<PAGE>

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

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

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

                                    FORM 10-Q

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

                  For the Quarterly Period Ended June 30, 2003

                                       OR

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

For the transition period from _______ to ___________

                          Commission File No. 0 - 26173

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

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

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

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

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

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

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

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

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: 537,309 shares of common stock
as of August 12, 2003.

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

<PAGE>

                             STUDENT ADVANTAGE, INC.
                                    FORM 10-Q
                       FOR THE QUARTER ENDED JUNE 30, 2003

                                      INDEX

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

ITEM 1.         FINANCIAL STATEMENTS

                Consolidated Balance Sheets as of June 30, 2003 (Unaudited) and December 31, 2002                           3

                Consolidated Statements of Operations for the three and six months ended June 30, 2003 (Unaudited)
                and 2002 (Unaudited)                                                                                        4

                Consolidated Statements of Cash Flows for the six months ended June 30, 2003 (Unaudited) and 2002
                (Unaudited)                                                                                                 5

                Notes to Consolidated Financial Statements (Unaudited)                                                      6

ITEM 2.         MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS                        11

ITEM 3.         QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                                                 25

ITEM 4.         CONTROLS AND PROCEDURES                                                                                    26

PART II.        OTHER INFORMATION                                                                                          26

ITEM 4.         SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                                        26

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

SIGNATURES                                                                                                                 28

EXHIBIT INDEX                                                                                                              29
</TABLE>

                                       2
<PAGE>

PART 1.   FINANCIAL INFORMATION.

ITEM 1.   FINANCIAL STATEMENTS.

                             STUDENT ADVANTAGE, INC.
                           CONSOLIDATED BALANCE SHEETS
                        (IN THOUSANDS, EXCEPT SHARE DATA)
                                  (UNAUDITED)
<TABLE>
<CAPTION>
                                                                                                   JUNE 30,      DECEMBER 31,
                                                                                                    2003            2002
                                                                                                 ----------      ------------
<S>                                                                                              <C>             <C>
                                     ASSETS

Current assets
      Cash and cash equivalents................................................................   $   2,640       $   1,468
      Restricted cash..........................................................................         463             515
      Accounts receivable (net of reserves of $188 and $207 at June 30, 2003, and December 31,
        2002, respectively)....................................................................       1,292           1,901
      Inventory (finished goods)...............................................................           -              11
      Prepaid expenses.........................................................................         726           1,204
      Other current assets.....................................................................         571             557
      Current assets of discontinued operations................................................           -           4,537
                                                                                                  ---------       ---------
           Total current assets................................................................       5,692          10,193
      Notes receivable.........................................................................       3,734           4,156
      Long term restricted cash................................................................       1,000               -
      Property and equipment, net..............................................................       2,092           4,296
      Intangible and other assets, net.........................................................           -             758
      Noncurrent assets of discontinued operations.............................................           -          19,086
                                                                                                  ---------       ---------
           Total assets........................................................................   $  12,518       $  38,489
                                                                                                  =========       =========

                      LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities
      Accounts payable.........................................................................   $   1,910       $   4,717
      Other accrued expenses...................................................................       3,776           4,950
      Accrued compensation.....................................................................         111             930
      Deferred revenue and other advances......................................................       1,612           8,280
      Current obligation under capital lease...................................................           4              14
      Notes payable............................................................................           -          12,500
      Related party note payable...............................................................           -           3,500
      Current liabilities of discontinued operations...........................................           -           3,656
                                                                                                  ---------       ---------
           Total current liabilities...........................................................       7,413          38,547
                                                                                                  ---------       ---------

      Deferred gain............................................................................         534             534
      Other long-term accrued expenses.........................................................         121             153
      Notes payable............................................................................       5,250               -
      Related party note payable...............................................................       2,250               -
      Long-term obligations of discontinued operations.........................................           -             108
                                                                                                  ---------       ---------
           Total long-term obligations.........................................................       8,155             795
                                                                                                  ---------       ---------
           Total liabilities...................................................................      15,568          39,342
                                                                                                  ---------       ---------
Commitments and Contingencies (see Note 7)

Stockholders' deficit
      Preferred stock, $0.01 par value, 100,000 and 5,000,000 shares authorized
       at June 30, 2003 and December 31, 2002, respectively, no shares issued and outstanding..           -               -
      Common stock, $0.01 par value; authorized: 1,000,000 and 150,000,000 shares at
       June 30, 2003 and December 31, 2002, respectively; issued and outstanding: 536,261 and
       536,261 at June 30, 2003 and December 31, 2002, respectively............................           5               5
      Additional paid-in capital...............................................................     124,006         124,006
      Accumulated deficit......................................................................    (127,011)       (124,814)
      Note receivable from stockholder.........................................................         (50)            (50)
                                                                                                  ---------       ---------
           Total stockholders' deficit.........................................................      (3,050)           (853)
                                                                                                  ---------       ---------
           Total liabilities and stockholders' deficit.........................................   $  12,518       $  38,489
                                                                                                  =========       =========
</TABLE>

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

*    All share and per share items have been adjusted to reflect the one-for-ten
     reverse split of the common stock effected on June 30, 2003

              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       SIX MONTHS ENDED
                                                                       JUNE 30,                JUNE 30,
                                                                   2003        2002        2003        2002
                                                                   ----        ----        ----        ----
<S>                                                              <C>         <C>         <C>         <C>
Revenue
      Student services .......................................   $  3,408    $  5,246    $  7,373    $ 12,427
      Corporate and university solutions .....................        636       1,353       1,301       2,829
                                                                 --------    --------    --------    --------
              Total revenue ..................................      4,044       6,599       8,674      15,256

Costs and expenses
      Cost of student services revenue .......................      1,275       1,850       2,808       3,822
      Cost of corporate and university solutions revenue .....          -         818           -       1,856
      Product development ....................................      1,464       1,542       3,056       3,580
      Sales and marketing ....................................      1,138       3,818       2,739       7,226
      General and administrative .............................        849       1,158       1,750       4,203
      Depreciation and amortization ..........................      1,230       2,170       2,950       3,799
                                                                 --------    --------    --------    --------

              Total costs and expenses .......................      5,956      11,356      13,303      24,486
                                                                 --------    --------    --------    --------

Loss from operations .........................................     (1,912)     (4,757)     (4,629)     (9,230)

Realized gain on sale of assets ..............................      1,500       6,953       5,838       6,953
Interest and other income (expense) ..........................        387        (584)        443      (1,170)
                                                                 --------    --------    --------    --------
Income (loss) from continuing operations .....................        (25)      1,612       1,652      (3,447)
                                                                 --------    --------    --------    --------

Discontinued operations:
      Income (loss) from operations of discontinued
       subsidiary.............................................        440         (60)     (3,159)     (2,562)
      Loss on disposal of discontinued subsidiary ............       (690)          -        (690)          -
                                                                 --------    --------    --------    --------

Net income (loss) ............................................   $   (275)   $  1,552    $ (2,197)   $ (6,009)
                                                                 ========    ========    ========    ========

Earnings per share - Basic:
Income (loss) from continuing operations .....................   $  (0.05)   $   3.21    $   3.08    $  (7.05)
Income (loss) from discontinued operations ...................      (0.47)      (0.12)      (7.18)      (5.24)
                                                                 --------    --------    --------    --------
Net income (loss) ............................................   $  (0.52)   $   3.09    $  (4.10)   $ (12.29)
                                                                 ========    ========    ========    ========

Weighted-average number of shares - basic ....................        536         502         536         489
                                                                 ========    ========    ========    ========

Earnings per share - Diluted:
Income (loss) from continuing operations .....................   $  (0.05)   $   3.16    $   3.08    $  (7.05)
Income (loss) from discontinued operations ...................      (0.47)      (0.12)      (7.18)      (5.24)
                                                                 --------    --------    --------    --------
Net income (loss) ............................................   $  (0.52)   $   3.04    $  (4.10)   $ (12.29)
                                                                 ========    ========    ========    ========

Weighted-average number of shares - diluted ..................        536         510         536         489
                                                                 ========    ========    ========    ========
</TABLE>

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

*    All share and per share items have been adjusted to reflect the one-for-ten
     reverse split of the common stock effected on June 30, 2003.

              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 SIX MONTHS
                                                                                                                 ENDED JUNE 30,
                                                                                                             2003            2002
                                                                                                            -------        --------

<S>                                                                                                        <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES FROM CONTINUING OPERATIONS:
   Income (loss) from continued operations...............................................................  $  1,652        $ (3,447)
   Adjustments to reconcile income (loss) from continuing operations to net cash used
   in operating activities:
     Depreciation........................................................................................     2,192           3,227
     Amortization of intangible assets...................................................................       758             572
     Gain on sale of assets..............................................................................    (5,838)         (6,953)
     Reserve for allowances and bad debts................................................................        --             195
     Compensation expense relating to issuance of equity.................................................        --              49
     Changes in current assets and liabilities, net of effects of acquisitions:
       Accounts and notes receivable.....................................................................       609           3,120
       Prepaid expenses and other current assets.........................................................       414          (1,110)
       Inventory.........................................................................................       (34)             30
       Accounts payable..................................................................................    (2,798)           (873)
       Accrued compensation..............................................................................      (819)           (511)
       Other accrued expenses............................................................................      (807)         (4,082)
       Deferred revenue..................................................................................    (5,668)          3,297
                                                                                                           --------        --------
Net cash used in operating activities from continuing operations.........................................   (10,339)         (6,486)
                                                                                                           --------        --------
CASH FLOWS FROM INVESTING ACTIVITIES FROM CONTINUING OPERATIONS:
   Purchases of fixed assets.............................................................................      (169)           (797)
   Proceeds from sale of fixed assets....................................................................       117              --
   Proceeds from notes receivable........................................................................       370              --
   Proceeds from sale of assets, net of $1,002 cash sold.................................................    21,409           6,500
                                                                                                           --------        --------
Net cash provided by investing activities from continuing operations.....................................    21,727           5,703
                                                                                                           --------        --------
CASH FLOWS FROM FINANCING ACTIVITIES FROM CONTINUING OPERATIONS:
   (Increase) decrease in restricted cash................................................................      (948)             64
   Proceeds from issuance of stock.......................................................................        --           2,725
   Proceeds from exercise of common stock options and employee stock purchase plan.......................        --              61
   Repayment of capital lease obligations................................................................       (10)           (610)
   Repayment of note payable.............................................................................   (10,500)         (5,200)
   Proceeds of notes payable.............................................................................     2,000              --
                                                                                                           --------        --------
Net cash used in financing activities from continuing operations.........................................    (9,458)         (2,960)
                                                                                                           --------        --------
Net cash (used in) provided by discontinued operations...................................................    (2,048)            188
                                                                                                           --------        --------
Decrease in cash and cash equivalents....................................................................      (118)         (3,555)
Cash and cash equivalents, beginning of period, including cash related to discontinued operations........     2,758           5,093
                                                                                                           --------        --------
Cash and cash equivalents, end of period.................................................................  $  2,640        $  1,538
                                                                                                           ========        ========
</TABLE>

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

                                       5
<PAGE>

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

NOTE 1 - THE COMPANY

         Student Advantage, Inc. is an integrated media and commerce company
focused on the higher education market. The Company works with hundreds of
colleges, universities and campus organizations, and more than 15,000
participating national and local business locations to develop products and
services that enable students to make purchases less expensively and more
conveniently on and around campus.

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

         The Company has experienced substantial net losses since its inception
and, as of June 30, 2003, had an accumulated deficit of $127.0 million. Such
losses and accumulated deficit resulted primarily from significant costs
incurred in the development of the Company's products and services and the
establishment of the Company's infrastructure. As of the filing of the Company's
annual report on Form 10-K, as amended, for the year ended December 31, 2002,
certain factors raised concerns about the Company's ability to continue as a
going concern. The Company has taken significant steps through the sale of its
SA Cash product line in February 2003 for proceeds of $4.5 million, the sale of
the assets of its OCM Direct subsidiary in early May 2003 for cash proceeds of
$15.6 million and $1.8 million in settlement of intercompany obligations, and
the amendment of the terms of its outstanding indebtedness in May 2003, enabling
the Company to significantly reduce its outstanding debt obligations and to
restructure the remainder of its debt obligations. The Company's operating and
financing plan for the remainder of 2003, assumes that it will be able to
achieve significant reduction in net cash loss for the remainder of 2003 and
into 2004. However, if the Company's revenue and expense projections do not
materialize as anticipated, the Company will be required to obtain additional
financing. Failure to generate sufficient revenues, reduce certain discretionary
spending and obtain additional capital or financing, if needed, would have a
material adverse effect on the Company's ability to achieve its intended
business objectives. With the proceeds of the sales of its SA Cash product line
and the assets of its OCM Direct subsidiary, the related reduction of its debt
obligations and restructuring of its remaining debt, the Company believes that
it has sufficient cash resources for at least the next 12 months.

         All share and per share items in these Notes to the Consolidated
Financial Statements have been adjusted to reflect the one-for-ten reverse split
of the Company's Common Stock effected on June 30, 2003.

         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, as amended, for the year ended December 31, 2002.

UNAUDITED INTERIM FINANCIAL INFORMATION

         The unaudited interim consolidated financial statements of Student
Advantage for the three and six months ended June 30, 2003 and 2002,
respectively, included herein have been prepared in accordance with accounting
principles generally accepted in the United States for interim financial
information and with the instructions from Form 10-Q under the Securities
Exchange Act of 1934, as amended, and Article 10 of Regulation S-X under the
Securities Act of 1933, as amended. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with accounting
principles generally accepted in the United States have been condensed or
omitted pursuant to such rules and regulations relating to interim financial
statements.

         In the opinion of management, the accompanying unaudited interim
consolidated financial statements reflect all adjustments, consisting only of
normal recurring adjustments, necessary to present fairly the financial position
of Student Advantage at June 30, 2003, and the results of its operations for the
three and six months ended June 30, 2003 and 2002, respectively, and its cash
flows for the six months ended June 30, 2003 and 2002, respectively. The results
for the three and six months ended June 30, 2003 are not necessarily indicative
of the expected results for the full fiscal year or any future period due to the
seasonal nature of the Company's Student Advantage Membership Program revenue
cycle.

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

                                       6
<PAGE>

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

<TABLE>
<CAPTION>
                                                                                THREE MONTHS ENDED    SIX MONTHS ENDED
                                                                                      JUNE 30,            JUNE 30,
                                                                                 2003        2002      2003      2002
                                                                                -------    -------   -------   -------
<S>                                                                             <C>        <C>       <C>       <C>
BASIC AND FULLY DILUTED NET INCOME (LOSS) PER SHARE:

Income (loss) from continuing operations ..............................         $   (25)   $ 1,612   $ 1,652   $(3,447)
                                                                                =======    =======   =======   =======
Net income (loss)......................................................         $  (275)   $ 1,552   $(2,197)  $(6,009)
                                                                                =======    =======   =======   =======

Basic weighted average common shares outstanding  (2), (3) ............             536        502       536       489
                                                                                =======    =======   =======   =======
Basic income (loss) from continuing operations per share ..............         $ (0.05)   $  3.21   $  3.08   $ (7.05)
                                                                                =======    =======   =======   =======
Basic net income (loss) per share......................................         $ (0.52)   $  3.09   $ (4.10)  $(12.26)
                                                                                =======    =======   =======   =======

Fully diluted weighted average common shares outstanding  (2), (3) ....             536        510       536       489
                                                                                =======    =======   =======   =======
Fully diluted income (loss) from continuing operations per share.......         $ (0.05)   $  3.16   $  3.08   $ (7.05)
                                                                                =======    =======   =======   =======
Fully diluted net income (loss) per share..............................         $ (0.52)   $  3.04   $ (4.10)  $(12.26)
                                                                                =======    =======   =======   =======

</TABLE>

(1)  Net income (loss) per share is computed under SFAS No. 128, "Earnings Per
     Share." Basic net income (loss) per share is computed using the weighted
     average number of common shares outstanding during the period. Diluted net
     income (loss) per share is computed by using the weighted average number of
     common shares and dilutive potential common shares and warrants outstanding
     during the period.

(2)  For all periods, except for the three month period ended June 30, 2002 and
     six month period ended June 30, 2003, diluted net income (loss) per share
     does not differ from basic net income (loss) per share since potential
     common shares from exercise of stock options and warrants are
     anti-dilutive. For the three month period ended June 30, 2002 and six month
     period ended June 30, 2003, fully diluted net income (loss) per share
     assumes the exercise of all outstanding dilutive stock options and
     warrants.

(3)  All share and per share amounts reflect the one-for-ten reverse stock split
     of the Company's common stock effected on June 30, 2003.

(4)  As of June 30, 2003, Student Advantage had reserved 23,552 shares of its
     common stock for the exercise of various options with exercise prices
     ranging from $0.40 to $1,587.50 per share. As of June 30, 2003, Student
     Advantage had reserved 32,675 shares of its common stock for the exercise
     of various warrants with exercise prices ranging from $100.00 to $1,108.00
     per share.

NOTE 3 - STOCK COMPENSATION

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

                                       7
<PAGE>

<TABLE>
<CAPTION>
                                                                       FOR THE THREE MONTHS ENDED    FOR THE SIX MONTHS ENDED
                                                                                JUNE 30,                      JUNE 30,
                                                                           2003         2002          2003            2002
                                                                         -------      --------      ---------      ---------
                                                                                (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                                                                             (UNAUDITED)
<S>                                                                      <C>          <C>           <C>            <C>
Net income (loss):
      As reported ..............................................         $  (275)     $  1,552      $  (2,197)     $  (6,009)
      Add:     Stock-based employee compensation expense
               included in reported net loss, net of related
               tax effects .....................................               -            49              -             49

      Deduct:  Total stock-based employee compensation
               determined under fair value based method for all
               awards, net of related tax effects ..............         $  (632)     $   (736)       (1,276)        (1,455)
                                                                         -------      --------      ---------      ---------
      Pro forma net income (loss) ..............................         $  (907)     $    865     $  (3,473)     $  (7,415)
                                                                         =======      ========      =========      =========

Basic net income (loss) per share:
      As reported ..............................................         $ (0.52)     $   3.09      $   (4.10)     $  (12.29)
      Pro forma ................................................         $ (1.69)     $   1.72      $   (6.48)     $  (15.16)

Diluted net income (loss) per share:
      As reported ..............................................         $ (0.52)     $   3.04      $   (4.10)     $  (12.29)
      Pro forma ................................................         $ (1.69)     $   1.70      $   (6.48)     $  (15.16)
</TABLE>

NOTE 4 - RELATED PARTY TRANSACTIONS

         Effective May 15, 2000, the Company entered into an Affiliate and
E-Commerce Agreement with Princeton Review Publishing, LLC, and The Princeton
Review Management, LLC ("TPR"). One of the officers and equity holders of
Princeton Review Publishing was a member of the Company's Board of Directors
until December 30, 2002 and is currently a guarantor of the Company's debt
obligation to Reservoir Capital. Under the agreement, TPR paid the Company a fee
to participate in the Student Advantage network by placing the Student Advantage
logo and content on The Princeton Review's review.com website. In addition, TPR
provided discounts as part of the Student Advantage Membership Program and
marketed the discount to high school, college and university students.
Additionally, under the agreement the Company paid TPR a fee in exchange for
exclusive advertising sales responsibilities for the review.com website. The
agreement expired on March 31, 2002. The Company recorded revenues of $0.2
million and expenses of $0.2 million related to this agreement during the six
months ended June 30, 2002. Additionally, the Company recorded revenue of $0.2
million and expenses of $0.3 million related to additional work performed by
both parties for the six months ended June 30, 2002. No revenue or expenses were
recorded related to this agreement for the six months ended June 30, 2003.

         On September 30, 2002, the Company entered into a $3.5 million loan
agreement with Scholar, Inc., an entity formed by Raymond V. Sozzi, Jr., the
Company's President and Chief Executive Officer, Atlas II, L.P. and certain
other stockholders. The loan is referred to as the Scholar loan, has an interest
rate of 10% per annum and a maturity date of January 31, 2005, and otherwise has
the same terms as the Reservoir Capital credit facility. On May 6, 2003,
pursuant to an amendment to the Scholar Loan, the Company repaid $1.3 million of
the Scholar Loan (See Note 5).

         During the six month period ended June 30, 2002, Raymond V. Sozzi, Jr.,
the Company's President and CEO, advanced an aggregate of $0.5 million to the
Company, all of which was repaid during the six month period ended June 30,
2002. There were no advances during the six month period ended June 30, 2003.

NOTE 5 - BORROWINGS

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

         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

                                       8
<PAGE>

the OCM loan. On May 5, 2003, in connection with the Company's sale of
substantially all of the assets of OCM Direct to Alloy, Inc., Alloy assumed
substantially all of the liabilities of OCM Direct and its subsidiaries,
including its obligations under the OCM loan with Bank of America as they
existed on May 1, 2003. Until May 1, 2003, the Company provided an unsecured
guaranty of the obligations of its three subsidiaries to Bank of America and the
interest rate under the OCM loan was LIBOR plus 2.5.

         As noted above, on September 30, 2002, the Company agreed to borrow
$3.5 million from Scholar, Inc., an entity formed by the Company's President and
Chief Executive Officer, an affiliate of Atlas II, L.P. and certain other of the
Company's stockholders. The loan is referred to as the Scholar loan, had an
annual interest rate of 8% through April 30, 2003 and otherwise has the same
terms as the Reservoir credit facility. On May 6, 2003, pursuant to an amendment
to the Scholar Loan, the Company made a payment of $1.3 million of the principal
outstanding under the Scholar loan with a portion of the proceeds from the sale
of the assets of the Company's OCM Direct subsidiary to Alloy, Inc. Scholar
agreed to extend the maturity date of the loan from July 1, 2003 to January 31,
2005, to set the interest rate at 10% per annum beginning May 1, 2003 and to
require quarterly payments of interest beginning September 30, 2003. In
addition, the Company agreed to pay a fee of $0.1 million on December 31, 2003
and June 30, 2004 if any amount of the loan is outstanding as of such date. As
of June 30, 2003, the outstanding principal amount under the Scholar loan was
$2.3 million.

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

         On each of January 31, 2003, March 14, 2003, April 14, 2003 and April
28, 2003, the terms of the Reservoir Capital credit facility were further
amended. On January 31, 2003, the Reservoir Lenders agreed to reduce the $3.5
million payment due on January 31, 2003 to $1.5 million, which payment was made
on that date. On March 14, 2003, the Reservoir Lenders agreed to lend the
Company an additional $0.5 million. On March 31, 2003, Reservoir Capital agreed
to lend the Company an additional $1.5 million and agreed to change the date on
which the Company is required to repay $4.0 million of borrowings under the loan
agreement from March 31, 2003 to April 14, 2003. On April 14, 2003, the
repayment date for the $4.0 million was amended to become April 28, 2003. On
April 28, 2003, the repayment date for the $4.0 million was amended to become
May 2, 2003.

         Effective May 1, 2003, the Company amended its loan agreement with the
Reservoir Lenders and John Katzman, to provide for a payment of $7.8 million of
the principal amount outstanding under the Reservoir credit facility upon the
consummation of the sale of the assets of the Company's OCM Direct subsidiary to
Alloy, Inc. The payment was made on May 6, 2003. In addition, the Reservoir
Lenders and Mr. Katzman agreed to extend the maturity date of their loans from
July 1, 2003 to January 31, 2005, to set the interest rate at 10% per annum
beginning May 1, 2003 and require quarterly payments of interest beginning
September 30, 2003. The Reservoir Lenders and Mr. Katzman also agreed to waive
all accrued and unpaid interest under the loan through April 30, 2003. In
addition, the Company agreed to pay a fee of $0.1 million on December 31, 2003
and June 30, 2004 if any of the loans are outstanding as of such date. As of
June 30, 2003, the outstanding principal amount under the Reservoir credit
facility was $5.3 million.

         As of June 30, 2003 and December 31, 2002, the Company had total
borrowings outstanding of $7.8 million and $18.2 million, respectively.

NOTE 6 - OTHER EVENTS

         Effective April 1, 2002, the Company entered into a two year Sales
Agency Agreement with Alloy, Inc., appointing Alloy as the primary,
non-exclusive agent for the purpose of selling its CollegeClub.com media
inventory. The Company received an agent fee of $4.9 million under the agreement
and must make quarterly payments to Alloy for agent performance and base
commissions and may make additional variable commission payments to Alloy based
on CollegeClub.com media revenues over the two-year term of the agreement. The
Company deferred the $4.9 million fee it received and is reducing it over the
two year term of the agreement as appropriate. For the first fifteen months of
the agreement, the payments for agent performance, base commissions and variable
commissions have equaled $2.2 million. On April 1, 2003, the parties amended the
agreement to provide for a minimum quarterly base commission rate of $0.5
million for the period from April 1, 2003 to March 31, 2004. On May 6, 2003, the
Company prepaid $2.2 million to Alloy for anticipated commissions through March
31, 2004. As of June 30, 2003, the remaining $1.7 million prepaid balance has
been offset against the remaining $1.9 million of deferred agent fee on the
Company's balance sheet.

                                       9
<PAGE>
         Effective May 8, 2002, the Company sold the assets relating to its SA
Marketing Group product line to Triple Dot, Inc., a subsidiary of Alloy, Inc. At
the time of the sale the Company had the opportunity to receive an additional
$1.5 million based on the performance of certain pending proposals, of which
$1.0 million was prepaid to the company and deferred until earned. On May 5,
2003, the parties amended the purchase agreement to note that all obligations
had been met by both parties and on May 5, 2003, the remaining $0.5 million was
paid to the Company. The Company recorded the $1.5 million as additional gain on
sale during the three month period ended June 30, 2003.

         On May 5, 2003, the Company completed the sale of substantially all the
assets of its OCM Direct subsidiary to Alloy Inc., for cash consideration of
$15.6 million and $1.8 million as settlement of the intercompany balance between
OCM Direct and the Company and the amendment of the terms of OCM Direct's
outstanding indebtedness to Bank of America. $1.0 million of the consideration
paid was placed into an escrow account, which expires on May 1, 2005, and may be
drawn down by the Company upon payment of tax liabilities related to OCM Direct
prior to that date. The assets sold consisted of primarily cash, accounts
receivable, property and equipment, goodwill and intangible assets, inventory
and prepaid expenses. The buyer also assumed certain accounts payable, accrued
liabilities and the outstanding balance on the Bank of America line of credit.
OCM Direct's sales, reported in discontinued operations, for the six month
periods ended June 30, 2003 and 2002 were $4.2 million and $9.2 million,
respectively. OCM Direct's loss, reported in discontinued operations, for the
six month periods ended June 30, 2003 and 2002 were $3.2 million and $2.6
million respectively. In connection with the sale, the Company agreed not to
compete with Alloy in the business of selling diploma frames, carpets, residence
halls linens and related dorm accessories as well as care packages and related
sampling programs except as currently done through the Company's websites and
membership program until May 2007. In relation to the sale, the Company deferred
$1.0 million of the purchase price for anticipated tax liabilities and recorded
a net loss of $0.7 million, inclusive of transaction costs of $1.0 million,
during the three month period ended June 30, 2003.

         On June 30, 2003, the Company's shareholders approved a
one-for-ten-reverse split of the common stock. In addition, the shareholders
approved a reduction in the number of authorized shares of common stock from
150,000,000 to 1,000,000 and a reduction in the number of authorized shares of
preferred stock from 5,000,000 to 100,000. Effective July 1, 2003, the Company's
common stock began trading under the new ticker symbol "STUA" on the OTC
Bulletin Board.

NOTE 7 - COMMITMENTS AND CONTINGENCIES

Legal Proceedings

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

         In November 2002, the Company was named as a defendant in a lawsuit
filed against it and General Motors by Richard M. Kipperman, Liquidating Trustee
of the bankruptcy estate of CollegeClub.com, Inc., Campus24, Inc. and
CollegeStudent.com, Inc., in the U.S. Bankruptcy Court for the Southern District
of California. The suit seeks damages of $2.25 million and interest and costs
relating to payments received by the Company under an agreement with General
Motors that the Company acquired from

                                       10
<PAGE>

CollegeClub.com. The trustee alleges that the payments were earned by
CollegeClub.com prior to the Company's acquisition of the agreement and were not
sold to the Company as part of the agreement. The Company believes that the
trustee's allegations are factually incorrect and are inconsistent with the
terms of the acquisition agreement with CollegeClub.com and intends to defend
the matter vigorously. If, however, the Company is found to have significant
liability to the liquidating trustee or incurs significant costs in connection
with the litigation, its financial condition and liquidity would suffer
significant harm.

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

         Student Advantage has included in this filing certain "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995 concerning Student Advantage's business, operations and financial
condition. The words or phrases "can be," "expects," "may affect," "may depend,"
"believes," "estimate," "project" and similar words and phrases are intended to
identify such forward-looking statements. Such forward-looking statements are
subject to various known and unknown risks and uncertainties and Student
Advantage cautions you that any forward-looking information provided by or on
behalf of Student Advantage is not a guarantee of future performance. Actual
results could differ materially from those anticipated in such forward-looking
statements due to a number of factors, some of which are beyond Student
Advantage's control, in addition to those discussed in Student Advantage's other
public filings, press releases and statements by Student Advantage's management,
including those set forth below under "Factors That May Affect Future Results".
All such forward-looking statements are current only as of the date on which
such statements were made. Student Advantage does not undertake any obligation
to publicly update any forward-looking statement to reflect events or
circumstances after the date on which any such statement is made or to reflect
the occurrence of unanticipated events.

OVERVIEW

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

         We reach consumers offline through our Student Advantage Membership
Program, and online through our highly trafficked websites studentadvantage.com,
CollegeClub.com and our Official College Sports Network ("OCSN"). The Student
Advantage Membership Program is a national fee-based membership program that
provides its student members with exclusive benefits including ongoing discounts
on products and services currently offered by more than 15,000 participating
national and local business locations. Discounts are made available to students
both through our studentadvantage.com website and at sponsors' retail and online
locations. OCSN is the largest, most trafficked network on the web devoted
exclusively to college sports, providing online brand management and content
delivery to more than 135 schools and athletic conferences. Until January 2003,
we also reached our consumers through our SA Cash programs. The SA Cash programs
enabled students to use their college ID cards as a method of payment
(stored-value card) for off-campus dining, shopping and other purchase needs. In
January 2003, we sold the portion of our assets relating to our SA Cash brand to
Blackboard, Inc. In connection with the sale, we entered into a limited
licensing agreement with Blackboard under which we will continue to offer the SA
Cash product line to a set of designated colleges and universities, but
otherwise will not compete with Blackboard in the SA Cash business other than in
connection with schools operating on the Diebold payments platform until January
2010. We do not anticipate that the SA Cash product will be a significant source
of revenue in the future. Effective May 1, 2003, we sold substantially all the
assets of our OCM Direct subsidiary to Alloy, Inc. OCM Direct was our direct
mail marketing business and provided college and university-endorsed products to
students and their parents. In connection with the sale, we agreed not to
compete with Alloy in the business of selling diploma frames, carpets, residence
halls linens and related dorm accessories as well as care packages and related
sampling programs except as currently done through the Company's websites and
membership program until May 2007.

         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.

CRITICAL ACCOUNTING POLICIES

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

         On an on-going basis management evaluates its estimates and judgments,
including those related to revenue recognition, bad debts, intangible assets,
contingencies and litigation. Management bases its estimates on historical
experience and on various other

                                       11
<PAGE>

factors that are believed to be reasonable under the circumstances, the results
of which form the basis for making judgments about the carrying values of assets
and liabilities that are not readily apparent from other sources. However,
results may differ from these estimates under different assumptions or
conditions. Critical accounting policies are those that are reflective of
significant judgments and uncertainties, and could potentially result in
materially different results under different assumptions and conditions. Our
most critical accounting polices are described below.

Accounts Receivable

         We evaluate the collectibility of our accounts receivable based on a
combination of factors. In circumstances where we become aware of a specific
customer's inability to meet its financial obligations to us, such as a
bankruptcy filing or a substantial down-grading of a customer's credit rating,
we record a specific reserve to reduce our net receivable to the amount we
reasonably expect to collect. We also record reserves for bad debts based on the
length of time our receivables are past due, the payment history of our
individual customers and the current financial condition of our customers based
on obtainable data and historical payment and loss trends. Our allowance for
doubtful accounts was $0.2 million and $0.2 million at June 30, 2003 and
December 31, 2002, respectively. Uncertainties affecting our estimates include
future industry and economic trends and the related impact on the financial
condition of our customers, as well as the ability of our customers to generate
cash flows sufficient to pay the amounts due. If circumstances change, such as
higher than expected defaults or an unexpected material adverse change in a
customer's ability to meet its financial obligations to us, our estimates of the
recoverability of the receivables due us could be reduced by a material amount.

Revenue Recognition

         We report revenues in two categories: student services revenue and
corporate and university solutions revenue. Student services revenue is
attributable to the parts of our business focused primarily on providing goods
and services to students, their parents and alumni. We derive student services
revenue from commerce, subscription and advertising. Commerce revenue from
continuing operations is derived primarily from transaction-based revenue earned
for reselling products and services and processing stored value transactions. To
date, commerce revenue has primarily included revenue that we receive from the
sale of residence hall linens and related accessories, care packages and diploma
frames through direct mail marketing, fees from SA Cash transactions and
e-commerce revenue from our network of websites. As a result of the February
2003 sale of our SA Cash product line, fees from SA Cash transactions were not a
significant part of our revenue stream beginning with the three month period
ended June 30, 2003. As a result of the May 2003 sale of the assets of our OCM
Direct subsidiary, revenue from the sale of residence hall linens and related
accessories, care packages and diploma frames will be presented in the results
of discontinued operations on our Consolidated Statements of Operations.
Commerce revenue is recognized upon the completion of the related contractual
obligations. Subscription revenue is derived from membership fees related to
enrolling students in the Student Advantage Membership Program. Subscription
revenue is recognized ratably from the date of subscription to the end of the
annual membership period. Advertising revenue consists primarily of fees for
banner advertisements and sponsorships on our network of websites. Website
advertising revenue is recognized as the related impressions are displayed,
provided that no significant obligations remain and collection of the related
receivable is assured. Certain advertising arrangements include guarantees of a
minimum number of impressions. For arrangements with guarantees, revenue is
recognized based upon the lesser of: (1) ratable recognition over the period the
advertising is displayed, provided that no significant Company obligations
remain and collection of the receivable is assured, or (2) a pro-rata portion of
contract revenue based upon impressions delivered relative to minimum guaranteed
impressions to be delivered.

         Corporate and university solutions revenue is attributable to the parts
of our business focused primarily on providing goods and services to
universities and consists of licensing, management and consulting fees from
universities. This revenue is recognized upon the completion of the related
contractual obligations. Payments received in advance of revenue being earned
are recorded as deferred revenue.

         In accordance with the EITF Issue No. 99-17, "Accounting for
Advertising Barter Transactions," we have recorded barter revenue and expense
based upon the fair value of the advertising surrendered in the transaction.
Fair value is established by reference to comparable cash transactions during
the six-month period preceding the barter transaction. Generally, barter
transactions involve exchanges of banner advertising. For the six months ended
June 30, 2003 and 2002, we recorded $19,000 and $2.1 million of barter revenue
and $19,000 and $2.1 million of barter expense as sales and marketing expense,
respectively.

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

         In November 2001, the Emerging Issues Task Force concluded its
discussions on EITF Issue 01-9, "Accounting for Consideration Given by a Vendor
to a Customer (Including a Reseller of the Vendor's Products)". This guidance
requires that an entity account for consideration given to a customer as a
reduction of revenue unless it can demonstrate an identifiable benefit that can

                                       12
<PAGE>

be sufficiently separable from the sale of the products or services to the
customer, and can reasonably estimate the fair value of the benefit identified.
We adopted EITF Issue 01-9 effective January 1, 2002. In accordance with EITF
01-9, we have offset amortization of consideration given to certain vendors
against revenue (for the six months ended June 30, 2003, this approximated $0.9
million). While consideration given and received by us are carried at the gross
value of the amounts on the balance sheet, any revenue recognized is reflected
on a net basis in the accompanying statement of operations.

Goodwill and other intangible assets

         Intangible assets include the excess of the purchase price over
identifiable tangible net assets acquired in acquisitions. Such assets include
goodwill, completed technology, workforce, customer lists, non-compete
agreements, websites and other intangible assets, which are being amortized on a
straight-line basis over their estimated economic lives ranging from two to
fifteen years. As a result of the application of SFAS 142 in 2002, we stopped
amortizing the remaining goodwill related to the acquisition of OCM Direct in
the first quarter of 2002. We continued to amortize the remaining value of our
intangible assets related to completed technology, workforce, customer lists,
non-compete agreements and contracts related to our acquisitions of OCM Direct
and Collegeclub. As of May 1, 2003, in relation to our sale of the assets of OCM
Direct, we removed $17.8 million of net goodwill and intangible assets as part
of the overall loss on sale calculation. As of June 30, 2003, the remaining
intangible asset related to our acquisition of Collegeclub has been fully
amortized. Amortization expense from continuing operations for the six month
period ended June 30, 2003 and 2002 was $0.8 million and $0.6 million,
respectively.

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

RESULTS OF CONTINUING OPERATIONS

Comparison of Quarter Ended June 30, 2003 with Quarter Ended June 30, 2002

         Revenue. Total revenues decreased to $4.0 million for the second
quarter of 2003 from $6.6 million for the second quarter of 2002, due to
decreases in student services revenue of $1.8 million and corporate and
university solutions revenue of $0.7 million.

         Student Services Revenue. Student services revenue decreased to $3.4
million in the second quarter of 2003 from $5.2 million in the second quarter of
2002. The decrease was primarily due to a reduction in barter revenue of $1.0
million, a reduction in the amount of revenue related to our contract with
General Motors which expired in May 2003, and the sale of substantially all the
assets of our SA Cash brand in February 2003. Additionally, advertising revenue
from our network of web sites decreased primarily as a result of a decrease in
online advertising on CollegeClub.com.

         Corporate and University Solutions Revenue. Corporate and university
solutions revenue decreased to $0.6 million in the second quarter of 2003 from
$1.4 million in the second quarter of 2002. The decrease in revenue was
primarily due to the sale of our SA Marketing Group brand on May 8, 2002, and
partially offset by increases in our licensing fees from universities.

         For the three month period ended June 30, 2003 and 2002, there were no
individual customers that accounted for more than 10% of revenue.

         Cost of Student Services Revenue. Cost of student services revenue
consists of the costs associated with subscription, commerce and advertising
revenue. Subscription costs consists of the costs associated with the
fulfillment of membership subscriptions and customer service. Commerce costs
include costs of goods paid to partners in connection with selling products and
personnel-related costs associated with acquiring customers for the Company.
Advertising costs consist primarily of royalties paid to colleges and
universities and fees paid to partners' in exchange for the right to place media
inventory on such parties' web sites. Cost of student services revenue decreased
to $1.3 million in the second quarter of 2003 from $1.9 million in the second
quarter of 2002. The decrease was due the sale of our SA Cash brand on February
1, 2003, consistent with the decrease in the related revenue.

         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 provided
through our SA Marketing Group brand. Cost of corporate and university solutions
revenue decreased to zero in the second quarter of 2003 from $0.8 million in the
second quarter of 2002, consistent with the sale of our SA Marketing Group
assets on May 8, 2002, which constituted our only cost of sales against our
corporate and university solutions revenue.

         Product Development. Product development expenses consist primarily of
personnel-related and consulting costs associated with the development and
enhancement of our suite of products, which include the Student Advantage
Membership Program and our

                                       13
<PAGE>

network of web sites. Product development expenses remained level at $1.5
million in the second quarter of 2003 as compared to the second quarter of 2002.

         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 $1.1 million in the second quarter of 2003 from
$3.8 million in the second quarter of 2002. The decrease was primarily related
to a reduction in barter expense of $1.0 million, the sale of the assets of our
SA Marketing Group brand in May 2002, and the sale of the assets of our SA Cash
brand in February 2003.

         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 $0.8 million in the second quarter of
2003 from $1.2 million in the second quarter of 2002. The decrease was primarily
due to a significant reduction in the number of employees engaged in the general
and administrative functions.

         Depreciation and Amortization. Depreciation expense decreased to $1.0
million in the second quarter of 2003 from $1.6 million in the second quarter of
2002, primarily due to decreased capital expenditures throughout 2002 and the
first two quarters of 2003. Amortization expense decreased to $0.2 million in
the second quarter of 2003 from $0.6 million in the second quarter of 2002. In
accordance with SFAS 142, we amortized the value of acquired contract related to
CollegeClub, which was fully amortized as of April 2003.

         Realized Gain on Sale of Assets. On May 5, 2003, we amended the SA
Marketing Group purchase agreement dated May 8, 2002 with Triple Dot, Inc., to
provide that all obligations had been met by both parties in relation to the
$1.5 million earn-out in the original agreement. The Company recorded the $1.5
million as additional gain on sale during the three-month period ended June 30,
2003.

         Interest and Other Income (Expense), Net. Interest net, includes
interest income from cash balances and notes receivable and interest expense
related to the Company's financing obligations. Interest income was $0.4 million
in the second quarter of 2003 compared to $0.6 million of interest expense in
the second quarter of 2002. The decrease in interest expense resulted mainly
from the May 1, 2003 amendment to our Reservoir credit facility. The Reservoir
Lenders agreed to waive $0.5 million of accrued and unpaid interest under the
loan through April 30, 2003. In addition, we recorded $0.1 million of interest
income related to cash balances and notes receivable offset by $0.2 million of
interest expense on our Reservoir credit facility.

Comparison of Six Months Ended June 30, 2003 with Six Months Ended June 30, 2002

         Revenue. Total revenues decreased to $8.7 million for the first six
months of 2003 from $15.3 million for the first six months of 2002 due to a
decrease in student services revenue of $5.1 million and corporate and
university solutions revenue of $1.5 million.

         Student Services Revenue. Student services revenue decreased to $7.4
million in the first months of 2003 from $12.4 million in the first six months
of 2002. The decrease in student services revenue was primarily due to a
reduction in barter revenue of $2.1 million, a $1.6 million reduction in the
amount of revenue related to our contract with General Motors, which expired in
May 2003, and the sale of substantially all assets of our SA Cash brand in
February 2003.

         Corporate and University Solutions Revenue. Corporate and university
solutions revenue decreased to $1.3 million in the first six months of 2003 from
$2.8 million in the first six months of 2002. The decrease in revenue was due to
the sale of certain assets of our SA Marketing Group brand on May 8, 2002, and
partially offset by increases in our licensing fees from universities.

         For the six month period ended June 30, 2003 and 2002 there were no
individual customers that accounted for more than 10% of revenue.

         Cost of Student Services Revenue. Cost of student services revenue
decreased to $2.8 million in the first six months of 2003 from $3.8 million in
the first six months of 2002. The decrease was primarily due to the sale of
substantially all the assets of our SA Cash brand in February 2003, consistent
with the decrease in the related revenue.

         Cost of Corporate and University Solutions Revenue. Cost of corporate
and university solutions revenue decreased to zero in the first six months of
2003 from $1.9 million in the first six months of 2002, consistent with the sale
of our SA Marketing Group assets on May 8, 2002, which constituted our only cost
of sales against our corporate and university solutions revenue.

         Product Development. Product development expenses decreased to $3.1
million in the first six months of 2003 from $3.6 million in the first six
months of 2002. The decrease was primarily due to the sale of the assets of our
SA Cash brand in February 2003, the reduction in number of employees engaged in
product development in the first six months of 2003 and a general reduction in
technology spending.

                                       14
<PAGE>

         Sales and Marketing. Sales and marketing expenses decreased to $2.7
million in the first six months of 2003 from $7.2 million in the first six
months of 2002. The decrease was primarily related to a reduction in barter
expense of $2.1 million, the sale of our SA Marketing Group assets in May 2002,
and the sale of the assets of our SA Cash brand in February 2003.

         General and Administrative. General and administrative expenses
decreased to $1.8 million in the first six months of 2003 from $4.2 million in
the first six months of 2002. The decrease was primarily due to a significant
reduction in the number of employees engaged in the general and administrative
functions.

         Depreciation and Amortization. Depreciation expense decreased to $2.2
million in the first six months of 2003 from $3.2 million in the first six
months of 2002, primarily due to decreased capital expenditures in 2002 and
2003. Amortization expense decreased to $0.8 million in the first six months of
2003 from $0.6 million in the first six months of 2002 resulting from the full
amortization of our intangible assets relating to our acquisition of Collegeclub
in April 2003.

         Realized Gain (Loss) on Sale of Assets. In May 2002, we sold the assets
of our SA Marketing Group brand to Triple Dot, Inc., for a cash payment of $6.5
million and an opportunity to earn up to an additional $1.5 million based on the
performance of certain pending proposals. For the six month period ended June
30, 2002, we recorded a gain of $7.0 million. Effective May 5, 2003, we amended
the SA Marketing Group purchase agreement dated May 8, 2002 with Triple Dot,
Inc., to provide that all obligations had been met by both parties in relation
to the $1.5 million earn-out in the original agreement. The Company recorded the
$1.5 million as additional gain on sale during the six month period ended June
30, 2003. On February 3, 2003, we completed the sale of certain assets of our SA
Cash brand to Blackboard Inc. for a cash payment of $4.5 million and recorded a
net gain of $4.3 million.

         Interest and Other Income (Expense), Net. Interest net, includes
interest income, net, of $0.4 million in the first six months of 2003 compared
to $1.2 million of interest expense, net, in the first six months of 2002. The
decrease in interest expense was mainly a result of December 31, 2002 debt
restructuring with our lenders. In accordance with SFAS 15 "Accounting by
Debtors and Creditors Regarding Troubled Debt Restructuring", we recorded the
anticipated total interest expense over the remaining term of the debt as of
December 31, 2002. Accordingly, no interest expense was recorded for the three
month period ended March 31, 2003. The decrease in interest expense was also a
result of the May 1, 2003 amendment to our Reservoir credit facility. The
Reservoir Lenders agreed to waive $0.5 million of accrued and unpaid interest
under the loan through April 30, 2003. In addition, we recorded $0.1 million of
interest income related to cash balances and notes receivable offset by $0.3
million of interest expense on our Reservoir credit facility.

RESULTS OF DISCONTINUED OPERATIONS

         On May 5, 2003, we sold substantially all of the assets of our OCM
Direct subsidiary to Alloy, Inc., for a cash payment of $15.6 million and $1.8
million in settlement of the intercompany balance between OCM Direct and us.

        OCM Direct is accounted for as a discontinued operation in the
accompanying financial statements in accordance with Statement of Financial
Accounting Standards (SFAS) No. 144, "Accounting for the Impairment or Disposal
of Long-Lived Assets." OCM Direct's results of operations and cash flows have
been removed from our results of continuing operations for all periods
presented. All related disclosures have also been adjusted to reflect the
discontinued operation. Summarized selected financial information from
discontinued operations for the periods indicated is as follows:

<TABLE>
<CAPTION>
                        THREE MONTHS ENDED    SIX MONTHS ENDED
                             JUNE 30,             JUNE 30,
                          2003      2002      2003        2002
                        -------   -------    -------    -------
                                   (IN THOUSANDS)
                                    (UNAUDITED)
<S>                     <C>       <C>        <C>        <C>
Revenue .........       $ 3,021   $ 7,681    $ 4,187    $ 9,171
                        -------   -------    -------    -------
Income (loss)....       $   440   $   (60)   $(3,159)   $(2,562)
                        =======   =======    =======    =======
</TABLE>

         The assets and liabilities of the discontinued operation are stated
separately in the consolidated balance sheet. The following is a summary of the
primary asset and liability categories as of December 31, 2002:

<TABLE>
<CAPTION>
                                                  DECEMBER 31,
                                                     2002
                                                    ------
                                                (IN THOUSANDS)
                                                  (UNAUDITED)
<S>                                              <C>
Cash .....................................         $ 1,290
Accounts receivable, net .................           1,047
Prepaid Expenses and other current assets.             787
Inventories (finished goods) .............           1,413
Property and equipment, net ..............           1,049
Goodwill .................................          16,843
Intangible assets.........................           1,194
                                                   -------
  Total Assets ...........................         $23,623
                                                   =======

Accounts payable .........................        $    553
Accrued liabilities ......................           1,345
Borrowings under line of credit ..........           1,670
Other liabilities ........................             196
                                                   -------
  Total Liabilities ......................         $ 3,764
                                                   =======
</TABLE>

LIQUIDITY AND CAPITAL RESOURCES

                                       15
<PAGE>

         Since our inception, we have financed our operations primarily through
the private placement and public offering of securities, cash from operations,
borrowings under our term loan, credit facilities, loans from equity holders,
sales of accounts receivable and dispositions of businesses. Our liquidity needs
arise primarily from our operating losses, our working capital requirements,
debt service on the indebtedness to the Reservoir Lenders, which we refer to as
the Reservoir credit facility, and debt service on the Scholar loan. In
addition, we expect to have additional liquidity needs as a result of required
repayments of the Reservoir credit facility, the Scholar loan and the guarantee
fee to Mr. Katzman. As of June 30, 2003 and December 31, 2002, we had $7.8
million and $18.2 million of total indebtedness, consisting of $5.3 and $13.0
million in principal borrowings and interest under the Reservoir credit
facility, $2.5 and $3.5 million in principal borrowings and interest under the
Scholar loan and $0 and $1.7 million in borrowings under the OCM loan,
respectively. The OCM loan was assumed by Alloy, Inc. as of May 1, 2003 as part
of their purchase of OCM Direct.

         As of June 30, 2003, we had cash and cash equivalents of $2.6 million.
We had current restricted cash of $0.5 million, which represents amounts held by
our third party credit card processor, and long-term restricted cash of $1.0
million held in escrow pursuant to the terms of acquisition agreements we
entered into relating to the sale of OCM Direct.

         Net cash used in operating activities from continuing operations was
$10.3 million for the six months ended June 30, 2003, an increase of $3.8
million compared to net cash used for operating activities of $6.5 million for
the six months ended June 30, 2002. Net cash used in operating activities from
continued operations in the six months ended June 30, 2003 was primarily a
result of a net gain on sale of assets of $5.8 million, a decrease in accounts
payable of $2.8 million, and a decrease in deferred revenue of $5.7 million,
partially offset by depreciation and amortization of $3.4 million and income
from continuing operations of $1.7 million.

         Net cash provided by investing activities from continuing operations
was $21.7 million for the six months ended June 30, 2003. Net cash provided by
investing activities was $5.7 million for the six months ended June 30, 2002.
Net cash provided by investing activities in the six months ended June 30, 2003
was primarily a result of the proceeds received for the sale of the assets of
OCM Direct in May 2003 and SA Cash in February 2003, which was partially offset
by purchases of fixed assets. Net cash provided by investing activities the
first six months of 2002 was a result of the proceeds received for the sale of
the assets of our SA Marketing Group brand in May 2002, offset by purchases of
fixed assets.

         Net cash used in financing activities from continuing operations was
$9.5 million and $3.0 million for the six months ended June 30, 2003 and 2002,
respectively. The net cash used in financing activities in the six months ended
June 30, 2003 was primarily the result of repayment of $10.5 million under the
Reservoir Capital credit facility and an increase in restricted cash of $1.0
million, which were partially offset by borrowings of $2.0 million under the
Reservoir credit facility. The net cash provided by financing activities in the
six months ended June 30, 2002 was primarily the result of the net proceeds of
$2.7 million from the sale of 36,000 shares of common stock in a private
placement in May 2002, partially offset by the repayment of $5.2 million of our
obligations to Reservoir Capital.

         On September 30, 2002, we agreed to borrow $3.5 million from Scholar,
Inc., an entity formed by Raymond V. Sozzi, Jr., our President and Chief
Executive Officer, an affiliate of Atlas II, L.P. and certain other of our
stockholders. The loan is referred to as the Scholar loan, has an interest rate
of 10% per annum and a maturity date of January 31, 2005 and otherwise has the
same terms as the Reservoir Capital credit facility.

         On December 30, 2002, Reservoir Capital agreed to reduce our total
indebtedness to them from approximately $15.7 million to $9.5 million in
exchange for a guarantee from Mr. John Katzman, a member of our Board of
Directors who resigned at the time the amendment was consummated. In exchange
for his guarantee, we agreed to pay Mr. Katzman a $1.0 million fee payable at
the time of certain loan repayments. In addition, Reservoir Capital agreed to
lend us an additional $2.0 million, which was not secured by Mr. Katzman's
guarantee. On January 31, 2003, Reservoir Capital agreed to reduce the $3.5
million payment due on January 31, 2003 to $1.5 million.

         Effective April 30, 2003, we amended our loan agreements with the
Reservoir Lenders, Scholar, Inc. and John Katzman, (together with Scholar, Inc.
and the Reservoir Lenders, the "Lenders") to provide for payments of $7.8
million of the principal amount outstanding under the Reservoir credit facility
and $1.2 million of the principal outstanding under the Scholar loan upon the
consummation of the sale of substantially all the assets of the our OCM Direct
subsidiary to Alloy, Inc. In addition, the Reservoir Lenders agreed to extend
the maturity date of the loan from July 1, 2003 to January 31, 2005, to set the
interest rate at 10% per annum beginning May 1, 2003 and require quarterly
payments of interest beginning on September 30, 2003. The Reservoir Lenders and
Mr. Katzman also agreed to waive all accrued and unpaid interest under the loan
through April 30, 2003. In addition, we agreed to pay a fee of $0.1 million on
December 31, 2003 and June 30, 2004 if any of the loans are outstanding as of
such date. After payment of an aggregate of $9.0 million on May 6, 2003 in
accordance with the terms of the amendments, the outstanding principal amounts
under the Reservoir credit facility and the Scholar loan were $5.3 million and
$2.3 million, respectively. In connection with the Company's

                                       16
<PAGE>

sale of substantially all of the assets of OCM Direct to Alloy, Inc., Alloy
assumed substantially all of the liabilities of OCM Direct and its subsidiaries,
including its obligations under the OCM loan with Bank of America. Our guarantee
of the loan was terminated as of May 1, 2003.

The following table summarizes our future minimum lease payments under
noncancelable operating and capital leases as of December 31, 2002. Other than
the reduction in operating and capital lease commitments as a result of the OCM
Direct divestiture described in footnote (1) below, since December 31, 2002,
there has been no material change in our future obligations for these
commitments (in thousands):

YEAR ENDING DECEMBER 31,             CAPITAL LEASES          OPERATING LEASES
-------------------------            --------------          ----------------

2003                                            117                     1,780
2004                                             46                     1,471
2005                                             35                     1,355
2006                                             23                       749
2007                                             16                       481
Thereafter                                        3                        --
                                     --------------          ----------------
Total minimum lease payments         $          240          $          5,836
                                     ==============          ================


(1) The capital and operating lease commitments shown above include the
following amounts related to the OCM Direct business, which was divested on May
5, 2003 (in thousands, unaudited):


YEAR ENDING DECEMBER 31,             CAPITAL LEASES          OPERATING LEASES
-------------------------            --------------          ----------------

2003                                            103                     1,011
2004                                             46                     1,035
2005                                             35                     1,066
2006                                             23                       749
2007                                             10                       481
Thereafter                                        3                        --
                                     --------------          ----------------
Total minimum lease payments         $          226          $          4,342
                                     ==============          ================

         We have experienced substantial net losses since our inception and, as
of June 30, 2003, had an accumulated deficit of $127.0 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 as a result of the sale of various
assets, including the OCM Direct business. During 2003, we have continued to
reduce our operating costs and plan to further reduce operating costs over the
remainder of 2003. However, our cash requirements for debt service, primarily
the repayment of debt, and continued operations are substantial and our
available resources may not be sufficient to fund such obligations, requiring us
to obtain additional financing.

         We believe that our available cash resources are sufficient to meet our
current obligations under the Reservoir Capital and Scholar loans, which consist
of quarterly interest payments beginning on September 30, 2003. However, if we
are unable to realize an anticipated increase in revenue for the remainder of
2003 and cost savings through significant reductions in our net cash loss, we
may be required to obtain additional financing. In addition, based on our
current expectations, we will be required to raise additional financing in order
to repay our outstanding indebtedness when it becomes due beginning on January
31, 2005. 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. 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.
As of the filing of our annual report on Form 10-K, as amended, for the year
ended December 31, 2002, these and other factors raised concerns about our
ability to continue as a going concern. With the proceeds of the sales of our SA
Cash product line and substantially all of the assets of our OCM Direct
subsidiary, the related reduction of our debt obligations and restructuring of
our remaining debt, we believe that we have sufficient cash resources for at
least the next 12 months.

     CERTAIN FACTORS THAT MAY AFFECT FUTURE RESULTS

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

         We have not achieved profitability and have incurred significant
operating losses to date. As of June 30, 2003, our accumulated deficit was
$127.0 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 HAVE INCURRED A SUBSTANTIAL AMOUNT OF DEBT AND NEED ADDITIONAL CAPITAL, AND
THE FUTURE FUNDING OF OUR CAPITAL NEEDS IS UNCERTAIN.

         We require substantial working capital to fund our business and service
our outstanding debt obligation. As of June 30, 2003, we had $7.8 million of
total indebtedness, consisting of $5.3 million in principal borrowings and
interest under the Reservoir Capital credit facility, and $2.5 million in
principal borrowings and interest under the Scholar loan. In connection with our
sale of substantially all of the assets of OCM Direct to Alloy, Inc., Alloy
assumed substantially all of the liabilities of OCM Direct, including its
obligations under the OCM loan with Bank of America as of May 1, 2003. The
Company's guarantee of the loan was terminated as of May 1, 2003. Also effective
May 1, 2003, we amended our loan agreement with our Reservoir Lenders to provide
for payments of $7.8 million of the principal amount outstanding under the
credit facility and $1.2 million of the principal outstanding under the Scholar
loan upon the consummation of the sale of substantially all the assets of the
our OCM Direct subsidiary to Alloy, Inc. The Reservoir Lenders also agreed to
extend the maturity date of the loan from July 1, 2003 to January 31, 2005, to
set the interest rate at 10% per annum beginning May 1, 2003 and will require
quarterly payments of interest beginning September 30, 2003. The required
payments were made to the Lenders on May 6, 2003.

                                       17
<PAGE>

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

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

         Based on our current expectations, we will be required to raise
additional financing and sell additional assets in order to repay our
outstanding indebtedness as it comes due beginning on January 31, 2005 and we
cannot assure you that we will be able to do so. Our loan agreement with
Reservoir Capital imposes significant restrictions on our ability to raise funds
through the sale of equity, make investments and acquisitions, restructure our
operations, obtain other financing and realize proceeds from sales of assets or
equity financings. In addition, funds raised through the issuance of equity
securities or securities convertible into stock may have negative effects on our
stockholders, such as a dilution in percentage of ownership in Student
Advantage, and the rights, preferences or privileges of the new security holders
may be senior to those of the common stockholders.

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

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

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

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

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

         Our ability to repay or to refinance our obligations with respect to
our indebtedness will depend on our future financial and operating performance,
which, in turn, may be subject to prevailing economic and competitive conditions
and other factors, many of which are beyond our control. We have experienced a
reduction in revenue and increase in net losses as a result of the economic
downturn and, in particular, the downturn in the media and advertising sector.
Our ability to meet our debt service and other obligations may depend in
significant part on the extent to which we can successfully implement our
business and growth strategy. There can be no assurance that we will be able to
successfully implement our strategy or that the anticipated results of our
strategy will be realized.

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

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

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

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

         The delisting could result in a number of negative implications,
including reduced liquidity in our common stock as a result of the loss of
market efficiencies associated with the Nasdaq National Market as well as the
potential loss of confidence by suppliers, customers and employees, the loss of
institutional investor interest, fewer business development opportunities and
greater difficulty in obtaining financing.

                                       18
<PAGE>

         In addition, the delisting may make it more difficult for an investor
to dispose of, or obtain accurate quotations as to the market value of our
stock. This delisting may negatively impact the value of our stock as stocks
trading on the over-the-counter market are typically less liquid and trade with
larger variations between the bid and ask price. In addition, there are
additional sales practice requirements on broker-dealers who sell such
securities, such as determining the suitability of the purchaser and receiving
the purchaser's written consent to the transaction prior to sale. While the
trading price of our stock is below $5.00 per share, trading in the common stock
is also subject to certain other securities laws requirements, which require
additional disclosure by broker-dealers in connection with any trades involving
a stock defined as a "penny stock," such as delivery of a disclosure schedule
explaining the penny stock market and the risks associated with it. The
additional burdens imposed upon broker-dealers by such requirements may
discourage broker-dealers from effecting transactions in our stock, which could
severely limit the market price and liquidity of our stock.

GENERAL MARKET CONDITIONS COULD ADVERSELY AFFECT OUR BUSINESS.

         We believe that general economic conditions and the financial
difficulties that many companies have experienced have caused a slowdown in
consumer and business spending and in companies' budgets for marketing services
and have reduced the perceived urgency by companies to begin or to continue
marketing initiatives. In addition, recent acts of terrorism and subsequent
geopolitical uncertainties have materially and adversely affected travel and
tourism spending, and as a result our revenues for student-related travel
services have been adversely affected. As a result, our current customers may
cancel or delay spending on marketing and other initiatives and there may be a
decrease in demand for our services from potential customers. If companies
continue to delay or reduce their marketing initiatives because of the current
economic climate, or for other reasons, our business, financial condition and
results of operations could be materially adversely affected. Moreover, the
current market conditions have decreased the demand for online advertising, and
have put downward pressure on the cost per thousand impressions which we can
charge for such advertising and have increased the likelihood that, despite our
best efforts and written agreements supporting such efforts, certain of our
customers may be unable to pay for such advertising services we have provided to
them.

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

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

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

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

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

         -    sustain historical revenue growth rates,

         -    generate sufficient revenue to achieve and maintain profitability,

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

                                       19
<PAGE>

         -    implement our business model,

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

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

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

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

WE MAY NOT SUCCESSFULLY IMPLEMENT OUR BUSINESS STRATEGY.

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

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

         -    maintain our network of corporate sponsors,

         -    continue to aggressively build the Student Advantage brand,

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

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

We are dependent on maintaining college and university relationships to market
and sell our products and services. Our ability to maintain these alliances and
relationships and to develop new alliances and relationships is critical to our
ability to maintain our members, our direct mail customers, our remaining SA
Cash university partners and our Official College Sports Network university
partners. A failure to acquire or maintain alliances and relationships with
colleges and universities could have a material adverse effect on our business.
We are also dependent upon our sponsors, both national and local, to provide our
members and SA Cash participants with discounts on their products and services.
However, our agreements with a number of our sponsors preclude us from entering
into similar arrangements with their competitors. This restriction may prevent
us in some cases from offering attractive additional discounts to our members.
We may encounter difficulties in establishing or maintaining our network of web
sites. Several companies that provide content to our web sites have discontinued
operations or filed for bankruptcy protection. We may be forced to procure
services from other suppliers, and cannot assure you that we will be able to do
so in a timely and cost-effective manner, and may be required to alter certain
of our offerings to reflect such events. In addition, our members and customers
may perceive our web sites to be lacking certain content or attributes due to
the failure of certain business partners. Finally, we cannot guarantee that
Internet users will maintain interest in our network of websites. A decline in
membership or usage of our network of websites would decrease revenue.

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

Our business model depends, in part, on increasing the amount of revenues and
profits derived from certain established and new products and services. Our
ability to generate significant revenues and profits from these products and
services will depend, in part, on the implementation of our strategy to generate
significant transaction commerce and user traffic. Our strategy includes using
our membership card program to achieve a significant presence in university and
college communities, and to develop and expand on sponsor relationships to
include revenue sharing agreements based on transaction volume. There is intense
competition among offerors of alternative payment methods, including
stored-value cards, debit card and credit cards, and among websites that sell
online advertising. During the second quarter of 2001, AT&T completed its
obligation to purchase Student Advantage memberships in bulk. In prior periods,
the majority of student memberships were obtained through AT&T or other
corporate partners' promotional offers of Student Advantage memberships. These
promotional offers typically included a free one-year membership in the Student
Advantage Membership Program. Our corporate partners purchased Student Advantage
memberships in bulk to fulfill these promotional offers. We have focused our
efforts to change the marketing model for the sale of memberships from a
primarily bulk sale model to a more balanced model which includes the sale of
memberships to both corporate partners in bulk and direct sales to individuals.
We expect to sell memberships under this model through our corporate partners,
the Student Advantage network of websites, and other related

                                       20
<PAGE>

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.

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

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

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

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

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

We tend to sell most of our memberships in the beginning of each academic term.
Starting in May 2003, all memberships expire on the thirteenth month after
issuance. Because the aggregate number of memberships within a school year
increases as new members are added and because we recognize revenue from
memberships ratably over the period from the time of subscription until the end
of our membership year, our subscription revenue will typically be higher in the
first and second quarters than in the fourth quarter of each fiscal year. It is
difficult to determine how the third quarter will typically compare, since it
includes two calendar months from the end of a membership year and the first
month of the subsequent membership year. These seasonal factors could have a
material adverse effect on our business, financial condition and results of
operations.

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

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

                                       21
<PAGE>

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

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

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

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

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

Competition for online users and advertisers is intense and is expected to
increase over time as barriers to entry are relatively low. We compete for
visitors, traffic, sponsors and online merchants with web directories, search
engines, content sites, online service providers and traditional media
companies. We also face competition from other companies maintaining websites
dedicated to college students as well as high-traffic websites sponsored by
companies such as AOL Time Warner, CBS, Disney, Terra Lycos, Microsoft, MTV and
Yahoo!

Many of our competitors have longer operating histories, greater name
recognition, larger customer bases and significantly greater financial,
technical and marketing resources than we do. In addition, substantially all of
our current advertising customers have established collaborative relationships
with other high-traffic websites. As a result, our advertising customers might
conclude that other Internet businesses, such as search engines, commercial
online services and sites that offer professional editorial content are more
effective sites for advertising than we are. Moreover, we may be unable to
maintain either the level of traffic on our web sites or a stable membership
base, which would make our sites less attractive than those of our competitors.
Increased competition from these and other sources could require us to respond
to competitive pressures by establishing pricing, marketing and other programs
or seeking out additional strategic alliances or acquisitions that may be less
favorable to us than we could otherwise establish or obtain.

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

Since 1999, we have acquired and disposed of a number of businesses. In the
future, we may undertake additional acquisitions and sales of certain businesses
or operations. These transactions involve a number of risks, including:

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

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

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

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

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

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

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

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

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

                                       22
<PAGE>

In previous years we experienced dramatic growth in personnel and expect to
continue to hire additional personnel in selected areas. We reduced our
workforce in 2001, 2002 and 2003 to decrease our costs and create greater
operational efficiency. Ongoing growth and consolidation requires significant
time and resource commitments. Further, as a result in part of our acquisitions,
approximately 65% of our employees are based outside of our Boston headquarters.
If we are unable to effectively manage a large and geographically dispersed
group of employees, anticipate our future growth or manage our consolidations
effectively, our business will be adversely affected.

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

Our management team has had limited significant experience in a leadership role
in a public company. We have recently experienced losses in or changes in our
management team, including in information technology, human resources, legal,
marketing and finance and our chief operating officer. We cannot assure you that
the management team as currently configured will be able to continue to
successfully lead a public company. The failure of the management team to
continue to adequately handle this challenge could have a material adverse
effect on our business.

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

         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
Navisite, Inc. in Andover, Massachusetts and Cable & Wireless in Irvine,
California. Fire, floods, earthquakes, power loss (whether through brown-outs or
the like) or distribution issues, telecommunications failures, break-ins, acts
of terrorism, and similar events could damage these systems. Computer viruses,
electronic break-ins or other similar disruptive problems could also adversely
affect our websites. Our business could be adversely affected if our systems
were affected by any of these occurrences. Our insurance policies may not
adequately compensate us for any losses that may occur due to any failures or
interruptions in our systems. We do not presently have any secondary "off-site"
systems or a formal disaster recovery plan. Our network of websites must
accommodate a high volume of traffic and deliver frequently updated information.
Our websites have in the past and may in the future experience slower response
times or decreased traffic for a variety of reasons. These types of occurrences
could cause users to perceive our websites as not functioning properly and
therefore cause them to use another website or other methods to obtain
information. In addition, our users depend on Internet service providers, online
service providers and other website operators for access to our network of
websites. Many of them have experienced significant outages in the past, and
could experience outages, delays and other difficulties due to system failures
unrelated to our systems.

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

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

WE MAY BE SUED FOR INFORMATION RETRIEVED FROM THE INTERNET.

         We may be subjected to claims for defamation, invasion of privacy,
negligence, copyright or trademark infringement, personal injury or other legal
theories relating to the information we publish on our network of websites or in
our publications or in the form of web crawling or framing. These types of
claims have been brought, sometimes successfully, against online services as
well as other print publications in the past, particularly in connection with
archive services. Our syndication of content, including U-WIRE content, to such
archive services could expose us to indemnification claims in the event
copyright holders assert their rights, and a request for

                                       23
<PAGE>

indemnification for legal fees incurred is pending. We could also be subjected
to claims based upon the content that is accessible from our network of websites
through links to other websites or through content and materials that may be
posted by members in chat rooms or bulletin boards including those located on
the CollegeClub.com website. Our insurance may not adequately protect us against
these types of claims.

WE MAY LOSE MEMBERS AND OUR REPUTATION MAY SUFFER BECAUSE OF UNSOLICITED BULK
EMAIL OR SPAM.

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

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

         We collect and our network of websites captures information regarding
our members and users in order to provide information to them, enable them to
access the services offered on our websites, tailor content to them or assist
advertisers in targeting their advertising campaigns to particular demographic
groups. However, privacy concerns may cause users to resist providing the
personal data necessary to support this tailoring capability. Even the
perception of security and privacy concerns, whether or not valid, may
indirectly inhibit market acceptance of our network of websites. Our network of
websites currently uses "cookies" to track demographic information and user
preferences. A cookie is information keyed to a specific server, file pathway or
directory location that is stored on a user's hard drive, possibly without the
user's knowledge, but is generally removable by the user. Germany has imposed
laws limiting the use of cookies, and a number of internet commentators,
advocates and governmental bodies in the United States and other countries have
urged the passage of laws limiting or abolishing the use of cookies. If these
laws are passed, our business, financial condition and results of operations
could be materially harmed. Legislative or regulatory requirements may heighten
privacy concerns if businesses must notify Internet users that the data may be
used by marketing entities to direct product promotion and advertising to the
user. The Federal Trade Commission and state agencies have been investigating
various Internet companies regarding their use of personal information. In 1998,
the United States Congress enacted the Children's On-line Privacy Protection Act
of 1998. In addition, the Gramm-Leach-Bliley Act ("GLB"), which governs privacy
issues related to financial institutions, went into effect on July 1, 2001. If
our programs are determined to be of a nature covered by the GLB, we may be
required to undertake certain notices to our members and users and/or modify the
membership program and other services. We depend upon collecting personal
information from our customers, and the regulations promulgated under this act
have made it more difficult for us to collect personal information from some of
our customers. If third parties are able to penetrate our network security or
otherwise misappropriate our users' personal information, we could be subject to
liability. We could also be liable for claims based on unauthorized purchases
with credit card information, impersonation or other similar fraud claims. We
could also be held responsible for disclosing personal information or images,
such as our disclosing such information for unauthorized marketing purposes or
for including it in our photo gallery and web cam section on CollegeClub.com.
These claims could result in litigation. In addition, we could incur additional
expenses if new regulations regarding the use of personal information are
introduced or if our privacy practices are investigated. Other countries and
political entities, such as the European Economic Community, have adopted such
legislation or regulatory requirements. If consumer privacy concerns are not
adequately addressed, our business, financial condition and results of
operations could be materially harmed. Although we carry general liability
insurance, this insurance may not be available to cover a particular claim or
may be insufficient. Additionally, our user community on CollegeClub.com exists
in part because of our members' willingness to provide information about
themselves. If claims, litigation, regulation or the acts of third parties
reduce our members' willingness to share this information or our ability to use
it, the attractiveness of the website will decline, which would reduce our
ability to generate revenue through the affected website.

WE MAY BE 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.

                                       24
<PAGE>

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

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

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

OUR CHARTER DOCUMENTS MAY INHIBIT A TAKEOVER.

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

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

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

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

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

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

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

ITEM 4.  CONTROLS AND PROCEDURES

                                       25
<PAGE>

                  The Company's management, with the participation of the
Company's chief executive officer and chief financial officer, evaluated the
effectiveness of the Company's disclosure controls and procedures (as defined in
Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of June 30, 2003. Based
on this evaluation, the Company's chief executive officer and chief financial
officer concluded that, as of June 30, 2003, the Company's disclosure controls
and procedures were (i) designed to ensure that material information relating to
the Company, including its consolidated subsidiaries, is made known to the
Company's chief executive officer and chief financial officer by others within
those entities, particularly during the period in which this report was being
prepared and (ii) effective, in that they provide reasonable assurance 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.

                  No change in the Company's internal control over financial
reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act)
occurred during the fiscal quarter ended June 30, 2003 that has materially
affected, or is reasonably likely to materially affect, the Company's internal
control over financial reporting.

PART II. OTHER INFORMATION.

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

On June 30, 2003, the following proposals were voted on at the Annual Meeting of
Stockholders:

<TABLE>
<CAPTION>
                                                                                  AGAINST/
                          PROPOSAL                                  FOR           WITHHELD             ABSTAIN
<S>                                                              <C>              <C>                  <C>
To elect Charles E. Young to serve as the Class I Director
until the 2006 annual meeting of stockholders and until his
successor is duly elected and qualified.                         3,548,311         66,486                  --

To approve an amendment to the Company's Amended and
Restated Certificate of Incorporation to decrease the number
of authorized shares of the Company's preferred stock from
5,000,000 shares to 1,000,000 shares and to decrease the
number of authorized shares of the Company' s common stock
from 150,000,000 shares to 10,000,000 shares.                    1,828,682         71,845              15,485

To approve an Amendment to the Company's Amended and
Restated Certificate of Incorporation to effect a
one-for-ten reverse split of the Company's issued and
outstanding stock and to decrease the number of authorized
shares of the Company's preferred stock from 5,000,000
shares to 100,000 shares and to decrease the number of
authorized shares of the Company's common stock from
150,000,000 shares to 1,000,000 shares.                          3,524,209         75,103              15,485
</TABLE>

In addition to Charles E. Young, who was elected at the meeting, the terms of
the following directors continued after the meeting: John M. Connolly, Raymond
V. Sozzi, Jr., William S. Kaiser and Marc J. Turtletaub.

All share amounts and vote counts in this Item 4 are prior to giving effect to
the one-for-ten reverse split of the Common Stock effected on June 30, 2003.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

         a) Exhibits

3.1      Amended and Restated Certificate of Incorporation of the Company, as
         amended.

31.1     Rule 13a-14(a)/15d-14(a) Certification of President and Chief Executive
         Officer.

31.2     Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.

                                       26
<PAGE>

32.1     Section 1350 Certification of President and Chief Executive Officer.

32.2     Section 1350 Certification of Chief Financial Officer.

         b) Reports on Form 8-K

         The Company filed a Current Report on Form 8-K dated March 31, 2003
with the Securities and Exchange Commission on April 4, 2003 reporting an
amendment to its loan agreement with Reservoir Capital Partners and a notice
that the Company was not able to file its Annual Report on Form 10-K for the
fiscal year ended December 31, 2002 by March 31, 2003.

         The Company filed a Current Report on Form 8-K dated May 5, 2003 with
the Securities and Exchange Commission on May 20, 2003 reporting the sale of the
assets related to its OCM Direct business to Alloy, Inc. and an amendment to its
loan agreement with Bank of America.

                                       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.

Dated: August 14, 2003           By: /s/ Sevim M. Perry
                                 -----------------------------------------------
                                 Sevim M. Perry
                                 Chief Financial Officer and Assistant Treasurer
                                 (Principal Financial and Accounting Officer)

                                       28
<PAGE>

                                  EXHIBIT INDEX

<TABLE>
<CAPTION>
Exhibit No.                             Exhibit
-----------                             -------
<S>               <C>
   3.1            Amended and Restated Certificate of Incorporation of the
                  Company, as amended.

   31.1           Rule 13a-14(a)/15d-14(a) Certification of President and Chief
                  Executive Officer.

   31.2           Rule 13a-14(a)/15d-14(a) Certification of Chief Financial
                  Officer.

   32.1           Section 1350 Certification of President and Chief Executive
                  Officer.

   32.2           Section 1350 Certification of Chief Financial Officer.
</TABLE>

                                       29