................     5,219          4,813
    Amortization of intangible assets............................     1,617          5,467
    Deferred financing amortization..............................       900             --
    Net gain on sale of assets...................................    (6,532)            --
    Equity interest in Edu.com net loss..........................        --            495
    Reserve for allowances and bad debts.........................       315            432
    Compensation expense relating to issuance of equity..........        49            397
    Exchange of notes receivable for assets sold.................        --           (504)
    Amortization of marketing expense associated with common
      stock warrant..............................................        --            888
    Changes in current assets and liabilities, net of effects
      of acquisitions:
      Accounts and notes receivable..............................     3,845         (2,997)
      Prepaid expenses and other current assets..................    (1,787)         2,111
      Inventory..................................................    (1,559)         3,322
      Accounts payable...........................................     1,818         (5,254)
      Accrued compensation.......................................    (1,037)           408
      Other accrued expenses.....................................    (4,488)         2,393
      Deferred revenue...........................................     5,284          1,102
                                                                    -------       --------
      Net cash used in operating activities......................    (5,695)       (10,648)
                                                                    -------       --------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of fixed assets......................................    (1,325)        (3,481)
  Proceeds from sale of business.................................     6,500             --
  Proceeds from sale of notes....................................       100
  Proceeds from sale of fixed assets.............................       170
  Acquisition of business for cash and common stock..............        --         (9,331)
                                                                    -------       --------
      Net cash provided by (used in) investing activities........     5,445        (12,812)
                                                                    -------       --------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Decrease in restricted cash....................................       153             --
  Proceeds from issuance of stock................................     2,725          9,800
  Proceeds from exercise of common stock options, warrants and
    employee stock purchase plan.................................        61            222
  Repayment of capital lease obligations.........................      (759)        (1,207)
  Proceeds of revolving lines of credit, net.....................        --           (789)
  Repayment of note payable......................................    (5,200)        (1,011)
  Proceeds of notes payable......................................     3,400         10,000
                                                                    -------       --------
      Net cash provided by financing activities..................       380         17,015
                                                                    -------       --------
Increase (decrease) in cash and cash equivalents.................       130         (6,445)
Cash and cash equivalents, beginning of period ..................     5,093         12,762
                                                                    -------       --------
Cash and cash equivalents, end of period.........................   $ 5,223       $  6,317
                                                                    =======       ========
Cash paid during the period for interest.........................     1,142            270
                                                                    =======       ========
</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 more than 1,000
colleges and universities, student organizations and alumni associations, and
more than 15,000 participating business locations to develop products and
services that enable students to make less expensive and more convenient
purchases on and around campus. The Company's exclusive university and business
relationships allows it to sell campus specific products and services and
licensed collegiate sports memorabilia directly to parents, students and alumni.

      Student Advantage, Inc. was incorporated in the State of Delaware on
October 20, 1998. The Company began operations in 1992 as a sole proprietorship,
converted to a general partnership in 1995, converted to a limited liability
company in 1996 and became a C corporation in 1998. From inception through
December 1997, the Company's revenue was derived primarily from annual
membership fees. Since that time, the Company has expanded its product and
service offerings through internal growth as well as acquisitions. However,
despite the expansion of products and service offerings, the Company operates as
one business segment.

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

      The Company has experienced substantial net losses since its inception
and, as of September 30, 2002, had an accumulated deficit of $118.2 million.
Such losses and accumulated deficit resulted primarily from significant costs
incurred in the development of the Company's products and services and the
establishment of the Company's infrastructure. The Company has taken significant
steps through the restructuring that it announced in October 2001 to reduce
operating costs for 2002. However, the Company's operating and financing plan
for the remainder of 2002 and into 2003 reflects the following assumptions:

          -    The Company will be able to achieve significant reductions in net
               cash loss through the end of 2002.

          -    The Company will not be required to repay amounts due to
               Reservoir Capital and Scholar, Inc. (see Note 5) under the terms
               of the loan agreement, as the outstanding amounts will be
               refinanced.

          -    The Company will have continue access to the revolving loan with
               Bank of America entered into by OCM Direct, a subsidiary of the
               Company. This revolving loan is scheduled to terminate in January
               2003.

          -    The Company will be able to sell a significant amount of its
               assets.

          -    The Company will obtain required consents from Reservoir Capital
               and close a $1.0 million loan from Raymond V. Sozzi, Jr., the
               Company's President and Chief Executive Officer.

      If the Company's revenue and expense projections do not materialize as
anticipated or if the Company is required to repay the amounts outstanding under
the Company's credit facility with Reservoir Capital and Scholar in July 2003,
as required by the terms of the loan agreement, the Company may be required to
obtain additional financing prior to September 2003. Failure to generate
sufficient revenues, obtain additional capital or financing if needed, or reduce
certain discretionary spending if necessary, would have a material adverse
effect on the Company's ability to achieve its intended business objectives and
its ability to continue as a going concern.

      These financial statements should be read in conjunction with the
consolidated financial statements and related footnotes included in our Annual
Report on Form 10-K for the year ended December 31, 2001.

UNAUDITED INTERIM FINANCIAL INFORMATION

      The unaudited interim consolidated financial statements of Student
Advantage for the nine months ended September 30, 2002 and 2001, respectively,
included herein have been prepared in accordance with accounting principles
generally accepted in the United States for interim financial information and
with the instructions from Form 10-Q under the Securities Exchange Act of 1934,
as amended, and Article 10 of Regulation S-X under the Securities Act of 1933,
as amended. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with accounting principles generally
accepted in the United States have been condensed or omitted pursuant to such
rules and regulations relating to interim financial statements.

      In the opinion of management, the accompanying unaudited interim
consolidated financial statements reflect all adjustments, consisting only of
normal recurring adjustments, necessary to present fairly the financial position
of Student Advantage at September 30, 2002, and the results of its operations
for the three and nine month periods ended September 30, 2002 and 2001,
respectively, and

                                       6
<PAGE>

its cash flows for the nine month periods ended September 30, 2002 and 2001,
respectively. The results for the three and nine month periods ended September
30, 2002 are not necessarily indicative of the expected results for the full
fiscal year or any future period.

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


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

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

Net loss                                        $(3,330)      $(6,313)      $(9,339)      $(23,721)
                                                -------       -------       -------       --------

Basic and diluted weighted average common
  shares outstanding (2), (3)                     5,347         4,721         5,040          4,345
                                                -------       -------       -------       --------
Basic and diluted net loss per share            $ (0.62)      $ (1.34)      $ (1.85)      $  (5.46)
                                                -------       -------       -------       --------
</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 September 30, 2002, Student Advantage had reserved 511,993 shares of
     its common stock for the exercise of various options with exercise prices
     ranging from $0.74 to $222.50 per share. As of September 30, 2002, Student
     Advantage had reserved 301,653 shares of its common stock for the exercise
     of various warrants with exercise prices ranging from $12.60 to $110.80 per
     share.

NOTE 3 -- RECENT ACCOUNTING PRONOUNCEMENTS

      In July 2001, the FASB issued SFAS No. 141, "Business Combinations" and
SFAS No. 142, "Goodwill and Other Intangible Assets." SFAS No. 141, which
requires all business combinations to be accounted for using the purchase
method, is effective for all business combinations initiated after June 30,
2001. SFAS No. 142 applies to goodwill and intangible assets acquired after June
30, 2001, as well as to goodwill and intangible assets previously acquired.
Under this statement, goodwill and other certain intangible assets deemed to
have an infinite life will no longer be amortized. Instead, these assets will be
reviewed for impairment on a periodic basis, which may result in a non-cash
charge to earnings. This statement was effective for the Company on July 1, 2001
with respect to any acquisitions completed after June 30, 2001, and on January
1, 2002 for all other goodwill and intangible assets. In accordance with SFAS
142, the Company discontinued the amortization of goodwill effective January 1,
2002. A reconciliation of previously reported net income and earnings per share,
to the amounts adjusted for the exclusion of goodwill, follow (in thousands,
except per share amounts). These amounts are adjusted for each of the periods
included in this Form 10-Q. In the fourth quarter of 2002, the Company will
perform an analysis to assess the carrying value of the remaining goodwill
amounts to determine whether any asset impairment has occurred.


                                       7
<PAGE>
<TABLE>
<CAPTION>
                                            THREE MONTHS ENDED SEPTEMBER 30,     NINE MONTHS ENDED SEPTEMBER 30,
                                                  2002             2001              2002             2001
                                               ---------         -------          ---------        -----------

<S>                                            <C>               <C>              <C>              <C>
Reported net loss                              $  (3,330)        $(6,313)         $ (9,339)        $  (23,721)
Add: Goodwill amortization                            --           1,244                --              3,808
                                               ---------         -------          --------         ----------
Adjusted net loss                              $  (3,330)        $(5,069          $ (9,339)        $  (19,913)

Basic and diluted loss per share:
Reported loss per share                        $   (0.62)        $ (1.34)         $  (1.85)        $    (5.46)
Add: Goodwill amortization                            --            0.26                --               0.88
                                               ---------         -------          --------         ----------
Adjusted basic and diluted loss per share      $   (0.62)        $ (1.08)         $  (1.85)        $    (4.58)
</TABLE>

      In August 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets," which superseded SFAS No. 121,
"Accounting for Long-Lived Assets and for Long-Lived Assets to be Disposed of."
The Company was required to adopt SFAS No. 144 effective January 1, 2002 and has
determined that it had no impact on its financial condition or results of
operations.

NOTE 4 -- RELATED PARTY TRANSACTIONS

      Effective May 15, 2000, the Company entered into an Affiliate and
E-Commerce Agreement with Princeton Review Publishing, LLC, and The Princeton
Review Management, LLC ("TPR"). Princeton Review Publishing, LLC is a
stockholder of the Company and one of its officers and equity holders is a
member of the Company's Board of Directors. Under the agreement, TPR paid the
Company a fee to participate in the Student Advantage network by placing the
Student Advantage logo and content on The Princeton Review's review.com website.
In addition, TPR provided discounts as part of the Student Advantage Membership
Program and marketed the discount to high school, college and university
students. Additionally, under the agreement the Company paid TPR a fee in
exchange for exclusive advertising sales responsibilities for the review.com
website. The agreement expired on March 31, 2002. The Company recorded revenues
of $0.2 million and $0.6 million and expenses of $0.2 million and $0.7 million
related to this agreement during the nine months ended September 30, 2002 and
2001, respectively. Additionally, the Company recorded revenue and expenses of
approximately $0.4 million and $0.5 million, respectively, related to additional
work performed by both parties for the nine month period ended September 30,
2002.

      During the nine month period ended September 30, 2002, Raymond V. Sozzi,
Jr., the Company's President and Chief Executive Officer, advanced an aggregate
of $0.9 million to the Company, all of which was repaid during the nine month
period ended September 30, 2002. There were no advances for the nine month
period ended September 30, 2001.

      On September 30, 2002, the Company announced that a Special Committee of
its Board of Directors, formed to consider strategic alternatives, was in
discussions regarding a proposal for the acquisition of the Company made by a
group of stockholders, including Raymond V. Sozzi, Jr., the Company's President
and Chief Executive Officer, and Atlas II, L.P., at a price between $1.50 and
$1.75 per share. The proposal is subject to, among other things, the receipt of
sufficient financing and the negotiation of a definitive agreement.

      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, which is referred to as the Scholar loan. As of September
30, 2002, the Company had received $3.4 million of the loan. The remaining $0.1
million was received on October 1, 2002.

      On November 8, 2002, the Company's Board of Directors authorized the
Company to borrow $1.0 million from Raymond V. Sozzi, Jr., the Company's
President and Chief Executive Officer. The proposed loan, which is referred to
as the Sozzi loan, is anticipated to be secured by certain promissory notes that
the Company acquired in connection with the disposition of the Voice FX assets
in November and December of 2001 and accrues interest at a rate of 8 percent per
annum. The loan would mature on the first to occur of July 1, 2003 or an event
of default under the Reservoir Capital loan agreement. Of the $1.0 million
anticipated to be borrowed under the Sozzi loan, $250,000 will be paid to
Reservoir Capital to reduce the Company's indebtedness to Reservoir Capital. Any
payments under the Voice FX promissory notes prior to the maturity of the Sozzi
loan would be paid to Raymond V. Sozzi, Jr. to reduce the outstanding principal
balance of the Sozzi loan. The terms of and definitive documentation for the
Sozzi loan are, on the date of this report, still subject to negotiation.

NOTE 5 -- BORROWINGS


                                       8
<PAGE>

      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
maturity date of the loan is January 31, 2003, provided that OCM Direct was
required to repay all amounts outstanding under the loan for a period of 30
consecutive days between August 1 and October 1, 2002. The Company met this
requirement by maintaining a zero balance on the facility from August 9, 2002
through October 1, 2002. As of November 11, 2002, OCM Direct had reborrowed $2.4
million under the OCM loan.

      On September 30, 2002, Reservoir Capital agreed to modify the terms of the
Reservoir Capital credit facility. Reservoir Capital agreed, absent future
defaults, not to demand payment for principal, interest and fees due under the
credit facility prior to July 1, 2003, which is the maturity date for the credit
facility. Reservoir Capital also agreed to cancel the warrants previously issued
under the credit facility and the associated right to require the Company to
repurchase the warrants for cash in exchange for a $4.2 million increase in the
amount of indebtedness under the Reservoir Capital. Prior to the amendment, the
Company had previously recorded warrant liability and deferred financing costs
of $2.5 million. As of September 30, 2002, $1.5 million has been amortized as
interest expense since the inception of the loan in June 2001. The remaining
balance of $2.7 million in deferred financing costs will be amortized to
interest expense over the remaining term of the loan. Reservoir Capital agreed
that the Company could satisfy its obligations to Reservoir Capital under the
credit facility by making a payment of $11.5 million prior to January 31, 2003.
If the Company makes payments of at least $6.0 million but less than $11.5
million prior to January 31, 2003, the remaining indebtedness to Reservoir
Capital under the Reservoir Capital credit facility will be reduced to the
difference between $11.5 million and the amounts paid as of such date, and such
remaining indebtedness will bear interest at 20 percent per annum and will be
due on July 1, 2003. If the Company fails to make payments of at least $6.0
million prior to January 31, 2003, it will be obligated to make payments in
accordance with the existing terms of the Reservoir Capital credit facility. The
Company has classified the amounts due to Reservoir as current liabilities in
the accompanying financial statements.

      On September 30, 2002, the Company entered into a $3.5 million loan
agreement with Scholar, Inc. See Note 4 above.

      On November 8, 2002, the Company's Board of Directors authorized the
Company to borrow $1.0 million from Raymond V. Sozzi, Jr., the Company's
President and Chief Executive Officer. See Note 4 above.

NOTE 6 -- OTHER EVENTS

      Effective April 1, 2002, the Company entered into a two year Sales Agency
Agreement with a third party, whereby the Company appointed the third party as
the primary, non-exclusive agent for the purpose of selling the media products
of the Company. Under the agreement, the Company received $4.9 million as an
agent fee and will be making quarterly payments to the third party of $0.4
million and additional commission payments based on media revenues over the
two-year term of the agreement. Under certain circumstances, including the sale
of College Club assets, the Company may be required to provide the third party
with payments of $3.0 million to $3.5 million from any proceeds, less amounts
paid by the Company to the third party during the agreement's term. Accordingly,
the Company deferred the $4.9 million fee it received and is recognizing the
unguaranteed amount of $1.9 million over the two-year term of the agreement as
appropriate. If the agreement is terminated, the sales agent could seek to
recover more than $2.0 million from the Company. The remaining $3.0 million is
being reduced as required payments are made to the third party. On November 4,
2002, the third party notified the Company that it believed the Company was in
default under the Sales Agency Agreement and reserved its rights to terminate
the agreement on the expiration of the 45-day cure period.

      On July 15, 2002, the Company agreed to a lease termination regarding its
facility in San Diego, CA. The facility was acquired during the October 2000
acquisition of CollegeClub and at that time the Company identified its intention
to vacate the facility. As a result, the Company provided for an accrual on
unused space for the future lease obligation as part of the original accounting
of the purchase price. At the time of the termination of the lease, the Company
had $2.4 million accrual remaining related to unused space. In accordance with
EITF 95-3, the Company reversed the accrual against the goodwill related to the
acquisition during the quarter ended September 30, 2002.

      As of June 30, 2002, the Company was not in compliance with the Nasdaq
National Market minimum requirement of $4.0 million in net tangible assets or
$10.0 million in stockholder's equity. On August 20, 2002, the Company was
notified by Nasdaq that it had regained compliance with the stockholder's equity
requirement for continued inclusion on the Nasdaq National Market. On September
9 and September 20, 2002, the Company received letters from the Nasdaq National
Market indicating that its common stock had not maintained a minimum market
value of publicly held shares of $5.0 million or a minimum closing bid price of
$1.00 over the previous thirty consecutive trading days, respectively. On
October 30, 2002, the Company was notified by Nasdaq that it had regained
compliance with the minimum closing bid price requirement for continued
inclusion on the Nasdaq National Market. Under


                                       9
<PAGE>

applicable Nasdaq rules, our common stock could be delisted from the Nasdaq
National Market if the common stock does not regain a minimum market value of
publicly-held shares of $5.0 million before December 9, 2002.

      On May 6, 2002, the Company issued 360,000 shares of Student Advantage
common stock to three investors for an aggregate purchase price of $2.7 million.
The Company also granted these investors the right, exercisable at any time
prior to November 1, 2002, to purchase in the aggregate an additional 45,000
shares of common stock for a purchase price of $7.50 per share and an additional
45,000 shares of common stock with a purchase price of $10.00 per share. As of
September 30, 2002 no additional shares have been issued. On September 27, 2002,
one investor terminated the right to purchase 28,337 shares of common stock for
a purchase price of $7.50 and an additional 28,337 shares of common stock with a
purchase price of $10.00 per share.

      On November 8, 2002, the Company's Board of Directors authorized the
Company to borrow $1.0 million from Raymond V. Sozzi, Jr., the Company's
President and Chief Executive Officer. See Note 4 above.


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

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

      We recorded deferred compensation of $4.2 million in 1998 and an
additional $0.2 million in 1999, which were offset by reductions of $0.3million,
$0.7 million and $0.2 million, during 1999, 2000 and 2001, respectively, due to
stock option cancellations as a result of employee terminations. Of the
remaining $3.2 million deferred, the full amount had been amortized to expense
as of March 31, 2002, of which $1.1 million, $0.8 million, $0.5 million and
$49,000 was recorded as an expense in 1999, 2000, 2001 and the first nine months
of 2002 respectively. The stock based compensation charges have been included in
the individual operating expense line items in the financial statements.


                                       10
<PAGE>

CRITICAL ACCOUNTING POLICIES

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

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

Accounts Receivable Securitizations

      We account for the factoring of accounts receivable in accordance with
SFAS No. 140, "Accounting for Transfers and Servicing of Financial Assets and
Extinguishment of Liabilities." At the time the receivables are sold, the
balances are removed from the Consolidated Balance Sheet. Costs associated with
the sale of receivables, primarily related to interest and administrative costs,
are included in general and administrative expense in the Consolidated
Statements of Operations. During the nine month period ended September 30, 2002,
we entered into an agreement with a financial institution to sell an undivided
interest in certain trade accounts receivable. Proceeds from the sale of certain
receivables during the nine month period ended September 30, 2002 were
approximately $5.6 million. Costs associated with the sale of receivables,
primarily related to the interest and administrative fees were $0.2 million and
are included in general and administrative expenses in the Consolidated
Statements of Operations. As of November 11, 2002, all trade accounts receivable
related to this agreement had been collected and remitted in accordance with the
agreement.

Revenue Recognition

      We report revenues in two categories: student services revenue and
corporate and university solutions revenue. Student services revenue is
attributable to the parts of our business which are 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 consisted of revenue that we receive from the sale of residence hall
linens and related accessories, care packages and diploma frames through direct
mail marketing, fees from SA Cash transactions and e-commerce revenue from our
network of websites. Commerce revenue is recognized upon the completion of the
related contractual obligations. Subscription revenue is derived from membership
fees related to enrolling students in the Student Advantage Membership Program.
Memberships are distributed in several ways. We sell memberships directly to
students and parents of students for an annual membership fee, we distribute
memberships at no cost to certain qualified students and we sell memberships to
certain of our corporate partners for resale to students at their retail
locations. Subscription revenue is recognized ratably from the date of
subscription to the end of the annual membership period, which ends on August 31
of each year. Advertising revenue consists primarily of fees for banner
advertisements and sponsorships on our network of websites. Website advertising
revenue is recognized as the related impressions are displayed, provided that no
significant obligations remain and collection of the related receivable is
assured. Certain advertising arrangements include guarantees of a minimum number
of impressions. For arrangements with guarantees, revenue is recognized based
upon the lesser of: (1) ratable recognition over the period the advertising is
displayed, provided that no significant Company obligations remain and
collection of the receivable is 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 which are focused primarily on providing goods and services to
corporations and universities and is made up of marketing services revenue from
corporate clients and licensing, management and consulting fees from
universities. Marketing services revenue is derived primarily from providing
tailored event management and execution services to businesses seeking to market
their products and services to college students. This revenue is recognized upon
the completion of the related contractual obligations. Fees from marketing
services are recognized as the related services are rendered, provided that no
significant obligations remain and collection of the related receivable is
assured. Payments received in advance of revenue being earned are recorded as
deferred revenue.

      In accordance with the EITF Issue No. 99-17 "Accounting for Advertising
Barter Transactions," we have appropriately recorded barter revenue and expense
based upon the fair value of the advertising surrendered in the transaction.
Fair value is established by reference to comparable cash transactions during
the nine-month period preceding the barter transaction. Generally, barter
transactions involve exchanges of banner advertising. For the nine months ended
September 30, 2002 and 2001, we recorded $2.5 million and $3.5 million of barter
revenue and $2.5 million and $3.5 million of barter expense recorded as sales
and marketing expense, respectively.


                                       11
<PAGE>

      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 Issued 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 will
offset the amortization of consideration given to certain vendors against
revenue. In accordance with EITF 01-9, the Company has offset amortization of
consideration given to certain vendors against revenue. While consideration
given and received by the Company is 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.


Intangible and Other 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. Accumulated amortization was $12.7 million and $11.1 million at
September 30, 2002 and December 31, 2001, respectively. We periodically evaluate
our intangible assets for potential impairment. As a result of the application
of SFAS 142 in 2002, we stopped amortizing the remaining goodwill related to the
acquisitions of OCM Direct and CollegeClub in the first quarter of 2002. On July
15, 2002, we agreed to a lease termination regarding our facility in San Diego,
CA. The lease obligation was acquired during the October 2000 acquisition of
College Club and at that time we identified our intentions to vacate the
facility. As a result, we provided for an accrual on unused space for the future
lease obligation as part of the purchase price. At the time of the lease
termination, we carried a $2.4 million accrual related to the purchase price
accrual. In accordance with EITF 95-3, we reversed the accrual against a
portion of the remaining goodwill related to the acquisition during the quarter
ended September 30, 2002.

Long-Lived Assets

      We assessed the realizability of long-lived assets in accordance with SFAS
No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets." We
review our long-lived assets for impairment if events and circumstances indicate
the carrying amount of an asset may not be recoverable. We evaluated the
realizability of its long-lived assets based on profitability and cash flow
expectations for the related asset. As a result of its review, we recorded asset
impairment charges of $1.9 million for the year ended December 31, 2001. There
were no impairments for the nine month period ended September 30, 2002. We will
be reviewing our impairment again in the fourth quarter of 2002.

RESULTS OF OPERATIONS

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

      Revenue. Total revenues decreased to $20.1 million for the quarter of 2002
from $22.9 million for the third quarter of 2001, due to decreases in student
services revenue of $0.9 million and decrease in corporate and university
solutions revenue of $2.0 million.

      Student Services Revenue. Student services revenue decreased to $19.3
million in the third quarter of 2002 from $20.1 million in the third quarter of
2001. The decrease in student services revenue was primarily due to the sale of
the eStudentLoan business in 2001. Additionally, online advertising on our
network of web sites decreased primarily as a result of a decrease in
advertising on CollegClub.com.

      Corporate and University Solutions Revenue. Corporate and university
solutions revenue decreased to $0.8 million in the third quarter of from $2.8
million in the third quarter of 2001. The decrease in revenue was primarily due
to the sale of our Voice FX assets on December 31, 2001 and the sale of our SA
Marketing Group assets on May 8, 2002. The decrease was also as the result of a
reduction in marketing spending by several of our corporate customers. The
reduction in marketing spending is attributable to the continued overall
slow-down in the economy and more specifically, the advertising and marketing
sectors.


                                       12
<PAGE>

      For the three month period ended September 30, 2002 there were no
individual customers that accounted for more than 10% of total revenue. General
Motors accounted for 12% of total revenue and 14% of student services revenue in
three month period ended September 30, 2001.

      Cost of Student Services Revenue. Cost of student services revenue
consists of the costs associated with subscription, commerce and advertising
revenue. Subscription costs 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 and
our corporate clients. Advertising costs consist primarily of royalties paid to
colleges and universities and fees paid to partners' in exchange for the right
to place media inventory on such parties' web sites. Cost of student services
revenue increased to $7.9 million in the third quarter of 2002 from $7.2 million
in the third quarter of 2001. The increase was primarily due to an increase in
commerce costs consisting of cost of goods paid to third parties in connection
with selling products related to OCM Direct, our direct mail business, which we
acquired in June 2001.

      Cost of Corporate and University Solutions Revenue. Cost of corporate and
university solutions revenue consists primarily of the costs of marketing
services and the costs of acquiring customers on behalf of our corporate
clients. Marketing services costs primarily include the direct and indirect
costs associated with planning and implementing events and promotions. Cost of
corporate and university solutions revenue decreased to $0.2 million in the
third quarter of 2002 from $1.3 million in the third quarter of 2001, consistent
with decreases in revenues for marketing services, decreases in revenues due to
the sale of our Voice FX assets on December 31, 2001 and the sale of our SA
Marketing Group assets on May 8, 2002.

      Product Development. Product development expenses consist primarily of
personnel-related and consulting costs associated with the development and
enhancement of our suite of products, which includes the Student Advantage
Membership Program, the SA Cash Program and our network of web sites. Product
development expenses decreased to $1.9 million in the quarter of 2002 from $3.8
million in the third quarter of 2001. The decrease was primarily due to the sale
of our eStudentLoan and Voice FX assets in the fourth quarter of 2001, the sale
of our SA Marketing Group assets in May 2002, the reduction in number of
employees engaged in product development in the fourth quarter of 2001 and a
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 $6.8 million in the third quarter of 2002 from
$9.5 million in the third quarter of 2001. The decrease was related to a
one-time non-cash expense for television advertising recorded in the second
quarter of 2001, the sale of our Voice FX assets on December 31, 2001 and the
sale of our SA Marketing Group assets in May 2002. The decrease was partially
offset by additional sales and marketing expenses associated with OCM Direct,
which was acquired in June 2001.

      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 $2.5 million in the third quarter of
2002 from $2.9 million in the third quarter of 2001. The decrease was primarily
due to continued efforts to reduce operating expenses, the sale of our Voice FX
assets on December 31, 2001 and the sale of our SA Marketing Group assets on May
8, 2002. The decrease was partially offset by the general and administrative
costs associated with OCM Direct, which was acquired in June 2001.

      Depreciation and Amortization. Depreciation expense decreased to $1.7
million in the third quarter of 2002 from $1.9 million in the third quarter of
2001. Amortization expense decreased to $0.7 million in the third quarter of
2002 from $2.1 million in the third quarter of 2001 as a result of the
application of SFAS 142 in 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. On July 15, 2002, we agreed to a lease termination regarding our
facility in San Diego, CA. The lease obligation was acquired during the October
2000 acquisition of College Club and at that time we identified our intention to
vacate the facility. As a result, we provided for an accrual on unused space for
the future lease obligation as part of the purchase price. At the time of the
lease termination, we carried a $2.4 million dollar accrual related to the
purchase price accrual. In accordance with EITF 95-3, we reversed the accrual
against a portion of the remaining goodwill related to the acquisition during
the quarter ended September 30, 2002. The remaining goodwill attributable to OCM
Direct will not be amortized, but will be subject to an impairment test.

      Realized Gain (Loss) on Sale of Assets. Realized gain (loss) on sale of
assets for the third quarter of 2002 was a loss of $0.4 million. The loss was
primarily related to the sale of certain fixed assets at a price lower than
their net book value.

      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 $1.3 million in the third quarter of
2002 compared to $0.6 million of interest expense in the third quarter of 2001.
The increase in interest expense was partially a result of the September


                                       13
<PAGE>
30, 2002 amendment to our loan agreement with Reservoir Capital. Reservoir
Capital agreed to cancel warrants previously issued under the credit facility
and the associated right to require us to repurchase the warrants for cash in
exchange for a $4.2 million increase in the amount of indebtedness under the
Reservoir Capital credit facility. Prior to the amendment, we had previously
recorded warrant liability and deferred financing costs of $2.5 million.
Accordingly, we recorded an additional $1.7 million as a note payable and
deferred financing costs during the period ended September 30, 2002. As of
September 30, 2002, $1.5 million of the deferred financing cost had been
amortized as interest expense since the inception of the loan in June 2001. The
remaining balance of $2.7 million in deferred financing costs will be amortized
to interest expense over the remaining term of the loan. The increase in
interest expense is also a result of interest expense associated with the $5.0
million revolving loan facility entered into by OCM Direct in February 2002.

Comparison of Nine Months Ended September 30, 2002 with Nine Months Ended
September 30, 2001

      Revenue. Total revenues decreased to $44.5 million for the first nine
months of 2002 from $49.7 million for the first nine months of 2001 due to a
decrease in corporate and university solutions revenue of $6.5 million which was
offset in part by an increase in student services revenue of $1.3 million.

      Student Services Revenue. Student services revenue increased to $40.9
million in the first nine months of 2002 from $39.6 million in the first nine
months of 2001. The increase in revenue was primarily due to revenue from OCM
Direct, a direct mail business, which we acquired in June 2001. The increase was
partially offset by the one time recognition of $1.0 million in revenue related
to Edu.com in the first quarter of 2001, divestitures of eStudentLoan and Rail
Connection in 2001 and decreased online advertising on our network of web sites.

      Corporate and University Solutions Revenue. Corporate and university
solutions revenue decreased to $3.7 million in the first nine months of 2002
from $10.2 million in the first nine months of 2001. The decrease in revenue was
primarily due to the sale of our Voice FX assets on December 31, 2001, the sale
of our SA Marketing Group assets on May 8, 2002 and the reduction in fees
related to the restructuring of the AT&T agreement under which we did not earn
any fees from AT&T after August 31, 2001. The decrease was also as the result of
a reduction in marketing spending by several of our corporate customers. The
reduction in marketing spending is attributable to the continued overall
slow-down in the economy and more specifically, the advertising and marketing
sectors.

      For the nine month period ended September 30, 2002 there were no
individual customers that accounted for more than 10% of total revenue. For the
nine month period ended September 30, 2001, General Motors Corp. and Capital One
accounted for 18% and 13% of total revenue, respectively. We do not expect to
earn significant revenues from Capital One in the future as the services
provided to Capital One were provided by our Voice FX assets, which were sold on
December 31, 2001.

      Cost of Student Services Revenue. Cost of student services revenue
increased to $15.5 million in the first nine months of 2002 from $11.8 million
in the first nine months of 2001. The increase was primarily due to an increase
in commerce costs consisting of cost of goods paid to third parties in
connection with selling products related to OCM Direct, a direct mail business,
which we acquired in June 2001.

      Cost of Corporate and University Solutions Revenue. Cost of corporate and
university solutions revenue decreased to $2.1 million in the first nine months
of from $5.3 million in the first nine months of 2001, consistent with decreases
in revenues for marketing services, decreases in revenues due to the sale of our
Voice FX assets on December 31, 2001 and the sale of our SA Marketing Group
assets on May 8, 2002.

      Product Development. Product development expenses decreased to $5.6
million in the first nine months of 2002 from $14.4 million in the first nine
months of 2001. The decrease was primarily due to the sale of our eStudentLoan
and Voice FX assets in the fourth quarter of 2001, the sale of our SA Marketing
Group assets on May 8, 2002, the impact of the reduction in number of employees
engaged in product development in the fourth quarter of 2001 and a reduction in
technology spending.

      Sales and Marketing. Sales and marketing expenses decreased to $18.7
million in the first nine months of 2002 from $22.1 million in the first nine
months of 2001. The decrease was mostly related to a non-cash expense for
television advertising recorded in the second quarter of 2001, the sale of our
Voice FX assets on December 31, 2001 and the sale of our SA Marketing Group
assets in May 2002. The decrease was partially offset by additional sales and
marketing expenses associated with the OCM Direct business, which was acquired
in June 2001.

      General and Administrative. General and administrative expenses increased
to $9.1 million in the first nine months of 2002 from $8.6 million in the first
nine months of 2001. The increase was primarily due to general and
administrative costs associated with OCM


                                       14
<PAGE>

Direct, which was acquired in June 2001, and offset by decreases related to the
sale of our Voice FX and SA Marketing Group assets on December 31, 2001 and May
8, 2002, respectively.

      Depreciation and Amortization. Depreciation expense increased to $5.2
million in the first months of 2002 from $4.8 million in the first nine months
of 2001 primarily as a result of our acquisition of OCM Direct in June 2001.
Amortization expense decreased to $1.6 million in the first nine months of 2002
from $5.5 million in the first nine months of 2001 as a result of the
application of SFAS 142 in 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. On July 15, 2002, we agreed to a lease termination regarding our
facility in San Diego, CA. The facility was acquired during the October 2000
acquisition of CollegeClub and at that time we stated our intention to vacate
the facility. As a result, we provided for an accrual on unused space for the
future lease obligation as part of the purchase price. At the time of the lease
termination, we carried a $2.4 million accrual related to the purchase price
accrual. In accordance with EITF 95-3, we reversed the accrual against a portion
of the remaining goodwill related to the acquisition during the quarter ended
September 30, 2002. The remaining goodwill attributable to OCM Direct will not
be amortized, but will be subject to an impairment test.

      Realized Gain (Loss) on Sale of Assets. On May 8, 2002, we sold our SA
Marketing Group assets to Triple Dot, Inc., a subsidiary of Alloy, Inc., for a
cash payment of $6.5 million (subject to working capital adjustments) and an
opportunity to earn up to an additional $1.5 million based on the performance of
certain pending proposals. In relation to the sale of the SA Marketing Group
assets, the Company recorded a gain of $7.0 million. For the nine month period
ended September 30, 2002, the gain was partially offset by the sale of certain
fixed assets at a price lower than the net book value. For the nine month period
ended September 30, 2002, we recorded a net gain of $6.5 million.

      Equity Interest in Edu.com. In the second quarter of 2001, we purchased
substantially all of the assets of Edu.com, Inc. Prior to the acquisition, we
held a minority interest in Edu.com, which was accounted for under the cost
method of accounting. The resulting treatment of the additional investment in
the second quarter of 2001 was in accordance with Accounting Principles
Bulletin: The Equity Method for Accounting for Investments in Common Stock ("APB
18"), which requires the application of step accounting in accordance with
Accounting Research Bulletin 51: Consolidated Financial Statements Elimination
of Intercompany Investment ("ARB 51"). Accordingly, we retroactively restated
our investment in Edu.com on the equity method of accounting and recorded its
ownership percentage of Edu.com's net loss. As a result of applying the equity
method to the Edu.com investment, we recorded an equity interest in Edu.com's
net loss of $0.5 million for the nine months ended September 30, 2001.

      Interest and Other Income (Expense), Net. Interest expense, net, was $2.6
million in the first nine months of 2002 compared to $0.4 million of interest
expense, net, in the first months of 2001. The increase in interest expense was
partially a result of the September 30, 2002 amendment to our loan agreement
with Reservoir Capital. Reservoir Capital agreed to cancel warrants previously
issued under the credit facility and the associated right to require us to
repurchase the warrants for cash in exchange for a $4.2 million increase in the
amount of indebtedness under the Reservoir Capital credit facility. Prior to the
amendment, we had previously recorded warrant liability and deferred financing
costs of $2.5 million. Accordingly, we recorded an additional $1.7 million as a
note payable and deferred financing costs during the period ended September 30,
2002. As of September 30, 2002, $1.5 million of the deferred financing cost had
been amortized as interest expense since the inception of the loan in June 2001.
The remaining balance of $2.7 million in deferred financing costs will be
amortized to interest expense over the remaining term of the loan. The increase
in interest expense is also a result of borrowings under the $5.0 million
revolving loan facility entered into by OCM Direct in February 2002.

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. During the nine
month period ended September 30, 2002 Raymond V. Sozzi, Jr., our President and
Chief Executive Officer, advanced an aggregate of $0.9 million to the Company,
all of which had been repaid as of September 30, 2002. Our liquidity needs arise
primarily from our operating losses, our working capital requirements, debt
service on the indebtedness to Reservoir Capital incurred in connection with the
acquisition of OCM Direct in June 2001, which we refer to as the Reservoir
Capital credit facility, and debt service on the revolving loan incurred by OCM
Direct in February 2002, which we refer to as the OCM loan. In addition, we
expect to have additional liquidity needs as a result of payments required under
the Reservoir Capital credit facility and under the indebtedness to Scholar,
Inc., which we incurred on September 30, 2002 and refer to as the Scholar loan.
As of September 30, 2002, we had $18.8 million of total indebtedness, consisting
of $15.4 million in principal borrowings and interest under the Reservoir
Capital credit facility and $3.4 million in principal borrowings under the
Scholar loan. As of September 30, 2002, there were no borrowings under the OCM
loan. We had borrowed $2.4 million under the OCM loan as of November 11, 2002,
and are in the process of negotiating a $1.0 million loan from Raymond V. Sozzi,
Jr., our President and Chief Executive Officer.


                                       15
<PAGE>

      As of September 30, 2002, we had cash and cash equivalents of $5.2
million. In addition, we had restricted cash of $0.5 million at September 30,
2002, 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 and businesses.

      Net cash used for operating activities was $5.7 million for the nine
months ended September 30, 2002, a decrease of $4.9 million compared to net cash
used for operating activities of $10.6 million for the nine months ended
September 30, 2001. Net cash used for operating activities in the nine months
ended September 30, 2002 was primarily a result of a net loss of $9.3 million, a
net gain on sale of assets of $6.5 million, an increase in prepaid expenses and
other current assets of $1.8 million, an increase in inventory of $1.5 million,
a decrease in accrued compensation of $1.0 million, and a decrease in other
accrued expenses of $4.5 million. The net loss was partially offset by
depreciation and amortization of $6.8 million, deferred financing amortization
of $0.9 million, a decrease in accounts and notes receivable of $3.8 million, an
increase in accounts payable of $1.8 million, and an increase in deferred
revenue of $5.3 million.

      Net cash provided by investing activities was $5.4 million for the nine
months ended September 30, 2002. Net cash used for investing activities was
$12.8 million for the nine months ended September 30, 2001. Net cash provided by
investing activities in the nine months ended September 30, 2002 was primarily a
result of the proceeds received for the sale of the SA Marketing Group assets in
May 2002, and the proceeds received from the sale of notes and certain fixed
assets, which was partially offset by purchases of fixed assets. Net cash used
in the first nine months of 2001 was due to the acquisition of OCM Direct in
June 2001 and purchases of fixed assets.

      Net cash provided by financing activities was $0.4 million and $17.0
million for the nine months ended September 30, 2002 and 2001, respectively. The
net cash provided by financing activities in the nine months ended September 30,
2002 was primarily the result of borrowings of $3.4 million under the Scholar
loan and net proceeds of $2.7 million from the sale of equity securities in May
2002, which were partially offset by the repayment of $5.2 million under the
Reservoir Capital credit facility. The net cash provided by financing activities
in the nine months ended September 30, 2001 was primarily related to the sale of
five million shares of common stock in a private placement and the net proceeds
from a debt financing consisting of two loans from Reservoir Capital.

      As of September 30, 2002, we had $15.4 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 September 30, 2002, Reservoir Capital agreed to modify the
terms of the Reservoir Capital credit facility. Reservoir Capital agreed, absent
future defaults, not to demand payment for principal, interest and fees due
under the credit facility prior to July 1, 2003, which is the maturity date for
the credit facility. Reservoir Capital also agreed to cancel the warrants issued
under the credit facility and the associated right to require us to repurchase
the warrants for cash in exchange for a $4.2 million increase in the amount of
indebtedness under the Reservoir Capital. In addition, Reservoir Capital agreed
that we could satisfy our obligations to Reservoir Capital under the credit
facility ($15.4 million as of September 30, 2002) by making a payment of $11.5
million prior to January 31, 2003. If we make payments of at least $6.0 million
but less than $11.5 million prior to January 31, 2003, the remaining
indebtedness to Reservoir Capital under the Reservoir Capital credit facility
will be reduced to the difference between $11.5 million and the amounts paid as
of such date, and such indebtedness will bear interest at 20 percent per annum
and will be due on July 1, 2003. If we fail to make payments of at least $6.0
million prior to January 31, 2003, we will be obligated to make payments in
accordance with the existing terms of the Reservoir Capital credit facility,
which consist of quarterly payments due under the term loan on February 15, 2003
and on May 15, 2003, and monthly payments of the revolving loan commencing
February 1, 2003. Under the terms of the Reservoir Capital credit facility, we
are required to make mandatory prepayments of the value of the net proceeds of
equity financings and asset dispositions and are subject to significant
restrictions on our ability to obtain additional financing.

      On September 30, 2002, we entered into a $3.5 million loan agreement with
Scholar, an entity formed by Raymond V. Sozzi, Jr., our President and Chief
Executive Officer, Atlas II, L.P. and certain other stockholders. The Scholar
loan has the same terms as the Reservoir Capital credit facility, other than the
interest rate, which is 8 percent per annum. As of September 30, 2002, we had
received $3.4 million of the loan. The remaining amount was received on October
1, 2002.

      On November 8, 2002, the Company's Board of Directors authorized the
Company to borrow $1.0 million from Raymond V. Sozzi, Jr., the Company's
President and Chief Executive Officer. The loan, which is referred to as the
Sozzi loan, is anticipated to be secured by certain promissory notes that the
Company acquired in connection with the disposition of the Voice FX assets in
December 2001 and accrues interest at a rate of 8 percent per annum. The loan
would mature on the first to occur of July 1, 2003 or an event of default under
the Reservoir Capital loan agreement. Of the $1.0 million anticipated to be
borrowed under the Sozzi loan, $250,000 will be paid to Reservoir Capital to
reduce the Company's indebtedness to Reservoir Capital. Any payments under the
Voice FX promissory notes prior to the maturity of the Sozzi loan would be paid
to Raymond V. Sozzi, Jr. to reduce the outstanding principal balance of the
Sozzi loan. The terms of and definitive documentation for the Sozzi loan are, on
the date of this report still subject to negotiation.


                                       16
<PAGE>

      In February 2002, our subsidiary, OCM Direct, and its subsidiaries,
CarePackages and Collegiate Carpets, entered into the OCM loan with Bank of
America. The OCM loan provides for a $5.0 million revolving loan, which is
secured by all of the assets of OCM Direct and its two subsidiaries. The
interest rate under the OCM loan is LIBOR plus 2.5 percent and the maturity date
of the loan is January 31, 2003. We provided an unsecured guaranty of the
obligations of OCM Direct and its subsidiaries to Bank of America. At September
30, 2002, the balance on the loan facility was zero. As of November 11, 2002,
the outstanding principal balance under the OCM loan was $2.4 million.

      We have experienced substantial net losses since our inception and, as of
September 30, 2002, had an accumulated deficit of $118.2 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.
Consequently, we have undertaken several steps to reduce our operating costs,
including the restructuring that we announced in October 2001. Due to the
continuing economic downturn, we have identified the need to make further cost
reductions. In addition, our cash requirements for debt service, primarily the
repayment of debt beginning in January 2003, and continued operations are
substantial and our available resources are not sufficient to fund such
obligations, requiring us to obtain additional financing.

      We currently anticipate that our available cash resources, together with
cash expected to be provided from operations, based upon an anticipated increase
in revenue for the remainder of 2002, potential sales of assets, a proposed $1.0
million loan from Raymond V. Sozzi, Jr., our President and Chief Executive
Officer, and significant reductions in our operating costs, will be sufficient
to meet our anticipated needs for working capital and capital expenditures
through September 2003. Our expectations regarding available cash resources
through September 2003 are based on the continued availability of the OCM loan
through January 2003, sales of significant assets, the closing of a $1.0 million
loan from Raymond V. Sozzi, Jr., and significant reductions in the net cash loss
that we expect to incur for the remainder of 2002 and there can be no assurance
that the OCM loan will be available and close the proposed $1.0 million loan
from Raymond V. Sozzi, Jr. or that we can reduce costs or sell assets. We will
require additional financing in order to pay the amounts due under the OCM loan
in January 2003, the Reservoir Capital credit facility beginning in February
2003, the Scholar and proposed Sozzi loans in July 2003. The Reservoir Capital
loan matures in July 2003. Failure to generate sufficient revenues, obtain
additional capital or financing prior to January 31, 2003, or reduce certain
discretionary spending if necessary, would have a material adverse effect on our
assets, properties, operations and our ability to achieve our intended business
objectives and our ability to continue as a going concern. 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.

    FACTORS THAT MAY AFFECT FUTURE RESULTS

WE HAVE EXPERIENCED LOSSES IN THE PAST AND EXPECT FUTURE LOSSES.

We have not achieved profitability and have incurred significant operating
losses to date. We incurred net losses of $28.7 million in 2000, $35.8 million
in 2001 and $9.3 million in the first nine months of 2002. As of September 30,
2002, our accumulated deficit was $118.2 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 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 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 obligations. Due in part to the spending patterns of students
and universities and our need to acquire inventory for our OCM Direct business,
we experience seasonal variations in our receipts and expenditures of cash. We
have experienced and expect to continue to experience periodic cash demands that
exceed our cash flow and will require additional external financing through
credit facilities, sale of debt or equity securities or by obtaining other
financing facilities to support our operations and repay our outstanding debt.
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.


                                       17
<PAGE>

In June 2001, we entered into a loan agreement with Reservoir Capital Partners
and two affiliated entities, who we refer to collectively as Reservoir Capital,
in connection with our acquisition of OCM Direct. As of September 30, 2002, we
had $15.4 million of 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 September 30, 2002,
Reservoir Capital agreed to modify the terms of the Reservoir Capital credit
facility. Reservoir Capital agreed, absent future defaults, not to demand
payment for principal, interest and fees due under the credit facility prior to
July 1, 2003, which is the maturity date for the credit facility. Reservoir
Capital also agreed to cancel the warrants issued under the credit facility and
the associated right to require us to repurchase the warrants for cash in
exchange for a $4.2 million increase in the amount of indebtedness under the
Reservoir Capital credit facility. In addition, Reservoir Capital agreed that we
could satisfy our obligations to Reservoir Capital under the credit facility by
making a payment of $11.5 million prior to January 31, 2003. If we make payments
of at least $6.0 million but less than $11.5 million prior to January 31, 2003,
the remaining indebtedness to Reservoir Capital under the Reservoir Capital
credit facility will be reduced to the difference between $11.5 million and the
amounts paid as of such date, and such remaining indebtedness will bear interest
at 20 percent per annum and will be due on July 1, 2003. If we fail to make
payments of at least $6.0 million prior to January 31, 2003, we will be
obligated to make payments in accordance with the existing terms of the
Reservoir Capital credit facility, which consist of quarterly payments due under
the term loan on February 15, 2003 and on May 15, 2003 and monthly payments of
the revolving loan commencing February 1, 2003.

On September 30, 2002, we 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,
which is referred to as the Scholar loan. The Scholar loan has the same terms as
the Reservoir Capital credit facility, other than the interest rate, which is 8
percent per annum. The Scholar loan matures on July 1, 2003.

In February 2002, our subsidiary, OCM Direct, and its subsidiaries, CarePackages
and Collegiate Carpets, entered into the OCM loan with Bank of America, which we
refer to as the OCM loan. The OCM loan provides for a $5.0 million revolving
loan, which is secured by all of the assets of OCM Direct and its two
subsidiaries. The interest rate under the OCM loan is LIBOR plus 2.5 percent and
the maturity date of the loan is January 31, 2003. We provided an unsecured
guaranty of the obligations of OCM Direct and its subsidiaries to Bank of
America. As of September 30, 2002, there were no borrowings under the OCM loan.
As of November 11, 2002, the outstanding principal balance under the OCM loan
was $2.4 million.

On November 8, 2002, the Company's Board of Directors authorized the Company to
borrow $1.0 million from Raymond V. Sozzi, Jr., the Company's President and
Chief Executive Officer. The loan, which is referred to as the Sozzi loan, is
anticipated to be secured by certain promissory notes that the Company acquired
in connection with the disposition of the Voice FX assets in December 2001 and
accrues interest at a rate of 8 percent per annum. The loan would mature on the
first to occur of July 1, 2003 or an event of default under the Reservoir
Capital loan agreement. Of the $1.0 million anticipated to be borrowed under the
Sozzi loan, $250,000 will be paid to Reservoir Capital to reduce the Company's
indebtedness to Reservoir Capital. Any payments under the Voice FX promissory
notes prior to the maturity of the Sozzi loan would be paid to Raymond V. Sozzi,
Jr. to reduce the outstanding principal balance of the Sozzi loan. The terms of
and definitive documentation for the Sozzi loan are, on the date of this report
still subject to negotiation.


As of November 11, 2002, we had $21.2 million of indebtedness, primarily
consisting of $15.4 million in borrowings under the Reservoir Capital credit
facility, $3.4 million in borrowings under the Scholar loan, $2.4 million in
borrowings under the OCM loan. We also anticipate borrowing $1.0 million from
Raymond V. Sozzi, Jr., our President and Chief Executive Officer. Based on our
current expectations regarding cash flow, we will be required to raise
additional financing in order to repay our outstanding indebtedness as it comes
due beginning in January 2003 and there can be no assurance 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, additional
funds raised through the issuance of equity securities or securities convertible
into stock may have negative effects on our stockholders, such as a dilution in
percentage of ownership in Student Advantage, and the rights, preferences or
privileges of the new security holders may be senior to those of the common
stockholders.


                                       18
<PAGE>

      Finally, we may find it more difficult to obtain additional financing as a
result of our recent disclosure regarding receipt of a proposal from Scholar to
acquire us. There can be no assurance that the proposed acquisition will be
consummated.

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 business units;

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

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

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

WE MAY FACE CHALLENGES MAINTAINING OUR NASDAQ NATIONAL MARKET LISTING.

We do not presently satisfy certain of the requirements for continued listing on
the Nasdaq National Market. We have received notification from the Nasdaq
National Market that for 30 consecutive trading days, our common stock has not
maintained a minimum market value of publicly held shares of $5 million. The
Nasdaq National Market gave us until December 3, 2002 to regain compliance with
this requirement by satisfying the requirement for at least ten consecutive
trading days.

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

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

GENERAL MARKET CONDITIONS COULD ADVERSELY AFFECT OUR BUSINESS.

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


                                       19
<PAGE>

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, 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.

On October 24, 2002, we received a demand for a payment of $2.25 million from
the trustee of the CollegeClub.com, Inc. liquidating trust. The trustee claims
that we improperly received payments under a contract with General Motors that
we acquired from CollegeClub.com. The trustee alleges that the payments were
earned by CollegeClub.com prior to the acquisition and were not sold to us. We
believe that the trustee's allegations are factually incorrect and are
inconsistent with the terms of our acquisition agreement with CollegeClub.com.
We intend to defend the trustee's claims vigorously if litigation is commenced.
If we are required to make the requested payment to the trustee, 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, SA Cash and OCM Direct products and
          services, and our online Official College Sports Network website,

     -    maintain our network of corporate sponsors,

     -    continue to aggressively build the Student Advantage brand,


                                       20
<PAGE>

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

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

We are dependent on maintaining college and university relationships to market
and sell our products and services. Our ability to maintain these alliances and
relationships and to develop new alliances and relationships is critical to our
ability to maintain our members, our direct mail customers, our SA Cash
university partners and our Official College Sports Network university partners.
A failure to acquire or maintain alliances and relationships with colleges and
universities could have a material adverse effect on our business. We are also
dependent upon our sponsors, both national and local, to provide our members and
SA Cash participants with discounts on their products and services. However, our
agreements with a number of our sponsors preclude us from entering into similar
arrangements with their competitors. This restriction may prevent us in some
cases from offering attractive additional discounts to our members. 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 new model through our corporate
partners, the Student Advantage network of websites, our direct mail marketing
business and other related marketing channels. We have experienced and
anticipate continuing to experience a decline in the overall number of
memberships sold through bulk sale arrangements, although we expect that this
decline will be partially offset by an increase in the number of individual
memberships sold at a higher per unit price. The inability to successfully
develop this marketing model or the related sales channels could have a
materially adverse effect on the business and our ability to attract and retain
corporate partners. It is difficult for us to project future levels of
subscription, transaction-related and advertising revenues and profits.

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

In the past, a limited number of customers have accounted for a significant
percentage of our total revenues. In the first nine months of 2002, there was no
single customer that accounted for more than 10% of total revenue. In 2001,
three customers, in the aggregate, accounted for approximately 23% of our total
revenue. While we anticipate that revenue from this limited number of customers
will decline as a percentage of total revenues, a limited number of customers
may account for a significant percentage of total revenues in the future, and we
believe that we must continue to acquire additional customers to be successful.
The loss of any one of these customers, or a material decrease in the services
provided to these customers, could have a materially adverse effect on our
business. In addition, many of our customers have slowed their payment cycles,
and because a substantial portion of our revenue is generated from a limited
number of customers, the non-payment or late payment of amounts due from
customers could have a material adverse effect on our business, financial
condition and results of operations.

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


                                       21
<PAGE>

Colleges and universities are becoming increasingly wary of businesses that
market products and services to their students. Recent proposed and enacted laws
may restrict how companies can market products and services to students. Many
colleges and universities are seeking to decrease or eliminate such marketing.
In particular, colleges and universities are concerned that many students have
incurred substantial levels of credit card debt. As a result, colleges and
universities often attempt to prevent credit card companies and other companies
that offer credit from marketing to their students. In the past, we have been
mistaken for a credit card company because we give students a plastic card and a
unique identification number to represent their membership. This sometimes makes
it difficult for us to gain access to college and university students, as we
have been denied access to certain college and university campuses in the past.

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

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

Our status under state and federal financial services regulation is unclear.
Violation of any present or future regulation could expose us to liability,
force us to change our business practice or force us to cease or alter our
offerings.

Our SA Cash offerings involve an industry potentially subject to government
regulation. In the future, we might be subjected to federal or state banking
laws or regulations. If we are deemed to be in violation of any current or
future regulations, we could be exposed to financial liability or forced to
change our business practices or offerings. As a result, we could face
significant legal fees, delays in extending our product offerings, a curtailing
of current or contemplated offerings and damage to our reputation that could
adversely affect our financial results. One or more governmental agencies that
regulate or monitor banks or other types of providers of electronic commerce
services, including the Office of the Comptroller of the Currency and the
Federal Reserve Board, may conclude that, under its statutes and licensing
requirements, we are engaged in an unauthorized banking business. In that event,
we might be subject to monetary penalties and adverse publicity and might be
required to cease doing business with residents of those states. A number of
states have enacted legislation regulating check sellers, money transmitters or
service providers as banks. This uncertainty regarding the scope and application
of these regulations has slowed our ability to market our offerings. Such
liability or changes could have a material adverse effect on our business,
results of operations and financial condition. Even if we are not forced to
change our business practices, we could be required to obtain licenses or
regulatory approvals that could cause us to incur substantial costs.

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

We tend to sell most of our memberships in the beginning of each academic term.
All of these memberships expire on August 31st of each year. Because the
aggregate number of memberships within a school year increases as new members
are added and because we recognize revenue from memberships ratably over the
period from the time of subscription until the end of our membership year, our
subscription revenue will typically be higher in the first and second quarters
than in the fourth quarter of each fiscal year. It is difficult to determine how
the third quarter will typically compare, since it includes two calendar months
from the end of a membership year and the first month of the subsequent
membership year. In addition, a significant portion of the direct mail business
revenue is recognized during the third quarter. The revenue on these sales is
generally recognized when the products are shipped to our customers. These
seasonal factors could have a material adverse effect on our business, financial
condition and results of operations.

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

In addition to the seasonal fluctuations described above, our revenues and
operating results may vary from quarter to quarter for a variety of other
reasons, such as the timing of revenues from corporate sponsors or non-recurring
revenues or charges. You should not rely on quarter-to-quarter comparisons of
our operating results or our operating results for any particular quarter as
indicative of our future performance. It is possible that in some future periods
our operating results may be below the expectations of public market analysts
and investors. In this event, the price of our common stock might fall. A
significant portion of our revenue is derived from our membership and direct
mail business. A significant percentage of our members graduate each year and,
therefore, do not renew their memberships. Furthermore, substantially all of our
memberships expire annually and require our members to renew the membership
subscription. Our revenue growth is highly dependent upon our ability to market
the value of our Membership Program to college students and to retain members on
a yearly basis. To date, we have not maintained sufficient data to determine the
specific number of members who renew on a yearly basis. Through our direct mail
business, a disproportionate share of our revenue is recorded in the


                                       22
<PAGE>

second and third quarter of each calendar year as a result of the timing of our
mailings and customer demand. A failure to acquire new members, renew current
members or to predict customer demand in our direct mail business could have a
material adverse effect on our business.

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

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;

     -    providers of payment platforms such as stored-value cards and credit
          cards; and

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

We compete for client marketing budget dollars with other marketing activities
and, in particular, other forms of direct marketing activities, such as direct
mail. In recent years, there have been significant advances in new forms of
direct marketing, such as the development of interactive shopping and data
collection through television, the Internet and other media. Many industry
experts predict that electronic interactive commerce, such as shopping and
information exchange through the Internet will proliferate in the foreseeable
future. To the extent such proliferation occurs, it could have a material
adverse effect on the demand for membership programs. Competition for online
users and advertisers is intense and is expected to increase over time as
barriers to entry are relatively low. We compete for visitors, traffic, sponsors
and online merchants with web directories, search engines, content sites, online
service providers and traditional media companies. We also face competition from
other companies maintaining websites dedicated to college students as well as
high-traffic websites sponsored by companies such as AOL Time Warner, CBS,
Disney, Terra Lycos, Microsoft, MTV and Yahoo! Many of our competitors have
longer operating histories, greater name recognition, larger customer bases and
significantly greater financial, technical and marketing resources than we do.
In addition, substantially all of our current advertising customers have
established collaborative relationships with other high-traffic websites. As a
result, our advertising customers might conclude that other Internet businesses,
such as search engines, commercial online services and sites that offer
professional editorial content are more effective sites for advertising than we
are. Moreover, we may be unable to maintain either the level of traffic on our
web sites or a stable membership base, which would make our sites less
attractive than those of our competitors. Increased competition from these and
other sources could require us to respond to competitive pressures by
establishing pricing, marketing and other programs or seeking out additional
strategic alliances or acquisitions that may be less favorable to us than we
could otherwise establish or obtain.

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

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

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

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

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

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

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

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

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


                                       23
<PAGE>

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

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

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

We have experienced dramatic growth in personnel in recent years and expect to
continue to hire additional personnel in selected areas. We also reduced our
workforce in 2001 and in 2002 to decrease our costs and create greater
operational efficiency. This growth and consolidation requires significant time
and resource commitments. Further, as a result in part of our acquisitions,
approximately 73% of our employees are based outside of our Boston headquarters.
If we are unable to effectively manage a large and geographically dispersed
group of employees, anticipate our future growth or manage our consolidations
effectively, our business will be adversely affected.

OUR MANAGEMENT TEAM HAS LIMITED EXPERIENCE IN RUNNING A PUBLIC COMPANY.

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

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

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

OUR SYSTEMS MAY FAIL OR EXPERIENCE A SLOWDOWN.

Substantially all of our communications hardware and certain of our other
computer hardware operations are located at third-party locations such as
Hosting.com in Boston, Massachusetts and Navisite in Andover, Massachusetts and
San Jose, California. Fire, floods, earthquakes, power loss (whether through
brown-outs or the like) or distribution issues, telecommunications failures,
break-ins, acts of terrorism, and similar events could damage these systems.
Computer viruses, electronic break-ins or other similar disruptive problems
could also adversely affect our websites. Our business could be adversely
affected if our systems were affected by any of these occurrences. 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


                                       24
<PAGE>

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.

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


                                       25
<PAGE>

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.

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 November 1, 2002, our executive officers, directors and affiliated
entities, together own approximately 36% 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


                                       26
<PAGE>

     -    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 vice president finance and assistant treasurer have concluded that
          the Company's disclosure controls and procedures are designed to
          ensure that information 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. 6 to Loan Agreement and Amendment to Warrant Agreement,
dated as of September 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.). Incorporated herein by reference to the
Registrant's Current Report on Form 8-K dated September 30, 2002 and filed on
October 1, 2002.

99.1      Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.

     b)   Reports on Form 8-K

The Company filed a Current Report on Form 8-K dated July 25, 2002 with the
Securities and Exchange Commission on July 25, 2002 reporting a change in
certifying accountants.

The Company filed a Current Report on Form 8-K dated September 30, 2002 with the
Securities and Exchange Commission on October 1, 2002 reporting an amendment to
its loan agreement and warrant agreement with Reservoir Capital Partners, a loan
from Scholar, Inc. and the receipt of an acquisition proposal from Scholar, Inc.


                                       27
<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: November 14, 2002                 By: /s/ Sevim M. Perry
                                            --------------------------------
                                            Sevim M. Perry
                                            Vice President Finance and Assistant
                                            Treasurer
                                            (Principal Financial and Accounting
                                            Officer)


                                       28
<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: November 14, 2002                /s/ Raymond V. Sozzi, Jr.
                                        -------------------------------------
                                        Raymond V. Sozzi, Jr.
                                        President and Chief Executive Officer



                                       29
<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: November 14, 2002          /s/ Sevim M. Perry
                                  ----------------------------------------------
                                  Sevim M. Perry
                                  Vice President Finance and Assistant Treasurer


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