<PAGE>   1
 
     AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 7, 1999
 
                                                  REGISTRATION NO. 333-
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
 
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                            ------------------------
 
                                    FORM S-1
            REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
 
                            STUDENT ADVANTAGE, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
 
<TABLE>
<S>                                  <C>                                  <C>
              DELAWARE                               8699                              04-3263743
  (STATE OR OTHER JURISDICTION OF        (PRIMARY STANDARD INDUSTRIAL               (I.R.S. EMPLOYER
   INCORPORATION OR ORGANIZATION)        CLASSIFICATION CODE NUMBER)             IDENTIFICATION NUMBER)
</TABLE>
 
                            ------------------------
 
                               280 SUMMER STREET
                          BOSTON, MASSACHUSETTS 02210
                                 (617) 912-2011
    (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
                  OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
                            ------------------------
 
                             RAYMOND V. SOZZI, JR.
          CHAIRMAN OF THE BOARD, PRESIDENT AND CHIEF EXECUTIVE OFFICER
                            STUDENT ADVANTAGE, INC.
                               280 SUMMER STREET
                          BOSTON, MASSACHUSETTS 02210
                                 (617) 912-2011
               (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE
               NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
                            ------------------------
 
                                   COPIES TO:
 
<TABLE>
<S>                                                    <C>
                 MARK G. BORDEN, ESQ.                               LAWRENCE S. WITTENBERG, ESQ.
                  HALE AND DORR LLP                               TESTA, HURWITZ & THIBEAULT, LLP
                   60 STATE STREET                                        125 HIGH STREET
             BOSTON, MASSACHUSETTS 02109                            BOSTON, MASSACHUSETTS 02110
              TELEPHONE: (617) 526-6000                              TELEPHONE: (617) 248-7000
               TELECOPY: (617) 526-5000                               TELECOPY: (617) 248-7100
</TABLE>
 
                            ------------------------
 
    APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date hereof.
 
    If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act,
check the following box. [ ]
 
    If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
 
    If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
 
    If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
 
    If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [ ]
                            ------------------------
 
                        CALCULATION OF REGISTRATION FEE
 
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
            TITLE OF EACH CLASS OF SECURITIES TO                    PROPOSED MAXIMUM                AMOUNT OF
                       BE REGISTERED                          AGGREGATE OFFERING PRICE (1)      REGISTRATION FEE
---------------------------------------------------------------------------------------------------------------------
<S>                                                           <C>                           <C>
Common Stock, $.01 par value per share......................         $80,500,000                     $22,379
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
</TABLE>
 
(1) Estimated solely for the purpose of calculating the amount of the
    registration fee.
                            ------------------------
 
    THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>   2
 
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL SECURITIES, AND WE ARE NOT SOLICITING OFFERS TO BUY THESE SECURITIES, IN
ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
 
                   SUBJECT TO COMPLETION, DATED APRIL 7, 1999
 
                                     [LOGO]
 
                                                 SHARES
                                  COMMON STOCK
 
     Student Advantage, Inc. is offering                     shares of its
common stock. This is Student Advantage's initial public offering and no public
market currently exists for its shares. We have applied for approval for
quotation on the Nasdaq National Market under the symbol "STAD" for the shares
we are offering. We anticipate that the initial public offering price will be
between $     and $     per share.
 
                         ------------------------------
 
                 INVESTING IN THE COMMON STOCK INVOLVES RISKS.
                    SEE "RISK FACTORS" BEGINNING ON PAGE 7.
 
                         ------------------------------
 
<TABLE>
<CAPTION>
                                                               PER SHARE       TOTAL
                                                               ---------       -----
<S>                                                           <C>           <C>
Public Offering Price.......................................  $             $
Underwriting Discounts and Commissions......................  $             $
Proceeds to the Company.....................................  $             $
</TABLE>
 
     THE SECURITIES AND EXCHANGE COMMISSION AND STATE SECURITIES REGULATORS HAVE
NOT APPROVED OR DISAPPROVED THESE SECURITIES, OR DETERMINED IF THIS PROSPECTUS
IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
 
     Student Advantage has granted the underwriters a 30-day option to purchase
up to an additional           shares of common stock to cover over-allotments.
BancBoston Robertson Stephens Inc. expects to deliver the shares of common stock
to purchasers on                     , 1999.
 
                         ------------------------------
 
BANCBOSTON ROBERTSON STEPHENS
                            PRUDENTIAL SECURITIES
                                     VOLPE BROWN WHELAN & COMPANY
           The date of this Prospectus is                     , 1999.
<PAGE>   3
     [The inside front cover depicts five computer screen shots of Student
Advantage's Web site. The Student Advantage logo is at the top of the page and
the heading beneath the logo is "Studentadvantage.com." The top computer screen
shot depicts the home page of www.studentadvantage.com. The two middle screens
show content provided by "College News" through the U-Wire news feed and
services available from many corporate partners via "E-Commerce." The bottom two
screens depict other resources available such as "Bulletin Boards" and "Address
book & E-mail" screens.]
<PAGE>   4
     The graphic covering the gatefold pages depicts various products and
services provided to the three communities served by Student Advantage. The
heading Student Advantage is centered across the top of the two pages. The upper
left corner with the heading "Students" depicts a graphic of the 1998 - 1999
Student Advantage membership card. In the lower left corner is a graphic of four
covers of the Student Advantage magazine. A graphic of five computer screens
described on the inside front cover is centered across the middle of the two
pages. In the upper right corner is the heading, universities. Beneath this is a
graphic of the U-Wire logo. A map of the United States and the heading
"Businesses" are centered on the bottom of the page. Logos from the following
corporate sponsors are placed on the map: Amtrak, Tower Records, AT&T, America
Online, Lexis, Nexis, USA Today and Excite.
<PAGE>   5
 
     YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS. WE
HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION DIFFERENT FROM THAT
CONTAINED IN THIS PROSPECTUS. WE ARE OFFERING TO SELL, AND SEEKING OFFERS TO
BUY, SHARES OF COMMON STOCK ONLY IN JURISDICTIONS WHERE OFFERS AND SALES ARE
PERMITTED. THE INFORMATION CONTAINED IN THIS PROSPECTUS IS ACCURATE ONLY AS OF
THE DATE OF THIS PROSPECTUS, REGARDLESS OF THE TIME OF DELIVERY OF THIS
PROSPECTUS OR OF ANY SALE OF OUR COMMON STOCK. IN THIS PROSPECTUS, "STUDENT
ADVANTAGE," THE "COMPANY," "WE," "US" AND "OUR" REFER TO STUDENT ADVANTAGE, INC.
 
     UNTIL                     , 1999, ALL DEALERS THAT BUY, SELL OR TRADE OUR
COMMON STOCK, WHETHER OR NOT PARTICIPATING IN THIS OFFERING, MAY BE REQUIRED TO
DELIVER A PROSPECTUS. THIS REQUIREMENT IS IN ADDITION TO THE DEALERS' OBLIGATION
TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR
UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
 
                            ------------------------
 
                               TABLE OF CONTENTS
 
<TABLE>
<CAPTION>
                                                              PAGE
                                                              ----
<S>                                                           <C>
Prospectus Summary..........................................     4
Risk Factors................................................     7
Use of Proceeds.............................................    16
Dividend Policy.............................................    16
Capitalization..............................................    17
Dilution....................................................    18
Selected Financial Data.....................................    19
Management's Discussion and Analysis of Financial Condition
  and Results of Operations.................................    20
Business....................................................    30
Management..................................................    42
Certain Transactions........................................    50
Principal Stockholders......................................    52
Description of Capital Stock................................    54
Shares Eligible for Future Sale.............................    56
Underwriting................................................    58
Legal Matters...............................................    59
Experts.....................................................    60
Additional Information......................................    60
Index to Financial Statements...............................   F-1
</TABLE>
 
                            ------------------------
 
     "Student Advantage", "U-WIRE", "Virtual Backpack" and "The Main Quad" are
trademarks and service marks of Student Advantage. All other trademarks, service
marks or trade names referred to in this prospectus are the property of their
respective owners.
 
                                        3
<PAGE>   6
 
                                    SUMMARY
 
     This summary highlights information contained elsewhere in this prospectus.
This summary is not complete and may not contain all of the information that you
should consider before investing in our common stock. You should read the entire
prospectus carefully. Unless otherwise indicated, all information contained in
this prospectus assumes that the underwriters will not exercise their
over-allotment option immediately prior to this offering. This prospectus
contains forward-looking statements which involve risks and uncertainties.
Student Advantage's actual results could differ materially from those
anticipated in these forward-looking statements as a result of certain factors,
including those set forth under "Risk Factors" and elsewhere in this prospectus.
 
                                  THE COMPANY
 
Our Business............Student Advantage is dedicated to serving the needs of
                        college students through our leading membership program
                        and studentadvantage.com Web site. With our national
                        fee-based membership program, we have created a
                        community of over 1,000,000 student members. Our members
                        receive a variety of services and benefits, including
                        ongoing discounts on products and services offered by
                        national and local vendors. Through
                        studentadvantage.com, we are leveraging our membership
                        base, brand name, partnerships with corporations and
                        colleges, and existing online business with the
                        objective of becoming the leading online destination for
                        college students.
 
                        We believe that Student Advantage appeals to students,
                        businesses and schools because we provide a combination
                        of the following benefits:
 
                        - For students, a valuable program that offers ongoing
                          discounts, as well as online content, community and
                          e-commerce targeted at their particular needs,
 
                        - For businesses, targeted online and offline access to
                          an attractive demographic group through a trusted
                          brand, and
 
                        - For schools, a useful resource that may be offered to
                          their students.
 
                        Our position at the intersection of these three groups
                        has enabled us to create a powerful vehicle for
                        advertising and commerce directed at the student market.
 
Our Products and
  Services..............Membership in Student Advantage provides students with
                        discounts on products and services offered by over 40
                        national partners, including Amtrak, AT&T, Foot Locker,
                        Greyhound, Staples and Tower Records, and over 12,000
                        local partners in 115 local markets. Student members
                        also receive SAM, the Student Advantage magazine.
 
                        A key component of our strategy is to make our Web site
                        the centerpiece of our membership program. We currently
                        provide content and services through
                        studentadvantage.com, including our proprietary U-WIRE
                        news feed and the Virtual Backpack, a service which
                        includes free e-mail, an online calendar, and online
                        document storage; community through online bulletin
                        boards and articles offering advice on student life; and
                        e-commerce through partners including Egghead.com, Music
                        Boulevard and 1-800-FLOWERS. We believe that our primary
                        role as a provider of information and services to
                        students, along with the Web-savvy nature of our student
                        membership base, makes the Internet ideally suited for
                        our business.
                                        4
<PAGE>   7
 
                        We also provide tailored marketing services for
                        businesses seeking to market their products to college
                        students. Through our membership program and Web site,
                        we provide businesses a platform through which they can
                        reach a large, demographically attractive market. These
                        businesses benefit from targeted and continued access to
                        the student market, as well as our expertise in
                        designing and implementing effective marketing programs
                        to reach college students.
 
Our Market..............College students represent an attractive market
                        opportunity for businesses because of their significant
                        purchasing power and their tendency to retain brand
                        loyalties after graduation. According to Student Monitor
                        LLC, a market research company, college students spent
                        over $100 billion in the 1997-1998 academic year.
 
                        In the United States, there are over 15 million
                        full-time and part-time undergraduate and graduate
                        students at more than 3,000 university and college
                        campuses. This population is expected to grow as there
                        are currently 40 million children and young adults from
                        ages 10 to 19.
 
Our Strategy............Our objective is to be the leading online and offline
                        resource for college students. The key elements of our
                        strategy include the following:
 
                        - Strengthen our online destination for students,
                        - Continue to build the Student Advantage brand,
                        - Aggressively grow our membership,
                        - Enhance relationships with students, businesses and
                          schools, and
                        - Continue to pursue strategic acquisitions and
                          alliances
 
                            ------------------------
 
     Student Advantage's principal executive offices are located at 280 Summer
Street, Boston, Massachusetts 02210 and our telephone number at that location is
(617) 912-2011. Our Web site is located at www.studentadvantage.com. Information
contained on our Web site is not part of this prospectus.
 
                            ------------------------
 
     Except as otherwise noted, all information in this prospectus:
 
     - Reflects the automatic conversion of all of our outstanding shares of
       convertible preferred stock into an aggregate of 8,241,108 shares of
       common stock upon completion of this offering;
 
     - Reflects a three-for-one stock split of all of our outstanding shares of
       common stock to be effected before completion of this offering; and
 
     - Assumes no exercise of the underwriters' over-allotment option.
 
                                        5
<PAGE>   8
 
                                  THE OFFERING
 
Common stock offered....................               shares
 
Common stock to be outstanding after the
offering................................               shares(1)
 
Use of proceeds.........................     To fund continued growth and
                                             expansion of its business, capital
                                             expenditures, product development,
                                             potential acquisitions and other
                                             general corporate purposes. See
                                             "Use of Proceeds."
 
Proposed Nasdaq National Market
symbol..................................     STAD
 
                             SUMMARY FINANCIAL DATA
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)
 
     Set forth below are summary statements of operations data for the years
ended December 31, 1994, 1995, 1996, 1997 and 1998, and summary balance sheet
data as of December 31, 1998, on an actual basis and on a pro forma basis as
adjusted to give effect to (1) the sale by Student Advantage of shares of common
stock in this offering at an assumed initial offering price of $     per share,
after deducting the estimated underwriting discounts and commissions and
offering expenses payable by Student Advantage, and the application of the net
proceeds from this offering, and (2) the conversion of our convertible preferred
stock upon the consummation of this offering. This information should be read in
conjunction with the Financial Statements and Notes thereto appearing elsewhere
in this prospectus. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations."
 
<TABLE>
<CAPTION>
                                                                YEAR ENDED DECEMBER 31,
                                                -------------------------------------------------------
                                                   1994          1995        1996      1997      1998
                                                -----------   -----------   -------   -------   -------
                                                (UNAUDITED)   (UNAUDITED)
<S>                                             <C>           <C>           <C>       <C>       <C>
STATEMENT OF OPERATIONS DATA
Total revenue.................................    $   155       $   448     $ 1,730   $ 3,792   $17,443
Total costs and expenses......................        230           412       2,386     6,973    22,560
Net income (loss).............................        (75)           36        (657)   (3,152)   (5,115)
Basic and diluted net income (loss) per
  share.......................................    $ (0.01)      $  0.00     $ (0.05)  $ (0.21)  $ (0.32)
Shares used in computing basic and diluted net
  income (loss) per share.....................     14,184        14,184      14,184    15,295    15,957
Unaudited pro forma basic and diluted net loss
  per share(2)................................    $    --       $    --     $    --   $    --    $(0.24)
Shares used in computing unaudited pro forma
  basic and diluted net loss per share........         --            --          --        --    21,128
</TABLE>
 
<TABLE>
<CAPTION>
                                                                DECEMBER 31, 1998
                                                              ----------------------
                                                                          PRO FORMA
                                                               ACTUAL    AS ADJUSTED
                                                              --------   -----------
<S>                                                           <C>        <C>
BALANCE SHEET DATA
Cash and cash equivalents...................................  $  5,048
Working capital.............................................    (2,247)
Total assets................................................     9,934
Deferred revenue............................................     6,666
Stockholders' equity (deficit)..............................   (10,741)
</TABLE>
 
---------------
(1) This information is based on the number of shares outstanding as of March
    31, 1999. Excludes 2,222,550 shares subject to outstanding options as of
    March 31, 1999 at a weighted average exercise price of $0.35 per share.
 
(2) Pro forma information is based on the conversion of all outstanding shares
    of our preferred stock into shares of common stock.
 
                                        6
<PAGE>   9
 
                                  RISK FACTORS
 
     You should carefully consider the following risks before making an
investment decision. The risks described below are not the only ones that we
face. Additional risks that are not yet identified or that we currently think
are immaterial may also impair our business operations. Our business, operating
results and financial condition could be adversely affected by any of the
following risks. The trading price of our common stock could decline due to any
of these risks, and you could lose all or part of your investment. You should
also refer to the other information set forth in this prospectus, including our
financial statements and the related notes.
 
     This prospectus contains forward-looking statements that involve risks and
uncertainties. These forward-looking statements are usually accompanied by words
such as "believes," "anticipates", "plans", "expects" and similar expressions.
Our actual results may differ materially from the results discussed in the
forward-looking statements because of factors such as the Risk Factors discussed
below.
 
WE HAVE EXPERIENCED LOSSES IN THE PAST AND EXPECT TO CONTINUE TO EXPERIENCE
LOSSES IN THE NEAR FUTURE
 
     We have not achieved profitability and expect to continue to incur
operating losses for the foreseeable future. We incurred net losses of $3.2
million in 1997 and $5.1 million in 1998. As of December 31, 1998, our
accumulated deficit was $11.6 million. We expect to continue to incur
significant operating and capital expenditures and, as a result, we will need to
generate significant revenue to achieve and maintain profitability.
 
     We cannot assure you that we will achieve sufficient revenue for
profitability. Even if we do achieve profitability, we cannot assure you that we
can sustain or increase profitability on a quarterly or annual basis in the
future. If revenue grows more slowly than we anticipate, or if operating
expenses exceed our expectations or cannot be adjusted accordingly, our
business, results of operations and financial condition will be materially and
adversely affected.
 
WE ARE DEPENDENT UPON AT&T FOR A LARGE PERCENTAGE OF OUR REVENUE
 
     We have an exclusive relationship with AT&T through which AT&T pays us for
a variety of goods and services, including:
 
     - memberships provided free to students with an AT&T calling card,
 
     - marketing services,
 
     - advertising in our media products, such as our Web site and SAM, the
       Student Advantage magazine, and
 
     - sponsorship of certain of our products and services, such as the Virtual
       Backpack.
 
     Our agreement with AT&T prevents us from providing our goods and services
to other telecommunications companies. Our agreement with AT&T also precludes us
from entering into a relationship with another sponsor that will distribute our
memberships free to students as an incentive or through any promotion.
 
     In 1997, we derived $2.4 million, or 62%, of our total revenue from AT&T.
In 1998, we derived $11.8 million, or 68%, of our total revenue from AT&T. Our
relationship with AT&T has accounted for most of our members to date. These
members are obtained through distribution of Student Advantage memberships to
students who enroll for an AT&T telecommunications service. In addition, most of
our commerce revenue is currently attributable to fees that we earn from AT&T
for obtaining completed calling card applications from students. There can be no
assurance that we will be successful in expanding our membership base
independent of our relationship with AT&T.
 
     The termination dates of our current agreements with AT&T have been
extended until June 2001. However, AT&T may terminate these agreements upon 120
days' prior notice, subject to payment of a termination fee in certain cases. In
addition, AT&T can terminate the current agreements if Raymond V.
 
                                        7
<PAGE>   10
 
Sozzi, Jr. is no longer employed as our president, or if he no longer owns at
least five percent of our capital stock. The termination of our relationship
with AT&T would have a material adverse effect on our business. Our relationship
with AT&T could hinder our ability to attract additional national partners, in
particular partners who may be interested in purchasing memberships for
distribution to students.
 
WE HAVE A LIMITED OPERATING HISTORY
 
     We have a limited operating history on which an investor can evaluate our
business. Our operations began in 1992. An investor in our common stock must
consider the risks and difficulties frequently encountered by early stage
companies implementing an Internet strategy. These risks include our ability to:
 
     - sustain historical revenue growth rates,
 
     - implement our business model,
 
     - manage our expanding operations,
 
     - retain and attract members and maintain their satisfaction,
 
     - maintain and increase our alliances with partners, advertisers, colleges
       and universities,
 
     - introduce new and enhanced Web and offline content, products and
       services, and
 
     - respond to competitive developments.
 
     If we do not successfully manage these risks, our business, results of
operations and financial condition will be materially adversely affected. We
cannot assure you that we will successfully address these risks or that our
business strategy will be successful.
 
OUR BUSINESS IS HIGHLY DEPENDENT UPON OUR PRESIDENT AND CHIEF EXECUTIVE OFFICER
 
     We are highly dependent on our president and chief executive officer,
Raymond V. Sozzi, Jr., the loss of whom would adversely affect our future
success. If Mr. Sozzi or any of our other officers or key employees leave our
company, the relationships that they have with our corporate partners and
universities could be lost.
 
WE MAY NOT SUCCESSFULLY IMPLEMENT OUR INTERNET STRATEGY
 
     In order to successfully implement our Internet strategy, we must:
 
     - establish our Web site as the primary vehicle for delivery of our
       products and services, including member registration and renewal,
       information regarding national and local partners, and customer service,
 
     - expand our Web site to include more content and services for students and
       encourage our members to use the site so that it becomes more attractive
       for advertisers, and
 
     - establish our Web site as an effective e-commerce platform.
 
     Our failure to successfully implement our Internet strategy could have a
material adverse effect on our business.
 
THE INTERNET PORTION OF OUR BUSINESS MODEL IS UNPROVEN
 
     The profit potential for an Internet community business model is unproven.
Our ability to generate significant revenues from advertisers, sponsors and
other partners in connection with online activities will depend, in part, on our
ability to generate sufficient user traffic with demographic characteristics
attractive to our advertisers. The intense competition among Web sites that sell
online advertising has led to the creation of a number of pricing alternatives
for online advertising. These alternatives make it difficult for us to project
future levels of advertising and other Internet-related revenue and applicable
gross margins related to our online offerings that can be sustained by us or the
online advertising industry in general. Although we do not currently derive a
substantial portion of our revenue from Internet advertising and
 
                                        8
<PAGE>   11
 
other Internet-related activities, our business model depends in part on
increasing the amount of such revenue.
 
OUR BUSINESS IS SEASONAL AND SUBJECT TO SIGNIFICANT FLUCTUATIONS
 
     Our operating results are dependent upon the college student market and
vary seasonally based upon the typical school year. We tend to sell most of our
memberships in the beginning of the fall academic term and the beginning of the
spring academic term. In addition, all of our memberships expire on August 31 of
each year. 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 is typically higher in the second and third quarters than
in the first and fourth quarters of each fiscal year. In 1998, our revenue from
advertising, marketing services and commerce was higher in the third quarter
than in other quarters in part because of increased activity associated with the
commencement of the school year. We believe this seasonality may also occur in
subsequent years.
 
     In addition, our revenue and operating results may vary significantly from
quarter to quarter for a number of other factors. Many of these factors are
outside of our control and include:
 
     - our ability to successfully integrate operations and technologies from
       acquisitions or other business combinations,
 
     - the availability of corporate partners and colleges and universities to
       support our membership programs,
 
     - our ability to expand our online presence,
 
     - changes in the growth rate of Internet usage,
 
     - new sites, services or products introduced by us or our competitors, and
 
     - increased competition.
 
     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.
 
OUR OPERATING RESULTS DEPEND ON SELLING NEW MEMBERSHIPS EVERY YEAR
 
     A significant portion of our revenue is derived from membership fees.
Members must join our program each year. A significant percentage of our members
graduate each year and, therefore, do not renew their memberships. Our revenue
growth is highly dependent upon our ability to market the value of our
membership to college students and to retain members on a yearly basis. A
failure to acquire new members or renew current members could have a material
adverse effect on our business.
 
OUR OPERATING RESULTS DEPEND ON OUR ABILITY TO MAINTAIN AND INCREASE BUSINESS
ALLIANCES AND UNIVERSITY RELATIONSHIPS
 
     We are dependent upon our partners, both national and local, to provide our
members with discounts on their products and services. We are also dependent on
maintaining college and university relationships to market and sell our products
and services. Our ability to maintain these alliances and relationships and to
develop new alliances and relationships is critical to our ability to maintain
our members. A failure to acquire or maintain partners and relationships could
have a material adverse effect on our business. In addition, our agreements with
a number of our partners 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.
 
                                        9
<PAGE>   12
 
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
which market products and services to their students. Many colleges and
universities are seeking to decrease or eliminate such marketing. In particular,
colleges and universities are concerned that many students have incurred
substantial levels of credit card debt. As a result, colleges and universities
often attempt to prevent credit card companies and other companies that offer
credit from marketing to their students. We are sometimes 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. Any inability to directly
contact students on campus could have a material adverse effect on our business.
 
WE FACE SIGNIFICANT COMPETITION ON THE INTERNET
 
     Many Web sites compete for consumers' and advertisers' attention and
spending. We believe that our ability to compete depends upon many factors,
including the following:
 
     - the market acceptance of our Web site and online services,
 
     - the success of our brand building and sales and marketing efforts,
 
     - the performance, price and reliability of services developed by us or our
       competitors,
 
     - the effectiveness of our customer service efforts,
 
     - the ability of our competitors to maintain or establish cooperative
       relationships among themselves or with strategically aligned third
       parties, and
 
     - the emergence of new competitors.
 
     We compete for members and advertisers online with the following types of
companies:
 
     - online services or Web sites targeted at college students, and
 
     - Web search and retrieval and other online service companies, commonly
       referred to as portals, such as Excite, Infoseek, Lycos and Yahoo!.
 
OUR MEMBERSHIP PROGRAM EXPERIENCES SIGNIFICANT COMPETITION FROM OTHER MARKETING
ACTIVITIES
 
     We compete for client marketing budget dollars with other marketing
activities and, in particular, other forms of direct marketing activities, such
as direct mail. In recent years, there have been significant advances in new
forms of direct marketing, such as the development of interactive shopping and
data collection through television, the Internet and other media. Many industry
experts predict that electronic interactive commerce, such as shopping and
information exchange via the Internet, will proliferate significantly in the
foreseeable future. To the extent such proliferation occurs, it could have a
material adverse effect on the demand for membership programs.
 
WE MAY BE UNABLE TO MAKE ATTRACTIVE ACQUISITIONS OR INTEGRATE ACQUIRED COMPANIES
 
     We plan to acquire or make investments in complementary businesses,
products, services or technologies. However, we cannot assure you that we will
be able to identify suitable acquisition or investment candidates. Even if we do
identify suitable candidates, we cannot assure you that we will be able to make
such acquisitions or investments on commercially acceptable terms. If we buy a
business, we could have difficulty in assimilating that company's personnel,
operations, products, services or technologies into our operations. These
difficulties could disrupt our ongoing business, distract our management and
employees, increase our expenses and adversely affect our results of operations.
Furthermore, we may incur debt or issue equity securities to pay for any future
acquisitions. The issuance of equity securities could be dilutive to our
existing stockholders.
 
                                       10
<PAGE>   13
 
WE MAY BE UNABLE TO SUCCESSFULLY MANAGE CHANGES IN OUR BUSINESS
 
     We have experienced a period of significant growth. This growth has placed
significant demands on our management and strains on our resources. Revenue
increased from approximately $1.7 million in 1996 to $17.4 million in 1998.
During that same time period we increased from fewer than 50 to more than 150
employees.
 
     Our ability to manage changes in our business will depend on our ability to
continue to enhance our operating, financial and management information systems.
We cannot assure you that our personnel, systems and controls will be adequate
to support our growth, if any. If we are unable to manage change effectively,
maintain the quality of our products and services and retain key personnel, our
operating results and financial condition could be significantly affected.
 
     We do not expect our current financial and management information systems
to be adequate to support our operations in the future. We expect to replace our
current accounting system within the next year. If we incur delays or
difficulties in implementing an appropriate accounting system, our business
could be adversely affected.
 
OUR MANAGEMENT TEAM HAS NO EXPERIENCE IN RUNNING A PUBLIC COMPANY
 
     Our management team has not had any experience in a leadership role in a
public company. We cannot assure you that the management team as currently
configured will be able to successfully transition into the leadership role of a
public company. The failure of the management team to adequately handle this
challenge could have a material adverse effect on our business.
 
WE MUST ATTRACT AND RETAIN HIGHLY-QUALIFIED PERSONNEL IN A COMPETITIVE LABOR
MARKET
 
     We need to hire additional members of our management team and other key
employees. Competition for such personnel is intense. We have experienced, and
we expect to continue to experience in the future, difficulty in hiring highly
skilled employees with the appropriate qualifications. If we do not succeed in
attracting new personnel or retaining and motivating our current personnel, our
business could be adversely affected.
 
TO EXPAND OUR BUSINESS, WE MAY NEED ADDITIONAL CAPITAL, AND THE FUTURE FUNDING
OF THESE CAPITAL NEEDS IS UNCERTAIN
 
     We require substantial working capital to fund our business. While we
believe that this offering will provide us with sufficient funding for the
foreseeable future, if capital requirements vary materially from those currently
planned, we may require additional financing.
 
     Additional funds raised through the issuance of equity securities may have
the following negative effects on the then current common stockholders:
 
     - dilution in percentage of ownership in our company, and
 
     - the rights, preferences or privileges of the new security holders may be
       senior to those of the common stockholders.
 
     Additional financing may not be available when needed on terms favorable to
us or at all. Our failure to raise additional funds, if needed, may result in
our inability to:
 
     - develop or enhance our services,
 
     - take advantage of future opportunities, or
 
     - respond to competitive pressures.
 
                                       11
<PAGE>   14
 
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 USWeb/CKS's facilities in New York.
Fire, floods, earthquakes, power loss, telecommunications failures, break-ins
and similar events could damage these systems. Computer viruses, electronic
break-ins or other similar disruptive problems could also adversely affect our
Web site. Our business could be adversely affected if our systems were affected
by any of these occurrences. Our insurance policies may not adequately
compensate us for any losses that may occur due to any failures or interruptions
in our systems. We do not presently have any secondary "off-site" systems or a
formal disaster recovery plan.
 
     Our Web site must accommodate a high volume of traffic and deliver
frequently updated information. Our Web site has in the past and may in the
future experience slower response times or decreased traffic for a variety of
reasons. These types of occurrences could cause users to perceive our Web site
as not functioning properly and therefore cause them to use another Web site or
other methods to obtain information.
 
     In addition, our users depend on Internet service providers, online service
providers and other Web site operators for access to our Web site. 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.
 
WE ARE DEPENDENT ON THIRD PARTIES FOR SOFTWARE, SYSTEMS AND RELATED SERVICES
 
     We are dependent on various third parties for software, systems and related
services. For example, a third party provides warehousing, distribution,
fulfillment, mail, and data processing services for us. As a result, our ability
to deliver various services to our users may be adversely affected by the
failure of these third parties to provide reliable software, systems and related
services to us.
 
     We have in the past and may in the future experience slower response times
or delays in the processing of applications for students and the delivery of
membership identification cards to our members. Many of these delays have been
caused by third parties upon which we rely for fulfillment services. If we are
unsuccessful in providing our members with membership identification cards or
delivering products and services on a timely basis, our business may be
adversely affected.
 
WE MAY BE SUED FOR INFORMATION RETRIEVED FROM THE INTERNET
 
     Inappropriate use of our Internet services
 
     We may be subjected to claims for defamation, negligence, copyright or
trademark infringement, personal injury or other legal theories relating to the
information we publish on our Web site or in our magazine. These types of claims
have been brought, sometimes successfully, against online services as well as
other print publications in the past. We could also be subjected to claims based
upon the content that is accessible from our Web site through links to other Web
sites or through content and materials that may be posted by members in chat
rooms or bulletin boards. We also offer e-mail services, which may subject us to
potential risks, such as liabilities or claims resulting from unsolicited
e-mail, lost or misdirected messages, illegal or fraudulent use of e-mail or
interruptions or delays in e-mail service. Our insurance may not adequately
protect us against these types of claims.
 
     Identification of Web site visitors
 
     Web sites typically place certain "cookies" on a user's hard drive without
the user's knowledge or consent. Student Advantage and other Web sites use
cookies for a variety of reasons, including the collection of data derived from
the user's Internet activity. Most currently available Web browsers allow users
to remove cookies at any time or to prevent cookies from being stored on their
hard drive. In addition, some commentators, privacy advocates and governmental
bodies have suggested limiting or eliminating the use of cookies. Any reduction
or limitation in the use of cookies could limit the effectiveness of our sales
and marketing efforts. In addition, the European Union recently adopted a
 
                                       12
<PAGE>   15
 
directive addressing data privacy that may limit the collection and use of
certain information regarding Internet users. This directive may limit our
ability to target advertising or collect and use information in certain European
countries.
 
     Misappropriation of personal information
 
     Any penetration of our network security or other misappropriation of our
members' personal or credit card information could subject us to liability. We
may be liable for claims based on unauthorized purchases with credit card
information, impersonation or other similar fraud claims. Claims could also be
based on other misuses of personal information, such as for unauthorized
marketing purposes. These claims could result in litigation. In addition, the
Federal Trade Commission and several states have investigated the use by certain
Internet companies of personal information. We could incur expenses if new
regulations regarding the use of personal information are introduced or if our
privacy practices were investigated.
 
WE MAY BE UNABLE TO RESPOND TO THE RAPID TECHNOLOGICAL CHANGE IN OUR INDUSTRY
 
     Our market is characterized by rapidly changing technologies, frequent new
product and service introductions and evolving industry standards. The recent
growth of the Internet and intense competition in our industry exacerbates these
market characteristics. To achieve our goals, we need to effectively integrate
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 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.
 
OUR INTELLECTUAL PROPERTY RIGHTS MAY BE VIOLATED OR SUBJECT TO LITIGATION
 
     We believe that protection of our copyrights, service marks, trademarks,
trade secrets, proprietary technology and similar intellectual property is
critical to our success. We rely on the following mechanisms to protect such
intellectual property:
 
     - trademark and copyright law,
 
     - trade secret protection, and
 
     - confidentiality agreements with employees, customers, independent
       contractors, partners 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 subject to claims and expect to be subject to legal
proceedings and claims in the future for infringement of the trademark and other
intellectual property rights of third parties. Any such proceedings or claims
could have a material adverse effect on our business, financial condition and
results of operations.
 
THE FAILURE OF COMPUTER SYSTEMS AND SOFTWARE PROGRAMS TO BE YEAR 2000 COMPLIANT
COULD NEGATIVELY IMPACT OUR BUSINESS
 
     Many currently installed computer systems and software products only accept
two digits to identify the year in any date. Thus, the year 2000 will appear as
"00", which the system might consider to be the year 1900 rather than the year
2000. This could result in system failures, delays or miscalculations causing
disruptions to our operations.
 
                                       13
<PAGE>   16
 
     We are currently conducting an inventory, and developing testing
procedures, for all software and other systems that we believe might be affected
by Year 2000 issues. Since third parties developed and currently support many of
the systems that we use, a significant part of this effort will be to ensure
that these third-party systems are Year 2000 compliant. We plan to confirm this
compliance through a combination of the representation by these third parties of
their products' Year 2000 compliance, as well as specific testing of these
systems. The failure of systems maintained by third parties to be Year 2000
compliant could cause us to incur significant expense to remedy any problems,
reduce our revenues from such third parties or otherwise seriously damage our
business. A significant Year 2000-related disruption of the network services or
equipment that third-party vendors provide to us could also cause our members or
other users to consider seeking alternate providers or cause an unmanageable
burden on our customer service and technical support.
 
     Our failure to correct a material Year 2000 problem could result in an
interruption in, or a failure of, some of our normal business activities or
operations.
 
CERTAIN CURRENT STOCKHOLDERS OWN A LARGE PERCENTAGE OF OUR VOTING STOCK
 
     Following the closing of this offering, our officers, directors and
affiliated entities together will beneficially own approximately   % of our
outstanding common stock (     % if the underwriters' over-allotment option is
exercised in full). As a result, these stockholders may, as a practical matter,
be able to control 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.
 
THE PRICE OF OUR STOCK COULD BE EXTREMELY VOLATILE
 
     We cannot predict the extent to which investor interest in Student
Advantage will lead to the development of a trading market or how liquid that
market might become. The initial public offering price for the shares will be
determined by negotiations between us and the underwriters' representatives and
may not be indicative of prices that will prevail in the trading market. The
stock market has experienced significant price and volume fluctuations, and the
market prices of technology companies, particularly Internet-related companies,
have been highly volatile. Investors may not be able to resell their shares at
or above the initial public offering price.
 
     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.
 
SHARES ELIGIBLE FOR PUBLIC SALE AFTER THIS OFFERING COULD ADVERSELY AFFECT OUR
STOCK PRICE
 
     After this offering, there will be outstanding                     shares
of our common stock. There will be                     shares outstanding if the
underwriters' over-allotment option is exercised in full. Of these shares, the
shares sold in this offering will be freely tradeable except for any shares
purchased by our "affiliates" as defined in Rule 144 under the Securities Act.
The remaining                     shares of common stock held by existing
stockholders will be "restricted securities" and will become eligible for sale
only if registered or if they qualify for an exemption from registration under
Rules 144, 144(k) or 701 under the Securities Act. Upon expiration of lock-up
agreements with the underwriters, 180 days after the date of this prospectus,
                    shares of common stock will be eligible for resale in
accordance with the provisions of Rule 144. In addition, certain stockholders
holding an aggregate of
 
                                       14
<PAGE>   17
 
16,746,186 shares of common stock can require us to register their shares for
public sale. Upon the effectiveness of any such registration, all shares covered
by the registration statement would be freely transferable.
 
     We cannot predict if future sales of our common stock, or the availability
of our common stock for sale, will adversely affect the market price of our
common stock.
 
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.
 
               SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
 
     Some of the statements under "Summary," "Risk Factors," "Management's
Discussion and Analysis of Financial Condition and Results of Operations,"
"Business" and elsewhere in this prospectus constitute forward-looking
statements. These statements relate to future events or our future performance,
and are identified by terminology such as "may," "will," "should," "expects,"
"scheduled," "plans," "intends," "anticipates," "believes," "estimates,"
"potential," or "continue" or the negative of such terms or other comparable
terminology. These statements are only predictions. Actual events or results may
differ materially. In evaluating these statements, you should specifically
consider various factors, including the risks outlined under "Risk Factors."
These factors may cause our actual results to differ materially from any
forward-looking statement.
 
     Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, levels of
activity, performance, or achievements. Moreover, neither we nor any other
person assumes responsibility for the accuracy and completeness of such
statements. We are under no duty to update any of the forward-looking statements
after the date of this prospectus to conform such statements to actual results.
 
                                       15
<PAGE>   18
 
                                USE OF PROCEEDS
 
     The net proceeds we will receive from the sale of      shares of common
stock offered by us are estimated to be $     ($     if the underwriters'
over-allotment option is exercised in full) after deducting the estimated
underwriting discounts and commissions and offering expenses payable by us and
assuming an initial public offering price of $     .
 
     The principal purposes of this offering are:
 
     - to increase our equity capital,
 
     - to create a public market for our common stock,
 
     - to facilitate future access by us to public equity markets,
 
     - to provide increased visibility and credibility in a marketplace where
       several of our current and potential competitors are, or may in the
       future be, public companies, and
 
     - to enhance our ability to use our common stock as consideration for
       acquisitions and as a means of attracting and retaining key employees.
 
     We expect to use the net proceeds from this offering for working capital
and other general corporate purposes, capital expenditures, growth and expansion
of our business, product development and acquisitions. We may use approximately
$          to repay outstanding indebtedness under our bank line of credit,
which bears interest at        % and is due on June 30, 2000. We have not
identified other specific uses for such proceeds and management will have
discretion over their use and investment. Pending such uses, we intend to invest
the net proceeds from this offering in investment grade, interest-bearing
securities or guaranteed obligations of the U.S. Government.
 
     We intend to seek acquisitions of businesses, products and technologies
that are complementary to us, and a portion of the net proceeds may be used for
such acquisitions. While we discuss potential acquisitions from time to time, we
currently have no commitments or agreements for any such acquisitions and there
can be no assurances that any acquisitions will be made.
 
                                DIVIDEND POLICY
 
     We currently intend to retain earnings, if any, to fund the development and
growth of our business and do not anticipate paying cash dividends in the
foreseeable future. Payment of future dividends, if any, will be at the
discretion of our Board of Directors after taking into account various factors,
including our financial condition, operating results, current and anticipated
cash needs and plans for expansion. Our credit facility contains restrictive
covenants that limit our ability to pay cash dividends or make stock repurchases
without the prior written consent of the lender.
 
                                       16
<PAGE>   19
 
                                 CAPITALIZATION
 
     The following table sets forth the capitalization of Student Advantage as
of December 31, 1998:
 
     - on an actual basis,
 
     - on a pro forma basis giving effect to the conversion of all outstanding
       shares of preferred stock into common stock upon the closing of the
       offering, and
 
     - on a pro forma as adjusted basis to reflect the sale by Student Advantage
       of           shares of common stock offered hereby at the initial public
       offering price of $          per share, after deducting estimated
       underwriting discounts and commissions and offering expenses.
<TABLE>
<CAPTION>
                                                                     DECEMBER 31, 1998
                                                            ------------------------------------
                                                                                      PRO FORMA
                                                             ACTUAL     PRO FORMA    AS ADJUSTED
                                                            --------   -----------   -----------
<S>                                                         <C>        <C>           <C>
                                                                       (UNAUDITED)   (UNAUDITED)
 
<CAPTION>
                                                                       (IN THOUSANDS)
<S>                                                         <C>        <C>           <C>
Redeemable convertible preferred stock, $1.00 par value:
     4,000,000 shares authorized: 2,747,036 shares issued
       and outstanding actual; no shares issued and
       outstanding pro forma and pro forma as adjusted....  $ 10,196    $     --      $     --
Stockholders' equity (deficit):
     Common stock, $0.01 par value; 45,000,000 shares
       authorized actual and pro forma and 100,000,000
       shares authorized pro forma as adjusted; and
       16,133,892 shares issued and outstanding actual;
       24,375,000 shares issued and outstanding pro forma;
            shares issued and outstanding pro forma as
       adjusted...........................................       183         272
     Additional paid in capital...........................     4,692      14,799            --
     Accumulated deficit..................................   (11,623)    (11,623)           --
     Treasury stock (at cost).............................      (630)       (630)           --
     Deferred compensation................................    (3,363)     (3,363)           --
                                                            --------    --------      --------
Total stockholders' equity (deficit)......................   (10,741)       (545)           --
                                                            --------    --------      --------
Total capitalization......................................  $   (545)   $   (545)     $     --
                                                            ========    ========      ========
</TABLE>
 
                                       17
<PAGE>   20
 
                                    DILUTION
 
     The pro forma net tangible book value of Student Advantage at December 31,
1998 was $     , or $     per share of common stock. Pro forma net tangible book
value per share represents the amount of total tangible assets less total
liabilities, divided by the number of pro forma shares of common stock
outstanding after giving effect to the conversion of all shares of preferred
stock. After giving effect to the sale of           shares of common stock
offered hereby by Student Advantage at the assumed initial offering price of
$     per share and after deducting estimated underwriting discounts and
commissions and offering expenses, the pro forma net tangible book value as of
December 31, 1998 would have been $     or $     per share. This represents an
immediate increase in pro forma net tangible book value of $     per share to
existing stockholders and an immediate dilution of $     per share to new
investors purchasing shares of common stock in the offering. The following table
illustrates this dilution:
 
<TABLE>
<S>                                                             <C>
     Assumed initial public offering price per share........    $
       Pro forma net tangible book value per share at
        December 31, 1998...................................
       Increase attributable to the offering................
     Pro forma net tangible book value per share after the
      offering..............................................
     Net tangible book value dilution per share to new
      investors in the offering.............................
</TABLE>
 
     The following table summarizes as of December 31, 1998 on the pro forma
basis described above, the total number of shares and consideration paid to
Student Advantage and the average price per share paid by the existing
stockholders and by new investors purchasing shares of common stock in the
offering at the initial public offering price of $     per share (before
deducting the estimated underwriting discounts and commissions and offering
expenses):
 
<TABLE>
<CAPTION>
                                            SHARES PURCHASED      TOTAL CONSIDERATION
                                          --------------------   ---------------------   AVERAGE PRICE
                                            NUMBER     PERCENT     AMOUNT      PERCENT     PER SHARE
                                          ----------   -------   -----------   -------   -------------
<S>                                       <C>          <C>       <C>           <C>       <C>
Existing stockholders...................                     %   $                   %       $
New investors...........................
                                          ----------   ------    -----------   ------
          Totals........................
                                          ==========   ======    ===========   ======
</TABLE>
 
     None of the foregoing tables or calculations assumes that any options
outstanding as of March 31, 1999 will be exercised. If all outstanding options
were exercised on the date of the closing of this offering, investors purchasing
shares in the offering would suffer total dilution of $     per share.
 
                                       18
<PAGE>   21
 
                            SELECTED FINANCIAL DATA
 
     The following selected financial data are derived from the financial
statements of Student Advantage, Inc. The selected financial data as of December
31, 1997 and 1998, and for each of the three years in the period ended December
31, 1998, are derived from financial statements which have been audited by
PricewaterhouseCoopers LLP, independent accountants. These financial statements
are included elsewhere in this prospectus. The selected financial data as of
December 31, 1996 are derived from financial statements which have been audited
by PricewaterhouseCoopers LLP, and the balance sheet data for these financial
statements are not included elsewhere in this prospectus. The selected financial
data as of December 31, 1994 and 1995 and for each of the two years in the
period ended December 31, 1995 are derived from unaudited financial statements,
which are not included in this prospectus. The data set forth below should be
read in conjunction with "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and the Financial Statements and the
related Notes included elsewhere in this prospectus.
 
<TABLE>
<CAPTION>
                                                                         YEAR ENDED DECEMBER 31,
                                                         -------------------------------------------------------
                                                            1994          1995        1996      1997      1998
                                                         -----------   -----------   -------   -------   -------
                                                         (UNAUDITED)   (UNAUDITED)
                                                                  (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                                      <C>           <C>           <C>       <C>       <C>
STATEMENT OF OPERATIONS DATA
Revenue
  Subscription.........................................    $  131        $  420      $ 1,093   $ 2,971   $ 7,174
  Other................................................        24            28          637       821    10,269
                                                           ------        ------      -------   -------   -------
     Total revenue.....................................       155           448        1,730     3,792    17,443
                                                           ------        ------      -------   -------   -------
Costs and expenses
  Cost of subscription revenue.........................       126           160          543     2,628     2,442
  Cost of other revenue................................        --            --          506       309     7,331
  Product development..................................        19            62          507     1,469     2,588
  Sales and marketing..................................        57           110          356       843     4,717
  General and administrative...........................        27            79          437     1,485     3,647
  Depreciation and amortization........................         1             1           37       239     1,027
  Stock-based compensation.............................        --            --           --        --       808
                                                           ------        ------      -------   -------   -------
     Total costs and expenses..........................       230           412        2,386     6,973    22,560
                                                           ------        ------      -------   -------   -------
Income (loss) from operations..........................       (75)           36         (656)   (3,181)   (5,117)
                                                           ------        ------      -------   -------   -------
Interest income (expense), net.........................        --            --           (1)       29         2
                                                           ------        ------      -------   -------   -------
Net income (loss)......................................    $  (75)       $   36      $  (657)  $(3,152)  $(5,115)
                                                           ======        ======      =======   =======   =======
Basic and diluted net loss per share...................    $(0.01)       $(0.00)     $ (0.05)  $ (0.21)  $ (0.32)
                                                           ======        ======      =======   =======   =======
Shares used in computing basic and diluted net loss per
  share................................................    14,184        14,184       14,184    15,295    15,957
                                                           ======        ======      =======   =======   =======
Unaudited pro forma basic and diluted net loss per
  share................................................    $   --        $   --      $    --   $    --   $ (0.24)
                                                           ======        ======      =======   =======   =======
Shares used in computing unaudited pro forma basic and
  diluted net loss per share...........................        --            --           --        --    21,128
                                                           ======        ======      =======   =======   =======
</TABLE>
 
<TABLE>
<CAPTION>
                                                                      YEAR ENDED DECEMBER 31,
                                                              ----------------------------------------
                                                                 1995       1996     1997       1998
                                                              -----------   -----   -------   --------
                                                              (UNAUDITED)
                                                                           (IN THOUSANDS)
<S>                                                           <C>           <C>     <C>       <C>
BALANCE SHEET DATA
Cash and cash equivalents...................................     $   8      $  26   $ 1,904   $  5,048
Working capital.............................................      (389)      (667)   (4,836)    (2,247)
Total assets................................................        97        256     2,745      9,934
Deferred revenue............................................       183        276     5,668      6,666
Stockholders' deficit.......................................      (302)      (702)   (4,335)   (10,741)
</TABLE>
 
                                       19
<PAGE>   22
 
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
     The following should be read in conjunction with Student Advantage's
Financial Statements and related Notes and the other financial information
appearing elsewhere in this prospectus. In addition to historical information,
the following discussion and other parts of this prospectus contain
forward-looking information that involves risks and uncertainties. Student
Advantage's actual results could differ materially from those anticipated by
such forward-looking information due to factors discussed under "Risk Factors"
and elsewhere in this prospectus.
 
OVERVIEW
 
     Student Advantage is dedicated to serving the needs of college students
through its leading membership program and Web site. Our revenue is generated
from subscription revenue and other revenue.
 
     Subscription revenue is derived from membership sales. Memberships are sold
in three different ways. Most are sold to AT&T and distributed in conjunction
with an AT&T calling card. The membership cards associated with these membership
sales are co-branded and serve as both the Student Advantage membership
identification card and an AT&T calling card. We earn a fee from AT&T for each
of these memberships, with a current minimum commitment by AT&T of 1.25 million
memberships per academic year. During the years ended December 31, 1997 and
1998, AT&T accounted for approximately 77% and 95% of subscription revenue.
Memberships are also sold by Student Advantage to colleges, universities and
university organizations for distribution free of charge to students. In
addition, Student Advantage sells memberships directly to students for a
membership fee that is currently $20 per year. Subscription revenue is
recognized ratably from the date of subscription to the end of the annual
membership period, which ends on August 31 of each year.
 
     Other revenue includes advertising, marketing service and commerce revenue.
Advertising revenue consists primarily of fees for advertisements placed in SAM,
the Student Advantage magazine, sponsorship fees paid by vendors for inclusion
in the member guide, and fees for banner advertisements and sponsorships on our
Web site. Marketing services revenue is derived primarily from providing
tailored marketing services to businesses seeking to market their products and
services to college students. These services include organizing and executing
marketing tours that travel to college campuses, staffing tables in college
locations to solicit potential student customers on behalf of businesses and
providing media planning and placement. Commerce revenue includes primarily
transaction-based fees earned for reselling products and services on behalf of
business partners. To date, commerce revenue has included primarily fees that we
receive from AT&T for obtaining completed applications from students for AT&T
calling cards. In connection with each application accepted by AT&T, we also
earn membership fees that are included in subscription revenue.
 
     We began operations in 1992 as a sole proprietorship, converted to a
general partnership in 1995, converted to a limited liability company in 1996
and became a C Corporation in 1998. From inception through December 1997, our
revenue was derived primarily from annual membership fees. Since that time, we
have expanded our product and service offerings through internal growth as well
as acquisitions.
 
     In December 1997, we completed our acquisition of The Main Quad, Inc. which
owned and operated Web sites focused on providing content for students. These
Web sites serve as the basis for Student Advantage's current online activities.
In January 1998, we completed our acquisition of Collegiate Advantage, Inc. a
provider of marketing and promotional services to businesses targeting college
students. The acquisition of Collegiate Advantage marked our entrance into the
marketing services business. These acquisitions were accounted for under the
purchase method of accounting, and the results of operations of each of the
acquired companies have been included in our financial statements since their
respective dates of acquisition. Goodwill and other intangible assets in the
aggregate amount of $1.4 million were recorded in connection with these and
other acquisitions and are being amortized over the economic lives of the
related assets, ranging from two to five years. As of December 31, 1998, a
balance of approximately
                                       20
<PAGE>   23
 
$617,000 remained to be amortized. We may be required to pay additional
contingent consideration, estimated to be approximately $625,000, to the former
owners of Collegiate Advantage.
 
     On April 1, 1999, Student Advantage completed its acquisitions of The
Travel Holding Group, LLC and The Campus Agency, LLC. The Campus Agency provides
media planning and strategy consulting services to the U.S. student travel
market. The Travel Holding Group is a reseller of Eurail passes. These
acquisitions have been accounted for under the purchase method of accounting,
and the results of operations of each company will be included in our results
beginning on the acquisition date. Goodwill and other intangible assets in the
aggregate amount of $280,000 were recorded in connection with these acquisitions
and will be amortized over three years. Because the historical results of Campus
Agency and Travel Holding Group are not material, pro forma financial
information has not been presented.
 
     In the future we may pursue additional acquisitions to obtain complementary
products, services and technologies. There are no assurances that the
acquisitions we already have completed, or any acquisitions that we may complete
in the future, will produce the anticipated revenue, earnings or business
synergies.
 
     We recorded deferred compensation of approximately $4.2 million in the year
ended December 31, 1998, representing the difference between the exercise price
of stock options granted in 1998 and the fair market value of the underlying
common stock at the date of grant. The difference is recorded as a reduction of
stockholders' equity and is being amortized over the vesting period of the
applicable options, typically four years. Of the total deferred compensation
amount, approximately $800,000 had been amortized as of December 31, 1998. The
amortization of deferred compensation is recorded as an operating expense. We
currently expect to amortize the following remaining amounts of deferred
compensation annually:
 
<TABLE>
<S>                                                        <C>
1999...................................................    $1,070,000
2000...................................................     1,015,000
2001...................................................       958,000
2002...................................................       320,000
</TABLE>
 
     Student Advantage has experienced substantial net losses since 1996 and, as
of December 31, 1998, had an accumulated deficit of $11.6 million. Student
Advantage expects to increase its expenditures in all areas in order to execute
its business plan. As a result, Student Advantage believes that it will continue
to incur operating losses and negative cash flows from operations for the
foreseeable future and that the rate at which such losses will be incurred may
increase from current levels.
 
                                       21
<PAGE>   24
 
RESULTS OF OPERATIONS
 
     The following table sets forth results of operations data for Student
Advantage as a percentage of total revenue for the periods presented:
 
<TABLE>
<CAPTION>
                                                              YEAR ENDED DECEMBER 31,
                                                              -----------------------
                                                              1996     1997     1998
                                                              ----     ----     ----
<S>                                                           <C>      <C>      <C>
Revenue
  Subscription..............................................   63.2%    78.3%    41.1%
  Other.....................................................   36.8     21.7     58.9
                                                              -----    -----    -----
     Total revenue..........................................  100.0    100.0    100.0
                                                              -----    -----    -----
 
Costs and expenses
  Cost of subscription revenue..............................   31.4     69.3     14.0
  Cost of other revenue.....................................   29.2      8.2     42.0
  Product development.......................................   29.3     38.7     14.8
  Sales and marketing.......................................   20.6     22.2     27.1
  General and administrative................................   25.3     39.2     20.9
  Depreciation and amortization.............................    2.1      6.3      5.9
  Stock-based compensation..................................     --       --      4.6
                                                              -----    -----    -----
     Total costs and expenses...............................  137.9    183.9    129.3
                                                              -----    -----    -----
Loss from operations........................................  (37.9)   (83.9)   (29.3)
Interest income (expense), net..............................   (0.1)     0.8      0.0
                                                              -----    -----    -----
Net loss....................................................  (38.0)%  (83.1)%  (29.3)%
                                                              =====    =====    =====
</TABLE>
 
COMPARISON OF YEAR ENDED DECEMBER 31, 1998 WITH YEAR ENDED DECEMBER 31, 1997
 
     Revenue. Total revenue increased from $3.8 million in 1997 to $17.4 million
in 1998. The increase in revenue was due in part to the significant increase in
subscription revenue from $3.0 million in 1997 to $7.2 million in 1998, mostly
due to memberships purchased by AT&T. The increase in other revenue was
attributable primarily to both: (1) the addition of Student Advantage's
marketing services business, which was acquired from Collegiate Advantage on
January 1, 1998, and (2) an increase in commerce revenue due primarily to fees
for obtaining calling card applications for AT&T, which began in the third
quarter of 1998. The increase in other revenue was attributable to a lesser
extent to increased advertising revenues related to the Student Advantage
magazine and the Student Advantage Web site. The first two issues of the Student
Advantage magazine shipped in the fourth quarter of 1998.
 
     AT&T accounted for approximately 62% and 68% of total revenue for 1997 and
1998. Additionally, AT&T accounted for approximately 77% and 95% of subscription
revenue for 1997 and 1998, and 9% and 49% of other revenue for 1997 and 1998. No
other single customer accounted for 10% or more of total revenues for 1997 or
1998.
 
     Cost of Subscription Revenue. Cost of subscription revenue consists of the
costs associated with the fulfillment of membership subscriptions and customer
service. Cost of subscription revenue decreased from $2.6 million in 1997 to
$2.4 million in 1998, due primarily to increased fulfillment efficiencies.
 
     Cost of Other Revenue. Cost of other revenue consists of the cost of
advertising, marketing services and commerce. Advertising costs include
production and mailing costs for the magazine, as well as costs incurred for the
Student Advantage Web site. Marketing services costs include the direct and
indirect costs associated with planning and implementing events and promotions,
media placement and other marketing services. Commerce costs include
personnel-related costs associated primarily with acquiring calling card
customers. Cost of other revenue increased from $309,000 in 1997 to $7.3 million
in 1998. The increase in cost of other revenue is due primarily to the addition
of Collegiate Advantage and its
 
                                       22
<PAGE>   25
 
marketing services business in 1998 and the commencement of activities under the
AT&T marketing agreement, entered into in the third quarter of 1998, under which
Student Advantage visits college campuses to acquire calling card customers for
AT&T. Costs associated with the production of SAM, which shipped for the first
time in the fourth quarter of 1998, also contributed to the increase.
 
     Product Development. Product development expenses consist primarily of
personnel-related costs associated with the development and enhancement of the
membership products, which include the Student Advantage membership card, the
Student Advantage magazine and the studentadvantage.com Web site. Product
development expenses increased from $1.5 million in 1997 to $2.6 million in
1998. The increase is primarily due to Student Advantage's increased investment
in enhancing and improving the functionality of its Web site and other related
costs.
 
     Sales and Marketing. Sales and marketing expenses consist primarily of
personnel and other costs related to our sales and marketing programs. These
expenses increased from $843,000 in 1997 to $4.7 million in 1998. The increase
in sales and marketing expenses was due, in large part, to increased
expenditures related to building brand awareness, expanding and servicing the
customer base of partners, selling more online advertising, and supporting the
marketing services business. In 1998, we incurred additional sales and marketing
expenses as a result of the acquisition of the Collegiate Advantage business.
 
     General and Administrative.  General and administrative expenses consist
primarily of costs related to general corporate functions, including executive
management, finance, human resources, facilities, and legal. General and
administrative expenses increased from $1.5 million in 1997 to $3.6 million in
1998. The increase in general and administrative expenses is primarily due to
facilities and personnel-related costs.
 
     Depreciation and Amortization.  Depreciation and amortization expenses
increased from $239,000 in 1997 to $1.0 million in 1998. Amortization expense
increased as a result of the amortization over five years of goodwill and other
intangible assets related to the acquisitions of Collegiate Advantage and The
Main Quad. Depreciation expense increased primarily as a result of fixed asset
purchases in 1998.
 
     Stock-Based Compensation.  We recorded deferred compensation of $4.2
million in the year ended December 31, 1998. Of this amount, $808,000 is being
recorded as an expense in 1998. The remainder is being amortized over the
remaining vesting period of the individual options.
 
     Interest Income (Expense), Net.  Interest income, net includes interest
income from cash balances and interest expense related to Student Advantage's
financing obligations. Interest income, net decreased from $29,000 in 1997 to
$2,000 in 1998. The decrease is a result of interest due on borrowings under our
line of credit which was offset later in the year by interest income earned on
cash balances as a result of the issuance of preferred stock in October 1998, as
well as interest from a promissory note to a stockholder. Additionally, Student
Advantage incurred interest expense related to loans from the Chief Executive
Officer, which were repaid in full in 1998.
 
     Income Taxes.  On October 20, 1998, Student Advantage converted from a
limited liability company to a C Corporation. Operating losses originating while
Student Advantage was a limited liability company do not carry over to the C
Corporation, although certain other timing items as a result of differences
resulting from accrual to cash basis adjustments will be available to Student
Advantage. For the period October 21, 1998 to December 31, 1998 Student
Advantage generated a net operating loss carryforward of $2.0 million. Student
Advantage's net operating loss carryforwards expire beginning in 2018. Certain
future changes in the share ownership of Student Advantage, as defined in the
Tax Reform Act of 1996, may restrict the utilization of carryforwards. A
valuation allowance has been recorded for the entire deferred tax asset as a
result of uncertainties regarding the utilization of the asset due to Student
Advantage's lack of earnings history.
 
                                       23
<PAGE>   26
 
COMPARISON OF YEAR ENDED DECEMBER 31, 1997 WITH YEAR ENDED DECEMBER 31, 1996
 
     Revenue.  Total revenue increased from $1.7 million in 1996 to $3.8 million
in 1997. The increase in revenue was due primarily to an increase in
subscription revenue from $1.1 million in 1996 to $3.0 million in 1997. The
increase in subscriptions was due to the commencement of Student Advantage's
membership agreement with AT&T, under which AT&T purchased membership
subscriptions for distribution to students. Other revenue increased from
$637,000 in 1996 to $821,000 in 1997, due primarily to increased advertising
revenue and, to a lesser extent, an increase in commerce revenue.
 
     AT&T accounted for approximately 62% of total revenues in 1997. No other
single customer accounted for 10% or more of revenues in 1996 or 1997.
 
     Cost of Subscription Revenue.  Cost of subscription revenue increased from
$543,000 in 1996 to $2.6 million in 1997. This increase is due primarily to the
increased costs associated with fulfilling new membership subscriptions, as well
as costs related to the addition of personnel to support the growth in revenues.
 
     Cost of Other Revenue.  Cost of other revenue decreased from $506,000 in
1996 to $309,000 in 1997, due primarily to lower advertising costs.
 
     Product Development.  Product development expenses increased from $507,000
in 1996 to $1.5 million in 1997. The increase is primarily due to the continued
investment in the membership subscription business. During 1997, Student
Advantage continued to develop new products to offer to support the membership
subscription business as well as enhance and grow the base of corporate
partners.
 
     Sales and Marketing.  Sales and marketing expenses increased from $356,000
in 1996 to $843,000 in 1997. The increase in sales and marketing is due to
increased expenditures to support the membership subscription business, which
grew significantly in 1997 with the addition of the AT&T membership agreement.
 
     General and Administrative.  General and administrative expenses increased
from $437,000 in 1996 to $1.5 million in 1997. The increase in general and
administrative expenses is primarily due to the increase in facilities costs and
an increase in the number of personnel hired during the year to support the
growth in Student Advantage's business.
 
     Depreciation and Amortization.  Depreciation and amortization expenses
increased from $37,000 in 1996 to $239,000 in 1997, primarily due to the
amortization of goodwill and other intangible assets resulting from
acquisitions.
 
     Interest Income (Expense), Net.  Interest income (expense), net includes
interest income from Student Advantage's cash balances and interest expense
related to Student Advantage's financing obligations. Interest income increased
from $1,000 of net interest expense in 1996 to $29,000 of net interest income in
1997. The increase is primarily due to a higher average cash and cash
equivalents balance during 1997.
 
                                       24
<PAGE>   27
 
QUARTERLY RESULTS OF OPERATIONS
 
     The following table sets forth unaudited quarterly statement of operations
data for each of the four quarters in the year ended December 31, 1998. In the
opinion of management, the unaudited financial results include all adjustments,
consisting only of normal recurring adjustments, necessary for the fair
presentation of our results of operations for those periods. The quarterly data
should be read in conjunction with the Financial Statements and the Notes
thereto appearing elsewhere in this prospectus. The results of operations for
any quarter are not necessarily indicative of the results of operations for any
future period.
 
<TABLE>
<CAPTION>
                                                                       QUARTER ENDED
                                              ---------------------------------------------------------------
                                                MARCH 31,        JUNE 30,        SEPT. 30,        DEC. 31,
                                                   1998            1998             1998            1998
                                              --------------   -------------   --------------   -------------
                                                                 (UNAUDITED, IN THOUSANDS)
<S>                                           <C>              <C>             <C>              <C>
Revenue
  Subscription..............................      $1,738          $2,274           $1,856          $ 1,306
  Other.....................................       1,658           1,124            3,826            3,661
                                                  ------          ------           ------          -------
          Total revenue.....................       3,396           3,398            5,682            4,967
                                                  ------          ------           ------          -------
Costs and expenses
  Cost of subscription revenue..............         302             413              951              776
  Cost of other revenue.....................       1,515             854            1,572            3,390
  Product development.......................         485             812              596              695
  Sales and marketing.......................         746           1,069            1,281            1,621
  General and administrative................         508             776            1,067            1,296
  Depreciation and amortization.............         160             377              233              257
  Stock-based compensation..................          --              --               --              808
                                                  ------          ------           ------          -------
          Total costs and expenses..........       3,716           4,301            5,700            8,843
                                                  ------          ------           ------          -------
Loss from operations........................        (320)           (903)             (18)          (3,876)
                                                  ------          ------           ------          -------
Interest income (expense), net..............          15             (25)             (33)              45
                                                  ------          ------           ------          -------
Net loss....................................      $ (305)         $ (928)          $  (51)         $(3,831)
                                                  ======          ======           ======          =======
</TABLE>
 
                                       25
<PAGE>   28
 
     The following table sets forth certain unaudited quarterly statement of
operations data expressed as a percentage of total revenues for each of the four
quarters in the period ended December 31, 1998.
 
<TABLE>
<CAPTION>
                                                                QUARTER ENDED
                                              -------------------------------------------------
                                              MARCH 31,     JUNE 30,     SEPT. 30,     DEC. 31,
                                                1998          1998         1998          1998
                                              ---------     --------     ---------     --------
                                                          (UNAUDITED, IN THOUSANDS)
<S>                                           <C>           <C>          <C>           <C>
Revenue
  Subscription...........................        51.2%        66.9%         32.7%        26.3%
  Other..................................        48.8         33.1          67.3         73.7
                                                -----        -----         -----        -----
          Total revenue..................       100.0        100.0         100.0        100.0
                                                -----        -----         -----        -----
Costs and expenses
  Cost of subscription revenue...........         8.9         12.2          16.7         15.6
  Cost of other revenue..................        44.6         25.1          27.7         68.2
  Product development....................        14.2         23.9          10.5         14.0
  Sales and marketing....................        22.0         31.5          22.5         32.6
  General and administrative.............        15.0         22.8          18.8         26.1
  Depreciation and amortization..........         4.7         11.1           4.1          5.2
  Stock-based compensation...............          --           --            --         16.3
                                                -----        -----         -----        -----
          Total costs and expenses.......       109.4        126.6         100.3        178.0
                                                -----        -----         -----        -----
Loss from operations.....................        (9.4)       (26.6)         (0.3)       (78.0)
                                                -----        -----         -----        -----
Interest income (expense), net...........         0.4         (0.7)         (0.6)         0.9
                                                -----        -----         -----        -----
Net loss.................................        (9.0)%      (27.3)%        (0.9)%      (77.1)%
                                                =====        =====         =====        =====
</TABLE>
 
     Our operating results are dependent upon the college student market and
vary seasonally based upon the typical school year. We tend to sell most of our
memberships in the beginning of the fall academic term and the beginning of the
spring academic term. In addition, all of our memberships expire on August 31 of
each year. 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 is typically higher in the second and third quarters than
in the first and fourth quarters of each fiscal year. In 1998, our revenue from
advertising, marketing services and commerce was higher in the third quarter
than in other quarters in part because of increased activity associated with the
commencement of the school year. We believe that this seasonality may also occur
in subsequent years. The increase in other revenue in the third quarter of 1998
was also due to the commencement of activities under the AT&T marketing
agreement under which we receive fees for obtaining calling card applications
from students. Other revenue and the cost of other revenue were each affected in
the fourth quarter of 1998 by the publication of two issues of SAM.
 
LIQUIDITY AND CAPITAL RESOURCES
 
     Student Advantage has financed its operations primarily through the private
placement of securities, cash from operations, borrowings under its credit
facilities and loans from LLC members. In October 1998, Student Advantage
completed a private placement of equity securities to new investors and received
$9.9 million in net proceeds. As of March 31, 1999, Student Advantage had
approximately $3.7 million in cash and cash equivalents.
 
     Net cash used for operating activities was $2.7 million for 1998, compared
to $3.0 million provided by operating activities for 1997. The increase in net
cash used resulted primarily from an increase in accounts receivable of $2.7
million in 1998 and increasing net losses for 1998. The increase was partially
offset by the timing of payments of accounts payable and accrued expenses and
increased depreciation and amortization expense. Net cash in 1997 was affected
by an increase in deferred revenue of $5.4 million. Deferred revenues increased
$1.0 million in 1998 over those of 1997. Deferred revenue represents primarily
payments for membership fees not yet recognized as revenue and advance payments
for purchases of memberships and other services.
 
                                       26
<PAGE>   29
 
     Net cash used for investing activities increased from $650,000 in 1997 to
$1.7 million in 1998. This increase was due primarily to the purchase of fixed
assets and the acquisition of Collegiate Advantage in 1998.
 
     Net cash used for financing activities was $453,000 in 1997, compared to
net cash provided by financing activities of $7.5 million in 1998. This increase
was primarily due to net cash proceeds of $9.9 million from the sale of shares
of Student Advantage preferred stock, partially offset by a distribution of $2.3
million to LLC members. In 1997, Student Advantage repurchased a member's LLC
interest for $630,000.
 
     As of April 5, 1999, the Company had a line of credit and equipment lease
credit facility with a commercial bank in an aggregate amount of $2.75 million.
The line of credit bears interest at a rate of LIBOR plus 200 basis points or
the bank's base rate. As of April 5, 1999, $1.0 million was outstanding under
the line of credit.
 
     Student Advantage has experienced a substantial increase in its
expenditures consistent with growth in operations and staffing, and anticipates
that this will continue for the foreseeable future. Additionally, Student
Advantage will continue to evaluate possible investments in businesses, products
and technologies, and plans to expand its Web infrastructure, sales and
marketing programs and aggressively promote its brand. Student Advantage
currently anticipates that its available cash resources combined with the net
proceeds for this offering will be sufficient to meet its anticipated needs for
working capital and capital expenditures for at least 12 months following this
offering.
 
RECENT ACCOUNTING PRONOUNCEMENTS
 
     In March 1998, the Accounting Standards Executive Committee ("AcSEC")
issued Statement of Position 98-1, "Accounting for the Cost of Computer Software
Developed or Obtained for Internal Use" ("SOP 98-1"). SOP 98-1 is effective for
financial statements for years beginning after December 15, 1998. SOP 98-1
provides guidance for accounting for costs of software products developed or
purchased for internal use, including when costs should be capitalized. Student
Advantage does not expect the adoption of this standard to have a material
effect on Student Advantage's results of operation, financial position or cash
flows.
 
     In April 1998, AcSEC issued SOP 98-5, "Reporting on the Costs of Start-Up
Activities" ("SOP 98-5"). SOP 98-5, which is effective for fiscal years
beginning after December 15, 1998, provides guidance on the financial reporting
of start-up costs and organization costs. It requires costs of start up
activities and organization costs to be expensed as incurred. As Student
Advantage has expensed these costs historically, the adoption of this standard
is not expected to have a significant impact on Student Advantage's results of
operations, financial position or cash flows.
 
     In June 1998, FASB issued SFAS No. 133, "Accounting for Derivatives and
Hedging Activities" ("SFAS No. 133"), which establishes accounting and reporting
standards for derivative instruments, including derivative instruments embedded
in other contracts, (collectively referred to as derivatives) and for hedging
activities. SFAS No. 133 is effective for all fiscal quarters of fiscal years
beginning after June 15, 1999. The adoption of SFAS No. 133 is not expected to
have an impact on Student Advantage's results of operations, financial position
or cash flows.
 
YEAR 2000 COMPLIANCE
 
     Many currently installed computer systems and software products are coded
to accept or recognize only two digit entries in the date code field. These
systems and software products will need to accept four digit entries to
distinguish 21st century dates from 20th century dates. As a result, computer
systems and/or software used by many companies and governmental agencies may
need to be upgraded to comply with such Year 2000 requirements or risk system
failure or miscalculations causing disruptions of normal business activities.
 
                                       27
<PAGE>   30
 
     State of Readiness. Student Advantage does not internally develop a
significant amount of software. Student Advantage has made a preliminary
assessment of the Year 2000 readiness of its operating financial and
administrative systems, including the hardware and software that support Student
Advantage's systems. Student Advantage's assessment plan consists of:
 
     - contacting third-party vendors and licensors of material hardware,
       software and services that are both directly and indirectly related to
       the delivery of Student Advantage's services to its users,
 
     - contacting vendors of third-party systems,
 
     - assessing repair or replacement requirements,
 
     - implementing repair or replacement, and
 
     - creating contingency plans in the event of Year 2000 failures.
 
     Student Advantage is currently conducting an inventory of and developing
testing procedures for all software and other systems that it believes might be
affected by Year 2000 issues. Since third parties developed and currently
support many of the systems that we use, a significant part of this effort will
be to ensure that these third-party systems are Year 2000 compliant. We plan to
confirm this compliance through a combination of the representation by these
third parties of their products' Year 2000 compliance, as well as specific
testing of these systems. Student Advantage plans to complete this process prior
to the end of the third quarter of 1999. Until such testing is completed and
such vendors and providers are contacted, Student Advantage will not be able to
completely evaluate whether its systems will need to be revised or replaced.
 
     Costs. To date, Student Advantage has spent an immaterial amount on Year
2000 compliance issues but expects to incur an additional approximately $100,000
in connection with identifying, evaluating and addressing Year 2000 compliance
issues. Most of Student Advantage's expenses have related to, and are expected
to continue to relate to, the operating costs associated with time spent by
employees and consultants in the evaluation process and Year 2000 compliance
matters generally. Such expenses, if higher than anticipated, could have a
material adverse effect on Student Advantage's business, results of operations
and financial condition.
 
     Risks. Student Advantage is not currently aware of any Year 2000 compliance
problems relating to its systems that would have a material adverse effect on
Student Advantage's business, results of operations and financial condition,
without taking into account Student Advantage's efforts to avoid or fix such
problems. There can be no assurance that Student Advantage will not discover
Year 2000 compliance problems in its systems that will require substantial
revision. In addition, there can be no assurance that third-party software,
hardware or services incorporated into Student Advantage's material systems will
not need to be revised or replaced, all of which could be time-consuming and
expensive. The failure of Student Advantage to fix or replace its internally
developed proprietary software or third-party software, hardware or services on
a timely basis could result in lost revenues, increased operating costs, the
loss of customers and other business interruptions, any of which could have a
material adverse effect on Student Advantage's business, results of operations
and financial condition.
 
     Student Advantage is heavily dependent on a significant number of
third-party vendors to provide both network services and equipment. A
significant Year 2000-related disruption of the network, services or equipment
that third-party vendors provide to Student Advantage could cause Student
Advantage's members and visitors to consider seeking alternate sites or cause an
unmanageable burden on its customer service, which in turn could materially and
adversely affect Student Advantage's business, financial condition and results
of operations.
 
     In addition, there can be no assurance that governmental agencies, utility
companies, Internet access companies, third-party service providers and others
outside of Student Advantage's control will be Year 2000 compliant. The failure
by such entities to be Year 2000 compliant could result in a systemic failure
beyond the control of Student Advantage, such as a prolonged Internet,
telecommunications or electrical failure, which could also impair Student
Advantage's ability to deliver its services to its customers,
                                       28
<PAGE>   31
 
decrease the use of the Internet or prevent users from accessing its Web sites
which could have a material adverse effect on Student Advantage's business,
results of operations and financial condition.
 
     Contingency Plan. As discussed above, Student Advantage is engaged in an
ongoing Year 2000 assessment and has not yet developed any contingency plans.
The results of Student Advantage's Year 2000 simulation testing and the
responses received from third-party vendors and service providers will be taken
into account in determining the nature and extent of any contingency plans.
 
                                       29
<PAGE>   32
 
                                    BUSINESS
 
OVERVIEW
 
     Student Advantage, Inc. is dedicated to serving the needs of college
students through our leading membership program and studentadvantage.com Web
site. With our national fee-based membership program, we have created a
community of over 1,000,000 student members who receive benefits including
ongoing discounts on products and services offered by over 40 national partners
and 12,000 partners in 115 local markets. Student Advantage offers the only
ongoing discount available to college students for the products and services of
many of our partners. Through studentadvantage.com, we are leveraging our
membership base, brand name, partnerships with corporations and universities,
and existing online business with the objective of becoming the leading online
destination for students. The studentadvantage.com Web site currently offers
content, community and e-commerce targeted to college students.
 
INDUSTRY BACKGROUND
 
     College students represent a large audience with needs and interests that
are specific to their group. These students are exposed, often for the first
time, to lifestyle decisions and other challenges unique to the college
experience. With so many new experiences to manage, these students seek
information and guidance from a trusted resource able to assist them in matters
such as:
 
     - purchasing and budgeting decisions,
 
     - selecting a major or a career, or finding a job,
 
     - conducting academic research,
 
     - making lifestyle and extracurricular decisions,
 
     - finding economical travel arrangements for breaks or holidays, and
 
     - understanding financial aid alternatives.
 
     To meet the needs of this audience, businesses are offering an increasing
variety of products and services designed to capture their interest. College
students represent an attractive market opportunity for businesses because of
their significant spending power and their tendency to retain brand loyalties
after graduation. According to Student Monitor LLC, a market research company,
college students spent over $100 billion in the 1997-1998 academic year. In the
United States, there are over 15 million full-time and part-time undergraduate
and graduate students at more than 3,000 university and college campuses. The
college student population is expected to grow as there are currently 40 million
children and young adults from ages 10 to 19.
 
     Businesses have recognized the importance of college students and have
dedicated significant advertising and marketing expenditures towards this group.
However, college students have been difficult to reach in a targeted fashion
because:
 
     - they are transient, frequently changing their addresses,
 
     - the college student population has significant turnover,
 
     - colleges are increasingly seeking to limit direct marketing to students
       on campus, and
 
     - few national advertising vehicles are directed toward the college student
       population.
 
     The Internet has emerged as an attractive medium for advertisers because it
offers a level of targetability, flexibility, interactivity and measureability
not available in traditional media. College students are active users of the
Internet, highly computer literate and active in e-commerce. According to
Student Monitor, 90% of students use the Internet and 52% of these students use
the Internet at least daily. Student Monitor estimates that in 1998, 21% of
students made online purchases representing $890 million
 
                                       30
<PAGE>   33
 
in e-commerce. According to Jupiter Communications, students will spend close to
$2.6 billion through e-commerce by the year 2002.
 
     Student Advantage believes that businesses are seeking a nationally-focused
vehicle for targeting the attractive college demographic. Many businesses that
have tried to target college students have been unsuccessful, due to the
inherent difficulties in reaching this group. Marketing organizations seeking to
help businesses reach this market have had only limited success because they are
either limited in their geographic scope or are not able to offer a wide range
of services and channels to reach students.
 
     Furthermore, Student Advantage believes that while the Internet creates an
opportunity to reach targeted audiences, it has not been used effectively to
target college students. The major Internet navigational portal sites are
generally designed to appeal to a broad audience. These portals do not focus on
the issues that are relevant to college students, such as financial and
budgeting assistance, economical travel, lifestyle decisions and careers.
Student Advantage believes that there is a need for a comprehensive student
destination focused on the specific requirements of students for information,
guidance and other services.
 
THE STUDENT ADVANTAGE SOLUTION
 
     Student Advantage is a leading resource and trusted advocate dedicated to
serving the needs of college students. As a result, we are positioned to serve
as a point of access to this market. Through our national membership program, we
have created a community of over 1,000,000 college student members who receive
benefits including ongoing discounts on products and services offered by over 40
national partners and 12,000 local partners. Student Advantage has also created
a comprehensive online destination for college students, studentadvantage.com.
 
     College students can join the Student Advantage membership program:
 
     - by obtaining, free of charge, a co-branded card that serves as both a
       Student Advantage membership identification card, paid for by AT&T, and
       an AT&T calling card,
 
     - through programs under which universities, colleges and university
       organizations purchase memberships in bulk for distribution free of
       charge to their students, and
 
     - by paying an annual membership fee of $20.
 
     While our primary constituency is our student members, we also enable
businesses to reach the student market and enable colleges and universities to
provide a highly useful resource to students.
 
    [DIAGRAM SHOWING STUDENT ADVANTAGE IN THE CENTER WITH ARROWS POINTING TO
              CAPTIONS FOR STUDENTS, BUSINESSES AND UNIVERSITIES.]
 
     Benefits to Student Members. The Student Advantage membership program
provides college students with ongoing discounts on products and services from
national partners including Amtrak, AT&T, Foot Locker, Greyhound, Staples and
Tower Records. For example, in 1998, our members spent $10.9 million on Amtrak
fares and saved over $1.9 million by using the Student Advantage discount. The
membership program also enables students to receive discounts for products and
services in 115 local markets.
 
     Through our Web site, studentadvantage.com, we provide content, community
and commerce. The Web site offers services and information of particular
interest to college students, including discount purchasing, travel
alternatives, career and job searches, lifestyle and extracurricular decisions
and financial aid. Our Web site:
 
     - enables access to college news from over 400 colleges and universities,
 
     - provides online bulletin boards,
 
     - provides free e-mail and an online address book, calendar and document
       storage,
 
                                       31
<PAGE>   34
 
     - offers an e-commerce marketplace, and
 
     - includes a searchable directory of partners who offer discounts for
       Student Advantage members.
 
     Student Advantage members also receive a subscription to SAM, a magazine
published by Student Advantage. SAM includes lifestyle and practical content for
students and updates on new discounts available to Student Advantage members.
 
     Benefits to Partners.  We provide a platform for our partners to market
their products and services to a large, demographically attractive market.
Student Advantage appeals to partners and advertisers because it combines:
 
     - a large and attractive demographic group,
 
     - database marketing capabilities,
 
     - a trusted brand,
 
     - program usage tracking,
 
     - quality online content, and
 
     - community interaction.
 
     By maintaining contact with students throughout their college experience
and by establishing university partnerships, we also benefit businesses by
allowing targeted and continued access for advertising and marketing efforts. In
addition, businesses that offer products and services through Student Advantage
benefit by being associated with the Student Advantage brand. For example,
according to Egghead.com, in 1998, Student Advantage members who visited
Egghead.com from studentadvantage.com were two times more likely to purchase
products than the average visitor and spent 55% more than the average visitor.
 
     Partners also benefit from our direct marketing knowledge and the expertise
of our management team in designing and implementing effective marketing
techniques to reach college students. AT&T, for example, utilizes Student
Advantage for a variety of marketing programs, primarily to increase the number
of students carrying AT&T calling cards. By partnering with us, AT&T during the
1998-99 school year exceeded its prior year's sales of calling cards to college
students by more than 300%.
 
     We maintain eight regional offices throughout the United States in order to
more effectively reach students and provide services in local markets. These
offices, which are managed by our headquarters in Boston, provide us with a
broad geographical presence and enable us to implement effective nationwide
marketing programs.
 
     Benefits to Colleges and Universities.  Colleges and universities can
generate goodwill and help reduce the cost of student life by making the Student
Advantage program readily available to students. Colleges, universities and
university organizations can endorse the membership program, co-market with us
and share in associated revenues. Schools can also purchase memberships in bulk
and offer them to their students free of charge. As colleges seek additional
revenue streams, Student Advantage can use its relationships with local
merchants and its membership card as a platform for colleges and universities to
participate in debit-card transaction revenue from off-campus transactions. We
also fund, and enlist our business partners to sponsor, on-campus student
activities and events. For example, Student Advantage co-sponsored Midnight
Madness at the University of North Carolina -- Charlotte, an event that marks
the beginning of its college basketball season.
 
                                       32
<PAGE>   35
 
STRATEGY
 
     Our objective is to be the leading online and offline resource for college
students. Student Advantage intends to broaden and deepen its relationship with
students by serving the needs of its three key constituencies - students,
businesses and schools. The key elements of our strategy include the following:
 
     Strengthen Online Destination for Students.  Student Advantage believes
that its existing 1,000,000 members provide a platform for building the leading
online destination for students. Our goal is to establish our Web site,
studentadvantage.com, as the primary vehicle for delivery of our products and
services to students. We believe that the Internet is ideally suited for
providing our products and services and is a natural extension of our current
business. Our Web site currently offers content, community and e-commerce
services targeted specifically to college students. The Web site also allows
students to enroll in our membership program, receive customer service, and
search our directory of national and local partners who offer discounts. We
intend to enhance our online offerings by making additional content available
and by expanding our e-commerce marketplace with additional partners. We also
expect to offer additional online programming in order to personalize the Web
site for particular college campuses.
 
     Continue to Build Brand.  Student Advantage believes that building its
brand is critical to attracting and expanding its membership and Internet user
base. Our market leadership position has been driven by our membership program
and by partnering with leading national and local partners and universities. We
believe that aggressive brand-building will become increasingly important to
sustain our leadership position. We have started to allocate some of our
branding expenditures toward online branding through partnerships and
distribution agreements with leading Internet-based companies and strategic
alliances with leading advertisers. We will also continue to enhance our offline
branding both directly and through co-marketing arrangements with our partners.
Student Advantage believes that it can build online brand awareness and attract
traffic by leveraging the reach of its student membership base.
 
     Aggressively Grow Membership.  We intend to continue to grow our membership
through a variety of initiatives including:
 
     - increasing the rate of new memberships through our Web site,
 
     - increasing our number of corporate partners,
 
     - expanding our partnerships with colleges and universities, including
       selling them memberships in bulk,
 
     - expanding our on-campus tabling and marketing services,
 
     - providing members-only premium services on our Web site by introducing
       new content and services and transitioning portions of our existing
       services and content to members-only status, and
 
     - offering our program to high school students and college graduates.
 
     Enhance Relationships with Students, Businesses and Schools.  We intend to
continue to enhance our value to students by offering new products and services,
including online offerings for content, commerce and community. In addition to
increasing the number of national and local partners, Student Advantage will
provide additional services to partners, such as visitor tracking and membership
data which will allow Student Advantage to better target advertising, make
recommendations and provide for a more personalized and engaging experience.
Student Advantage will continue to enroll colleges and universities as partners
and will strengthen its relationships with schools by continuing to provide
marketing services and offering online outsourcing services.
 
     Continue to Pursue Strategic Acquisitions and Alliances.  Since inception,
we have acquired and integrated eight complementary businesses in order to
expand and strengthen our offerings to students. We plan to continue to acquire
companies or enter into alliances that offer opportunities to increase our
online traffic and acquire new technologies.
 
                                       33
<PAGE>   36
 
PRODUCTS AND SERVICES
 
     We provide college students with discounts on a broad range of products and
services through our Student Advantage membership program, as well as valuable
resources through our Web site and other student-focused content and services
offerings. We also offer marketing services to businesses seeking to effectively
communicate with the college student population.
 
     STUDENT ADVANTAGE MEMBERSHIP PROGRAM
 
     Our membership program provides valuable savings opportunities, services
and information to college students. During the 1998-99 academic year, over
1,000,000 students at over 3,000 colleges and universities are members of the
Student Advantage program. Members typically subscribe for one-year memberships
that coincide with the academic year. Memberships are sold in three different
ways. Most are sold to AT&T and distributed in conjunction with an AT&T calling
card. These membership cards are co-branded and serve as both a Student
Advantage membership identification card and AT&T calling card. Memberships are
also sold to colleges, universities and university organizations for
distribution free of charge to students. In addition, Student Advantage sells
memberships directly to students for a membership fee that is currently $20 per
year.
 
     Upon enrollment, Student Advantage members receive a hard plastic Student
Advantage membership identification card and a member guide describing the
program and its benefits. By presenting the Student Advantage card at
participating retail locations, or by providing their membership number online,
Student Advantage members receive attractive discounts throughout the year for
products and services from both national and local partners. Student Advantage
currently offers discounts from our 40 national partners and over 12,000 local
partners in 115 local markets.
 
     National discounts available to Student Advantage members include:
 
     - 15% off Amtrak rail fares
 
     - 15% off purchases from Foot Locker
 
     - 15% off purchases from American Eagle Outfitters
 
     - $50 off any graduate school course at The Princeton Review
 
     - 15% off Greyhound bus fares
 
     STUDENT-FOCUSED CONTENT AND SERVICES
 
     studentadvantage.com
 
     Our Web site, studentadvantage.com, addresses the needs of college students
for content, community and e-commerce.
 
        Content.  Student Advantage's content offering includes up-to-date
        information on topics of interest to students, including purchasing and
        budgeting decisions, travel, career, education, entertainment, health,
        lifestyles and financial aid. For example, students may access articles
        that provide information on studying abroad or purchasing renters'
        insurance. Our content is both developed by our editors and collected
        from over 400 colleges using our U-WIRE news feed. In addition, our Web
        site provides students with information customized for their local
        market or college campus and a searchable online directory of national
        and local discounts offered by our partners. Our Web site also includes
        maps and directions to retail locations that offer discounts.
 
        Community.  The studentadvantage.com Web site offers students a number
        of community-building services. Student Advantage's online bulletin
        boards give students the opportunity to discuss topics such as
        interviewing techniques and campus life. Our Virtual Backpack service
        allows students to set up their own email account, organize contact
        information in an online
 
                                       34
<PAGE>   37
 
        address book, store documents and keep track of important dates on an
        online calendar. We also enable students to send online greeting cards.
 
        e-Commerce.  Students can purchase a variety of products online with a
        Student Advantage discount. Members can purchase products directly from
        vendors through our marketplace or link to a Web page that is co-branded
        with a partner. Products offered online include books, software, music,
        footwear, magazines and flowers. Companies whose products can be
        purchased online through links from our Web site include Egghead.com,
        1-800-FLOWERS, University Subscription Service and Rockport Interactive.
 
     U-WIRE (University Wire)
 
     U-WIRE is a daily electronic news service of college news, sports, opinion
and entertainment content collected from over 400 college newspapers. U-WIRE can
be accessed at studentadvantage.com. U-WIRE editors select news, sports, opinion
and entertainment articles from its member newspapers and distribute content
among the college newspapers for inclusion in their print and online editions.
Student Advantage has the exclusive right to syndicate most of the U-WIRE
content electronically and to provide college news feeds to syndication
partners, which currently include Yahoo!, Excite, USAToday.com, Lexis-Nexis and
Digital City, an affiliate of America Online.
 
     SAM, The Student Advantage Magazine
 
     The Student Advantage membership includes a subscription to SAM, the
Student Advantage magazine. SAM is a magazine that is mailed directly to our
members. SAM includes lifestyle and practical content for students, updates on
new discounts and privileges available to Student Advantage members and
interactive features, such as member surveys and contests. Articles are provided
primarily by freelance writers. We use feedback from our readers to tailor
future articles and offerings to their particular interests and needs.
 
     Rail Connection
 
     Through an arrangement with CIT Tours, Corp., a representative of the
Italian State Railways, we offer Eurail passes to student members and others. We
promote our Eurail passes to Student Advantage members in travel guide books,
through direct mail and in advertisements in campus publications.
 
     CORPORATE MARKETING SERVICES
 
     We provide tailored marketing services for businesses seeking to market
their products and services to college students. Our in-depth knowledge of the
college student market, our expertise in marketing to college students and our
extensive university relationships enable us to help businesses effectively and
efficiently reach college students. Student Advantage currently provides a
variety of marketing services to businesses, including the following:
 
     - organizing and executing marketing tours that travel campus to campus,
 
     - staffing tables at on-campus college locations, such as student unions,
       to solicit potential student customers,
 
     - developing and managing programs that recruit, train and supervise
       students to represent businesses on campus,
 
     - assisting marketers who desire to sponsor on-campus events, such as movie
       screenings and concerts, and
 
     - helping marketers place advertisements in college newspapers.
 
     We also provide staffing for on-campus events and other activities for
businesses that have already designed a marketing program but lack
implementation resources and expertise at the campus level.
 
                                       35
<PAGE>   38
 
     Our marketing services are typically offered to businesses on a fixed-cost
basis or hourly rate basis.
 
     Our marketing services group utilizes eight regional offices across the
United States. The broad geographical reach of our marketing services group
allows us to execute our services nationwide. In 1998, clients who purchased our
marketing services included Amtrak, AT&T, Coca-Cola and Visa.
 
ALLIANCES
 
     An important element of our strategy is to form alliances to assist us in
offering students products and services and in offering businesses and
advertisers an effective channel for reaching college students.
 
     AT&T
 
     Our relationship with AT&T has enabled us to rapidly expand our membership
base and strengthen our presence on college campuses as a resource associated
with quality brand products and services.
 
     In February 1997, Student Advantage and AT&T entered into a membership
agreement under which Student Advantage earns a fee from AT&T for each
membership issued in connection with a Student Advantage AT&T Calling Card, with
a minimum commitment by AT&T for 1.25 million Student Advantage memberships per
academic year. Student Advantage and AT&T agreed to market this program to
college students throughout all of their relevant college marketing channels.
Student Advantage also agreed that it would not enter into any promotional or
marketing activities with any credit card, telecommunications or multipurpose
college student identification card provider, other than AT&T. The agreement
provides that we will not allow any third party to offer a Student Advantage
membership to college students free of charge as an incentive or through any
promotion.
 
     In February 1998, we entered into a marketing agreement with AT&T under
which we agreed to promote and market AT&T's calling card services to college
students. We also agreed to provide certain marketing services focused on the
college market to AT&T. AT&T appointed Student Advantage as the exclusive
provider of tabling and non-tabling activities (which require a physical
presence by its employees on the college campus) with respect to the
solicitation of college students for the AT&T calling card service. In return,
AT&T agreed to pay us for the solicitation of each application for such service.
In addition, AT&T agreed to pay for additional marketing activities and to be
the exclusive sponsor of certain online offerings. We also granted AT&T a right
of first and last refusal to be the exclusive telecommunications advertiser for
the first four issues of the Student Advantage magazine. AT&T agreed to promote
and market the Student Advantage membership through television, mass media
marketing or other mass media advertising. We are also providing other marketing
services to AT&T in the college student market.
 
     In July 1998, AT&T exercised an option to extend the original termination
dates of the membership agreement and the marketing agreement to June 1, 2001.
However, AT&T may terminate these agreements prior to such date upon 120 days
prior notice, subject to payment of a termination fee under certain
circumstances. AT&T may also terminate the agreements if Raymond V. Sozzi, Jr.
is no longer employed as President of Student Advantage, or if he no longer owns
a minimum five percent ownership interest in Student Advantage. AT&T accounted
for 62% of our total revenues in 1997 and 68% of our total revenues in 1998.
While we are not aware of plans by AT&T to terminate its use of our services,
the termination of our relationship with AT&T, or a material reduction in the
use of our services by AT&T, would have a material adverse effect on our
business.
 
                                       36
<PAGE>   39
 
     Partners
 
     Student Advantage offers our members discounts on products and services
from over 40 national partners and 12,000 local partners in over 115 local
markets, including rail fares, bus fares, CDs, books and clothing.
Representative national partners and local markets include:
 
<TABLE>
<CAPTION>
            REPRESENTATIVE NATIONAL PARTNERS                            REPRESENTATIVE LOCAL MARKETS
<S>                                                       <C>
 
1-800-FLOWERS                                              Ann Arbor, Michigan
American Eagle Outfitters                                  Auburn, Alabama
Amtrak                                                     Austin, Texas
Blimpie International                                      Berkeley, California
Choice Hotels                                              Boston, Massachusetts
Dollar Rent a Car                                          Boulder, Colorado
Egghead.com                                                Chapel Hill, North Carolina
Foot Locker                                                Chicago, Illinois
Greyhound                                                  Columbus, Ohio
Hostelling International                                   Lawrence, Kansas
IBM                                                        Los Angeles, California
Jostens                                                    Madison, Wisconsin
Linens 'n Things                                           New York, New York
Pearle Vision                                              Philadelphia, Pennsylvania
Rockport Interactive                                       Princeton, New Jersey
Staples                                                    San Diego, California
The Wall Street Journal                                    Tallahassee, Florida
Tower Records                                              Washington, D.C.
</TABLE>
 
     For many of our national partners, the Student Advantage discount is the
only ongoing discount offered to college students. Many of our national partners
engage in co-marketing activities with Student Advantage. Student Advantage
seeks to identify and attract additional partners whose products and services
complement its offerings and who offer valuable ongoing discounts to its
members.
 
     Advertisers
 
     We provide advertisers with access to a large, demographically desirable
college student audience. We also provide advertisers with direct marketing
knowledge and expertise in designing and implementing effective advertising to
reach college students. Businesses which have purchased advertising from us,
such as advertising in SAM, sponsorship of portions of our Web site and banner
advertising, include Apple Computer, Barnes & Noble, Ford Motor Company,
Microsoft and Visa.
 
     Unlike many competitors, we are able to combine print, on-campus and Web
site advertisements. We intend to expand our in-house sales force during 1999
and offer additional banner advertising and sponsorship opportunities on our Web
site.
 
UNIVERSITY RELATIONSHIPS
 
     We believe that university relationships are critical to our success. An
important element of our strategy is to continue to develop relationships with
colleges, universities and university organizations to assist us in marketing
and selling our products and services. The Student Advantage membership program
has been endorsed by more than 30 colleges, universities and university
organizations. These schools and organizations typically agree to co-market the
Student Advantage membership program to their students and receive a percentage
of the associated membership fees. Several colleges and universities purchase
Student Advantage memberships in bulk and distribute the memberships to their
students free of charge.
 
     Colleges and universities, or university organizations from these schools,
that have endorsed the Student Advantage membership program or purchased
memberships in bulk include:
 
Arkansas State University
Auburn University
Brandeis University
Emory University
University of California-Berkeley
Florida State University
Northwestern University
University of Pennsylvania
University of Utah
Villanova University
University of Nevada, Las Vegas
University of Virginia
 
     Student Advantage has also established an off-campus debit card program for
New York University and American University. For these universities, we enroll
off-campus local merchants to participate in a debit-card program maintained by
the university.
 
                                       37
<PAGE>   40
 
SALES AND MARKETING
 
     As of March 31, 1999, Student Advantage had a direct sales organization
consisting of 27 professionals. Five of these professionals are dedicated to the
AT&T relationship with an additional four professionals dedicated primarily to
managing our other significant partner relationships. The remaining 18
professionals are engaged in a variety of sales functions, including:
 
     - selling advertising in SAM,
 
     - selling banner advertising and sponsorships on studentadvantage.com,
 
     - enlisting additional national partners for its discount program,
 
     - seeking opportunities for partner-sponsored events and promotions
       targeted at college students, and
 
     - managing existing partner relationships
 
     In addition, we maintain a regional sales organization of 37 professionals
in eight regional offices focused primarily on enlisting and managing local
partners and providing marketing services. These offices, which are managed by
our headquarters in Boston, provide us with a broad geographical presence and
enable us to implement effective nationwide marketing programs.
 
     Student Advantage uses a variety of online and traditional marketing
programs to increase brand awareness. Our marketing goals are to create and
enhance awareness of Student Advantage as the leading resource and trusted
advocate dedicated to serving the needs of college students, the most effective
way for marketers and advertisers to reach students, and a trusted and effective
partner for colleges and universities. Our marketing strategy for each contains
a mix of online advertising, programs which drive members to our Web site,
in-store advertising in local retail locations, on-campus direct solicitation of
students, outbound e-mail, co-marketing with colleges and universities through
on-campus posters and student mailbox drops, print advertising, new media banner
campaigns, and direct mail. Student Advantage's marketing department consisted
of 14 marketing professionals as of March 31, 1999.
 
TECHNOLOGY
 
     Student Advantage has implemented a broad array of site management,
advertising management, customer interaction, registration systems,
transaction-processing and fulfillment systems using a combination of its own
proprietary technologies and commercially available, licensed technologies. Our
current strategy is to license commercially available technology whenever
possible rather than seek internally developed solutions. We use contractors to
develop the specialized software necessary for our business, such as the
software required to register members online.
 
     Consistent with our preference for off-the-shelf software components, the
hardware systems that we utilize also consist of commercially available
components. Student Advantage believes that this architecture provides the
ability to increase scale quickly and reliably, and at a relatively low cost.
Although our existing infrastructure currently exceeds present demand, we have
plans for additional upgrades in anticipation of increased demand.
 
     Our membership database is hosted at AERO Fulfillment Services and utilizes
Microsoft SQL database. Our production servers utilize Sun Microsystems, Inc.
hardware and use Netscape Web server software. Student Advantage's system
hardware is hosted at USWeb/CKS, a third-party facility in New York. A group of
systems administrators and network managers at USWeb/CKS operate our Web site,
network operations and transaction-processing systems and monitor our systems 24
hours a day.
 
     Our operations are dependent upon USWeb/CKS's and AERO's ability to
maintain their systems in effective working order and to protect their systems
against damage from fire, natural disaster, power loss, telecommunications
failure or similar events. Student Advantage's servers are powered by an
uninterruptible power supply to provide a safeguard against unexpected power
loss. Our systems are copied to backup tapes each night and stored at an
off-site storage facility for one year. In addition, the servers are
 
                                       38
<PAGE>   41
 
equipped with redundant file systems, which allows for prompt replacement of
defective disks without interruption of service.
 
COMPETITION
 
     The market for student members and Internet services and products is
relatively new, intensely competitive and rapidly changing. With no substantial
barriers to entry, we believe that competition will continue to intensify. We
compete, directly and indirectly, for members, advertisers, partners and viewers
with the following categories of companies:
 
     - general purpose consumer online services such as America Online and
       Microsoft Network, each of which provides access to student-related
       content and services,
 
     - Web search and retrieval services, such as AltaVista, Excite, Infoseek,
       Lycos, and Yahoo!, and other high-traffic Web sites,
 
     - Web sites targeted to students generally or to students of a particular
       school,
 
     - membership programs,
 
     - publishers and distributors of traditional off-line media (such as
       television, radio and print), including those targeted to college
       students, many of which have established or may establish Web sites, and
 
     - vendors of college student information, merchandise, products and
       services distributed through other means, including retail stores, mail
       and schools.
 
     We believe that the principal competitive factors in attracting and
retaining members are:
 
     - brand recognition,
 
     - quality of content and service,
 
     - critical mass of members and partners,
 
     - number and type of discounts,
 
     - relationships with universities,
 
     - comprehensive geographic coverage,
 
     - breadth of offerings, and
 
     - cost of service.
 
     We believe that the principal competitive factor in attracting and
retaining partners, merchandisers and content providers is our ability to offer
sufficient incremental revenue from online and offline sales of products and
services. We believe that the principal competitive factors in attracting
advertisers include the demographics of our membership and user base, the number
of readers of our magazine, the number of members and users of our Web site,
cost of advertising and creative implementation of advertisement placements
across our products and services. There can be no assurance that we will be able
to compete favorably with respect to these factors.
 
     We believe that the strong Student Advantage brand combined with our
ability to deliver a targeted, demographically-attractive audience to
advertisers and partners, our existing base of over one million members, our
national and local partners and our relationships with colleges and universities
are principal competitive advantages. However, many of our competitors, current
and potential, have significantly greater financial, technical or marketing
resources. In addition, providers of Internet tools and services may be acquired
by, receive investments from, or enter into other commercial relationships with
larger, well-established and well-financed companies, such as Microsoft or
America Online. Greater competition resulting from such relationships could have
a material adverse effect on our business.
 
INTELLECTUAL PROPERTY AND PROPERTY RIGHTS
 
     Student Advantage regards its copyrights, service marks, trademarks, trade
dress, trade secrets, proprietary technology and similar intellectual property
as critical to its success, and relies on trademark and copyright law, trade
secret protection and confidentiality and/or license agreements with its
employees,
 
                                       39
<PAGE>   42
 
customers, independent contractors, partners, and others to protect its
proprietary rights. Student Advantage strategically pursues the registration of
its trademarks and service marks. Effective trademark, service mark, copyright
and trade secret protection may not be available in every country in which
Student Advantage's products and services are made available. There can be no
assurance that the steps taken by us to protect its proprietary rights will be
adequate or that third parties will not infringe or misappropriate our
copyrights, trademarks, trade secrets, trade dress and similar proprietary
rights. In addition, there can be no assurance that other parties will not
independently develop substantially equivalent intellectual property. A failure
by us to protect our intellectual property in a meaningful manner could have a
material adverse effect on our business, financial condition and results of
operations. In addition, litigation may be necessary in the future to enforce
our intellectual property rights, to protect our trade secrets or to determine
the validity and scope of the proprietary rights of others. Such litigation
could result in substantial costs and diversion of financial and managerial
resources, which could have a material adverse effect on our business.
 
     Student Advantage has been subject to claims and expects to be subject to
legal proceedings and claims from time to time in the ordinary course of its
business, including claims of alleged infringement of the trademarks and other
intellectual property rights of third parties. Such claims, even if not
meritorious, could result in the expenditure of significant financial and
managerial resources. Further, if such claims are successful, Student Advantage
may be required to change its trademarks, alter its content and pay financial
damages. There can be no assurance that such changes of trademarks, alteration
of content or payment of financial damages will not adversely affect our
business.
 
     We may be required to obtain licenses from others to refine, develop,
market and deliver new products and services. There can be no assurance that we
will be able to obtain any such license on commercially reasonable terms or at
all or that rights granted pursuant to any licenses will be valid and
enforceable.
 
GOVERNMENT REGULATION
 
     Student Advantage is subject to various laws and regulations relating to
its business. Although there are currently few laws or regulations directly
governing access to or commerce on the Internet, due to the increasing
popularity and use of the Internet, a number of laws and regulations may be
adopted regarding user privacy, pricing, acceptable content, taxation and
quality of products and services. In addition, several telecommunications
providers have petitioned the Federal Communications Commission to regulate and
impose fees on Internet service providers and online service providers in a
manner similar to long distance telephone carriers. The adoption of any such
laws or regulations could adversely affect the costs of communicating on the
Internet and adversely affect the growth in use of the Internet, or decrease the
acceptance of the Internet as a communications and commercial medium. Moreover,
it may take years to determine the extent to which existing laws relating to
issues such as property ownership, libel and personal privacy are applicable to
the Internet. Any new laws or regulations relating to the Internet could
decrease demand for our products and services or otherwise have a material
adverse effect on our business.
 
EMPLOYEES
 
     As of March 31, 1999, Student Advantage had a total of 175 full-time
employees. Student Advantage also hires temporary employees, particularly at the
beginning of each school semester, and contract service providers as necessary.
As we continue to grow and introduce additional products and services, we expect
to hire additional employees, particularly in online product development and
sales and marketing. None of our employees is represented by a labor union or is
the subject of a collective bargaining agreement. We believe that relations with
our employees are generally good. Competition for qualified personnel in our
industry is intense, particularly among sales, online product development and
technical staff. We believe that our future success will depend in part on our
continued ability to attract, hire and retain qualified personnel.
 
                                       40
<PAGE>   43
 
FACILITIES
 
     Student Advantage is headquartered at 280 Summer Street in Boston,
Massachusetts, where it presently leases an aggregate of approximately 30,000
square feet. Our current leases for this facility expire at various times
through 2005. We also maintain regional offices and lease space in Atlanta,
Georgia; Berkeley, California; Dallas, Texas; Evanston, Illinois; Lawrence,
Kansas; Los Angeles, California; New York, New York and Washington, D.C.
 
     We believe that our current facilities and other facilities that will be
available to us will be adequate to accommodate our needs for the foreseeable
future. There can be no assurance that we will be successful in obtaining
additional space, if required, or if such space is obtained that it will be on
terms acceptable to us.
 
LEGAL PROCEEDINGS
 
     We are not presently subject to any material legal proceedings. We may from
time to time become a party to various legal proceedings arising in the ordinary
course of our business.
 
                                       41
<PAGE>   44
 
                                   MANAGEMENT
 
DIRECTORS, EXECUTIVE OFFICERS AND KEY EMPLOYEES
 
     The directors, executive officers and other key employees of Student
Advantage, and their ages as of March 31, 1999 are as follows:
 
<TABLE>
<CAPTION>
                   NAME                     AGE                         POSITION
                   ----                     ---                         --------
<S>                                         <C>   <C>
Raymond V. Sozzi, Jr.*....................  30    Chairman of the Board, President and Chief Executive
                                                  Officer
Andrea K. Abegglen*.......................  32    Vice President, Marketing Communications
Christopher B. Andrews*...................  43    Vice President, Finance and Administration and Chief
                                                  Financial Officer
G. Todd Eichler*..........................  31    Executive Vice President, Member Management
David M. Liniado*.........................  28    Vice President, Campus Development
Daniel G. Siegel*.........................  30    Vice President, Product Development
Michael T. Fuller.........................  37    Vice President, Market Development
Mason Myers...............................  28    Vice President, Business Development
Kevin Watters.............................  27    Vice President, Marketing
William S. Kaiser(1)......................  43    Director
John Katzman(1)...........................  39    Director
Marc Turtletaub(1)........................  53    Director
</TABLE>
 
---------------
(1) Member of the Audit Committee and the Compensation Committee.
 
* Executive Officer.
 
     Raymond V. Sozzi, Jr. founded Student Advantage in 1992 and has served as
Chairman of the Board of Directors, President and Chief Executive Officer of
Student Advantage since its inception. Before founding Student Advantage, Mr.
Sozzi was employed by Bain & Company, a consulting company, as an associate
consultant. Mr. Sozzi received a B.A. from Dartmouth College in 1990.
 
     Andrea K. Abegglen has served as Vice President, Marketing Communications,
of Student Advantage since May 1998. From November 1997 to April 1998, Ms.
Abegglen served as Vice President, Strategic Partnerships, of Student Advantage.
From May 1996 to October 1997, Ms. Abegglen served as Chief Operating Officer of
Student Advantage. From June 1991 to June 1993, Ms. Abegglen served as Vice
President of Crimson & Brown Associates, a recruiting firm for minority students
and professionals, and as its President from June 1993 to April 1996. Ms.
Abegglen received a B.A. from the University of Pennsylvania in 1989.
 
     Christopher B. Andrews has served as Vice President and Chief Financial
Officer of Student Advantage since September 1998 and as Vice President, Finance
and Administration, of Student Advantage since January 1999. From January 1992
to August 1998, Mr. Andrews served as Vice President, Finance and
Administration, and from July 1996 to December 1996 also served as interim
President and Chief Executive Officer of Advanced Visual Systems Inc., a
visualization software company. Mr. Andrews received a J.D. from Boston College
Law School in 1981 and a B.A. from Harvard College in 1977.
 
     G. Todd Eichler has served as Executive Vice President, Member Management,
of Student Advantage since January 1997 and served as Vice President, Marketing,
of Student Advantage from January 1995 to December 1996. From January 1991 to
December 1994, Mr. Eichler was employed by Bronner, Slosberg, Humphrey, a direct
marketing and advertising agency, as an account supervisor. From 1989 to 1991
Mr. Eichler was employed by Bain & Company as an associate consultant. Mr.
Eichler received a B.A. from Duke University in 1989.
 
     David M. Liniado has served as Vice President, Campus Development, of
Student Advantage since January 1996. From September 1994 to December 1995, Mr.
Liniado was Director of the Southern
 
                                       42
<PAGE>   45
 
Region of Student Advantage. In May 1992 Mr. Liniado founded College Discount
Association, a student membership company, and served as its President from May
1992 to August 1994. Mr. Liniado received a B.A. from Emory University in 1993.
 
     Daniel G. Siegel has served as Vice President, Product Development, of
Student Advantage since May 1997, and served as Director of Marketing of Student
Advantage from November 1992 to July 1995. From May 1996 to August 1996, Mr.
Siegel was employed by Microsoft Corporation, a software company, to conduct a
worldwide original equipment manufacturer market study. Mr. Siegel received his
M.B.A. from the Wharton School of Business at the University of Pennsylvania in
1997. Mr. Siegel received a B.A. from the University of Michigan in 1990.
 
     Michael T. Fuller has served as Vice President, Market Development, of
Student Advantage since January 1999. From July 1995 to March 1999, Mr. Fuller
was President of both The Campus Agency, LLC, an advertising and custom
publishing company, and The Travel Holding Group, LLC, a travel marketing
company. From 1991 to June 1995, Mr. Fuller was Director, Sales and Marketing,
of Travel CUTS, a student travel company.
 
     Mason Myers has served as Vice President, Business Development, of Student
Advantage since January 1999 and served as Senior Director, New Media from
December 1997 to December 1998. Mr. Myers co-founded The Main Quad, Inc., a
student-focused Internet site, in May 1995, and served as its Co-President from
May 1995 to December 1997. From August 1994 to May 1995, Mr. Myers was employed
as a project manager by Smart Valley, Inc., a non-profit organization using the
Internet to improve the community of Silicon Valley. From January 1994 to July
1994, Mr. Myers was employed by MFS Communications, Inc., a telecommunications
company in various public relations roles. Mr. Myers received a B.A. from Duke
University in 1993.
 
     Kevin Watters has served as Vice President, Marketing, of Student Advantage
since April 1999 and served as Senior Director, New Media, of Student Advantage
from December 1997 to March 1999. Mr. Watters co-founded The Main Quad, Inc., a
student-focused Internet site, in May 1995, and served as its Co-President from
May 1995 to December 1997. From September 1993 to April 1995, Mr. Watters was
employed by The Procter & Gamble Company, a consumer products company, in its
sales management program. Mr. Watters received a B.A. from Duke University in
1993.
 
     William S. Kaiser has served as a Director of Student Advantage since
October 1998. Since 1986, Mr. Kaiser has been an employee of Greylock Management
Corporation, a venture capital company, and he is a general partner of several
venture capital funds affiliated with Greylock. Mr. Kaiser currently serves as a
Director of Clarus Corporation and Open Market, Inc.
 
     John Katzman has served as a Director of Student Advantage since March
1996. Mr. Katzman founded Princeton Review Publishing, a provider of test
preparation and admission services, and has served as its President since 1981.
 
     Marc Turtletaub has served as a Director of Student Advantage since October
1998. Mr. Turtletaub has served as Chief Executive Officer of The Money Store,
Inc., a financial services company, since 1979.
 
BOARD COMPOSITION
 
     Following this offering, the Board of Directors of Student Advantage will
be divided into three staggered classes, each of whose members will serve for a
three-year term. The Board will consist of one Class I Director (Mr. Katzman),
one Class II Director (Mr. Sozzi) and two Class III Directors (Messrs. Kaiser
and Turtletaub). At each annual meeting of stockholders, a class of directors
will be elected for a three-year term to succeed the directors of the same class
whose terms are then expiring. The terms of the Class I Director, Class II
Director and Class III Directors will expire upon the election and qualification
of successor directors at the annual meeting of stockholders to be held during
calendar years 2000, 2001 and 2002.
 
                                       43
<PAGE>   46
 
     Each executive officer serves at the discretion of the Board of Directors
and holds office until his or her successor is elected and qualified or until
his or her earlier resignation or removal. There are no family relationships
among any of the directors or executive officers of Student Advantage. All of
the Directors were originally elected to the Board of Directors pursuant to
agreements that will terminate upon the consummation of this offering.
 
BOARD COMMITTEES
 
     The Board of Directors has a Compensation Committee composed of Messrs.
Kaiser, Katzman and Turtletaub, which makes recommendations concerning salaries
and incentive compensation for employees of Student Advantage and administers
and grants stock options under Student Advantage's stock option plans. The Board
also has an Audit Committee composed of Messrs. Kaiser, Katzman and Turtletaub,
which reviews the results and scope of the audit and other services provided by
Student Advantage's independent public auditors.
 
DIRECTOR COMPENSATION
 
     We do not currently compensate directors for attending meetings of the
Board of Directors or committee meetings of the Board of Directors. Directors
are reimbursed for reasonable expenses incurred in attending board meetings.
 
EXECUTIVE COMPENSATION
 
     The following table sets forth information concerning the compensation
during the year ended December 31, 1998 of Student Advantage's Chief Executive
Officer and all other executive officers whose salary and bonus for such fiscal
year equaled or exceeded $100,000, collectively referred to as the Named
Executive Officers.
 
                           SUMMARY COMPENSATION TABLE
 
<TABLE>
<CAPTION>
                                                                           LONG-TERM
                                                                          COMPENSATION
                                                                             AWARDS
                                                                          ------------
                                                  ANNUAL COMPENSATION      SECURITIES
                                                -----------------------    UNDERLYING       ALL OTHER
         NAME AND PRINCIPAL POSITIONS           SALARY($)   BONUS($)(1)    OPTIONS(#)    COMPENSATION($)
         ----------------------------           ---------   -----------   ------------   ---------------
<S>                                             <C>         <C>           <C>            <C>
Raymond V. Sozzi, Jr..........................   $93,798     $150,000            --          $6,000(2)
  Chairman of the Board,
  President and Chief Executive Officer
G. Todd Eichler...............................   106,475       50,000            --              --
  Executive Vice President,
  Member Management
David M. Liniado..............................    85,340       15,000        90,000           6,882(2)
  Vice President, Campus
  Development
</TABLE>
 
---------------
(1) Represents the bonus earned by each of the Named Executive Officers for
    services performed in fiscal 1998 based upon Student Advantage's operating
    performance during 1998. Such amounts have not yet been paid.
 
(2) Includes an automobile allowance of $6,000.
 
                                       44
<PAGE>   47
 
                        OPTION GRANTS DURING FISCAL 1998
 
     The following table sets forth information as to options granted to the
Named Executive Officers during the year ended December 31, 1998. No stock
appreciation rights were granted during such fiscal year.
 
<TABLE>
<CAPTION>
                                              INDIVIDUAL GRANTS                      POTENTIAL REALIZABLE
                             ---------------------------------------------------       VALUE AT ASSUMED
                             NUMBER OF     PERCENT OF                               ANNUAL RATES OF STOCK
                             SECURITIES   TOTAL OPTIONS                             PRICE APPRECIATION FOR
                             UNDERLYING    GRANTED TO     EXERCISE                     OPTION TERM (2)
                              OPTIONS     EMPLOYEES IN      PRICE     EXPIRATION    ----------------------
           NAME              GRANTED(1)    FISCAL YEAR    PER SHARE      DATE          5%           10%
           ----              ----------   -------------   ---------   ----------    --------      --------
<S>                          <C>          <C>             <C>         <C>           <C>           <C>
Raymond V. Sozzi, Jr.......        --           --             --            --           --            --
G. Todd Eichler............        --           --             --            --           --            --
David M. Liniado...........    90,000          3.9%         $0.33      12/10/08     $264,370      $420,964
</TABLE>
 
---------------
(1) This option to purchase shares of common stock was granted under the 1998
    Stock Incentive Plan and vests as to 25% of the underlying common stock on
    January 1, 2000 and as to an additional 25% per year thereafter.
 
(2) Amounts that may be realized upon exercise of the options immediately before
    the expiration of their term, assuming the specified compound rates of
    appreciation (5% and 10%) on the market value of the common stock on the
    date of option grant over the term of the options. Market value is based on
    the value used in calculating stock-based compensation expense included in
    our financial statements. These numbers are calculated based on rules
    promulgated by the Securities and Exchange Commission and do not reflect
    Student Advantage's estimate of future stock price growth. Actual gains, if
    any, on stock option exercises and common stock holdings are dependent on
    the timing of exercise and the future performance of the common stock. There
    can be no assurance that the rates of appreciation assumed in this table can
    be achieved or that the amounts reflected will be received by the
    individuals. Assuming the fair market value of the common stock at the date
    of grant was the assumed initial public offering price of $     per share,
    the potential realizable value of the option held by Mr. Liniado at a 5%
    assumed annual rate of stock price appreciation would be $     and at a 10%
    assumed annual rate of stock price appreciation would be $     .
 
                         FISCAL YEAR-END OPTION VALUES
 
     The following table sets forth information with respect to unexercised
options held as of December 31, 1998 by each of the Named Executive Officers. No
options were exercised during 1998 by any of the Named Executive Officers.
 
<TABLE>
<CAPTION>
                                           NUMBER OF SHARES UNDERLYING           VALUE OF UNEXERCISED
                                               UNEXERCISED OPTIONS               IN-THE-MONEY OPTIONS
                                                AT FISCAL YEAR-END              AT FISCAL YEAR-END (1)
                                           ----------------------------      ----------------------------
                  NAME                     EXERCISABLE    UNEXERCISABLE      EXERCISABLE    UNEXERCISABLE
                  ----                     -----------    -------------      -----------    -------------
<S>                                        <C>            <C>                <C>            <C>
Raymond V. Sozzi, Jr.....................        --              --                --               --
G. Todd Eichler..........................        --              --                --               --
David M. Liniado.........................        --          90,000                --         $162,300
</TABLE>
 
---------------
(1) Calculated by determining the difference between the exercise price ($0.33)
    and the deemed fair market value of the securities underlying the options at
    December 31, 1998. Fair market value is based on the value used in
    calculating stock-based compensation expense included in our financial
    statements.
 
                                       45
<PAGE>   48
 
STOCK PLANS
 
     1998 Stock Incentive Plan
 
     Student Advantage's 1998 Stock Incentive Plan and a related plan for
California employees, collectively referred to as the Incentive Plan, were
adopted by the Board of Directors and approved by the stockholders of Student
Advantage on December 10, 1998. As of April 5, 1999, 120,000 shares of common
stock had been issued upon exercise of options granted under the Incentive Plan.
As of that date, options to purchase 2,222,550 shares of common stock at a
weighted average exercise price of $0.35 per share were outstanding.
 
     The Incentive Plan provides for the grant of incentive stock options
intended to qualify under Section 422 of the Internal Revenue Code of 1986, as
amended, non-statutory stock options, restricted stock awards and other
stock-based awards, collectively referred to as Awards. As of April 5, 1999, a
total of 5,277,450 shares of common stock were reserved for future grants under
the Incentive Plan.
 
     All officers, employees, directors, consultants and advisors of Student
Advantage and its subsidiaries are eligible to receive Awards under the
Incentive Plan. Under present law, however, incentive stock options may only be
granted to employees.
 
     Student Advantage may grant options at an exercise price less than, equal
to or greater than the fair market value of the common stock on the date of
grant. Under present law, incentive stock options and options intended to
qualify as performance-based compensation under Section 162(m) of the Internal
Revenue Code may not be granted at an exercise price less than the fair market
value of the common stock on the date of grant (or less than 110% of the fair
market value in the case of incentive stock options granted to optionees holding
more than 10% of the voting power of Student Advantage). The Incentive Plan
permits the Board of Directors to determine how optionees may pay the exercise
price of their options, including by cash, check or in connection with a
"cashless exercise" through a broker, by surrender to Student Advantage of
shares of common stock, by delivery to Student Advantage of a promissory note,
or by any combination of the permitted forms of payment.
 
     The Board of Directors has the authority to adopt, amend and repeal the
administrative rules, guidelines and practices relating to the Incentive Plan.
It may delegate authority under the Incentive Plan to one or more committees of
the Board of Directors and, subject to certain limitations, to one or more
executive officers of Student Advantage. The Board of Directors has authorized
the Compensation Committee to administer the Incentive Plan, including the
granting of options to executive officers. Subject to any applicable limitations
contained in the Incentive Plan, the Board of Directors, the Compensation
Committee or any other committee or executive officer to whom the Board of
Directors delegates authority, as the case may be, selects the recipients of
awards and determines:
 
     - the number of shares of common stock covered by options and the dates
       upon which such options become exercisable,
 
     - the exercise price of options,
 
     - the duration of options, and
 
     - the number of shares of common stock subject to any restricted stock or
       other stock-based awards and the terms and conditions of such awards,
       including the conditions for repurchase, issue price and repurchase
       price.
 
     In the event of a merger or other acquisition event, the Board of Directors
is authorized to provide for outstanding options or other stock-based Awards to
be assumed or substituted for by the acquiror and if not so assumed the Board
shall provide for the acceleration of the vesting of awards. The option
agreements evidencing grants under the Incentive Plan generally provide for the
acceleration of the vesting of options with respect to 50% of the unvested
shares in the event of a change in control of Student Advantage.
 
                                       46
<PAGE>   49
 
     No award may be granted under the Incentive Plan after December 2008, but
the vesting and effectiveness of awards previously granted may extend beyond
that date. The Board of Directors may amend, suspend or terminate the Incentive
Plan or any portion thereof at any time.
 
     1999 Employee Stock Purchase Plan
 
     The Board of Directors adopted Student Advantage's 1999 Employee Stock
Purchase Plan in April 1999, subject to stockholder approval. The Purchase Plan
authorizes the issuance of up to a total of 450,000 shares of common stock to
participating employees.
 
     All employees of Student Advantage, including directors of Student
Advantage who are employees, and all employees of any participating
subsidiaries:
 
     - whose customary employment is more than 20 hours per week for more than
       five months in any calendar year,
 
     - who have been employed by Student Advantage for at least three months
       prior to enrolling, and
 
     - who are employed on the first day of a designated payroll deduction
       period (the "offering period")
 
are eligible to participate in the Purchase Plan. Employees who would
immediately after the grant own five percent or more of the total combined
voting power or value of the stock of Student Advantage or any subsidiary are
not eligible to participate.
 
     On the first day of an offering period, Student Advantage will grant to
each eligible employee who has elected to participate in the Purchase Plan an
option to purchase shares of common stock as follows: the employee may authorize
an amount (up to 10%, or such lesser amount as shall be determined by the Board,
of such employee's base pay) to be deducted by Student Advantage from such
employee's base pay during the offering period. On the last day of the offering
period, the employee is deemed to have exercised the option, at the option
exercise price, to the extent of accumulated payroll deductions. Under the terms
of the Purchase Plan, the option price is an amount equal to 85% of the closing
price per share of the common stock on either the first day or the last day of
the offering period, whichever is lower. In no event may an employee purchase in
any one offering period a number of shares which exceeds the number of shares
determined by dividing the product of (1) $2,083 and (2) the number of months in
the offering period by the closing market price of a share of common stock on
the commencement date of the offering period or such other number as may be
determined by the Board prior to the commencement date of the offering period.
The Compensation Committee may, in its discretion, choose an offering period of
12 months or less for each offering and may choose a different offering period
for each offering.
 
     An employee who is not a participant on the last day of the offering
period, as a result of voluntary withdrawal or termination of employment or for
any other reason, is not entitled to exercise any option, and the employee's
accumulated payroll deductions will be refunded. However, upon termination of
employment because of death, the employee's beneficiary has certain rights to
elect to exercise the option to purchase the shares that the accumulated payroll
deductions in the participant's account would purchase at the date of death.
 
     Because participation in the Purchase Plan is voluntary, Student Advantage
cannot now determine the number of shares of common stock to be purchased by any
particular current executive officer, by all current executive officers as a
group or by non-executive employees as a group.
 
401(k) PLAN
 
     Student Advantage has a 401(k) plan, which is intended to qualify under
Sections 401(a) and 401(k) of the Internal Revenue Code. Generally, all
employees are eligible to participate in the 401(k) plan after they have
complete one year of service.
 
     Eligible employees electing to participate in the 401(k) plan may defer a
portion of their compensation, on a pre-tax basis, by making a contribution to
the 401(k) plan. The maximum
 
                                       47
<PAGE>   50
 
contribution is fixed in Section 401(k) of the Internal Revenue Code. The
contribution limit for 1998 was $10,000. In April of 1998, Student Advantage
began matching employee contributions to the 401(k) plan. Student Advantage made
matching contributions of $0.50 for each $1.00 contributed by the employee to
the plan, up to 6% of the employee's gross earnings in 1998, subject to the
foregoing limit. Eligible employees who elect to participate in the 401(k) plan
are generally vested in Student Advantage's matching contribution after four
years of service. Student Advantage contributed an aggregate of $61,000 in 1998
to the 401(k) plan.
 
EMPLOYMENT AGREEMENTS
 
     In March 1996, Student Advantage entered into an employment agreement with
Mr. Sozzi, which was amended in October 1998. The employment agreement provides
for an initial term of employment expiring on January 1, 1999 and automatically
renews for successive one-year terms, unless terminated by either party prior to
such renewal. The employment agreement provides for a base salary of $150,000 in
1999, and a bonus at a target level of $75,000 to be determined in discretion of
the Board of Directors. Pursuant to the employment agreement, if we terminate
Mr. Sozzi's employment without cause, Mr. Sozzi is entitled to receive severance
benefits, for a period of 18 months following his termination, equal to (1) his
base salary; (2) bonus payments at the fixed rate of $75,000 per year for each
year or portion thereof; (3) continued participation in all employee benefits;
and (4) outplacement services. In addition, Mr. Sozzi has agreed to certain
confidentiality, noncompetition and nonsolicitation provisions. Student
Advantage has purchased and presently maintains a key person life insurance
policy in the amount of $20.0 million on the life of Mr. Sozzi.
 
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
 
     The compensation committee of the Board of Directors consists of Messrs.
Kaiser, Katzman and Turtletaub, neither of whom has been an officer or employee
of Student Advantage at any time since our inception. No executive officer of
Student Advantage serves as a member of the board of directors or compensation
committee (or other committee serving an equivalent function) of any other
entity that has one or more executive officers serving as a member of our Board
of Directors or compensation committee. Prior to the formation of the
compensation committee, the Board of Directors made decisions relating to the
compensation of executive officers.
 
LIMITATION OF LIABILITY AND INDEMNIFICATION MATTERS
 
     Our amended and restated certificate of incorporation limits the liability
of directors to the maximum extent permitted by Delaware law. Delaware law
provides that a corporation's certificate of incorporation may contain a
provision eliminating or limiting the personal liability of a director for
monetary damages for breach of their fiduciary duties as directors, except for
liability (1) for any breach of their duty of loyalty to the corporation or its
stockholders, (2) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (3) for unlawful payments
of dividends or unlawful stock repurchases or redemptions as provided in Section
174 of the Delaware General Corporation Law or (4) for any transaction from
which the director derived an improper personal benefit.
 
     Our amended and restated certificate of incorporation provides that we
shall indemnify our directors, officers and employee benefit plan fiduciaries to
the fullest extent permitted by law. Our amended and restated certificate of
incorporation permits us to advance expenses incurred by an indemnified director
or officer in connection with the defense of any action or proceeding arising
out of such director's or officer's status or service as a director or officer
of Student Advantage upon an undertaking by such director or officer to repay
such advances if it is ultimately determined that such director or officer is
not entitled to such indemnification.
 
     We have entered into agreements to indemnify our directors and officers, in
addition to the indemnification provided for in our amended and restated
certificate of incorporation. These agreements, among other things, indemnify
our directors and officers for certain expenses (including attorneys' fees and
 
                                       48
<PAGE>   51
 
associated legal expenses), judgments, fines and amounts paid in settlement
amounts, actually and reasonably incurred by any such person's services as a
director or officer of Student Advantage or any other company or enterprise to
which the person provides services at the request of Student Advantage, if such
officer or director acted in good faith and in a manner which he or she
reasonably believed to be in, or not opposed to the best interests of Student
Advantage or with respect to any criminal proceeding, had no reasonable cause to
believe that his or her conduct was unlawful. We believe that these provisions
and agreements are necessary to attract and retain qualified directors and
officers.
 
                                       49
<PAGE>   52
 
                              CERTAIN TRANSACTIONS
 
EQUITY FINANCING
 
     On October 20, 1998, Greylock IX Limited Partnership and Marc Turtletaub
each purchased an aggregate of 625,000 preferred membership units (which
converted into 625,000 shares of Series A convertible preferred stock) from
certain members of our predecessor LLC, including Messrs. Sozzi, Eichler,
Siegel, Liniado, Ms. Abegglen, and The Main Quad, Inc., for an aggregate
purchase price of $10.0 million. On October 20, 1998, Student Advantage also
sold 625,000 shares of Series A convertible preferred stock to Greylock IX
Limited Partnership and 625,000 shares of Series A convertible preferred stock
to Marc Turtletaub, for an aggregate purchase price of $10.0 million. Mr.
Kaiser, who is a General Partner of the General Partner of Greylock IX Limited
Partnership, and Mr. Turtletaub each became a director of Student Advantage in
October 1998. Upon completion of this offering, these outstanding shares of
preferred stock will automatically be converted into an aggregate of 7,500,000
shares of common stock.
 
PRINCETON REVIEW PUBLISHING
 
     In March 1996, we entered into an Investment Agreement with Princeton
Review Publishing, L.L.C. Pursuant to this agreement, Princeton Review purchased
2,479 membership units in Student Advantage, LLC, our predecessor LLC, for an
aggregate purchase price of $250,000. Mr. Katzman, a director of Student
Advantage, is the President of Princeton Review Publishing. In connection with
this transaction, the predecessor LLC also:
 
     - issued a convertible promissory note to Princeton Review in the principal
       amount of $75,000, bearing interest at 8.5% per year, which was paid in
       September 1997, and
 
     - issued a secured promissory note to Princeton Review in the principal
       amount of $100,000, bearing interest at 8.5% per year, which was paid in
       September 1998.
 
     In September 1997, Student Advantage redeemed 1,498 of Princeton Review's
2,479 membership units in the predecessor LLC for an aggregate purchase price of
$630,000. In addition, Student Advantage borrowed $125,000 from Princeton
Review. This borrowing was repaid on October 23, 1998. In October 1998,
Princeton Review's remaining 981 membership units were converted into 1,854,378
shares of Student Advantage.
 
     In October 1998, Mr. Sozzi entered into an agreement with Princeton Review
requiring Mr. Sozzi to purchase up to 234,375 shares of preferred stock of
Student Advantage at $8.00 per share upon the election of Princeton Review.
Princeton Review exercised this put option on November 24, 1998 and consented to
the purchase of all 234,375 shares of preferred stock by Mr. Siegel and Mr.
Eichler, in addition to Mr. Sozzi.
 
     Student Advantage entered into an agreement in March 1996 with Princeton
Review, pursuant to which:
 
     - Princeton Review provides space on its Web site for Student Advantage to
       market its programs,
 
     - Princeton Review agreed to certain non-compete restrictions,
 
     - Student Advantage agreed to promote certain of Princeton Review's
       products, and
 
     - Student Advantage agreed not to permit competitors of Princeton Review to
       participate in certain Student Advantage programs.
 
OTHER AGREEMENTS
 
     In February 1995, Student Advantage entered into an agreement with David M.
Liniado d/b/a DML Enterprises. Mr. Liniado is an executive officer of Student
Advantage. Under this agreement, Student Advantage agreed to allow DML to market
discounts on products and services using the Student Advantage name in the
southeastern United States. In February 1996, Student Advantage acquired DML's
business and assets. DML received 111 membership units in the predecessor LLC
and the right to 35% of Student Advantage's pre-tax earnings derived from such
southeastern U.S. markets in 1996, 1997 and 1998. In April 1997, Student
Advantage issued an additional 239 membership units in satisfaction of its
                                       50
<PAGE>   53
 
obligation to pay DML 35% of its earnings derived from that region. The balance
of DML's total membership units as of October 20, 1998 have been converted into
567,630 shares of Student Advantage.
 
     In December 1997, Student Advantage entered into an Asset Purchase
Agreement with The Main Quad, Inc. under which Student Advantage purchased
certain assets, including U-WIRE and Virtual Backpack, for $263,500 and 270
membership units in the predecessor LLC. In connection with this agreement, the
predecessor LLC entered into an ancillary agreement entitling The Main Quad,
Inc. to a certain number of additional membership interests, depending on the
valuation of Student Advantage in its initial public offering. In October 1998,
Student Advantage issued to Main Quad an additional 480 membership units in
satisfaction of this obligation. The balance of The Main Quad Inc.'s total
membership units held as of October 20, 1998 have been converted into 1,275,048
shares of Student Advantage. In connection with the asset purchase agreement,
Student Advantage entered into a three year employment agreement, dated May 1,
1997, with Mr. Myers, co-founder of The Main Quad, Inc. Pursuant to the
agreement, Mr. Myers' base salary was $55,000 for the first year, $60,000 for
the second year and $65,000 for the third year of his employment. Student
Advantage also entered into an employment agreement with Kevin Watters,
co-founder of The Main Quad, Inc., on similar terms.
 
     Mr. Sozzi, the President, Chief Executive Officer and Chairman of the Board
of Directors of Student Advantage, loaned Student Advantage $400,000 on April
21, 1998 at an interest rate of 3%. Student Advantage repaid this loan on August
3, 1998. Mr. Sozzi loaned $300,000 to Student Advantage on August 17, 1998;
$200,000 on August 31, 1998; $100,000 on September 4, 1998 and $250,000 on
September 18, 1998, all at an interest rate of approximately 6% per year.
Student Advantage repaid all of these loans on October 29, 1998.
 
     Student Advantage loaned Mr. Siegel, Vice President, Product Development of
Student Advantage, $60,000 on February 9, 1998 at an interest rate per year of
approximately 6%. This loan was paid in late 1998. Mr. Siegel loaned the company
$100,000 on April 21, 1998 without interest. Student Advantage repaid this loan
on May 11, 1998.
 
     In May 1996, Ms. Abegglen, Vice President, Marketing Communications of
Student Advantage, borrowed $164,914 from Student Advantage in connection with
the purchase of membership units in the predecessor LLC. This borrowing, with
interest at 5% per year, was repaid in December 1998.
 
     In December 1998, Student Advantage granted Christopher B. Andrews, an
executive officer of the company, an option under the 1998 Stock Incentive Plan
to purchase 202,500 shares of common stock at an exercise price of $0.33 per
share. This option vests as to 16 2/3% of the shares on December 10, 1998,
8 1/3% of the shares on September 22, 1999, and 25% on each September 22 for
three years thereafter.
 
     All future transactions, including loans between us and our officers,
directors, principal stockholders and their affiliates will be approved by a
majority of the Board of Directors, including a majority of the disinterested
directors on the Board of Directors, and will be on terms no less favorable to
us than could be obtained from unaffiliated third parties.
 
DISTRIBUTIONS TO MEMBERS OF PREDECESSOR LIMITED LIABILITY COMPANY
 
     During April 1998, Student Advantage LLC distributed to its LLC members an
aggregate of approximately $1,043,000 so that they could pay their estimated tax
liability with respect to the 1997 taxable income of the LLC. These members
included, among others, Mr. Sozzi, Mr. Eichler, Mr. Siegel, Princeton Review,
Ms. Abegglen, Mr. Liniado and The Main Quad, Inc. In November 1998, Student
Advantage distributed to its members the remainder of the LLC's 1997 taxable
income (approximately $1,277,000). To the extent Princeton Review's tax
liability on the LLC's taxable income for 1997 and 1998 exceeds its estimated
tax liability, Student Advantage agreed to indemnify Princeton Review for such
excess. Student Advantage also has agreed to distribute to its former LLC
members approximately 45% of the LLC's 1998 taxable income (expected to be a
nominal amount) so that they can pay their tax liability with respect to the
1998 taxable income of the LLC for the period between January 1, 1998 and
October 20, 1998, which was the date on which the LLC was converted to a C
Corporation.
 
                                       51
<PAGE>   54
 
                             PRINCIPAL STOCKHOLDERS
 
     The following table sets forth information regarding the beneficial
ownership of the common stock of Student Advantage as of March 31, 1999, and as
adjusted to reflect the sale of the shares of common stock offered by this
prospectus, by:
 
     - each person or entity, or group of affiliated persons or entities, who
       Student Advantage knows beneficially owns five percent or more of the
       common stock,
 
     - each director and Named Executive Officer of Student Advantage, and
 
     - all directors and executive officers of Student Advantage as a group.
 
     Unless otherwise indicated, (1) each person or entity named in the table
has sole voting power and investment power (or shares such power with his or her
spouse) with respect to all shares of capital stock listed as beneficially owned
by such person or entity and (2) the address of each beneficial owner is c/o
Student Advantage, Inc., 280 Summer Street, Boston, Massachusetts 02210.
 
<TABLE>
<CAPTION>
                                                                                      PERCENTAGE OF
                                                                                          COMMON
                                                                                    STOCK OUTSTANDING
                                                                                   --------------------
                                                            SHARES BENEFICIALLY     BEFORE      AFTER
                 NAME OF BENEFICIAL OWNER                        OWNED(1)          OFFERING    OFFERING
                 ------------------------                   -------------------    --------    --------
<S>                                                         <C>                    <C>         <C>
Raymond V. Sozzi, Jr.(2)..................................            7,626,183      31.1%
Greylock IX Limited Partnership(3)........................            3,750,000      15.3
William S. Kaiser(3)......................................            3,750,000      15.3
Marc Turtletaub...........................................            3,750,000      15.3
Daniel G. Siegel..........................................            2,229,912       9.1
G. Todd Eichler...........................................            2,229,912       9.1
Princeton Review Publishing, L.L.C.(4)....................            1,620,003       6.6
John Katzman(4)...........................................            1,620,003       6.6
Mason Myers(5)(6).........................................            1,335,048       5.4
Kevin Watters(5)(6).......................................            1,323,048       5.4
The Main Quad, Inc.(5)....................................            1,275,048       5.2
David M. Liniado(6).......................................              657,630       2.7
All executive officers and directors as a group (9
  persons)(7).............................................           22,871,847      92.7%
</TABLE>
 
---------------
* Less than 1%
 
(1) The number of shares beneficially owned by each stockholder is determined
    under rules promulgated by the Securities and Exchange Commission, and the
    information is not necessarily indicative of beneficial ownership for any
    other purpose. Under such rules, beneficial ownership includes any shares as
    to which the individual or entity has sole or shared voting power or
    investment power and any shares as to which the individual or entity has the
    right to acquire beneficial ownership within 60 days after March 31, 1999
    through the exercise of any stock option or other right. The inclusion
    herein of such shares, however, does not constitute an admission that the
    named stockholder is a direct or indirect beneficial owner of such shares.
 
(2) Consists of shares held of record by Mr. Sozzi. Does not include a total of
    7,628,814 shares of common stock over which Mr. Sozzi has voting control
    pursuant to an irrevocable proxy granted under a Voting Agreement and Proxy
    dated October 20, 1998. Counting these shares, Mr. Sozzi may be deemed to
    beneficially own a total of 15,254,997 shares, or 62.3% of the outstanding
    common stock prior to this offering. The Voting Agreement and Proxy and the
    proxy granted thereunder terminate upon the consummation of this offering.
 
(3) Consists of 3,750,000 shares held of record by Greylock IX Limited
    Partnership. Mr. Kaiser is a general partner of Greylock IX GP Limited
    Partnership, the general partner of Greylock IX Limited Partnership.
    Greylock IX GP Limited Partnership has sole voting and investment power with
    respect to these shares. Mr. Kaiser disclaims beneficial ownership of such
    shares, except to the extent of his
 
                                       52
<PAGE>   55
 
    pecuniary interest therein. The address for Greylock IX Limited Partnership
    and Greylock IX GP Limited Partnership is One Federal Street, Boston,
    Massachusetts 02110.
 
(4) Consists of 1,620,003 shares held of record by Princeton Review Publishing,
    L.L.C. Mr. Katzman is President of Princeton Review Publishing, L.L.C. Mr.
    Katzman disclaims beneficial ownership of such shares, except to the extent
    of his pecuniary interest therein. The address for Princeton Review
    Publishing is 2315 Broadway, New York, New York 10024.
 
(5) Consists of 1,275,048 shares held of record by The Main Quad, Inc. Messrs.
    Myers and Watters are each stockholders, directors and officers of The Main
    Quad, Inc. Messrs. Myers and Watters share investment and voting power with
    respect to these shares. Messrs. Myers and Watters disclaim beneficial
    ownership of such shares, except to the extent of their pecuniary interest
    therein.
 
(6) Includes all shares subject to options held by Messrs. Myers, Watters and
    Liniado, which are immediately exercisable in full. Any shares acquired upon
    exercise are subject to vesting over a four-year period.
 
(7) See footnotes 2 through 6 above.
 
                                       53
<PAGE>   56
 
                          DESCRIPTION OF CAPITAL STOCK
 
     After this offering, the authorized capital stock of Student Advantage will
consist of 100,000,000 shares of common stock, $0.01 par value per share, and
5,000,000 shares of preferred stock, $0.01 par value per share. As of April 5,
1999, there were outstanding (1) 16,253,892 shares of common stock held by 12
stockholders of record, (2) 2,747,036 shares of convertible preferred stock
(convertible into 8,241,108 shares of common stock) held by 11 stockholders of
record and (3) options to purchase an aggregate of 2,222,550 shares of common
stock.
 
     The following summary of certain provisions of our securities and various
provisions of our amended and restated certificate of incorporation and our
amended and restated bylaws is not intended to be complete and is qualified by
reference to the provisions of applicable law and to our amended and restated
certificate of incorporation and amended and restated bylaws included as
exhibits to the Registration Statement of which this prospectus is a part. See
"Additional Information."
 
COMMON STOCK
 
     Holders of common stock are entitled to one vote for each share held on all
matters submitted to a vote of stockholders and do not have cumulative voting
rights. Accordingly, holders of a majority of the shares of common stock
entitled to vote in any election of directors may elect all of the directors
standing for election. Holders of common stock are entitled to receive
proportionately any such dividends declared by the Board of Directors, subject
to any preferential dividend rights of outstanding preferred stock. Upon the
liquidation, dissolution or winding up of Student Advantage, the holders of
common stock are entitled to receive ratably the net assets of Student Advantage
available after the payment of all debts and other liabilities and subject to
the prior rights of any outstanding preferred stock. Holders of common stock
have no preemptive, subscription, redemption or conversion rights. The
outstanding shares of common stock are, and the shares offered by Student
Advantage in this offering will be, when issued and paid for, fully paid and
nonassessable. The rights, preferences and privileges of holders of common stock
are subject to the rights of the holders of shares of any series of preferred
stock which Student Advantage may designate and issue in the future. Certain
holders of common stock have the right to require Student Advantage to register
their shares of common stock under the Securities Act in certain circumstances.
See "Shares Eligible for Future Sale."
 
PREFERRED STOCK
 
     Under the terms of our amended and restated certificate of incorporation,
the Board of Directors is authorized to issue such shares of preferred stock in
one or more series without stockholder approval. The Board has discretion to
determine the rights, preferences, privileges and restrictions, including voting
rights, dividend rights, conversion rights, redemption privileges and
liquidation preferences of each series of preferred stock.
 
     The purpose of authorizing the Board of Directors to issue preferred stock
and determine its rights and preferences is to eliminate delays associated with
a stockholder vote on specific issuances. The issuance of preferred stock, while
providing desirable flexibility in connection with possible acquisitions and
other corporate purposes, could make it more difficult for a third party to
acquire, or could discourage a third party from acquiring, a majority of the
outstanding voting stock of Student Advantage. Student Advantage has no present
plans to issue any shares of preferred stock.
 
DELAWARE ANTI-TAKEOVER LAW AND CERTAIN CHARTER AND BY-LAW PROVISIONS
 
     Student Advantage is subject to the provisions of Section 203 of the
General Corporation Law of Delaware. In general, the statute prohibits a
publicly held Delaware corporation from engaging in a "business combination"
with an "interested stockholder" for a period of three years after the date of
the transaction in which the person became an interested stockholder, unless the
business combination is approved in a prescribed manner. A "business
combination" includes mergers, asset sales and other transactions resulting in a
financial benefit to the interested stockholder. Subject to certain exceptions,
an
                                       54
<PAGE>   57
 
"interested stockholder" is a person who, together with affiliates and
associates, owns, or within three years did own, 15% or more of the
corporation's voting stock.
 
     The amended and restated bylaws provide for the division of the Board of
Directors into three classes as nearly equal in size as possible with staggered
three-year terms. Under the amended and restated bylaws, any vacancy on the
Board of Directors, including a vacancy resulting from an enlargement of the
Board of Directors, may only be filled by vote of a majority of the directors
then in office. The classification of the Board of Directors and the limitation
on and filling of vacancies could make it more difficult for a third party to
acquire, or discourage a third party from acquiring, control of Student
Advantage.
 
     The amended and restated bylaws also provide that after this offering, any
action required or permitted to be taken by the stockholders of Student
Advantage at an annual meeting or special meeting of stockholders may only be
taken if it is properly brought before such meeting and may not be taken by
written action in lieu of a meeting. The amended and restated bylaws further
provide that special meetings of the stockholders may only be called by the
Chairman of the Board, the President or the Board of Directors. In order for any
matter to be considered "properly brought" before a meeting, a stockholder must
comply with certain requirements regarding advance notice and provide certain
information to Student Advantage. These provisions could have the effect of
delaying until the next stockholders meeting stockholder actions which are
favored by the holders of a majority of the outstanding voting securities of
Student Advantage. These provisions could also discourage a third party from
making a tender offer for the common stock, because even if it acquired a
majority of the outstanding voting securities of Student Advantage, it would be
able to take action as a stockholder (such as electing new directors or
approving a merger) only at a duly called stockholders' meeting and not by
written consent.
 
TRANSFER AGENT AND REGISTRAR
 
     The transfer agent and registrar for the common stock is BankBoston, N.A.
 
                                       55
<PAGE>   58
 
                        SHARES ELIGIBLE FOR FUTURE SALE
 
     Prior to this offering, there has been no public market for our common
stock. We cannot predict the effect, if any, that sales of shares of common
stock to the public or the availability of shares for sale to the public will
have on the market price of the common stock prevailing from time to time.
Nevertheless, if a significant number of shares of common stock are sold in the
public market, or if people believe that such sales may occur, the prevailing
market price of our common stock could decline and could impair our future
ability to raise capital through the sale of our equity securities.
 
     Upon completion of this offering, we will have an aggregate of      shares
of common stock outstanding, assuming no exercise of the underwriters'
over-allotment option and no exercise of options outstanding at March 31, 1999.
Of the outstanding shares, the      shares sold in this offering will be freely
tradeable, without restriction under the Securities Act of 1933, except for any
such shares which may be acquired by an "affiliate" of Student Advantage, which
shares will be subject to the volume limitations of Rule 144 under the
Securities Act. As defined in Rule 144, an "affiliate" of an issuer is a person
who, directly or indirectly, through one or more intermediaries, controls or is
controlled by, or is under common control with, such issuer. Substantially all
of the remaining      shares of common stock outstanding will be "restricted
securities" as that phrase is defined in Rule 144 and may not be resold in the
absence of registration under the Securities Act or pursuant to an exemption
from such registration, including the exemption provided by Rule 144 under the
Securities Act.
 
     In connection with this offering, our directors, officers and stockholders,
holding 24,495,000 shares in the aggregate, have agreed that, without the prior
written consent of BancBoston Robertson Stephens Inc. on behalf of the
underwriters, during the period ending 180 days after the date of this
prospectus, they will not directly or indirectly offer to sell, contract to
sell, or otherwise sell, dispose of, loan, pledge, or grant any right with
respect to, any shares of common stock or any securities convertible into or
exchangeable for shares of common stock, whether such shares or any such
securities are then owned by such person or are thereafter acquired directly
from us.
 
     Subject to the foregoing and to the lock-up agreements, under Rule 144 as
currently in effect, beginning 180 days after the date of this prospectus,
holders of restricted securities will be entitled to sell a number of shares of
common stock within any three-month period equal to the greater of 1% of the
then outstanding shares of the common stock (approximately      shares following
the offering) or the average weekly reported volume of trading of the common
stock on the Nasdaq National Market during the four calendar weeks preceding
such sale, provided that certain manner of sale and notice requirements and
requirements as to the availability of current public information concerning
Student Advantage are satisfied.
 
     Immediately after the offering, there will be options to purchase
approximately      shares of common stock outstanding. Subject to the provisions
of the lock-up agreements described below, holders of these options may rely on
the resale provisions of Rule 701 under the Securities Act, which permits
nonaffiliates to sell shares without having to comply with the current public
information, holding period, volume limitation or notice provisions of Rule 144
and permits affiliates to sell their shares without having to comply with the
holding period provision of Rule 144, in each case beginning 90 days after the
consummation of this offering. In addition, immediately after this offering,
Student Advantage intends to file a registration statement on Form S-8 covering
all options granted under the 1998 Stock Incentive Plan. Shares of common stock
registered under such registration statement will, subject to Rule 144 volume
limitations applicable to affiliates, be available for sale in the open market,
unless such shares are subject to vesting restrictions with Student Advantage or
the lock-up agreements described above. See "Management--Stock Plans--1998 Stock
Incentive Plan."
 
     We have agreed not to sell or otherwise dispose of any shares of common
stock during the 180-day period following the date of the prospectus, except
that we may issue shares in connection with certain acquisitions and issue, and
grant options to purchase, shares of common stock under the 1998 Stock Incentive
Plan and the 1999 Employee Stock Purchase Plan.
 
                                       56
<PAGE>   59
 
     Following this offering, under specified conditions and subject to
customary exceptions, holders of 16,746,186 shares of common stock will have
demand registration rights with respect to their shares of common stock (subject
to the 180-day lock-up arrangement described above) to require us to register
their shares of common stock under the Securities Act, and they will have rights
to participate in any future registration of securities by us. We are not
required to effect more than two demand registrations on behalf of these
holders.
 
                                       57
<PAGE>   60
 
                                  UNDERWRITING
 
     The underwriters named below, acting through their representatives,
BancBoston Robertson Stephens Inc., Prudential Securities Incorporated and Volpe
Brown Whelan & Company, LLC have severally agreed with us and the selling
stockholders subject to the terms and conditions of the underwriting agreement,
to purchase from us and them the number of shares of common stock set forth
opposite their names below. The underwriters are committed to purchase and pay
for all such shares if any are purchased.
 
<TABLE>
<CAPTION>
                                                               NUMBER
                        UNDERWRITER                           OF SHARES
                        -----------                           ---------
<S>                                                           <C>
BancBoston Robertson Stephens Inc. .........................
Prudential Securities Incorporated..........................
Volpe Brown Whelan & Company, LLC...........................
 
                                                               -------
          Total.............................................
                                                               =======
</TABLE>
 
     The underwriters' representatives have advised us that the underwriters
propose to offer the shares of common stock to the public at the initial public
offering price set forth on the cover page of this prospectus and to certain
dealers at such price less a concession not in excess of $     per share, of
which $     per share may be reallowed to other dealers. After the initial
public offering, the public offering price, concession, and reallowance to
dealers may be reduced by the representatives. No such reduction shall change
the amount of proceeds to be received by us as set forth on the cover page of
this prospectus.
 
     The underwriters have informed us that they do not intend to confirm sales
to any accounts over which they exercise discretionary authority.
 
     Over-Allotment Option.  We have granted to the underwriters an option,
exercisable during the 30-day period after the date of this prospectus, to
purchase up to      additional shares of common stock at the same price per
share as we will be paid for the      shares that the underwriters have agreed
to purchase. To the extent that the underwriters exercise such option, each of
the underwriters will have a firm commitment to purchase approximately the same
percentage of such additional shares that the number of shares of common stock
to be purchased by it shown in the above table represents as a percentage of the
     shares offered hereby. If purchased, such additional shares will be sold by
the underwriters on the same terms as those on which the      shares are being
sold. We will be obligated, pursuant to the option, to sell shares to the extent
the option is exercised. The underwriters may exercise such option only to cover
over-allotments made in connection with the sale of the shares of common stock
offered hereby. If such option is exercised in full, the total public offering
price, underwriting discounts and commissions and proceeds to company will be
$     million, $     million and $     million, respectively.
 
     Directed Share Program.  At our request, the underwriters have reserved up
to      shares of common stock to be issued by us and offered hereby for sale,
at the initial public offering price, to business associates and certain persons
otherwise related to Student Advantage. The number of shares of common stock
available for sale to the general public will be reduced to the extent such
individuals purchase such reserved shares. Any reserved shares which are not so
purchased will be offered by the underwriters to the general public on the same
basis as the other shares offered hereby.
 
     Indemnity.  The Underwriting Agreement contains covenants of indemnity
between the underwriters and us against certain civil liabilities, including
liabilities under the Securities Act and liabilities arising from breaches of
representation and warranties contained in the underwriting agreement.
 
                                       58
<PAGE>   61
 
     Lock-Up Agreements.  Each director, officer and stockholder of Student
Advantage has agreed, during the period ending 180 days after the date of this
prospectus (the "lock-up period"), subject to certain exceptions, not to offer
to sell, contract to sell, or otherwise sell, dispose of, loan, pledge or grant
any rights with respect to any shares of common stock or any options, warrants
to purchase any shares of common stock, or any securities convertible into or
exchangeable for shares of common stock owned as of the date of this prospectus
or thereafter acquired directly by such holders or with respect to which they
have the power of disposition, without the prior written consent of BancBoston
Robertson Stephens Inc. However, BancBoston Robertson Stephens Inc. may, in its
sole discretion and at any time without notice, release all or any portion of
securities subject to the lock-up agreement. There are no existing agreements
between the representatives of the underwriters and any of our stockholders
providing consent to the sale of shares prior to the expiration of the lock-up
period.
 
     Future Sales.  In addition, we have agreed that during the lock-up period
we will not, without the prior written consent of BancBoston Robertson Stephens
Inc., subject to certain exceptions, (1) consent to the disposition of any
shares held by stockholders subject to lock-up agreements prior to the
expiration of the lock-up period or (2) issue, sell, contract to sell, or
otherwise dispose of, any shares of common stock, any options to purchase any
shares of common stock or any securities convertible into, exercisable for or
exchangeable for shares of common stock other than (a) our sale of shares in
this offering, (b) the issuance of common stock upon the exercise of outstanding
options and the issuance of options under existing stock option and incentive
plans, provided such common stock and the common stock issuable upon the
exercise of such options cannot be transferred prior to the expiration of the
lock-up period and (c) the issuance of shares in connection with certain
acquisitions that cannot be sold on the public market during the lock-up period.
See "Shares Eligible for Future Sale."
 
     Listing.  Application has been made to have the shares of common stock
approved for quotation on the Nasdaq National Market under the symbol "STAD."
 
     No Prior Public Market.  Prior to this offering, there has been no public
market for the common stock. Consequently, the initial public offering price for
the common stock offered by this prospectus will be determined through
negotiations among us and the representatives of the underwriters. Among the
factors to be considered in such negotiations are prevailing market conditions,
certain of our financial information, market valuations of other companies that
we and the representatives of the underwriters believe to be comparable to us,
estimates of our business potential, the present state of our development and
other factors deemed relevant.
 
     Stabilization.  The underwriters have advised us that, pursuant to
Regulation M under the Securities Act, certain persons participating in the
offering may engage in transactions, including stabilizing bids, syndicate
covering transactions or the imposition of penalty bids, that may have the
effect of stabilizing or maintaining the market price of the common stock at a
level above that which might otherwise prevail in the open market. A
"stabilizing bid" is a bid for or the purchase of common stock on behalf of the
underwriters for the purpose of fixing or maintaining the price of the common
stock. A "syndicate covering transaction" is the bid for or the purchase of the
common stock on behalf of the underwriters to reduce a short position incurred
by the underwriters in connection with this offering. A "penalty bid" is an
arrangement permitting the representatives to reclaim the selling concession
otherwise accruing to an underwriter or syndicate member in connection with this
offering if the common stock originally sold by such underwriter or syndicate
member is purchased by the representatives of the underwriters in a syndicate
covering transaction and has therefore not been effectively placed by such
underwriter or syndicate member. The representatives of the underwriters have
advised us that such transactions may be effected on the Nasdaq National Market
or otherwise and, if commenced, may be discontinued at any time.
 
                                 LEGAL MATTERS
 
     The validity of the shares of common stock offered hereby will be passed
upon for Student Advantage by Hale and Dorr LLP, Boston, Massachusetts, and for
the underwriters by Testa, Hurwitz & Thibeault, LLP, Boston, Massachusetts.
                                       59
<PAGE>   62
 
                                    EXPERTS
 
     The audited financial statements included in this Prospectus have been
audited by
PricewaterhouseCoopers LLP. The companies and periods covered by these audits
are indicated in the individual accountant's reports. Such financial statements
have been so included in reliance of the reports of PricewaterhouseCoopers LLP
given the authority of said firm as experts in auditing and accounting.
 
                             ADDITIONAL INFORMATION
 
     We have filed with the Securities and Exchange Commission a Registration
Statement on Form S-1. This prospectus, which is a part of the Registration
Statement, does not contain all of the information included in the Registration
Statement. Certain information is omitted and you should refer to the
Registration Statement and its exhibits. With respect to references made in this
prospectus to any contract, agreement or other document of Student Advantage,
such references are not necessarily complete and you should refer to the
exhibits attached to the Registration Statement for copies of the actual
contract, agreement or other document. You may review a copy of the Registration
Statement, including exhibits, at the Commission's public reference room at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 or Seven World
Trade Center, 13th Floor, New York, New York 10048 or Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Please call the Commission
at 1-800-SEC-0330 for further information on the operation of the public
reference rooms.
 
     We will also file annual, quarterly and current reports, proxy statements
and other information with the Commission. You may read and copy any reports,
statements or other information on file at the public reference rooms. You can
also request copies of these documents, for a copying fee, by writing to the
Commission.
 
     Our Commission filings and the Registration Statement can also be reviewed
by accessing the Commission's Internet site at http://www.sec.gov, which
contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission.
 
                                       60
<PAGE>   63
 
                            STUDENT ADVANTAGE, INC.
                         INDEX TO FINANCIAL STATEMENTS
 
<TABLE>
<CAPTION>
                                                              PAGE
                                                              ----
<S>                                                           <C>
STUDENT ADVANTAGE, INC.
Report of Independent Accountants...........................   F-2
Balance Sheet as of December 31, 1997 and 1998..............   F-3
Statement of Operations for the years ended December 31,
  1996, 1997 and 1998.......................................   F-4
Statement of Changes in Redeemable Convertible Preferred
  Stock and Stockholders' Deficit for the years ended
  December 31, 1996, 1997 and 1998..........................   F-5
Statement of Cash Flows for the years ended December 31,
  1996, 1997 and 1998.......................................   F-6
Notes to Financial Statements...............................   F-8
 
COLLEGIATE ADVANTAGE, INC.
Report of Independent Accountants...........................  F-18
Balance Sheet as of December 31, 1997.......................  F-19
Statement of Operations for the year ended December 31,
  1997......................................................  F-20
Statement of Changes in Stockholders' Equity for the year
  ended December 31, 1997...................................  F-21
Statement of Cash Flows for the year ended December 31,
  1997......................................................  F-22
Notes to Financial Statements...............................  F-23
 
THE MAIN QUAD, INC.
Report of Independent Accountants...........................  F-26
Balance Sheet as of December 6, 1997........................  F-27
Statement of Operations for the period from January 1, 1997
  through December 6, 1997..................................  F-28
Statement of Changes in Stockholders' Deficit for the period
  from January 1, 1997 through December 6, 1997.............  F-29
Statement of Cash Flows for the period from January 1, 1997
  through December 6, 1997..................................  F-30
Notes to Financial Statements...............................  F-31
</TABLE>
 
                                       F-1
<PAGE>   64
 
                       REPORT OF INDEPENDENT ACCOUNTANTS
 
To the Board of Directors and Stockholders
  of Student Advantage, Inc.
 
     The common stock split described in Note 1 to the financial statements has
not been consummated at April 7, 1999. When it has been consummated, we will be
in a position to furnish the following report:
 
     "In our opinion, the accompanying balance sheet and the related statements
of operations, of changes in redeemable convertible preferred stock and
stockholders' deficit and of cash flows present fairly, in all material
respects, the financial position of Student Advantage, Inc. at December 31, 1997
and 1998, and the results of its operations and its cash flows for each of the
three years in the period ended December 31, 1998 in conformity with generally
accepted accounting principles. These financial statements are the
responsibility of the Company's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above."
 
PricewaterhouseCoopers LLP
 
Boston, Massachusetts
April 5, 1999
 
                                       F-2
<PAGE>   65
 
                            STUDENT ADVANTAGE, INC.
 
                                 BALANCE SHEET
                       (IN THOUSANDS, EXCEPT SHARE DATA)
 
<TABLE>
<CAPTION>
                                                              DECEMBER 31,         PRO FORMA
                                                           -------------------    DECEMBER 31,
                                                            1997        1998          1998
                                                           -------    --------    ------------
                                                                                  (UNAUDITED)
<S>                                                        <C>        <C>         <C>
                                            ASSETS
Current assets:
  Cash and cash equivalents..............................  $ 1,904    $  5,048      $  5,048
  Accounts receivable (net of allowance for doubtful
     accounts of $70, at December 31, 1997 and December
     31, 1998, respectively).............................      142       2,867         2,867
  Prepaid expenses and other current assets..............       87         317           317
                                                           -------    --------      --------
          Total current assets...........................    2,133       8,232         8,232
Property and equipment, net..............................      235       1,085         1,085
Intangible assets, net...................................      377         617           617
                                                           -------    --------      --------
          Total assets...................................  $ 2,745    $  9,934      $  9,934
                                                           =======    ========      ========
 
                   LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND
                                    STOCKHOLDERS' DEFICIT
Current liabilities:
  Accounts payable.......................................  $   441    $  1,659      $  1,659
  Accrued compensation...................................      362         977           977
  Other accrued expenses.................................      273       1,177         1,177
  Deferred revenue.......................................    5,668       6,666         6,666
  Notes payable to stockholder...........................      225          --            --
                                                           -------    --------      --------
          Total current liabilities......................    6,969      10,479        10,479
                                                           -------    --------      --------
Series A redeemable convertible preferred stock; $1 par
  value; Authorized: 4,000,000 shares; Issued: 1,588,688
  and 2,952,568 shares at December 31, 1997 and 1998,
  respectively; Outstanding: 1,383,156 and 2,747,036
  shares at December 31, 1997 and 1998 actual,
  respectively; no shares issued and outstanding at
  December 31, 1998 pro forma (unaudited)................      111      10,196            --
                                                           -------    --------      --------
Commitments and contingencies (Notes 3 and 11)...........
Stockholders' deficit:
  Common stock, $.01 par value; Authorized: 45,000,000
     shares; Issued: 17,121,651 and 18,348,957 at
     December 31, 1997 and 1998, respectively;
     Outstanding: 14,906,586 and 16,133,892 shares at
     December 31, 1997 and 1998 actual, respectively;
     24,375,000 shares outstanding at December 31, 1998
     pro forma (unaudited)...............................      171         183           272
  Additional paid-in capital.............................      228       4,692        14,799
  Accumulated deficit....................................   (4,104)    (11,623)      (11,623)
  Treasury stock (at cost)...............................     (630)       (630)         (630)
  Deferred compensation..................................       --      (3,363)       (3,363)
                                                           -------    --------      --------
          Total stockholders' deficit....................   (4,335)    (10,741)         (545)
                                                           -------    --------      --------
          Total liabilities, redeemable convertible
            preferred stock and stockholders' deficit....  $ 2,745    $  9,934      $  9,934
                                                           =======    ========      ========
</TABLE>
 
   The accompanying notes are an integral part of these financial statements.
                                       F-3
<PAGE>   66
 
                            STUDENT ADVANTAGE, INC.
 
                            STATEMENT OF OPERATIONS
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)
 
<TABLE>
<CAPTION>
                                                                 YEAR ENDED DECEMBER 31,
                                                              -----------------------------
                                                               1996       1997       1998
                                                              -------    -------    -------
<S>                                                           <C>        <C>        <C>
Revenue
  Subscription..............................................  $ 1,093    $ 2,971    $ 7,174
  Other.....................................................      637        821     10,269
                                                              -------    -------    -------
          Total revenue.....................................    1,730      3,792     17,443
                                                              -------    -------    -------
Costs and expenses
  Cost of subscription revenue..............................      543      2,628      2,442
  Cost of other revenue.....................................      506        309      7,331
  Product development.......................................      507      1,469      2,588
  Sales and marketing.......................................      356        843      4,717
  General and administrative................................      437      1,485      3,647
  Depreciation and amortization.............................       37        239      1,027
  Stock-based compensation..................................       --         --        808
                                                              -------    -------    -------
          Total costs and expenses..........................    2,386      6,973     22,560
                                                              -------    -------    -------
Loss from operations........................................     (656)    (3,181)    (5,117)
Interest income (expense), net..............................       (1)        29          2
                                                              -------    -------    -------
Net loss....................................................  $  (657)   $(3,152)   $(5,115)
                                                              =======    =======    =======
Basic and diluted net loss per share........................  $ (0.05)   $ (0.21)   $ (0.32)
                                                              =======    =======    =======
Shares used in computing basic and diluted net loss per
  share.....................................................   14,184     15,295     15,957
                                                              =======    =======    =======
Unaudited pro forma basic and diluted net loss per share....  $    --    $    --    $ (0.24)
                                                              =======    =======    =======
Shares used in computing unaudited pro forma basic and
  diluted net loss per share................................       --         --     21,128
                                                              =======    =======    =======
</TABLE>
 
   The accompanying notes are an integral part of these financial statements.
                                       F-4
<PAGE>   67
 
                            STUDENT ADVANTAGE, INC.
 
STATEMENT OF CHANGES IN REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS'
                                    DEFICIT
                       (IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
                                               REDEEMABLE
                                               CONVERTIBLE
                                             PREFERRED STOCK           COMMON STOCK        ADDITIONAL
                                          ---------------------   ----------------------    PAID-IN     ACCUMULATED   TREASURY
                                            SHARES      AMOUNT      SHARES     PAR VALUE    CAPITAL       DEFICIT      STOCK
                                          -----------   -------   ----------   ---------   ----------   -----------   --------
<S>                                       <C>           <C>       <C>          <C>         <C>          <C>           <C>
Balance, January 1, 1996................    1,031,914   $   41    11,121,162     $111        $ (152)     $   (295)     $  --
Issuance of preferred and common
  stock.................................      340,129       13     3,665,652       37           200            --
Net loss................................                                                                     (657)        --
                                          -----------   -------   ----------     ----        ------      --------      -----
Balance, December 31, 1996..............    1,372,043       54    14,786,814      148            48          (952)        --
Issuance of preferred and common
  stock.................................      119,368       19     1,286,453       13            56
Issuance of preferred and common stock
  upon cancellation of notes payable....       27,440        5       295,736        3            16
Issuance of preferred and common stock
  in satisfaction of obligation to
  stockholder...........................       32,792        9       353,404        3            30
Repurchase of 205,532 shares of
  preferred stock and 2,215,065 shares
  of common stock.......................                                                                                (630)
Issuance of preferred and common stock
  in connection with the acquisition of
  The Main Quad.........................       37,045       24       399,244        4            78
Net loss................................                                                                   (3,152)
                                          -----------   -------   ----------     ----        ------      --------      -----
Balance, December 31, 1997..............    1,588,688      111    17,121,651      171           228        (4,104)      (630)
Issuance of preferred stock, net of
  issuance costs of $84.................    1,250,000   10,000                                                (84)
Issuance of preferred and common stock
  in connection with the acquisition of
  The Main Quad.........................       65,858       49       709,768        7           169
Issuance of preferred and common stock
  in exchange for note receivable.......       48,022       36       517,538        5           124
Distributions to stockholders...........                                                                   (2,320)
Deferred compensation relating to grants
  of stock options......................                                                      4,171
Compensation relating to grants of stock
  options...............................
Net loss................................                                                                   (5,115)
                                          -----------   -------   ----------     ----        ------      --------      -----
Balance, December 31, 1998..............    2,952,568   $10,196   18,348,957     $183        $4,692      $(11,623)     $(630)
                                          ===========   =======   ==========     ====        ======      ========      =====
 
<CAPTION>
 
                                                             TOTAL
                                            DEFERRED     STOCKHOLDERS'
                                          COMPENSATION      DEFICIT
                                          ------------   -------------
<S>                                       <C>            <C>
Balance, January 1, 1996................    $     --       $   (336)
Issuance of preferred and common
  stock.................................                        237
Net loss................................          --           (657)
                                            --------       --------
Balance, December 31, 1996..............          --           (756)
Issuance of preferred and common
  stock.................................                         69
Issuance of preferred and common stock
  upon cancellation of notes payable....                         19
Issuance of preferred and common stock
  in satisfaction of obligation to
  stockholder...........................                         33
Repurchase of 205,532 shares of
  preferred stock and 2,215,065 shares
  of common stock.......................                       (630)
Issuance of preferred and common stock
  in connection with the acquisition of
  The Main Quad.........................                         82
Net loss................................                     (3,152)
                                            --------       --------
Balance, December 31, 1997..............          --         (4,335)
Issuance of preferred stock, net of
  issuance costs of $84.................                        (84)
Issuance of preferred and common stock
  in connection with the acquisition of
  The Main Quad.........................                        176
Issuance of preferred and common stock
  in exchange for note receivable.......                        129
Distributions to stockholders...........                     (2,320)
Deferred compensation relating to grants
  of stock options......................      (4,171)            --
Compensation relating to grants of stock
  options...............................         808            808
Net loss................................                     (5,115)
                                            --------       --------
Balance, December 31, 1998..............      (3,363)      $(10,741)
                                            ========       ========
</TABLE>
 
                   See Note 1 for information on stock split.
 
   The accompanying notes are an integral part of these financial statements.
                                       F-5
<PAGE>   68
 
                            STUDENT ADVANTAGE, INC.
 
                            STATEMENT OF CASH FLOWS
                                 (IN THOUSANDS)
 
<TABLE>
<CAPTION>
                                                                YEAR ENDED DECEMBER 31,
                                                              ---------------------------
                                                              1996      1997       1998
                                                              -----    -------    -------
<S>                                                           <C>      <C>        <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net loss..................................................  $(657)   $(3,152)   $(5,115)
  Adjustments to reconcile net loss to net cash provided by
     (used for) operating activities:
     Depreciation and amortization..........................     37        239      1,027
     Reserve for bad debts..................................     --         70         --
     Compensation expense relating to issuance of equity....     --         --        808
     Changes in assets and liabilities
       Accounts receivable..................................    (34)       (44)    (2,725)
       Prepaid expenses and other current assets............      7        (79)      (230)
       Accounts payable.....................................    266         82      1,218
       Accrued compensation.................................     --        273        615
       Accrued expenses.....................................     17        199        704
       Deferred revenue.....................................     93      5,392        998
                                                              -----    -------    -------
       Net cash provided by (used for) operating
          activities........................................   (271)     2,980     (2,700)
                                                              =====    =======    =======
CASH FLOWS FROM INVESTING ACTIVITIES
  Purchases of fixed assets.................................    (16)      (220)    (1,037)
  Acquisitions of businesses for cash.......................   (135)      (429)      (655)
                                                              -----    -------    -------
       Net cash used for investing activities...............   (151)      (649)    (1,692)
                                                              =====    =======    =======
CASH FLOWS FROM FINANCING ACTIVITIES
  Proceeds from sale of preferred stock, net................    250         88      9,916
  Repayment of note from stockholder........................     --         --        165
  Proceeds from long-term debt..............................     --         39         --
  Proceeds from short-term debt -- related party............    190         50      1,410
  Repayment of short-term debt -- related party.............     --         --     (1,635)
  Repurchase of common and preferred stock..................     --       (630)        --
  Distributions to stockholders.............................     --         --     (2,320)
                                                              -----    -------    -------
       Net cash provided by (used for) financing
          activities........................................    440       (453)     7,536
                                                              -----    -------    -------
Net increase in cash and cash equivalents...................     18      1,878      3,144
                                                              -----    -------    -------
Cash and cash equivalents, beginning of year................      8         26      1,904
                                                              -----    -------    -------
Cash and cash equivalents, end of year......................  $  26    $ 1,904    $ 5,048
                                                              =====    =======    =======
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION AND
  NON-CASH INVESTING AND FINANCING ACTIVITIES
Cash paid during the year for interest......................  $   1    $    28    $    87
                                                              =====    =======    =======
</TABLE>
 
     During 1997, the Company issued 37,045 shares of Preferred Stock and
399,244 shares of Common Stock in connection with the acquisition of a company.
 
     During 1997, the Company issued 27,440 shares of Preferred Stock and
295,736 shares of Common Stock in exchange for the cancellation of a $24,000
note payable.
 
                                       F-6
<PAGE>   69
                            STUDENT ADVANTAGE, INC.
 
                     STATEMENT OF CASH FLOWS --(CONTINUED)
 
     During 1997, the Company issued 32,792 shares of Preferred Stock and
353,404 shares of Common Stock in satisfaction of an obligation to a
stockholder.
 
     During 1998, the Company issued 65,858 shares of Preferred Stock and
709,768 shares of Common Stock in connection with a contingent payment relating
to a 1997 acquisition of a company.
 
     During 1998, the Company issued 48,022 shares of Preferred Stock and
517,538 shares of Common Stock in exchange for a note receivable of $165,000.
 
   The accompanying notes are an integral part of these financial statements.
                                       F-7
<PAGE>   70
 
                            STUDENT ADVANTAGE, INC.
 
                         NOTES TO FINANCIAL STATEMENTS
 
1.  ORGANIZATION, NATURE OF BUSINESS AND BASIS OF PRESENTATION
 
     Student Advantage, Inc. (the "Company") provides college students with
discounts on a broad range of products and services nationwide through the
Student Advantage membership program, as well as its Web site and magazine.
Student Advantage also offers marketing services to corporations seeking to
communicate effectively with the college student market.
 
     Student Advantage, Inc. is the surviving entity of a reorganization of
Student Advantage, LLC, a limited liability corporation. In October 1998,
Student Advantage, LLC effected a recapitalization pursuant to which 10,911
outstanding Members' Interests converted into a total of 6,875,000 Members'
Interests, 1,497,036 of which were Preferred Members' Interests and 5,377,964 of
which were Common Members' Interests. Each Member received the proportion of
Preferred and Common Members' Interests that corresponded to such Member's
proportion of the 10,911 Members' Interests that existed immediately prior to
the recapitalization. Immediately following such recapitalization, certain
Members sold an aggregate of 1,250,000 Preferred Members' Interests to two
investors for aggregate consideration of $10 million. Immediately following such
transaction, the Company was reorganized from an "LLC" to a "C" corporation, and
as part of such reorganization, each Member received the number of shares of
common stock and of preferred stock of the Company that was equal to the number
of common and preferred Members' Interests that such Member held immediately
prior to the reorganization. The assets and liabilities of the limited liability
corporation were transferred to Student Advantage at historical cost. The
recapitalization and reorganization have been accounted for retroactively in the
accompanying financial statements.
 
     Student Advantage operates in one segment and is subject to the risks and
uncertainties common to growing companies, including reliance on certain
customers, growth and commercial acceptance of the Internet, dependence on
principal products and services and third-party technology, activities of
competitors, dependence on key personnel such as Ray Sozzi, Student Advantage's
Chief Executive Officer, and limited operating history.
 
     Student Advantage has also experienced substantial net losses since its
inception and, as of December 31, 1998, had an accumulated deficit of $11.6
million. Such losses and accumulated deficit resulted primarily from significant
costs incurred in the development of the Company's products and services and the
preliminary establishment of the Company's infrastructure. For the foreseeable
future, the Company expects to continue to experience growth in its operating
expenses in order to execute its current business plan. As a result, the
Company's business plan indicates that additional financing would be required to
support its planned expenditures. In the event that an initial public offering
is not completed on a timely basis, the Company would likely seek such funding
through a private financing.
 
     On April 5, 1999, the Company declared a 3-for-1 stock split in the form of
a stock dividend, subject to stockholder approval. All periods presented have
been restated to reflect the stock dividend.
 
2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
  Cash and Cash Equivalents
 
     Student Advantage considers all highly liquid investments purchased with an
original maturity of three months or less to be cash equivalents. Student
Advantage invests its excess cash in money markets and certificates of deposit,
which are subject to minimal credit and market risk. Student Advantage's cash
equivalents are classified as available-for-sale and are recorded at cost which
approximates fair value.
 
                                       F-8
<PAGE>   71
                            STUDENT ADVANTAGE, INC.
 
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
 
  Revenue Recognition
 
     The Company derives subscription revenue from membership fees related to
enrolling students in the Student Advantage Membership program. Subscription
income is recognized ratably over the remaining term of the membership
agreements. Other revenue includes advertising, marketing services, and
commerce. The Company derives revenue from advertisements placed in SAM, the
Student Advantage magazine, and on its Web site. Revenue from fees related to
advertisements placed in SAM are recognized when the magazine is shipped to
members. Web site advertising revenue is recognized as the related impressions
are displayed, provided that no significant obligations remain and collection of
the related receivable is probable. Marketing services revenue is derived from
providing tailored marketing services to corporations seeking to market their
products and services to college students. Fees from marketing services are
recognized as the related services are rendered, provided that no significant
obligations remain and collection of the related receivable is probable.
Commerce revenue includes primarily transaction-based fees earned from reselling
products and services on behalf of the Company's business partners. 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.
 
  Fair Value of Financial Instruments
 
     The carrying amounts of Student Advantage's financial instruments, which
include cash equivalents, accrued expenses, notes payable and redeemable
convertible preferred stock, approximate their fair values at December 31, 1997
and 1998.
 
  Concentrations of Credit Risk and Significant Customers
 
     Financial instruments which potentially expose the Company to concentration
of credit risk primarily are comprised of trade accounts receivable. Management
believes its credit policies are prudent and reflect normal industry terms and
business risk. The Company does not anticipate non-performance by the
counterparties and, accordingly, does not require collateral. The Company
maintains reserves for potential credit losses and such losses, in the
aggregate, have not exceeded management's expectations. For the years ended
December 31, 1997 and 1998, one customer accounted for 62% and 68% of total
revenue, respectively. At December 31, 1997, three customers accounted for 62%
of accounts receivable, and at December 31, 1998, one customer accounted for 67%
of accounts receivable.
 
  Product Development
 
     Costs incurred in the product development by Student Advantage are expensed
as incurred.
 
  Property and Equipment
 
     Fixed assets are recorded at cost and depreciated over their estimated
useful lives, generally three to five years, using the straight-line method.
Repair and maintenance costs are expensed as incurred.
 
  Intangible Assets
 
     Intangible assets include the excess of the purchase price over
identifiable net assets acquired in acquisitions. Such assets include goodwill,
customer lists, noncompete agreements, Web sites and other intangible assets,
which are being amortized over the estimated economic lives of such assets
ranging from two to five years. Accumulated amortization was $231,000 and
$871,000 at December 31, 1997 and 1998, respectively.
 
                                       F-9
<PAGE>   72
                            STUDENT ADVANTAGE, INC.
 
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
 
  Accounting for Stock-Based Compensation
 
     Student Advantage accounts for stock-based awards to employees using the
intrinsic value method as prescribed by Accounting Principles Board ("APB")
Opinion No. 25, "Accounting for Stock Issued to Employees," and related
interpretations. Accordingly, no compensation expense is recorded for options
issued to employees in fixed amounts and with fixed exercise prices at least
equal to the fair market value of Student Advantage's common stock at the date
of grant. Student Advantage has adopted the provisions of SFAS No. 123,
"Accounting for Stock-Based Compensation," through disclosure only (Note 8). All
stock-based awards to non-employees are accounted for at their fair value in
accordance with SFAS No. 123.
 
  Income Taxes
 
     Prior to its reorganization as a C Corporation in 1998 (Note 1), Student
Advantage was treated as a Limited Liability Corporation for federal and state
income tax purposes. Accordingly, no provision for corporate income taxes was
recorded during this period and all losses were passed through to Student
Advantage LLC's members. At the time of its reorganization, Student Advantage
adopted the liability method of accounting for income taxes as set forth in SFAS
No. 109, "Accounting for Income Taxes."
 
  Advertising Expense
 
     Student Advantage recognizes advertising expense as incurred. Advertising
expense was approximately $182,000, $158,000 and $371,000 for the years ended
December 31, 1996, 1997 and 1998, respectively.
 
  Use of Estimates
 
     The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
 
  Unaudited Pro Forma Balance Sheet
 
     Upon the closing of Student Advantage's anticipated initial public
offering, all 2,747,036 of the outstanding shares of Series A preferred stock
(Note 6) will automatically convert into 8,241,108 shares of common stock. This
conversion has been reflected in the unaudited pro forma balance sheet as of
December 31, 1998.
 
  Net Loss Per Share and Unaudited Pro Forma Net Loss Per Share
 
     Net loss per share is computed under SFAS No. 128, "Earnings Per Share".
Basic net loss per share is computed using the weighted average number of
shares. Diluted loss per share does not differ from basic loss per share since
potential common shares from conversion of preferred stock and exercise of stock
options are anti-dilutive for all periods presented. Pro forma basic and diluted
net loss per share have been calculated assuming the conversion of all
outstanding shares of Series A preferred stock into common shares, as if the
shares had converted immediately upon their issuance.
 
  Recently Issued Accounting Pronouncements
 
     In June 1997, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 130, "Reporting Comprehensive Income". This statement establishes standards
for the reporting and display of
 
                                      F-10
<PAGE>   73
                            STUDENT ADVANTAGE, INC.
 
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
 
comprehensive income and its components. SFAS No. 130 was effective for Student
Advantage's fiscal year ended December 31, 1998. Adoption of SFAS No. 130 is for
presentation purposes only and had no effect on Student Advantage's financial
position or results of operations.
 
     In June 1997, the FASB issued SFAS No. 131, "Disclosures about Segments of
an Enterprise and Related Information" which supersedes SFAS No. 14, "Financial
Reporting for Segments of a Business Enterprise". This statement changes the way
public business enterprises report segment information, including financial and
descriptive information about their selected segment information. Under SFAS No.
131, operating segments are defined as revenue-producing components of the
enterprise which are generally used internally for evaluating segment
performance. SFAS No. 131 is effective for Student Advantage's fiscal year
ending December 31, 1998 and will not affect Student Advantage's financial
position or results of operations.
 
     In February 1998, the FASB issued SFAS No. 132, "Employers' Disclosures
about Pensions and Other Postretirement Benefits". SFAS No. 132 standardizes the
disclosure requirements for pensions and other postretirement benefits and is
effective for Student Advantage's fiscal year ended December 31, 1998. SFAS No.
132 relates to disclosure only and will not affect Student Advantage's financial
position or results of operations.
 
     In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities". The new standard establishes accounting and
reporting standards for derivative instruments, including certain derivative
instruments embedded in other contracts, (collectively referred to as
derivatives) and for hedging activities. SFAS No. 133 is effective for all
fiscal quarters of fiscal years beginning after June 15, 1999 and is effective
for Student Advantage's fiscal year ending December 31, 1999. Student Advantage
does not expect the adoption of SFAS No. 133 to have a material effect on its
financial position or results of operations.
 
     In March 1998, the Accounting Standards Executive Committee ("AcSEC")
issued Statement of Position ("SOP") 98-1, "Accounting for the Cost of Computer
Software Developed or Obtained for Internal Use" ("SOP 98-1"). SOP 98-1 is
effective for financial statements for years beginning after December 15, 1998.
SOP 98-1 provides guidance over accounting for computer software development or
obtained for internal use including the requirement to capitalize specified
costs and amortization of such costs. Student Advantage does not expect the
adoption of this standard to have a material effect on Student Advantage's
financial position or results of operation.
 
     In April 1998, AcSEC issued SOP 98-5, "Reporting on the Costs of Start-Up
Activities". Start-up activities are defined broadly as those one-time
activities related to opening a new facility, introducing a new product or
service, conducting business in a new territory, conducting business with a new
class of customer, commencing some new operation or organizing a new entity.
Under SOP 98-5, the cost of start-up activities should be expensed as incurred.
SOP 98-5 is effective for Student Advantage's fiscal 1999 financial statements
and Student Advantage does not expect its adoption to have a material effect on
its financial position or results of operations.
 
3.  ACQUISITIONS
 
     All acquisitions by Student Advantage, since its inception, have been
accounted for as purchases. Accordingly, the purchase price of each transaction
has been allocated to the assets acquired and liabilities assumed based on the
fair value of such assets and liabilities at the respective acquisition dates.
 
     In March 1996, Student Advantage completed its acquisition of The Passport,
Inc. ("Passport"), a company that operated student discount programs. Student
Advantage paid $100,000 in cash and assumed liabilities of $35,000 in exchange
for the net assets of Passport, which consisted primarily of customer lists,
non-compete agreements and other intangible assets. Accordingly, the operating
results of Passport have
                                      F-11
<PAGE>   74
                            STUDENT ADVANTAGE, INC.
 
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
 
been included in Student Advantage's financial statements since the date of
acquisition. Student Advantage is amortizing these intangible assets on a
straight-line basis over a three-year period.
 
     In December 1997, Student Advantage completed its acquisition of The Main
Quad, Inc. ("Main Quad"), a company that owned and operated Web sites focused on
students. Student Advantage paid $272,000 in cash and issued 399,244 shares of
common stock and 37,045 shares of preferred stock with an aggregate estimated
fair value of $106,000 in exchange for the net assets of The Main Quad, which
consisted of certain office equipment as well as Web sites, customer lists,
non-compete agreements and other intangible assets. Student Advantage is
amortizing these tangible and intangible assets on a straight-line basis over a
two-year period. The agreement also provided for the payment of additional
consideration by Student Advantage upon the resolution of certain contingencies.
In 1998, the agreement was amended to eliminate the contingency provisions, and
Student Advantage agreed to issue an additional 709,768 shares of common stock
and 65,858 shares of preferred stock with an aggregate fair value of $225,000
which has been recorded as additional cost of the assets acquired. The operating
results of The Main Quad have been included in Student Advantage's financial
statements since the date of acquisition.
 
     In December 1997, Student Advantage completed its acquisition of Loci, Inc.
("Loci"), a company that owned and operated a Web site focused on students.
Student Advantage paid approximately $100,000 in cash in exchange for the net
assets of Loci, which consisted of the Web site, customer lists, non-compete
agreements and other intangible assets. Accordingly, the operating results of
Loci have been included in Student Advantage's financial statements since the
date of acquisition. Student Advantage is amortizing these intangible assets on
a straight-line basis over a three-year period.
 
     Student Advantage entered into an agreement effective January 1, 1998 for
the purchase of Collegiate Advantage, Inc., a provider of marketing and
promotional services to the college community. The cost of the acquisition
consisted of $601,000 in cash (including transaction costs) and the assumption
of liabilities of $275,000. During 1998, the Company paid additional contingent
consideration of $50,000. Student Advantage may be required to pay additional
consideration based on future performance of the former Collegiate Advantage
business. The following unaudited pro forma data summarizes the results of
operations for the year ended December 31, 1997 as if the acquisition of
Collegiate Advantage had been completed on January 1, 1997. The pro forma data
gives effect to actual operating results prior to the acquisition and
adjustments to interest income and amortization of goodwill and other intangible
assets. These pro forma amounts do not purport to be indicative of the results
that would have actually been obtained if the acquisition had occurred on
January 1, 1997 or that may be obtained in the future.
 
<TABLE>
<CAPTION>
                                                             FOR THE YEAR ENDED
                                                              DECEMBER 31, 1997
                                                          -------------------------
                                                          (UNAUDITED, IN THOUSANDS,
                                                           EXCEPT PER SHARE DATA)
<S>                                                       <C>
Net revenue.............................................           $ 8,641
Net loss................................................            (3,560)
Net loss per common share:
  Basic and diluted.....................................           $ (0.23)
</TABLE>
 
                                      F-12
<PAGE>   75
                            STUDENT ADVANTAGE, INC.
 
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
 
4.  PROPERTY AND EQUIPMENT
 
          Property and equipment consist of the following (in thousands):
 
<TABLE>
<CAPTION>
                                                               DECEMBER 31,
                                                              --------------
                                                              1997     1998
                                                              ----    ------
<S>                                                           <C>     <C>
Furniture and fixtures......................................  $ 17    $   50
Computer equipment and software.............................   164       673
Equipment...................................................    90       196
Leasehold improvements......................................    --       389
                                                              ----    ------
                                                               271     1,308
Less: Accumulated depreciation and amortization.............    36       223
                                                              ----    ------
                                                              $235    $1,085
                                                              ====    ======
</TABLE>
 
     Depreciation and amortization expense with respect to property and
equipment for the years ended December 31, 1996, 1997 and 1998 was $3,000,
$20,000 and $187,000, respectively.
 
5.  BORROWINGS
 
     At December 31, 1997, the Company had two notes payable from a stockholder
in the aggregate amount of $225,000. These notes were fully repaid in 1998.
 
     During 1998, the Company entered into a $1,250,000 line of credit agreement
with a bank expiring in April of 1999. The agreement is subject to certain
financial covenants as defined in the agreement, and the assets of the Company
collateralize the related obligation. Borrowings under the agreement bear
interest at the bank's rate, which at December 31, 1998 was 9.25%. During 1998,
the Company borrowed $1,250,000 under the agreement. There were no borrowing
outstanding at December 31, 1998.
 
     In April 1999, this line of credit agreement was replaced with and
superseded by a new line of credit agreement which provides for borrowings of up
to $2.75 million, including a $250,000 equipment line of credit. The terms of
this line of credit agreement require the maintenance of certain minimum
financial ratios and conditions and includes other covenants similar to those in
the initial agreement. A termination of the Company's agreements with AT&T would
give the bank the right to terminate the credit agreement. All borrowings under
this line of credit agreement bear interest at LIBOR plus 200 basis points or at
the bank's rate, and expires in June 2000.
 
6.  PREFERRED STOCK
 
     The Series A preferred stockholders have the following rights and
privileges:
 
  Voting Rights
 
     Each holder of the Series A preferred stock is entitled to a number of
votes equal to the number of shares of common stock into which each share of
such stock is convertible. With respect to the election of directors, the Series
A preferred stockholders, voting as a single class, may elect two directors.
 
  Conversion
 
     Each share of Series A preferred stock is convertible, at the option of the
holder, into three shares of common stock, subject to certain anti-dilution
adjustments. Each share of the Series A preferred stock will automatically
convert into three shares of common stock upon the closing of an underwritten
public
 
                                      F-13
<PAGE>   76
                            STUDENT ADVANTAGE, INC.
 
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
 
offering of Student Advantage's common stock at a price to the public of at
least $4.10 per share resulting in aggregate proceeds to Student Advantage of at
least $15 million.
 
  Dividend Rights
 
     The Series A preferred stockholders are not entitled to receive any
dividends unless declared by Student Advantage's Board of Directors. In the
event that dividends are paid on the common stock, the Series A preferred
stockholders are entitled to receive dividends at the same rate and at the same
time as the common stockholders, with each share of Series A preferred stock
being treated as equal to the number of shares of common stock into which each
share of such stock is convertible.
 
  Liquidation Preferences
 
     In the event of any liquidation, dissolution or winding up of Student
Advantage, the Series A preferred stockholders are entitled to receive, in
preference to the holders of the common stock, an amount equal to the greater of
$8.00 per share, subject to certain anti-dilutive adjustments, or such amount as
would have been payable had such shares been converted to common stock just
prior to liquidation. Any assets remaining following the initial distribution to
the preferred stockholders shall be available for distribution ratably among the
common stockholders only.
 
  Redemption
 
     On October 16, 2003, at the request of at least one-third of the holders of
the Series A preferred stock, Student Advantage shall redeem the then
outstanding shares of Series A preferred stock from each holder that requests
redemption. Upon redemption, each holder of the Series A will be entitled to
receive a cash payment equal to $8.00 per share plus any declared but unpaid
dividends.
 
  Undesignated Preferred Stock
 
     On April 5, 1999 Student Advantage's Board of Directors approved, subject
to stockholder approval, 5,000,000 shares of undesignated preferred stock.
Issuances of the undesignated preferred stock may be made at the discretion of
the Board of Directors (without stockholder approval), in one or more series and
with such designations, rights and preferences as determined by the Board. As a
result, the undesignated preferred stock may have dividend, liquidation,
conversion, redemption, voting or other rights which may be more expansive than
the rights of holders of and the common stock.
 
7.  COMMON STOCK
 
  Authorized Shares
 
     On April 5, 1999, Student Advantage's Board of Directors approved, subject
to stockholder approval, an increase in the authorized shares of common stock,
$0.01 par value, to 100,000,000.
 
8.  STOCK AWARD PLANS
 
  1998 Stock Incentive Plan
 
     Under the 1998 Incentive Stock Plan, the Board of Directors may award
options and restricted stock or other stock-based awards. Incentive stock
options may not be granted at less than the fair market value of Student
Advantage's common stock at the date of grant, for a term not to exceed ten
years and generally vesting over a four-year period. The exercise price under
each non-qualified stock option shall be specified by the Board of Directors.
Awards made under the 1998 Stock Plan may be made at the discretion of the Board
of Directors with terms to be defined therein.
 
                                      F-14
<PAGE>   77
                            STUDENT ADVANTAGE, INC.
 
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
 
     On April 5, 1999, the Board approved, subject to stockholder approval, an
increase in the 1998 Stock Plan providing for the issuance of up to an aggregate
7,500,000 shares of Student Advantage common stock to eligible employees,
officers, directors, consultants and advisors of Student Advantage.
 
     Prior to 1998, there was no compensation expense recognized for stock
option grants made by Student Advantage under APB Opinion No. 25. For the year
ended December 31, 1998, compensation expense recognized for stock option grants
totaled $808,000. Had compensation cost for Student Advantage's option grants
been determined based on the fair value at the date of grant consistent with the
method prescribed by SFAS No. 123, Student Advantage's net loss and net loss per
share would have increased to the pro forma amounts indicated below:
 
<TABLE>
<CAPTION>
                                                          YEAR ENDED
                                                       DECEMBER 31, 1998
                                                     ---------------------
                                                     (IN THOUSANDS, EXCEPT
                                                        PER SHARE DATA)
<S>                                                  <C>
Net loss:
  As reported......................................         $(5,115)
  Pro forma........................................          (5,139)
Basic and diluted net loss per share...............
  As reported......................................            0.32
  Pro forma........................................            0.32
</TABLE>
 
     Because the determination of the fair value of all options granted after
Student Advantage becomes a public entity will include an expected volatility
factor, because additional option grants are expected to be made subsequent to
December 31, 1998, and because most options vest over several years, the pro
forma effects of applying the fair value method may be material to the results
of operations in future years.
 
     Under SFAS No. 123, the fair value of each employee option grant is
estimated on the date of grant using the Black-Scholes option pricing model to
apply the minimum value method with the following weighted-average assumptions
used for grants made during the year ended December 31, 1998: no dividend yield;
risk free interest rates of 4.54%; no volatility; and an expected option term of
4 years.
 
     Stock option activity during the year ended December 31, 1998 was as
follows:
 
<TABLE>
<CAPTION>
                                                          OUTSTANDING OPTIONS
                                                         ----------------------
                                                                      WEIGHTED-
                                                                       AVERAGE
                                                          NUMBER      EXERCISE
                                                         OF SHARES      PRICE
                                                         ---------    ---------
<S>                                                      <C>          <C>
Outstanding -- January 1, 1998
  Granted (weighted average fair value of $1.86).......  2,313,000      $0.33
  Exercised............................................         --
  Canceled.............................................         --
                                                         ---------      -----
Outstanding -- December 31, 1998.......................  2,313,000      $0.33
                                                         =========      =====
</TABLE>
 
     As of December 31, 1998, 1,887,000 shares were available for grant under
the 1998 Stock Plan.
 
     The following table summarizes information about stock options outstanding
at December 31, 1998:
 
<TABLE>
<CAPTION>
                                               VESTED AND EXERCISABLE
                         WEIGHTED-AVERAGE   ----------------------------
                            REMAINING                   WEIGHTED-AVERAGE
EXERCISE     NUMBER      CONTRACTUAL LIFE   NUMBER OF       EXERCISE
 PRICE     OUTSTANDING      (IN YEARS)       SHARES          PRICE
--------   -----------   ----------------   ---------   ----------------
<S>        <C>           <C>                <C>         <C>
 $0.33      2,313,000          9.31           450,535        $0.33
</TABLE>
 
                                      F-15
<PAGE>   78
                            STUDENT ADVANTAGE, INC.
 
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
 
  1999 Employee Stock Purchase Plan
 
     On April 5, 1999, the Board of Directors authorized, subject to stockholder
approval, the 1999 Employee Stock Purchase Plan (the "Purchase Plan"). The
Purchase Plan provides for the issuance of up to 450,000 shares of Student
Advantage's common stock to eligible employees. Under the Purchase Plan, Student
Advantage is authorized to make one or more offerings during which employees may
purchase shares of common stock through payroll deductions made over the term of
the offering. The per-share purchase price at the end of each offering is equal
to 85% of the closing price of the common stock at the beginning or end of the
offering period (as defined by the Purchase Plan), whichever is lower. Student
Advantage has made no determination as to when the first offering period under
the Purchase Plan will commence.
 
  Deferred Compensation
 
     During 1998, Student Advantage granted stock options to purchase 2,313,000
shares of its common stock with an exercise price of $0.33 per share. Student
Advantage recorded compensation expense and deferred compensation relating to
these options totaling $808,000 and $4.2 million, respectively, representing the
differences between the estimated fair market value of the common stock on the
date of grant and the exercise price. Compensation relating to options which
vested immediately upon grant was expensed in full at the date of grant, while
compensation related to options which vest over time was recorded as a component
of stockholders' deficit and is being amortized over the vesting periods of the
related options.
 
9.  INCOME TAXES
 
     Deferred tax assets are comprised of the following:
 
<TABLE>
<CAPTION>
                                                       DECEMBER 31, 1998
                                                       -----------------
<S>                                                    <C>
Deferred tax assets:
  Deferred revenue...................................     $ 2,400,000
  Net operating loss carryforwards...................         800,000
  Non current assets.................................         200,000
  Accruals...........................................         300,000
  Deferred compensation..............................         300,000
  Other..............................................         100,000
                                                          -----------
          Total deferred tax assets..................       4,100,000
Deferred tax asset valuation allowance...............      (4,100,000)
                                                          -----------
                                                          $        --
                                                          ===========
</TABLE>
 
     The Company has provided a full valuation allowance for the deferred tax
assets since it is more likely than not that these future benefits will not be
realized. If the Company achieves future profitability, a significant portion of
these deferred tax assets could be available to offset future income taxes.
 
     At December 31, 1998, the Company has a net operating loss carryforward for
federal and state purposes of approximately $2 million which expires through
2018.
 
     Under the Internal Revenue Code, certain substantial changes in the
Company's ownership could result in an annual limitation on the amount of net
operating loss and tax credit carryforwards which can be utilized in future
years.
 
                                      F-16
<PAGE>   79
                            STUDENT ADVANTAGE, INC.
 
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
 
10.  EMPLOYEE SAVINGS PLAN
 
     During 1998, Student Advantage adopted an employee retirement savings plan
under Section 401(k) of the Internal Revenue Code which covers substantially all
employees. Under the terms of the 401(k) Plan, employees may contribute a
percentage of their salary, up to a maximum of 20%. Student Advantage
contributed $61,000 to the 401(k) Plan on behalf of its employees during 1998.
 
11.  COMMITMENTS AND CONTINGENCIES
 
     Student Advantage leases its operating facility and certain office
equipment under noncancelable operating lease agreements. Rent expense under
these leases for the years ended December 31, 1996, 1997 and 1998, totalled
approximately $44,000, $246,000 and $722,000, respectively.
 
     Future minimum lease payments under noncancelable operating leases at
December 31, 1998 are as follows:
 
<TABLE>
<CAPTION>
                                                           OPERATING
                                                             LEASES
                                                           ----------
<S>                                                        <C>
1999.....................................................  $  799,000
2000.....................................................     708,000
2001.....................................................     496,000
2002.....................................................     437,000
2003.....................................................     437,000
Thereafter...............................................     238,000
                                                           ----------
Total minimum lease payments.............................  $3,115,000
                                                           ==========
</TABLE>
 
  Legal Proceedings
 
     Student Advantage is from time to time subject to legal proceedings and
claims which 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 Student Advantage's financial position or
results of operations.
 
12.  SUBSEQUENT EVENT
 
     On April 1, 1999, Student Advantage completed its acquisitions of The
Travel Holding Group, LLC and The Campus Agency, LLC. The Campus Agency provides
media planning and strategy consulting services to the U.S. student travel
market. The Travel Holding Group is a reseller of Eurail passes. The
acquisitions have been accounted for under the purchase method of accounting and
the results of operations of each company will be included in Student
Advantage's results beginning on the acquisition date. Goodwill and other
intangible assets in the aggregate amount of $280,000 were recorded in
connection with these acquisitions and will be amortized over 3 years. Because
the historical results of Campus Agency and Travel Holding Group are immaterial,
pro forma financial information has not been presented.
 
                                      F-17
<PAGE>   80
 
                       REPORT OF INDEPENDENT ACCOUNTANTS
 
To the Board of Directors and Stockholders
  of Student Advantage, Inc.
 
     In our opinion, the accompanying balance sheet and the related statements
of operations, of changes in stockholders' equity and of cash flows present
fairly, in all material respects, the financial position of Collegiate
Advantage, Inc. at December 31, 1997, and the results of its operations and its
cash flows for the year then ended, in conformity with generally accepted
accounting principles. These financial statements are the responsibility of the
Company's management; our responsibility is to express an opinion on these
financial statements based on our audit. We conducted our audit of these
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for the opinion expressed above.
 
/s/ PricewaterhouseCoopers LLP
 
PricewaterhouseCoopers LLP
 
Boston, Massachusetts
April 5, 1999
 
                                      F-18
<PAGE>   81
 
                           COLLEGIATE ADVANTAGE, INC.
 
                                 BALANCE SHEET
                               DECEMBER 31, 1997
 
<TABLE>
<S>                                                           <C>
                                 ASSETS
Current assets
  Cash......................................................  $  304,665
  Accounts receivable (net of allowance for doubtful
     accounts of $20,000)...................................     851,195
  Costs in excess of billings...............................      65,337
  Prepaid expenses and other current assets.................      25,442
                                                              ----------
          Total current assets..............................   1,246,639
Fixed assets, net...........................................     275,630
Deposits....................................................      15,194
                                                              ----------
          Total assets......................................  $1,537,463
                                                              ==========
                  LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
  Accrued payroll...........................................  $  131,099
  Accounts payable..........................................     265,470
  Deferred revenue..........................................     371,092
                                                              ----------
          Total current liabilities.........................     767,661
                                                              ----------
Commitments (Note 4)
Stockholders' equity
  Capital stock, no par value; 15,000 shares authorized; 100
     shares issued and outstanding at December 31, 1997.....       2,000
  Retained earnings.........................................     767,802
                                                              ----------
          Total stockholders' equity........................     769,802
                                                              ----------
          Total liabilities and stockholders' equity........  $1,537,463
                                                              ==========
</TABLE>
 
   The accompanying notes are an integral part of these financial statements.
                                      F-19
<PAGE>   82
 
                           COLLEGIATE ADVANTAGE, INC.
 
                            STATEMENT OF OPERATIONS
                      FOR THE YEAR ENDED DECEMBER 31, 1997
 
<TABLE>
<S>                                                           <C>
Revenue.....................................................  $4,849,270
Cost of revenue.............................................   3,812,075
                                                              ----------
  Gross profit..............................................   1,037,195
General and administrative expenses.........................   1,207,580
                                                              ----------
  Loss from operations......................................    (170,385)
                                                              ----------
Interest and other income:
  Interest income...........................................      10,209
  Other income..............................................      17,611
                                                              ----------
                                                                  27,820
                                                              ----------
Net loss....................................................  $ (142,565)
                                                              ==========
</TABLE>
 
   The accompanying notes are an integral part of these financial statements.
                                      F-20
<PAGE>   83
 
                           COLLEGIATE ADVANTAGE, INC.
 
                  STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                      FOR THE YEAR ENDED DECEMBER 31, 1997
 
<TABLE>
<CAPTION>
                                                      COMMON STOCK
                                                   ------------------
                                                             CARRYING     RETAINED
                                                   SHARES     VALUE       EARNINGS       TOTAL
                                                   ------    --------    ----------    ----------
<S>                                                <C>       <C>         <C>           <C>
Balance at December 31, 1996.....................   100       $2,000     $1,041,517    $1,043,517
Net loss.........................................                          (142,565)     (142,565)
Dividends paid...................................                          (131,150)     (131,150)
                                                    ---       ------     ----------    ----------
Balance at December 31, 1997.....................   100       $2,000     $  767,802    $  769,802
                                                    ===       ======     ==========    ==========
</TABLE>
 
   The accompanying notes are an integral part of these financial statements.
                                      F-21
<PAGE>   84
 
                           COLLEGIATE ADVANTAGE, INC.
 
                            STATEMENT OF CASH FLOWS
                      FOR THE YEAR ENDED DECEMBER 31, 1997
 
<TABLE>
<S>                                                           <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net loss..................................................  $(142,565)
  Adjustments to reconcile net income to net cash provided
     by operating activities:
     Depreciation and amortization..........................    110,691
     Changes in operating assets and liabilities
       Accounts receivable..................................   (132,065)
       Costs in excess of billings..........................     37,531
       Prepaid expenses and other current assets............     12,353
       Accrued payroll......................................    131,099
       Accounts payable.....................................     15,039
       Deferred revenue.....................................    353,092
                                                              ---------
          Net cash provided by operating activities.........    385,175
                                                              ---------
CASH FLOWS FROM INVESTING ACTIVITIES
  Purchases of fixed assets.................................    (88,516)
                                                              ---------
CASH FLOWS FROM FINANCING ACTIVITIES
  Dividends paid............................................   (131,150)
                                                              ---------
Net increase in cash........................................    165,509
Cash, beginning of year.....................................    139,156
                                                              ---------
Cash, end of year...........................................  $ 304,665
                                                              =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
  Cash paid during the year for interest....................  $     338
                                                              =========
</TABLE>
 
   The accompanying notes are an integral part of these financial statements.
                                      F-22
<PAGE>   85
 
                           COLLEGIATE ADVANTAGE, INC.
 
                         NOTES TO FINANCIAL STATEMENTS
 
1.  ORGANIZATION, NATURE OF BUSINESS AND BASIS OF PRESENTATION
 
     Collegiate Advantage, Inc. operates in one business segment and is engaged
primarily in providing promotional, marketing and advertising services on
college campuses throughout the United States.
 
2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
  Use of Estimates
 
     The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates.
 
  Cash
 
     All highly liquid investments with an original maturity of three months or
less are considered to be cash equivalents. The Company maintains its cash in
bank deposit accounts which at times, may exceed federally insured limits. The
Company does not believe that it is exposed to significant credit risk
concerning cash and cash equivalents.
 
  Accounts Receivable, Concentration of Credit Risk and Significant Customers
 
     Financial statements which potentially expose the Company to concentrations
of credit risk include accounts receivable. The Company does not require
collateral but closely monitors amounts receivable from customers.
 
     During 1997, the Company earned approximately 61% of its revenue from one
customer. Additionally, the Company had $433,222 of accounts receivable and
$371,092 of deferred revenue related to this customer at December 31, 1997.
 
  Fixed Assets
 
     Fixed assets are recorded at cost and depreciated using the straight-line
method over their estimated useful lives. Maintenance and repairs costs are
expensed as incurred.
 
  Income Taxes
 
     Collegiate Advantage has elected, by consent of its stockholders, to be
taxed under the provisions of Subchapter S of the Internal Revenue Code for
income tax return purposes. Under these provisions, the Company does not pay
Federal income taxes on its taxable income. Instead, the stockholders are liable
for individual Federal income taxes on the Company's taxable income. Thus, the
Company does not incur Federal income tax obligations.
 
  Advertising Expense
 
     Collegiate Advantage recognizes advertising expense as incurred.
Advertising expense was approximately $11,469 for the year ended December 31,
1997.
 
                                      F-23
<PAGE>   86
                           COLLEGIATE ADVANTAGE, INC.
 
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
 
  Revenue Recognition
 
     Revenue is recognized as services are performed, provided that all
significant obligations have been fulfilled and collection of the related
receivable is probable. Billings and payments in advance of the recognition of
revenue are recorded as deferred revenue.
 
3.  FIXED ASSETS
 
     Fixed assets consist of the following:
 
<TABLE>
<CAPTION>
                                                        ESTIMATED
                                                       USEFUL LIVES    DECEMBER 31,
                                                        (IN YEARS)         1997
                                                       ------------    ------------
<S>                                                    <C>             <C>
Computers and equipment..............................     5              $374,381
Furniture and fixtures...............................   5 - 7              37,523
Motor vehicles.......................................     3               107,626
Leasehold improvements...............................     3                23,050
                                                                         --------
                                                                          542,580
Less -- accumulated depreciation and amortization....                    (266,950)
                                                                         --------
                                                                         $275,630
                                                                         ========
</TABLE>
 
     Depreciation and amortization expense totaled $110,691 for the year ended
December 31, 1997.
 
4.  COMMITMENTS
 
  Service Agreement
 
     During 1997, Collegiate Advantage negotiated the redemption of a 50%
stockholder's interest in the Company. The stock was purchased directly from the
50% stockholder by another stockholder of the Company. In connection with this
arrangement, the Company entered into a service consulting agreement with the
former stockholder which expires on December 31, 2000 unless terminated earlier
under the provisions of the agreement. The Company is required to pay $25,000 on
the last day of each calendar quarter commencing on March 31, 1998.
 
  Leases
 
     Collegiate Advantage leases its facilities and certain equipment under
operating leases extending through 1998. In addition to rent, Collegiate
Advantage is responsible for incremental operating costs, including real estate
taxes, on each property. Expenses incurred under these leases during the year
ended December 31, 1997 totaled $193,483.
 
     Future minimum lease payments under operating leases are as follows:
 
<TABLE>
<S>                                                         <C>
1998......................................................  $187,099
1999......................................................    91,290
                                                            --------
                                                            $278,389
                                                            ========
</TABLE>
 
5.  EMPLOYEE BENEFIT PLANS
 
     During 1995, Collegiate Advantage implemented a defined contribution profit
sharing plan covering all eligible employees. Employer contributions are at the
discretion of management. Collegiate Advantage elected not to make any
contributions to the plan in 1997.
 
                                      F-24
<PAGE>   87
                           COLLEGIATE ADVANTAGE, INC.
 
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
 
     In addition, Collegiate Advantage established an employee savings and
profit sharing plan during 1995. Employees may contribute to the employee
savings plan subject to the provisions of Code Section 401(k) of the Internal
Revenue Code. Collegiate Advantage matches employee contributions up to 6.0% of
eligible compensation. Collegiate Advantage contributed $20,031 to this plan in
1997.
 
6.  LINE OF CREDIT
 
     During 1997, the Company entered into a $450,000 line of credit agreement
with a bank. Borrowings under the agreement bear interest at the bank's prime
rate plus 0.5% (9.0% at December 31, 1997). At December 31, 1997, there were no
advances outstanding under this line of credit.
 
7.  RELATED PARTY TRANSACTIONS
 
     During 1997, Collegiate Advantage, Inc. paid $373,883 to Event Staffers,
L.L.C., a related company under common control, for payroll services provided to
Collegiate Advantage and related administrative expenses.
 
8.  SUBSEQUENT EVENT
 
     The Company entered into an agreement effective January 1, 1998 to be
purchased by Student Advantage. Student Advantage, paid $601,000 and assumed
$275,000 of the Company's liabilities in connection with the acquisition.
Student Advantage may be required to pay additional consideration based on the
future performance of the Company's former business.
 
                                      F-25
<PAGE>   88
 
                       REPORT OF INDEPENDENT ACCOUNTANTS
 
To the Board of Directors and Stockholders
  of Student Advantage, Inc.
 
     In our opinion, the accompanying balance sheet and the related statements
of operations, of changes in stockholders' deficit and of cash flows present
fairly, in all material respects, the financial position of The Main Quad, Inc.
at December 6, 1997, and the results of its operations and its cash flows for
the period from January 1, 1997 through December 6, 1997, in conformity with
generally accepted accounting principles. These financial statements are the
responsibility of the Company's management; our responsibility is to express an
opinion on these financial statements based on our audit. We conducted our audit
of these statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for the opinion expressed above.
 
/s/ PricewaterhouseCoopers LLP
 
PricewaterhouseCoopers LLP
 
Boston, Massachusetts
April 5, 1999
 
                                      F-26
<PAGE>   89
 
                              THE MAIN QUAD, INC.
 
                                 BALANCE SHEET
                                DECEMBER 6, 1997
 
<TABLE>
<S>                                                           <C>
                                ASSETS
Current assets
  Accounts receivable.......................................  $  32,743
  Prepaid expenses..........................................      5,800
                                                              ---------
          Total current assets..............................     38,543
Fixed assets, net...........................................     18,431
                                                              ---------
          Total assets......................................  $  56,974
                                                              =========
                 LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
  Accounts payable..........................................  $  45,608
  Advance from Student Advantage............................     25,000
  Current portion of capital lease obligations..............     10,019
  Notes payable founders and related parties................    187,511
                                                              ---------
          Total current liabilities.........................    268,138
Capital lease obligations...................................      1,790
                                                              ---------
          Total liabilities.................................    269,928
                                                              ---------
Commitments (Note 6)
Stockholders' deficit
  Series A Preferred Stock, $0.50 par value; 500,000 shares
     authorized; 120,000 shares issued and outstanding at
     December 6, 1997.......................................     60,000
  Series B Preferred Stock, $0.55 par value; 570,000 shares
     authorized; 387,724 shares issued and outstanding at
     December 6, 1997.......................................    213,248
  Common Stock, $0.01 par value; 5,000,000 shares
     authorized; 1,560,000 shares issued and outstanding at
     December 6, 1997.......................................     15,600
  Stock subscription receivable.............................    (13,120)
  Accumulated deficit.......................................   (488,682)
                                                              ---------
          Total stockholders' deficit.......................   (212,954)
                                                              ---------
          Total liabilities and stockholders' deficit.......  $  56,974
                                                              =========
</TABLE>
 
   The accompanying notes are an integral part of these financial statements.
                                      F-27
<PAGE>   90
 
                              THE MAIN QUAD, INC.
 
                            STATEMENT OF OPERATIONS
          FOR THE PERIOD FROM JANUARY 1, 1997 THROUGH DECEMBER 6, 1997
 
<TABLE>
<S>                                                           <C>
Revenue.....................................................  $  96,908
Cost of revenue.............................................     46,118
                                                              ---------
  Gross profit..............................................     50,790
                                                              ---------
Operating expenses
  Product development.......................................     31,232
  Selling and marketing.....................................     22,313
  General and administrative................................    125,531
                                                              ---------
                                                                179,076
                                                              ---------
  Net loss..................................................  $(128,286)
                                                              =========
</TABLE>
 
   The accompanying notes are an integral part of these financial statements.
                                      F-28
<PAGE>   91
 
                              THE MAIN QUAD, INC.
 
                 STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT
          FOR THE PERIOD FROM JANUARY 1, 1997 THROUGH DECEMBER 6, 1997
 
<TABLE>
<CAPTION>
                                SERIES A             SERIES B
                             PREFERRED STOCK     PREFERRED STOCK        COMMON STOCK
                            -----------------   ------------------   -------------------   SUBSCRIPTION   ACCUMULATED
                            SHARES    AMOUNT    SHARES     AMOUNT     SHARES     AMOUNT     RECEIVABLE      DEFICIT       TOTAL
                            -------   -------   -------   --------   ---------   -------   ------------   -----------   ---------
<S>                         <C>       <C>       <C>       <C>        <C>         <C>       <C>            <C>           <C>
Balance, January 1,
  1997....................  120,000   $60,000                        1,560,000   $15,600     $(13,120)     $(360,396)   $(297,916)
Issuance of Series B
  Preferred Stock.........                      387,724   $213,248                                                        213,248
Net loss..................                                                                                  (128,286)    (128,286)
                            -------   -------   -------   --------   ---------   -------     --------      ---------    ---------
Balance, December 6,
  1997....................  120,000   $60,000   387,724   $213,248   1,560,000   $15,600     $(13,120)     $(488,682)   $(212,954)
                            =======   =======   =======   ========   =========   =======     ========      =========    =========
</TABLE>
 
   The accompanying notes are an integral part of these financial statements.
 
                                      F-29
<PAGE>   92
 
                              THE MAIN QUAD, INC.
 
                            STATEMENT OF CASH FLOWS
          FOR THE PERIOD FROM JANUARY 1, 1997 THROUGH DECEMBER 6, 1997
 
<TABLE>
<S>                                                           <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net loss..................................................  $(128,286)
  Adjustments to reconcile net loss to net cash used for
     operating activities:
     Depreciation and amortization..........................     28,582
     Changes in operating assets and liabilities
       Accounts receivable..................................    (24,480)
       Prepaid expenses.....................................     (2,850)
       Other assets.........................................     45,285
       Accounts payable.....................................    (24,060)
       Accrued expenses.....................................     (9,736)
       Deferred revenue.....................................       (550)
                                                              ---------
       Net cash used for operating activities...............   (116,095)
                                                              ---------
CASH FLOWS FROM INVESTING ACTIVITIES
  Purchases of fixed assets.................................     (1,359)
                                                              ---------
CASH FLOWS FROM FINANCING ACTIVITIES
  Proceeds from issuance of Series B Preferred Stock........    213,248
  Advance from Student Advantage............................     25,000
  Repayment of notes........................................   (110,234)
  Payment of capital leases.................................    (10,607)
                                                              ---------
       Net cash provided by financing activities............    117,407
                                                              ---------
Net decrease in cash........................................        (47)
Cash, beginning of period...................................         47
                                                              ---------
Cash, end of period.........................................  $      --
                                                              =========
Supplemental disclosure of cash flow information
  Cash paid for interest....................................  $   2,275
                                                              =========
</TABLE>
 
   The accompanying notes are an integral part of these financial statements.
 
                                      F-30
<PAGE>   93
 
                              THE MAIN QUAD, INC.
 
                         NOTES TO FINANCIAL STATEMENTS
 
1.  NATURE OF THE BUSINESS
 
     The Main Quad, Inc. (the "Company") is organized as a California
corporation. The Company also runs a comprehensive Web site positioned as an
online collection of services and content for students in the United States.
 
2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
  Revenue Recognition
 
     The Company derives revenue from advertisements placed on its Web site and
from providing other advertising services to corporate sponsors participating in
the network. Sponsor advertising revenue is recognized when all significant
obligations have been fulfilled and collection of the related receivable is
probable. Web site advertising revenue is recognized as the related impressions
are displayed, provided that no significant obligations of the Company remain
and collection of the related receivable is probable.
 
  Use of Estimates
 
     The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
 
  Concentration of Credit Risk and Significant Customers
 
     Financial instruments which potentially expose the Company to concentration
of credit risk include accounts receivable. The Company does not require
collateral but closely monitors amounts receivable from customers.
 
     Revenue of approximately $27,000 (28%) and $14,500 (15%) was attributable
to two separate customers during the period from January 1, 1997 through
December 6, 1997.
 
  Fixed Assets
 
     Fixed assets are recorded at cost and depreciated using the straight-line
method over their estimated useful lives. Maintenance and repair costs are
expenses as incurred.
 
3.  FIXED ASSETS
 
     Fixed assets consist of the following:
 
<TABLE>
<CAPTION>
                                                         ESTIMATED
                                                        USEFUL LIFE    DECEMBER 6,
                                                          (YEARS)         1997
                                                        -----------    -----------
<S>                                                     <C>            <C>
Computer equipment and software.......................       3          $ 26,646
Furniture and fixtures................................       5             3,250
Office equipment......................................       5            35,332
                                                                        --------
                                                                          65,228
Less -- accumulated depreciation and amortization.....                   (46,797)
                                                                        --------
                                                                        $ 18,431
                                                                        ========
</TABLE>
 
                                      F-31
<PAGE>   94
                              THE MAIN QUAD, INC.
 
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
 
     Depreciation and amortization expense totaled $28,572 for the period from
January 1, 1997 through December 6, 1997.
 
4.  BORROWINGS
 
     The Company's borrowings consist of the following at December 6, 1997:
 
<TABLE>
<CAPTION>
                                                                         DECEMBER 6,
                                                                            1997
                                                                         -----------
<S>                                                        <C>           <C>
Notes payable, founders:
Non-interest bearing promissory notes payable to founders.............    $ 21,215
Notes payable, other related parties:
  Non-interest bearing promissory notes payable to other related
     parties..........................................................     166,296
                                                                          --------
                                                                          $187,511
                                                                          ========
</TABLE>
 
5.  SERIES A AND SERIES B PREFERRED STOCK
 
     The Series A and Series B Preferred Stock have the following
characteristics:
 
  Voting
 
     Except with regard to actions on which the Series A and Series B
Stockholders are entitled to vote as a separate class, the holders of Series A
and Series B Preferred Stock vote together with all other classes and series of
stock on all actions to be taken by the stockholders of the Company.
 
  Dividends
 
     The holders of the outstanding Series A and Series B Preferred Stock shall
be entitled to receive, when and as declared by the Board of Directors,
dividends at the rate of 8% ($0.04) per share per annum, payable in preference
and priority to any payment of any dividend on Common Stock. Such preferential
dividend rights of the Series A and Series B Preferred Stock shall have equal
priority to one another. Such dividends shall not be cumulative, and no right to
such dividends shall accrue to holders of Series A or Series B Preferred Stock
unless declared by the Board of Directors.
 
  Liquidation Preference
 
     In the event of any liquidation, dissolution, or winding-up of the Company,
the holders of Series A and Series B Preferred Stock are entitled to receive,
prior to and in preference to holders of Common Stock, the amount equal to the
original purchase price for their respective series of Preferred Stock on a pro
rata basis with all Preferred Stockholders, plus an amount equal to all declared
but unpaid dividends on the Series A and Series B Preferred Stock.
 
  Conversion
 
     Each share of Series A and Series B Preferred Stock may be converted, at
the option of the holders thereof, at any time after the date of the issuance,
into one share of Common Stock, subject to adjustment in the event of stock
split, combination or recapitalization.
 
  Warrants
 
     In connection with the issuance of Series A and Series B Preferred Stock,
the Company issued warrants to purchase 40,000 shares of Series A Preferred
Stock and 69,093 shares of Series B Preferred
 
                                      F-32
<PAGE>   95
                              THE MAIN QUAD, INC.
 
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
 
Stock at their respective par values. These warrants are immediately
exercisable, and will terminate five years from the date of issuance, unless the
Company's initial sale of its Common Stock in a public offering or the
acquisition of the Company occurs prior to that date.
 
6.  COMMON STOCK
 
     Each share of Common Stock entitles the holder to one vote on all matters
submitted to a vote of the Company's stockholders. Common stockholders are
entitled to receive dividends, if any, as may be declared by the Board of
Directors, subject to the preferential dividend rights of the Series A and
Series B Preferred stockholders.
 
7.  COMMITMENTS
 
     The Company leases its office space and certain office equipment under
non-cancelable operating and capital leases. Total rent expense under these
leases was approximately $41,600 for the period from January 1, 1997 through
December 6, 1997.
 
     Future minimum lease commitments at December 6, 1997 are as follows:
 
<TABLE>
<CAPTION>
                                                             CAPITAL
YEAR ENDING DECEMBER 31,                                     LEASES
------------------------                                     -------
<S>                                                          <C>
1998.....................................................    $11,063
1999.....................................................      1,844
                                                             -------
                                                              12,097
Less: portion representing interest......................     (1,098)
                                                             -------
                                                             $11,809
                                                             =======
</TABLE>
 
     There are no lease commitments for the period from December 7, 1997 through
December 31, 1997.
 
8.  SUBSEQUENT EVENT
 
     In December of 1997, the Company was purchased by Student Advantage.
Student Advantage paid $272,000 in cash and issued 270 Members' Interests with
an estimated fair value of $106,000 in exchange for the net assets of the
Company, which consisted of certain office equipment as well as customer lists,
non-compete agreements and other intangible assets. In 1998, the agreement was
amended to eliminate the contingency provisions, and Student Advantage agreed to
issue an additional 480 Members' Interests with an aggregate fair value of
$225,000.
 
                                      F-33
<PAGE>   96
     [The graphic on the inside back cover is a triangle centered in the middle
of the page with the terms students, universities and businesses on each point
of the triangle.

     A circle in the middle of the triangle has 3 arrows pointing towards
students, businesses and universities and represents Student Advantage as the
intersection of these three communities. The Student Advantage logo is at the
top of the page and the heading Student Advantage is centered beneath the logo.]


<PAGE>   97
 
                                     [LOGO]
<PAGE>   98
 
                                    PART II
 
                     INFORMATION NOT REQUIRED IN PROSPECTUS
 
ITEM 13.  OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
 
     The following table sets forth the various expenses, in connection with the
sale and distribution of the securities being registered. All amounts shown are
estimates except for the Securities and Exchange Commission registration fee and
the NASD filing fee.
 
<TABLE>
<CAPTION>
<S>                                                           <C>
SEC registration fee........................................  $  22,379
NASD filing fee.............................................      8,550
Nasdaq National Market listing fee..........................          *
Blue Sky fees and expenses..................................          *
Transfer Agent and Registrar fees...........................     10,000
Accounting fees and expenses................................          *
Legal fees and expenses.....................................          *
Printing and mailing expenses...............................          *
Miscellaneous...............................................          *
                                                              ---------
          Total.............................................  $       *
                                                              =========
</TABLE>
 
---------------
 
* To be completed by amendment.
 
ITEM 14.  INDEMNIFICATION OF DIRECTORS AND OFFICERS
 
     Article EIGHTH of the Registrant's Amended and Restated Certificate of
Incorporation (the "Restated Certificate of Incorporation") provides that no
director of the Registrant shall be personally liable for any monetary damages
for any breach of fiduciary duty as a director, except to the extent that the
Delaware General Corporation Law prohibits the elimination or limitation of
liability of directors for breach of fiduciary duty.
 
     Article NINTH of the Registrant's Amended and Restated Certificate of
Incorporation provides that a director or officer of the Registrant (a) shall be
indemnified by the Registrant against all expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement incurred in connection with any
litigation or other legal proceeding (other than an action by or in the right of
the Registrant) brought against him by virtue of his position as a director or
officer of the Registrant if he acted in good faith and in a manner he
reasonably believed to be in, or not opposed to, the best interests of the
Registrant, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful and (b) shall be
indemnified by the Registrant against all expenses (including attorneys' fees)
and amounts paid in settlement incurred in connection with any action by or in
the right of the Registrant brought against him by virtue of his position as a
director or officer of the Registrant if he acted in good faith and in a manner
he reasonably believed to be in, or not opposed to, the best interests of the
Registrant, except that no indemnification shall be made with respect to any
matter as to which such person shall have been adjudged to be liable to the
Registrant, unless the Court of Chancery of Delaware determines that, despite
such adjudication but in view of all of the circumstances, he is entitled to
indemnification of such expenses. Notwithstanding the foregoing, to the extent
that a director or officer has been successful, on the merits or otherwise,
including, without limitation, the dismissal of an action without prejudice, he
is required to be indemnified by the Registrant against all expenses (including
attorneys' fees) incurred in connection therewith. Expenses shall be advanced to
a director or officer at his request, unless it is determined that he did not
act in good faith and in a manner he reasonably believed to be in, or not
opposed to, the best interests of the Registrant, and, with respect to any
criminal action or proceeding had reasonable cause to believe that his conduct
was unlawful, provided that he undertakes to repay the amount advanced if it is
ultimately determined that he is not entitled to indemnification for such
expenses.
 
                                      II-1
<PAGE>   99
 
     Indemnification is required to be made unless the Registrant determines
that the applicable standard of conduct required for indemnification has not
been met. In the event of a determination by the Registrant that the director or
officer did not meet the applicable standard of conduct required for
indemnification, or if the Registrant fails to make an indemnification payment
within 60 days after such payment is claimed by such person, such person is
permitted to petition the court to make an independent determination as to
whether such person is entitled to indemnification. As a condition precedent to
the right of indemnification, the director or officer must give the Registrant
notice of the action for which indemnity is sought and the Registrant has the
right to participate in such action or assume the defense thereof.
 
     Article NINTH of the Registrant's Amended and Restated Certificate of
Incorporation further provides that the indemnification provided therein is not
exclusive, and provides that in the event that the Delaware General Corporation
Law is amended to expand the indemnification permitted to directors or officers
the Registrant must indemnify those persons to the fullest extent permitted by
such law as so amended.
 
     Section 145 of the Delaware General Corporation Law provides that a
corporation has the power to indemnify a director, officer, employee or agent of
the corporation and certain other persons serving at the request of the
corporation in related capacities against amounts paid and expenses incurred in
connection with an action or proceeding to which he is or is threatened to be
made a party by reason of such position, if such person shall have acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation, and, in any criminal proceeding, if such person
had no reasonable cause to believe his conduct was unlawful; provided that, in
the case of actions brought by or in the right of the corporation, no
indemnification shall be made with respect to any matter as to which such person
shall have been adjudged to be liable to the corporation unless and only to the
extent that the adjudicating court determines that such indemnification is
proper under the circumstances.
 
     The Registrant has entered into agreements to indemnify its directors and
officers, in addition to the indemnification provided for in the Registrant's
Amended and Restated Certificate of Incorporation. These agreements, among other
things, indemnify the Registrant's directors and officers for certain expenses
(including attorneys' fees and associated legal expenses), judgments, fines and
amounts paid in settlement amounts, actually and reasonably incurred by any such
person's services as a director or officer of the Registrant or any other
company or enterprise to which the person provides services at the request of
the Registrant, if such officer or director acted in good faith and in a manner
which he or she reasonably believed to be in, or not opposed to the best
interests of the Registrant and with respect to any criminal proceeding, had no
reasonable cause to believe his conduct was unlawful.
 
     Under Section 7 of the Underwriting Agreement, the Underwriters are
obligated, under certain circumstances, to indemnify directors and officers of
the Registrant against certain liabilities, including liabilities under the
Securities Act. Reference is made to the form of Underwriting Agreement filed as
Exhibit 1 hereto.
 
ITEM 15.  RECENT SALES OF UNREGISTERED SECURITIES
 
     Set forth in chronological order is information regarding shares of common
stock issued and options granted by the Registrant since March 1996. Further
included is the consideration, if any, received by the Registrant for such
shares, warrants and options and information relating to the section of the
Securities Act of 1933, as amended (the "Securities Act"), or rule of the
Securities and Exchange Commission under which exemption from registration was
claimed.
 
     (a) Issuances of Capital Stock.
 
     1. In February 1996, Student Advantage LLC issued 111 membership units of
        the predecessor LLC to David Liniado in connection with the purchase of
        certain assets from David M. Liniado d/b/a DML Enterprises.
 
                                      II-2
<PAGE>   100
 
     2. In March 1996, Student Advantage LLC sold 2,479 membership units in the
        predecessor LLC to Princeton Review Publishing, L.L.C. for $250,000.
 
     3. In May 1996, Ms. Abegglen exercised options to purchase 350 membership
        units of the predecessor LLC.
 
     4. In April 1997, Student Advantage LLC issued 239 membership units to Mr.
        Liniado in satisfaction of obligations under an asset purchase
        agreement.
 
     5. In December 1997, Student Advantage issued 270 membership units to The
        Main Quad, Inc. in connection with an asset purchase agreement. In
        October 1998, Student Advantage issued an additional 480 membership
        units in satisfaction of obligations under an ancillary agreement to
        such asset purchase agreement.
 
     6. On October 20, 1998, in connection with the recapitalization of Student
        Advantage LLC, Student Advantage, Inc. issued a total of 16,133,892
        shares of common stock and 1,497,036 shares of Series A convertible
        preferred stock (convertible into 4,491,108 shares of common stock) in
        exchange for LLC interests.
 
     7. On October 20, 1998, the Registrant sold an aggregate of 1,250,000
        shares of Series A Convertible Preferred Stock (convertible into
        3,750,000 shares of common stock) to Greylock IX Limited Partnership and
        Marc Turtletaub for $10.0 million.
 
     (b) Certain Grants and Exercises of Stock Options. The Registrant's 1998
Stock Incentive Plan and the 1998 California Stock Incentive Plan were adopted
by the Board of Directors and approved by the stockholders of the Registrant on
December 10, 1998. As of April 5, 1999, options to purchase 120,000 shares of
common stock had been exercised for a consideration of $40,000 under the
Registrant's 1998 Stock Incentive Plan and options to purchase 2,222,550 shares
of common stock were outstanding under the Registrant's 1998 Stock Incentive
Plan.
 
     The securities issued in the foregoing transactions were either (i) offered
and sold in reliance upon exemptions from Securities Act registration set forth
in Sections 3(b) and 4(2) of the Securities Act, or any regulations promulgated
thereunder, relating to sales by an issuer not involving any public offering, or
(ii) in the case of certain options to purchase shares of common stock and
shares of common stock issued upon the exercise of such options, such offers and
sales were made in reliance upon an exemption from registration under Rule 701
of the Securities Act. No underwriters were involved in the foregoing sales of
securities
 
                                      II-3
<PAGE>   101
 
ITEM 16.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
 
(a) EXHIBITS
 
<TABLE>
<CAPTION>
EXHIBIT
  NO.                             DESCRIPTION
-------                           -----------
<S>       <C>
 1        Form of Underwriting Agreement.*
 3.1      Certificate of Incorporation of the Registrant, as amended.
 3.2      Amended and Restated Certificate of Incorporation of the
          Registrant, to be effective upon the closing of this
          offering.*
 3.3      Restated Bylaws of the Registrant, as amended.
 3.4      Amended and Restated By-Laws of the Registrant, to be
          effective upon the closing of this offering.*
 4.1      Specimen certificate for shares of common stock.*
 5        Opinion of Hale and Dorr LLP.*
10.1      1998 Stock Incentive Plan, including form of stock option
          agreement for incentive stock option.
10.2      1999 Employee Stock Purchase Plan.*
10.3      Loan and Security Agreement between US Trust Bank and the
          Company, dated March 31, 1999.*
10.4      Form of Indemnification Agreement between the Company and
          each of its directors and officers.
10.5      Investor Rights Agreement, dated as of October 20, 1998,
          among the Company and certain stockholders.
10.6      Employment Agreement, dated March 25, 1996, between the
          Company and Raymond V. Sozzi, Jr., as amended by First
          Amendment to Employment Agreement, dated as of October 20,
          1998.
10.7      Agreement, effective as of February 1, 1997, between AT&T
          Communications, Inc. and the Company.*
10.8      Marketing Agreement, effective February 1, 1998, between
          AT&T Corp. and the Company.*
10.9      Notice of AT&T's Election to Extend Agreements, dated July
          14, 1998.*
10.10     Leases for premises at 280 Summer Street, Boston,
          Massachusetts.
10.11     Investment Agreement, dated March 25, 1996, between the
          Company and Princeton Review Publishing, L.L.C.
10.12     Letter Agreement, dated September 8, 1997, between the
          Company and Princeton Review Publishing, L.L.C.
10.13     Letter Agreement, dated October 20, 1998, between the
          Company and Princeton Review Publishing, L.L.C.
10.14     Master Services Agreement, dated December 22, 1997, between
          USWEB NY Central and the Company.*
10.15     Promissory Note (Equipment) to USTrust dated March 31,
          1999.*
10.16     Master Note to US Trust Bank March 31, 1999.*
11.1      Statement re: Computation of net loss per share and
          unaudited pro forma net loss per share.
23.1      Consent of PricewaterhouseCoopers LLP (Student Advantage,
          Inc.)
23.2      Consent of PricewaterhouseCoopers LLP (Collegiate Advantage,
          Inc.)
23.3      Consent of PricewaterhouseCoopers LLP (The Main Quad, Inc.)
23.4      Consent of Hale and Dorr LLP (included in Exhibit 5).*
24        Power of Attorney (included on page II-6).
27        Financial Data Schedule.
</TABLE>
 
---------------
 
* To be filed by amendment.
 
                                      II-4
<PAGE>   102
 
(b) FINANCIAL STATEMENT SCHEDULES
 
     All schedules have been omitted because they are not required or because
the required information is given in the Registrant's Financial Statements or
Notes thereto.
 
ITEM 17.  UNDERTAKINGS
 
     Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions contained in the Amended and Restated
Certificate of Incorporation of the Registrant and the laws of the State of
Delaware, or otherwise, the Registrant has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
 
     The undersigned Registrant hereby undertakes to provide to the Underwriters
at the closing specified in the Underwriting Agreement certificates in such
denominations and registered in such names as required by the Underwriters to
permit prompt delivery to each purchaser.
 
     The undersigned Registrant hereby undertakes that:
 
     (1) For purposes of determining any liability under the Securities Act, the
         information omitted from the form of prospectus filed as part of this
         Registration Statement in reliance upon Rule 430A and contained in a
         form of prospectus filed by the Registrant pursuant to Rule 424(b)(1)
         or (4) or 497(h) under the Securities Act shall be deemed to be part of
         this Registration Statement as of the time it was declared effective.
 
     (2) For the purpose of determining any liability under the Securities Act,
         each post-effective amendment that contains a form of prospectus shall
         be deemed to be a new registration statement relating to the securities
         offered therein, and the offering of such securities at that time shall
         be deemed to be the initial bona fide offering thereof.
 
                                      II-5
<PAGE>   103
 
                                   SIGNATURES
 
     Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Boston, Massachusetts, on this 7th
day of April, 1999.
                                          STUDENT ADVANTAGE, INC.
 
                                          By:   /s/ RAYMOND V. SOZZI, JR.
                                            ------------------------------------
                                              Raymond V. Sozzi, Jr.
                                              Chairman of the Board, President
                                              and Chief Executive Officer
 
                        POWER OF ATTORNEY AND SIGNATURES
 
     We, the undersigned officers and directors of Student Advantage, Inc.,
hereby severally constitute and appoint Raymond V. Sozzi, Jr., Christopher B.
Andrews and Mark G. Borden, and each of them singly, our true and lawful
attorneys with full power to them, and each of them singly, to sign for us and
in our names in the capacities indicated below, the Registration Statement on
Form S-1 filed herewith and any and all pre-effective and post-effective
amendments to said Registration Statement, and any subsequent Registration
Statement for the same offering which may be filed under Rule 462(b), and
generally to do all such things in our names and on our behalf in our capacities
as officers and directors to enable Student Advantage, Inc. to comply with the
provisions of the Securities Act of 1933, as amended, and all requirements of
the Securities and Exchange Commission, hereby ratifying and confirming our
signatures as they may be signed by our said attorneys, or any of them, to said
Registration Statement and any and all amendments thereto or to any subsequent
Registration Statement for the same offering which may be filed under Rule
462(b).
 
     Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
 
<TABLE>
<CAPTION>
              SIGNATURE                                 TITLE                        DATE
              ---------                                 -----                        ----
<C>                                     <S>                                     <C>
 
      /s/ RAYMOND V. SOZZI, JR.         Chairman of the Board, President and    April 7, 1999
--------------------------------------  Chief Executive Officer
        Raymond V. Sozzi, Jr.
 
      /s/ CHRISTOPHER B. ANDREWS        Vice President, Finance and             April 7, 1999
--------------------------------------  Administration, Treasurer and
        Christopher B. Andrews          Secretary (Principal Financial and
                                        Accounting Officer)
 
        /s/ WILLIAM S. KAISER           Director                                April 7, 1999
--------------------------------------
          William S. Kaiser
 
           /s/ JOHN KATZMAN             Director                                April 7, 1999
--------------------------------------
             John Katzman
 
         /s/ MARC TURTLETAUB            Director                                April 7, 1999
--------------------------------------
           Marc Turtletaub
</TABLE>
 
                                      II-6
<PAGE>   104
 
                                 EXHIBIT INDEX
 
<TABLE>
<CAPTION>
EXHIBIT
  NO.                             DESCRIPTION
-------                           -----------
<S>       <C>
 
 1        Form of Underwriting Agreement.*
 3.1      Certificate of Incorporation of the Registrant, as amended.
 3.2      Amended and Restated Certificate of Incorporation of the
          Registrant, to be effective upon the closing of this
          offering.*
 3.3      Restated Bylaws of the Registrant, as amended.
 3.4      Amended and Restated By-Laws of the Registrant, to be
          effective upon the closing of this offering.*
 4.1      Specimen certificate for shares of common stock.*
 5        Opinion of Hale and Dorr LLP.*
10.1      1998 Stock Incentive Plan, including form of stock option
          agreement for incentive stock option.
10.2      1999 Employee Stock Purchase Plan.*
10.3      Loan and Security Agreement between US Trust Bank and the
          Company, dated March 31, 1999.*
10.4      Form of Indemnification Agreement between the Company and
          each of its directors and officers.
10.5      Investor Rights Agreement, dated as of October 20, 1998,
          among the Company and certain stockholders.
10.6      Employment Agreement, dated March 25, 1996, between the
          Company and Raymond V. Sozzi, Jr., as amended by First
          Amendment to Employment Agreement, dated as of October 20,
          1998.
10.7      Agreement, effective as of February 1, 1997, between AT&T
          Communications, Inc. and the Company.*
10.8      Marketing Agreement, effective February 1, 1998, between
          AT&T Corp. and the Company.*
10.9      Notice of AT&T's Election to Extend Agreements, dated July
          14, 1998.*
10.10     Leases for premises at 280 Summer Street, Boston,
          Massachusetts.
10.11     Investment Agreement, dated March 25, 1996, between the
          Company and Princeton Review Publishing, L.L.C.
10.12     Letter Agreement, dated September 8, 1997, between the
          Company and Princeton Review Publishing, L.L.C.
10.13     Letter Agreement, dated October 20, 1998, between the
          Company and Princeton Review Publishing, L.L.C.
10.14     Master Services Agreement, dated December 22, 1997, between
          USWEB NY Central and the Company.*
10.15     Promissory Note (Equipment) to US Trust dated March 31,
          1999.*
10.16     Master Note to US Trust Bank March 31, 1999.*
11.1      Statement Re: Computation of net loss per share and
          unaudited pro forma net loss per share.
23.1      Consent of PricewaterhouseCoopers LLP (Student Advantage,
          Inc.)
23.2      Consent of PricewaterhouseCoopers LLP (Collegiate Advantage,
          Inc.)
23.3      Consent of PricewaterhouseCoopers LLP (The Main Quad, Inc.)
23.4      Consent of Hale and Dorr LLP (included in Exhibit 5).*
24        Power of Attorney (included on page II-6).
27        Financial Data Schedule.
</TABLE>
 
---------------
 
* To be filed by amendment.
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1
 
     AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 7, 1999
 
                                                  REGISTRATION NO. 333-
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
 
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                            ------------------------
 
                                    FORM S-1
            REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
 
                            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
                                 (617) 912-2011
    (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
                  OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
                            ------------------------
 
                             RAYMOND V. SOZZI, JR.
          CHAIRMAN OF THE BOARD, PRESIDENT AND CHIEF EXECUTIVE OFFICER
                            STUDENT ADVANTAGE, INC.
                               280 SUMMER STREET
                          BOSTON, MASSACHUSETTS 02210
                                 (617) 912-2011
               (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE
               NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
                            ------------------------
 
                                   COPIES TO:
MARK G. BORDEN, ESQ.                               LAWRENCE S. WITTENBERG, ESQ.
                  HALE AND DORR LLP                               TESTA, HURWITZ & THIBEAULT, LLP
                   60 STATE STREET                                        125 HIGH STREET
             BOSTON, MASSACHUSETTS 02109                            BOSTON, MASSACHUSETTS 02110
              TELEPHONE: (617) 526-6000                              TELEPHONE: (617) 248-7000
               TELECOPY: (617) 526-5000                               TELECOPY: (617) 248-7100
------------------------
 
    APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date hereof.
 
    If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act,
check the following box. [ ]
 
    If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
 
    If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
 
    If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
 
    If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [ ]
                            ------------------------
 
                        CALCULATION OF REGISTRATION FEE
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
            TITLE OF EACH CLASS OF SECURITIES TO                    PROPOSED MAXIMUM                AMOUNT OF
                       BE REGISTERED                          AGGREGATE OFFERING PRICE (1)      REGISTRATION FEE
---------------------------------------------------------------------------------------------------------------------
Common Stock, $.01 par value per share......................         $80,500,000                     $22,379
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
(1) Estimated solely for the purpose of calculating the amount of the
    registration fee.
                            ------------------------
 
    THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
2
 
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL SECURITIES, AND WE ARE NOT SOLICITING OFFERS TO BUY THESE SECURITIES, IN
ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
 
                   SUBJECT TO COMPLETION, DATED APRIL 7, 1999
 
                                     [LOGO]
 
                                                 SHARES
                                  COMMON STOCK
 
     Student Advantage, Inc. is offering                     shares of its
common stock. This is Student Advantage's initial public offering and no public
market currently exists for its shares. We have applied for approval for
quotation on the Nasdaq National Market under the symbol "STAD" for the shares
we are offering. We anticipate that the initial public offering price will be
between $     and $     per share.
 
                         ------------------------------
 
                 INVESTING IN THE COMMON STOCK INVOLVES RISKS.
                    SEE "RISK FACTORS" BEGINNING ON PAGE 7.
 
                         ------------------------------
PER SHARE       TOTAL
                                                               ---------       -----
Public Offering Price.......................................  $             $
Underwriting Discounts and Commissions......................  $             $
Proceeds to the Company.....................................  $             $
THE SECURITIES AND EXCHANGE COMMISSION AND STATE SECURITIES REGULATORS HAVE
NOT APPROVED OR DISAPPROVED THESE SECURITIES, OR DETERMINED IF THIS PROSPECTUS
IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
 
     Student Advantage has granted the underwriters a 30-day option to purchase
up to an additional           shares of common stock to cover over-allotments.
BancBoston Robertson Stephens Inc. expects to deliver the shares of common stock
to purchasers on                     , 1999.
 
                         ------------------------------
 
BANCBOSTON ROBERTSON STEPHENS
                            PRUDENTIAL SECURITIES
                                     VOLPE BROWN WHELAN & COMPANY
           The date of this Prospectus is                     , 1999.
3
     [The inside front cover depicts five computer screen shots of Student
Advantage's Web site. The Student Advantage logo is at the top of the page and
the heading beneath the logo is "Studentadvantage.com." The top computer screen
shot depicts the home page of www.studentadvantage.com. The two middle screens
show content provided by "College News" through the U-Wire news feed and
services available from many corporate partners via "E-Commerce." The bottom two
screens depict other resources available such as "Bulletin Boards" and "Address
book & E-mail" screens.]
4
     The graphic covering the gatefold pages depicts various products and
services provided to the three communities served by Student Advantage. The
heading Student Advantage is centered across the top of the two pages. The upper
left corner with the heading "Students" depicts a graphic of the 1998 - 1999
Student Advantage membership card. In the lower left corner is a graphic of four
covers of the Student Advantage magazine. A graphic of five computer screens
described on the inside front cover is centered across the middle of the two
pages. In the upper right corner is the heading, universities. Beneath this is a
graphic of the U-Wire logo. A map of the United States and the heading
"Businesses" are centered on the bottom of the page. Logos from the following
corporate sponsors are placed on the map: Amtrak, Tower Records, AT&T, America
Online, Lexis, Nexis, USA Today and Excite.
5
 
     YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS. WE
HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION DIFFERENT FROM THAT
CONTAINED IN THIS PROSPECTUS. WE ARE OFFERING TO SELL, AND SEEKING OFFERS TO
BUY, SHARES OF COMMON STOCK ONLY IN JURISDICTIONS WHERE OFFERS AND SALES ARE
PERMITTED. THE INFORMATION CONTAINED IN THIS PROSPECTUS IS ACCURATE ONLY AS OF
THE DATE OF THIS PROSPECTUS, REGARDLESS OF THE TIME OF DELIVERY OF THIS
PROSPECTUS OR OF ANY SALE OF OUR COMMON STOCK. IN THIS PROSPECTUS, "STUDENT
ADVANTAGE," THE "COMPANY," "WE," "US" AND "OUR" REFER TO STUDENT ADVANTAGE, INC.
 
     UNTIL                     , 1999, ALL DEALERS THAT BUY, SELL OR TRADE OUR
COMMON STOCK, WHETHER OR NOT PARTICIPATING IN THIS OFFERING, MAY BE REQUIRED TO
DELIVER A PROSPECTUS. THIS REQUIREMENT IS IN ADDITION TO THE DEALERS' OBLIGATION
TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR
UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
 
                            ------------------------
 
                               TABLE OF CONTENTS
PAGE
                                                              ----
Prospectus Summary..........................................     4
Risk Factors................................................     7
Use of Proceeds.............................................    16
Dividend Policy.............................................    16
Capitalization..............................................    17
Dilution....................................................    18
Selected Financial Data.....................................    19
Management's Discussion and Analysis of Financial Condition
  and Results of Operations.................................    20
Business....................................................    30
Management..................................................    42
Certain Transactions........................................    50
Principal Stockholders......................................    52
Description of Capital Stock................................    54
Shares Eligible for Future Sale.............................    56
Underwriting................................................    58
Legal Matters...............................................    59
Experts.....................................................    60
Additional Information......................................    60
Index to Financial Statements...............................   F-1
------------------------
 
     "Student Advantage", "U-WIRE", "Virtual Backpack" and "The Main Quad" are
trademarks and service marks of Student Advantage. All other trademarks, service
marks or trade names referred to in this prospectus are the property of their
respective owners.
 
                                        3
6
 
                                    SUMMARY
 
     This summary highlights information contained elsewhere in this prospectus.
This summary is not complete and may not contain all of the information that you
should consider before investing in our common stock. You should read the entire
prospectus carefully. Unless otherwise indicated, all information contained in
this prospectus assumes that the underwriters will not exercise their
over-allotment option immediately prior to this offering. This prospectus
contains forward-looking statements which involve risks and uncertainties.
Student Advantage's actual results could differ materially from those
anticipated in these forward-looking statements as a result of certain factors,
including those set forth under "Risk Factors" and elsewhere in this prospectus.
 
                                  THE COMPANY
 
Our Business............Student Advantage is dedicated to serving the needs of
                        college students through our leading membership program
                        and studentadvantage.com Web site. With our national
                        fee-based membership program, we have created a
                        community of over 1,000,000 student members. Our members
                        receive a variety of services and benefits, including
                        ongoing discounts on products and services offered by
                        national and local vendors. Through
                        studentadvantage.com, we are leveraging our membership
                        base, brand name, partnerships with corporations and
                        colleges, and existing online business with the
                        objective of becoming the leading online destination for
                        college students.
 
                        We believe that Student Advantage appeals to students,
                        businesses and schools because we provide a combination
                        of the following benefits:
 
                        - For students, a valuable program that offers ongoing
                          discounts, as well as online content, community and
                          e-commerce targeted at their particular needs,
 
                        - For businesses, targeted online and offline access to
                          an attractive demographic group through a trusted
                          brand, and
 
                        - For schools, a useful resource that may be offered to
                          their students.
 
                        Our position at the intersection of these three groups
                        has enabled us to create a powerful vehicle for
                        advertising and commerce directed at the student market.
 
Our Products and
  Services..............Membership in Student Advantage provides students with
                        discounts on products and services offered by over 40
                        national partners, including Amtrak, AT&T, Foot Locker,
                        Greyhound, Staples and Tower Records, and over 12,000
                        local partners in 115 local markets. Student members
                        also receive SAM, the Student Advantage magazine.
 
                        A key component of our strategy is to make our Web site
                        the centerpiece of our membership program. We currently
                        provide content and services through
                        studentadvantage.com, including our proprietary U-WIRE
                        news feed and the Virtual Backpack, a service which
                        includes free e-mail, an online calendar, and online
                        document storage; community through online bulletin
                        boards and articles offering advice on student life; and
                        e-commerce through partners including Egghead.com, Music
                        Boulevard and 1-800-FLOWERS. We believe that our primary
                        role as a provider of information and services to
                        students, along with the Web-savvy nature of our student
                        membership base, makes the Internet ideally suited for
                        our business.
                                        4
7
 
                        We also provide tailored marketing services for
                        businesses seeking to market their products to college
                        students. Through our membership program and Web site,
                        we provide businesses a platform through which they can
                        reach a large, demographically attractive market. These
                        businesses benefit from targeted and continued access to
                        the student market, as well as our expertise in
                        designing and implementing effective marketing programs
                        to reach college students.
 
Our Market..............College students represent an attractive market
                        opportunity for businesses because of their significant
                        purchasing power and their tendency to retain brand
                        loyalties after graduation. According to Student Monitor
                        LLC, a market research company, college students spent
                        over $100 billion in the 1997-1998 academic year.
 
                        In the United States, there are over 15 million
                        full-time and part-time undergraduate and graduate
                        students at more than 3,000 university and college
                        campuses. This population is expected to grow as there
                        are currently 40 million children and young adults from
                        ages 10 to 19.
 
Our Strategy............Our objective is to be the leading online and offline
                        resource for college students. The key elements of our
                        strategy include the following:
 
                        - Strengthen our online destination for students,
                        - Continue to build the Student Advantage brand,
                        - Aggressively grow our membership,
                        - Enhance relationships with students, businesses and
                          schools, and
                        - Continue to pursue strategic acquisitions and
                          alliances
 
                            ------------------------
 
     Student Advantage's principal executive offices are located at 280 Summer
Street, Boston, Massachusetts 02210 and our telephone number at that location is
(617) 912-2011. Our Web site is located at www.studentadvantage.com. Information
contained on our Web site is not part of this prospectus.
 
                            ------------------------
 
     Except as otherwise noted, all information in this prospectus:
 
     - Reflects the automatic conversion of all of our outstanding shares of
       convertible preferred stock into an aggregate of 8,241,108 shares of
       common stock upon completion of this offering;
 
     - Reflects a three-for-one stock split of all of our outstanding shares of
       common stock to be effected before completion of this offering; and
 
     - Assumes no exercise of the underwriters' over-allotment option.
 
                                        5
8
 
                                  THE OFFERING
 
Common stock offered....................               shares
 
Common stock to be outstanding after the
offering................................               shares(1)
 
Use of proceeds.........................     To fund continued growth and
                                             expansion of its business, capital
                                             expenditures, product development,
                                             potential acquisitions and other
                                             general corporate purposes. See
                                             "Use of Proceeds."
 
Proposed Nasdaq National Market
symbol..................................     STAD
 
                             SUMMARY FINANCIAL DATA
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)
 
     Set forth below are summary statements of operations data for the years
ended December 31, 1994, 1995, 1996, 1997 and 1998, and summary balance sheet
data as of December 31, 1998, on an actual basis and on a pro forma basis as
adjusted to give effect to (1) the sale by Student Advantage of shares of common
stock in this offering at an assumed initial offering price of $     per share,
after deducting the estimated underwriting discounts and commissions and
offering expenses payable by Student Advantage, and the application of the net
proceeds from this offering, and (2) the conversion of our convertible preferred
stock upon the consummation of this offering. This information should be read in
conjunction with the Financial Statements and Notes thereto appearing elsewhere
in this prospectus. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations."
YEAR ENDED DECEMBER 31,
                                                -------------------------------------------------------
                                                   1994          1995        1996      1997      1998
                                                -----------   -----------   -------   -------   -------
                                                (UNAUDITED)   (UNAUDITED)
STATEMENT OF OPERATIONS DATA
Total revenue.................................    $   155       $   448     $ 1,730   $ 3,792   $17,443
Total costs and expenses......................        230           412       2,386     6,973    22,560
Net income (loss).............................        (75)           36        (657)   (3,152)   (5,115)
Basic and diluted net income (loss) per
  share.......................................    $ (0.01)      $  0.00     $ (0.05)  $ (0.21)  $ (0.32)
Shares used in computing basic and diluted net
  income (loss) per share.....................     14,184        14,184      14,184    15,295    15,957
Unaudited pro forma basic and diluted net loss
  per share(2)................................    $    --       $    --     $    --   $    --    $(0.24)
Shares used in computing unaudited pro forma
  basic and diluted net loss per share........         --            --          --        --    21,128
DECEMBER 31, 1998
                                                              ----------------------
                                                                          PRO FORMA
                                                               ACTUAL    AS ADJUSTED
                                                              --------   -----------
BALANCE SHEET DATA
Cash and cash equivalents...................................  $  5,048
Working capital.............................................    (2,247)
Total assets................................................     9,934
Deferred revenue............................................     6,666
Stockholders' equity (deficit)..............................   (10,741)
---------------
(1) This information is based on the number of shares outstanding as of March
    31, 1999. Excludes 2,222,550 shares subject to outstanding options as of
    March 31, 1999 at a weighted average exercise price of $0.35 per share.
 
(2) Pro forma information is based on the conversion of all outstanding shares
    of our preferred stock into shares of common stock.
 
                                        6
9
 
                                  RISK FACTORS
 
     You should carefully consider the following risks before making an
investment decision. The risks described below are not the only ones that we
face. Additional risks that are not yet identified or that we currently think
are immaterial may also impair our business operations. Our business, operating
results and financial condition could be adversely affected by any of the
following risks. The trading price of our common stock could decline due to any
of these risks, and you could lose all or part of your investment. You should
also refer to the other information set forth in this prospectus, including our
financial statements and the related notes.
 
     This prospectus contains forward-looking statements that involve risks and
uncertainties. These forward-looking statements are usually accompanied by words
such as "believes," "anticipates", "plans", "expects" and similar expressions.
Our actual results may differ materially from the results discussed in the
forward-looking statements because of factors such as the Risk Factors discussed
below.
 
WE HAVE EXPERIENCED LOSSES IN THE PAST AND EXPECT TO CONTINUE TO EXPERIENCE
LOSSES IN THE NEAR FUTURE
 
     We have not achieved profitability and expect to continue to incur
operating losses for the foreseeable future. We incurred net losses of $3.2
million in 1997 and $5.1 million in 1998. As of December 31, 1998, our
accumulated deficit was $11.6 million. We expect to continue to incur
significant operating and capital expenditures and, as a result, we will need to
generate significant revenue to achieve and maintain profitability.
 
     We cannot assure you that we will achieve sufficient revenue for
profitability. Even if we do achieve profitability, we cannot assure you that we
can sustain or increase profitability on a quarterly or annual basis in the
future. If revenue grows more slowly than we anticipate, or if operating
expenses exceed our expectations or cannot be adjusted accordingly, our
business, results of operations and financial condition will be materially and
adversely affected.
 
WE ARE DEPENDENT UPON AT&T FOR A LARGE PERCENTAGE OF OUR REVENUE
 
     We have an exclusive relationship with AT&T through which AT&T pays us for
a variety of goods and services, including:
 
     - memberships provided free to students with an AT&T calling card,
 
     - marketing services,
 
     - advertising in our media products, such as our Web site and SAM, the
       Student Advantage magazine, and
 
     - sponsorship of certain of our products and services, such as the Virtual
       Backpack.
 
     Our agreement with AT&T prevents us from providing our goods and services
to other telecommunications companies. Our agreement with AT&T also precludes us
from entering into a relationship with another sponsor that will distribute our
memberships free to students as an incentive or through any promotion.
 
     In 1997, we derived $2.4 million, or 62%, of our total revenue from AT&T.
In 1998, we derived $11.8 million, or 68%, of our total revenue from AT&T. Our
relationship with AT&T has accounted for most of our members to date. These
members are obtained through distribution of Student Advantage memberships to
students who enroll for an AT&T telecommunications service. In addition, most of
our commerce revenue is currently attributable to fees that we earn from AT&T
for obtaining completed calling card applications from students. There can be no
assurance that we will be successful in expanding our membership base
independent of our relationship with AT&T.
 
     The termination dates of our current agreements with AT&T have been
extended until June 2001. However, AT&T may terminate these agreements upon 120
days' prior notice, subject to payment of a termination fee in certain cases. In
addition, AT&T can terminate the current agreements if Raymond V.
 
                                        7
10
 
Sozzi, Jr. is no longer employed as our president, or if he no longer owns at
least five percent of our capital stock. The termination of our relationship
with AT&T would have a material adverse effect on our business. Our relationship
with AT&T could hinder our ability to attract additional national partners, in
particular partners who may be interested in purchasing memberships for
distribution to students.
 
WE HAVE A LIMITED OPERATING HISTORY
 
     We have a limited operating history on which an investor can evaluate our
business. Our operations began in 1992. An investor in our common stock must
consider the risks and difficulties frequently encountered by early stage
companies implementing an Internet strategy. These risks include our ability to:
 
     - sustain historical revenue growth rates,
 
     - implement our business model,
 
     - manage our expanding operations,
 
     - retain and attract members and maintain their satisfaction,
 
     - maintain and increase our alliances with partners, advertisers, colleges
       and universities,
 
     - introduce new and enhanced Web and offline content, products and
       services, and
 
     - respond to competitive developments.
 
     If we do not successfully manage these risks, our business, results of
operations and financial condition will be materially adversely affected. We
cannot assure you that we will successfully address these risks or that our
business strategy will be successful.
 
OUR BUSINESS IS HIGHLY DEPENDENT UPON OUR PRESIDENT AND CHIEF EXECUTIVE OFFICER
 
     We are highly dependent on our president and chief executive officer,
Raymond V. Sozzi, Jr., the loss of whom would adversely affect our future
success. If Mr. Sozzi or any of our other officers or key employees leave our
company, the relationships that they have with our corporate partners and
universities could be lost.
 
WE MAY NOT SUCCESSFULLY IMPLEMENT OUR INTERNET STRATEGY
 
     In order to successfully implement our Internet strategy, we must:
 
     - establish our Web site as the primary vehicle for delivery of our
       products and services, including member registration and renewal,
       information regarding national and local partners, and customer service,
 
     - expand our Web site to include more content and services for students and
       encourage our members to use the site so that it becomes more attractive
       for advertisers, and
 
     - establish our Web site as an effective e-commerce platform.
 
     Our failure to successfully implement our Internet strategy could have a
material adverse effect on our business.
 
THE INTERNET PORTION OF OUR BUSINESS MODEL IS UNPROVEN
 
     The profit potential for an Internet community business model is unproven.
Our ability to generate significant revenues from advertisers, sponsors and
other partners in connection with online activities will depend, in part, on our
ability to generate sufficient user traffic with demographic characteristics
attractive to our advertisers. The intense competition among Web sites that sell
online advertising has led to the creation of a number of pricing alternatives
for online advertising. These alternatives make it difficult for us to project
future levels of advertising and other Internet-related revenue and applicable
gross margins related to our online offerings that can be sustained by us or the
online advertising industry in general. Although we do not currently derive a
substantial portion of our revenue from Internet advertising and
 
                                        8
11
 
other Internet-related activities, our business model depends in part on
increasing the amount of such revenue.
 
OUR BUSINESS IS SEASONAL AND SUBJECT TO SIGNIFICANT FLUCTUATIONS
 
     Our operating results are dependent upon the college student market and
vary seasonally based upon the typical school year. We tend to sell most of our
memberships in the beginning of the fall academic term and the beginning of the
spring academic term. In addition, all of our memberships expire on August 31 of
each year. 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 is typically higher in the second and third quarters than
in the first and fourth quarters of each fiscal year. In 1998, our revenue from
advertising, marketing services and commerce was higher in the third quarter
than in other quarters in part because of increased activity associated with the
commencement of the school year. We believe this seasonality may also occur in
subsequent years.
 
     In addition, our revenue and operating results may vary significantly from
quarter to quarter for a number of other factors. Many of these factors are
outside of our control and include:
 
     - our ability to successfully integrate operations and technologies from
       acquisitions or other business combinations,
 
     - the availability of corporate partners and colleges and universities to
       support our membership programs,
 
     - our ability to expand our online presence,
 
     - changes in the growth rate of Internet usage,
 
     - new sites, services or products introduced by us or our competitors, and
 
     - increased competition.
 
     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.
 
OUR OPERATING RESULTS DEPEND ON SELLING NEW MEMBERSHIPS EVERY YEAR
 
     A significant portion of our revenue is derived from membership fees.
Members must join our program each year. A significant percentage of our members
graduate each year and, therefore, do not renew their memberships. Our revenue
growth is highly dependent upon our ability to market the value of our
membership to college students and to retain members on a yearly basis. A
failure to acquire new members or renew current members could have a material
adverse effect on our business.
 
OUR OPERATING RESULTS DEPEND ON OUR ABILITY TO MAINTAIN AND INCREASE BUSINESS
ALLIANCES AND UNIVERSITY RELATIONSHIPS
 
     We are dependent upon our partners, both national and local, to provide our
members with discounts on their products and services. We are also dependent on
maintaining college and university relationships to market and sell our products
and services. Our ability to maintain these alliances and relationships and to
develop new alliances and relationships is critical to our ability to maintain
our members. A failure to acquire or maintain partners and relationships could
have a material adverse effect on our business. In addition, our agreements with
a number of our partners 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.
 
                                        9
12
 
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
which market products and services to their students. Many colleges and
universities are seeking to decrease or eliminate such marketing. In particular,
colleges and universities are concerned that many students have incurred
substantial levels of credit card debt. As a result, colleges and universities
often attempt to prevent credit card companies and other companies that offer
credit from marketing to their students. We are sometimes 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. Any inability to directly
contact students on campus could have a material adverse effect on our business.
 
WE FACE SIGNIFICANT COMPETITION ON THE INTERNET
 
     Many Web sites compete for consumers' and advertisers' attention and
spending. We believe that our ability to compete depends upon many factors,
including the following:
 
     - the market acceptance of our Web site and online services,
 
     - the success of our brand building and sales and marketing efforts,
 
     - the performance, price and reliability of services developed by us or our
       competitors,
 
     - the effectiveness of our customer service efforts,
 
     - the ability of our competitors to maintain or establish cooperative
       relationships among themselves or with strategically aligned third
       parties, and
 
     - the emergence of new competitors.
 
     We compete for members and advertisers online with the following types of
companies:
 
     - online services or Web sites targeted at college students, and
 
     - Web search and retrieval and other online service companies, commonly
       referred to as portals, such as Excite, Infoseek, Lycos and Yahoo!.
 
OUR MEMBERSHIP PROGRAM EXPERIENCES SIGNIFICANT COMPETITION FROM OTHER MARKETING
ACTIVITIES
 
     We compete for client marketing budget dollars with other marketing
activities and, in particular, other forms of direct marketing activities, such
as direct mail. In recent years, there have been significant advances in new
forms of direct marketing, such as the development of interactive shopping and
data collection through television, the Internet and other media. Many industry
experts predict that electronic interactive commerce, such as shopping and
information exchange via the Internet, will proliferate significantly in the
foreseeable future. To the extent such proliferation occurs, it could have a
material adverse effect on the demand for membership programs.
 
WE MAY BE UNABLE TO MAKE ATTRACTIVE ACQUISITIONS OR INTEGRATE ACQUIRED COMPANIES
 
     We plan to acquire or make investments in complementary businesses,
products, services or technologies. However, we cannot assure you that we will
be able to identify suitable acquisition or investment candidates. Even if we do
identify suitable candidates, we cannot assure you that we will be able to make
such acquisitions or investments on commercially acceptable terms. If we buy a
business, we could have difficulty in assimilating that company's personnel,
operations, products, services or technologies into our operations. These
difficulties could disrupt our ongoing business, distract our management and
employees, increase our expenses and adversely affect our results of operations.
Furthermore, we may incur debt or issue equity securities to pay for any future
acquisitions. The issuance of equity securities could be dilutive to our
existing stockholders.
 
                                       10
13
 
WE MAY BE UNABLE TO SUCCESSFULLY MANAGE CHANGES IN OUR BUSINESS
 
     We have experienced a period of significant growth. This growth has placed
significant demands on our management and strains on our resources. Revenue
increased from approximately $1.7 million in 1996 to $17.4 million in 1998.
During that same time period we increased from fewer than 50 to more than 150
employees.
 
     Our ability to manage changes in our business will depend on our ability to
continue to enhance our operating, financial and management information systems.
We cannot assure you that our personnel, systems and controls will be adequate
to support our growth, if any. If we are unable to manage change effectively,
maintain the quality of our products and services and retain key personnel, our
operating results and financial condition could be significantly affected.
 
     We do not expect our current financial and management information systems
to be adequate to support our operations in the future. We expect to replace our
current accounting system within the next year. If we incur delays or
difficulties in implementing an appropriate accounting system, our business
could be adversely affected.
 
OUR MANAGEMENT TEAM HAS NO EXPERIENCE IN RUNNING A PUBLIC COMPANY
 
     Our management team has not had any experience in a leadership role in a
public company. We cannot assure you that the management team as currently
configured will be able to successfully transition into the leadership role of a
public company. The failure of the management team to adequately handle this
challenge could have a material adverse effect on our business.
 
WE MUST ATTRACT AND RETAIN HIGHLY-QUALIFIED PERSONNEL IN A COMPETITIVE LABOR
MARKET
 
     We need to hire additional members of our management team and other key
employees. Competition for such personnel is intense. We have experienced, and
we expect to continue to experience in the future, difficulty in hiring highly
skilled employees with the appropriate qualifications. If we do not succeed in
attracting new personnel or retaining and motivating our current personnel, our
business could be adversely affected.
 
TO EXPAND OUR BUSINESS, WE MAY NEED ADDITIONAL CAPITAL, AND THE FUTURE FUNDING
OF THESE CAPITAL NEEDS IS UNCERTAIN
 
     We require substantial working capital to fund our business. While we
believe that this offering will provide us with sufficient funding for the
foreseeable future, if capital requirements vary materially from those currently
planned, we may require additional financing.
 
     Additional funds raised through the issuance of equity securities may have
the following negative effects on the then current common stockholders:
 
     - dilution in percentage of ownership in our company, and
 
     - the rights, preferences or privileges of the new security holders may be
       senior to those of the common stockholders.
 
     Additional financing may not be available when needed on terms favorable to
us or at all. Our failure to raise additional funds, if needed, may result in
our inability to:
 
     - develop or enhance our services,
 
     - take advantage of future opportunities, or
 
     - respond to competitive pressures.
 
                                       11
14
 
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 USWeb/CKS's facilities in New York.
Fire, floods, earthquakes, power loss, telecommunications failures, break-ins
and similar events could damage these systems. Computer viruses, electronic
break-ins or other similar disruptive problems could also adversely affect our
Web site. Our business could be adversely affected if our systems were affected
by any of these occurrences. Our insurance policies may not adequately
compensate us for any losses that may occur due to any failures or interruptions
in our systems. We do not presently have any secondary "off-site" systems or a
formal disaster recovery plan.
 
     Our Web site must accommodate a high volume of traffic and deliver
frequently updated information. Our Web site has in the past and may in the
future experience slower response times or decreased traffic for a variety of
reasons. These types of occurrences could cause users to perceive our Web site
as not functioning properly and therefore cause them to use another Web site or
other methods to obtain information.
 
     In addition, our users depend on Internet service providers, online service
providers and other Web site operators for access to our Web site. 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.
 
WE ARE DEPENDENT ON THIRD PARTIES FOR SOFTWARE, SYSTEMS AND RELATED SERVICES
 
     We are dependent on various third parties for software, systems and related
services. For example, a third party provides warehousing, distribution,
fulfillment, mail, and data processing services for us. As a result, our ability
to deliver various services to our users may be adversely affected by the
failure of these third parties to provide reliable software, systems and related
services to us.
 
     We have in the past and may in the future experience slower response times
or delays in the processing of applications for students and the delivery of
membership identification cards to our members. Many of these delays have been
caused by third parties upon which we rely for fulfillment services. If we are
unsuccessful in providing our members with membership identification cards or
delivering products and services on a timely basis, our business may be
adversely affected.
 
WE MAY BE SUED FOR INFORMATION RETRIEVED FROM THE INTERNET
 
     Inappropriate use of our Internet services
 
     We may be subjected to claims for defamation, negligence, copyright or
trademark infringement, personal injury or other legal theories relating to the
information we publish on our Web site or in our magazine. These types of claims
have been brought, sometimes successfully, against online services as well as
other print publications in the past. We could also be subjected to claims based
upon the content that is accessible from our Web site through links to other Web
sites or through content and materials that may be posted by members in chat
rooms or bulletin boards. We also offer e-mail services, which may subject us to
potential risks, such as liabilities or claims resulting from unsolicited
e-mail, lost or misdirected messages, illegal or fraudulent use of e-mail or
interruptions or delays in e-mail service. Our insurance may not adequately
protect us against these types of claims.
 
     Identification of Web site visitors
 
     Web sites typically place certain "cookies" on a user's hard drive without
the user's knowledge or consent. Student Advantage and other Web sites use
cookies for a variety of reasons, including the collection of data derived from
the user's Internet activity. Most currently available Web browsers allow users
to remove cookies at any time or to prevent cookies from being stored on their
hard drive. In addition, some commentators, privacy advocates and governmental
bodies have suggested limiting or eliminating the use of cookies. Any reduction
or limitation in the use of cookies could limit the effectiveness of our sales
and marketing efforts. In addition, the European Union recently adopted a
 
                                       12
15
 
directive addressing data privacy that may limit the collection and use of
certain information regarding Internet users. This directive may limit our
ability to target advertising or collect and use information in certain European
countries.
 
     Misappropriation of personal information
 
     Any penetration of our network security or other misappropriation of our
members' personal or credit card information could subject us to liability. We
may be liable for claims based on unauthorized purchases with credit card
information, impersonation or other similar fraud claims. Claims could also be
based on other misuses of personal information, such as for unauthorized
marketing purposes. These claims could result in litigation. In addition, the
Federal Trade Commission and several states have investigated the use by certain
Internet companies of personal information. We could incur expenses if new
regulations regarding the use of personal information are introduced or if our
privacy practices were investigated.
 
WE MAY BE UNABLE TO RESPOND TO THE RAPID TECHNOLOGICAL CHANGE IN OUR INDUSTRY
 
     Our market is characterized by rapidly changing technologies, frequent new
product and service introductions and evolving industry standards. The recent
growth of the Internet and intense competition in our industry exacerbates these
market characteristics. To achieve our goals, we need to effectively integrate
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 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.
 
OUR INTELLECTUAL PROPERTY RIGHTS MAY BE VIOLATED OR SUBJECT TO LITIGATION
 
     We believe that protection of our copyrights, service marks, trademarks,
trade secrets, proprietary technology and similar intellectual property is
critical to our success. We rely on the following mechanisms to protect such
intellectual property:
 
     - trademark and copyright law,
 
     - trade secret protection, and
 
     - confidentiality agreements with employees, customers, independent
       contractors, partners 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 subject to claims and expect to be subject to legal
proceedings and claims in the future for infringement of the trademark and other
intellectual property rights of third parties. Any such proceedings or claims
could have a material adverse effect on our business, financial condition and
results of operations.
 
THE FAILURE OF COMPUTER SYSTEMS AND SOFTWARE PROGRAMS TO BE YEAR 2000 COMPLIANT
COULD NEGATIVELY IMPACT OUR BUSINESS
 
     Many currently installed computer systems and software products only accept
two digits to identify the year in any date. Thus, the year 2000 will appear as
"00", which the system might consider to be the year 1900 rather than the year
2000. This could result in system failures, delays or miscalculations causing
disruptions to our operations.
 
                                       13
16
 
     We are currently conducting an inventory, and developing testing
procedures, for all software and other systems that we believe might be affected
by Year 2000 issues. Since third parties developed and currently support many of
the systems that we use, a significant part of this effort will be to ensure
that these third-party systems are Year 2000 compliant. We plan to confirm this
compliance through a combination of the representation by these third parties of
their products' Year 2000 compliance, as well as specific testing of these
systems. The failure of systems maintained by third parties to be Year 2000
compliant could cause us to incur significant expense to remedy any problems,
reduce our revenues from such third parties or otherwise seriously damage our
business. A significant Year 2000-related disruption of the network services or
equipment that third-party vendors provide to us could also cause our members or
other users to consider seeking alternate providers or cause an unmanageable
burden on our customer service and technical support.
 
     Our failure to correct a material Year 2000 problem could result in an
interruption in, or a failure of, some of our normal business activities or
operations.
 
CERTAIN CURRENT STOCKHOLDERS OWN A LARGE PERCENTAGE OF OUR VOTING STOCK
 
     Following the closing of this offering, our officers, directors and
affiliated entities together will beneficially own approximately   % of our
outstanding common stock (     % if the underwriters' over-allotment option is
exercised in full). As a result, these stockholders may, as a practical matter,
be able to control 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.
 
THE PRICE OF OUR STOCK COULD BE EXTREMELY VOLATILE
 
     We cannot predict the extent to which investor interest in Student
Advantage will lead to the development of a trading market or how liquid that
market might become. The initial public offering price for the shares will be
determined by negotiations between us and the underwriters' representatives and
may not be indicative of prices that will prevail in the trading market. The
stock market has experienced significant price and volume fluctuations, and the
market prices of technology companies, particularly Internet-related companies,
have been highly volatile. Investors may not be able to resell their shares at
or above the initial public offering price.
 
     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.
 
SHARES ELIGIBLE FOR PUBLIC SALE AFTER THIS OFFERING COULD ADVERSELY AFFECT OUR
STOCK PRICE
 
     After this offering, there will be outstanding                     shares
of our common stock. There will be                     shares outstanding if the
underwriters' over-allotment option is exercised in full. Of these shares, the
shares sold in this offering will be freely tradeable except for any shares
purchased by our "affiliates" as defined in Rule 144 under the Securities Act.
The remaining                     shares of common stock held by existing
stockholders will be "restricted securities" and will become eligible for sale
only if registered or if they qualify for an exemption from registration under
Rules 144, 144(k) or 701 under the Securities Act. Upon expiration of lock-up
agreements with the underwriters, 180 days after the date of this prospectus,
                    shares of common stock will be eligible for resale in
accordance with the provisions of Rule 144. In addition, certain stockholders
holding an aggregate of
 
                                       14
17
 
16,746,186 shares of common stock can require us to register their shares for
public sale. Upon the effectiveness of any such registration, all shares covered
by the registration statement would be freely transferable.
 
     We cannot predict if future sales of our common stock, or the availability
of our common stock for sale, will adversely affect the market price of our
common stock.
 
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.
 
               SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
 
     Some of the statements under "Summary," "Risk Factors," "Management's
Discussion and Analysis of Financial Condition and Results of Operations,"
"Business" and elsewhere in this prospectus constitute forward-looking
statements. These statements relate to future events or our future performance,
and are identified by terminology such as "may," "will," "should," "expects,"
"scheduled," "plans," "intends," "anticipates," "believes," "estimates,"
"potential," or "continue" or the negative of such terms or other comparable
terminology. These statements are only predictions. Actual events or results may
differ materially. In evaluating these statements, you should specifically
consider various factors, including the risks outlined under "Risk Factors."
These factors may cause our actual results to differ materially from any
forward-looking statement.
 
     Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, levels of
activity, performance, or achievements. Moreover, neither we nor any other
person assumes responsibility for the accuracy and completeness of such
statements. We are under no duty to update any of the forward-looking statements
after the date of this prospectus to conform such statements to actual results.
 
                                       15
18
 
                                USE OF PROCEEDS
 
     The net proceeds we will receive from the sale of      shares of common
stock offered by us are estimated to be $     ($     if the underwriters'
over-allotment option is exercised in full) after deducting the estimated
underwriting discounts and commissions and offering expenses payable by us and
assuming an initial public offering price of $     .
 
     The principal purposes of this offering are:
 
     - to increase our equity capital,
 
     - to create a public market for our common stock,
 
     - to facilitate future access by us to public equity markets,
 
     - to provide increased visibility and credibility in a marketplace where
       several of our current and potential competitors are, or may in the
       future be, public companies, and
 
     - to enhance our ability to use our common stock as consideration for
       acquisitions and as a means of attracting and retaining key employees.
 
     We expect to use the net proceeds from this offering for working capital
and other general corporate purposes, capital expenditures, growth and expansion
of our business, product development and acquisitions. We may use approximately
$          to repay outstanding indebtedness under our bank line of credit,
which bears interest at        % and is due on June 30, 2000. We have not
identified other specific uses for such proceeds and management will have
discretion over their use and investment. Pending such uses, we intend to invest
the net proceeds from this offering in investment grade, interest-bearing
securities or guaranteed obligations of the U.S. Government.
 
     We intend to seek acquisitions of businesses, products and technologies
that are complementary to us, and a portion of the net proceeds may be used for
such acquisitions. While we discuss potential acquisitions from time to time, we
currently have no commitments or agreements for any such acquisitions and there
can be no assurances that any acquisitions will be made.
 
                                DIVIDEND POLICY
 
     We currently intend to retain earnings, if any, to fund the development and
growth of our business and do not anticipate paying cash dividends in the
foreseeable future. Payment of future dividends, if any, will be at the
discretion of our Board of Directors after taking into account various factors,
including our financial condition, operating results, current and anticipated
cash needs and plans for expansion. Our credit facility contains restrictive
covenants that limit our ability to pay cash dividends or make stock repurchases
without the prior written consent of the lender.
 
                                       16
19
 
                                 CAPITALIZATION
 
     The following table sets forth the capitalization of Student Advantage as
of December 31, 1998:
 
     - on an actual basis,
 
     - on a pro forma basis giving effect to the conversion of all outstanding
       shares of preferred stock into common stock upon the closing of the
       offering, and
 
     - on a pro forma as adjusted basis to reflect the sale by Student Advantage
       of           shares of common stock offered hereby at the initial public
       offering price of $          per share, after deducting estimated
       underwriting discounts and commissions and offering expenses.
DECEMBER 31, 1998
                                                            ------------------------------------
                                                                                      PRO FORMA
                                                             ACTUAL     PRO FORMA    AS ADJUSTED
                                                            --------   -----------   -----------
(UNAUDITED)   (UNAUDITED)
(IN THOUSANDS)
Redeemable convertible preferred stock, $1.00 par value:
     4,000,000 shares authorized: 2,747,036 shares issued
       and outstanding actual; no shares issued and
       outstanding pro forma and pro forma as adjusted....  $ 10,196    $     --      $     --
Stockholders' equity (deficit):
     Common stock, $0.01 par value; 45,000,000 shares
       authorized actual and pro forma and 100,000,000
       shares authorized pro forma as adjusted; and
       16,133,892 shares issued and outstanding actual;
       24,375,000 shares issued and outstanding pro forma;
            shares issued and outstanding pro forma as
       adjusted...........................................       183         272
     Additional paid in capital...........................     4,692      14,799            --
     Accumulated deficit..................................   (11,623)    (11,623)           --
     Treasury stock (at cost).............................      (630)       (630)           --
     Deferred compensation................................    (3,363)     (3,363)           --
                                                            --------    --------      --------
Total stockholders' equity (deficit)......................   (10,741)       (545)           --
                                                            --------    --------      --------
Total capitalization......................................  $   (545)   $   (545)     $     --
                                                            ========    ========      ========
17
20
 
                                    DILUTION
 
     The pro forma net tangible book value of Student Advantage at December 31,
1998 was $     , or $     per share of common stock. Pro forma net tangible book
value per share represents the amount of total tangible assets less total
liabilities, divided by the number of pro forma shares of common stock
outstanding after giving effect to the conversion of all shares of preferred
stock. After giving effect to the sale of           shares of common stock
offered hereby by Student Advantage at the assumed initial offering price of
$     per share and after deducting estimated underwriting discounts and
commissions and offering expenses, the pro forma net tangible book value as of
December 31, 1998 would have been $     or $     per share. This represents an
immediate increase in pro forma net tangible book value of $     per share to
existing stockholders and an immediate dilution of $     per share to new
investors purchasing shares of common stock in the offering. The following table
illustrates this dilution:
Assumed initial public offering price per share........    $
       Pro forma net tangible book value per share at
        December 31, 1998...................................
       Increase attributable to the offering................
     Pro forma net tangible book value per share after the
      offering..............................................
     Net tangible book value dilution per share to new
      investors in the offering.............................
The following table summarizes as of December 31, 1998 on the pro forma
basis described above, the total number of shares and consideration paid to
Student Advantage and the average price per share paid by the existing
stockholders and by new investors purchasing shares of common stock in the
offering at the initial public offering price of $     per share (before
deducting the estimated underwriting discounts and commissions and offering
expenses):
SHARES PURCHASED      TOTAL CONSIDERATION
                                          --------------------   ---------------------   AVERAGE PRICE
                                            NUMBER     PERCENT     AMOUNT      PERCENT     PER SHARE
                                          ----------   -------   -----------   -------   -------------
Existing stockholders...................                     %   $                   %       $
New investors...........................
                                          ----------   ------    -----------   ------
          Totals........................
                                          ==========   ======    ===========   ======
None of the foregoing tables or calculations assumes that any options
outstanding as of March 31, 1999 will be exercised. If all outstanding options
were exercised on the date of the closing of this offering, investors purchasing
shares in the offering would suffer total dilution of $     per share.
 
                                       18
21
 
                            SELECTED FINANCIAL DATA
 
     The following selected financial data are derived from the financial
statements of Student Advantage, Inc. The selected financial data as of December
31, 1997 and 1998, and for each of the three years in the period ended December
31, 1998, are derived from financial statements which have been audited by
PricewaterhouseCoopers LLP, independent accountants. These financial statements
are included elsewhere in this prospectus. The selected financial data as of
December 31, 1996 are derived from financial statements which have been audited
by PricewaterhouseCoopers LLP, and the balance sheet data for these financial
statements are not included elsewhere in this prospectus. The selected financial
data as of December 31, 1994 and 1995 and for each of the two years in the
period ended December 31, 1995 are derived from unaudited financial statements,
which are not included in this prospectus. The data set forth below should be
read in conjunction with "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and the Financial Statements and the
related Notes included elsewhere in this prospectus.
YEAR ENDED DECEMBER 31,
                                                         -------------------------------------------------------
                                                            1994          1995        1996      1997      1998
                                                         -----------   -----------   -------   -------   -------
                                                         (UNAUDITED)   (UNAUDITED)
                                                                  (IN THOUSANDS, EXCEPT PER SHARE DATA)
STATEMENT OF OPERATIONS DATA
Revenue
  Subscription.........................................    $  131        $  420      $ 1,093   $ 2,971   $ 7,174
  Other................................................        24            28          637       821    10,269
                                                           ------        ------      -------   -------   -------
     Total revenue.....................................       155           448        1,730     3,792    17,443
                                                           ------        ------      -------   -------   -------
Costs and expenses
  Cost of subscription revenue.........................       126           160          543     2,628     2,442
  Cost of other revenue................................        --            --          506       309     7,331
  Product development..................................        19            62          507     1,469     2,588
  Sales and marketing..................................        57           110          356       843     4,717
  General and administrative...........................        27            79          437     1,485     3,647
  Depreciation and amortization........................         1             1           37       239     1,027
  Stock-based compensation.............................        --            --           --        --       808
                                                           ------        ------      -------   -------   -------
     Total costs and expenses..........................       230           412        2,386     6,973    22,560
                                                           ------        ------      -------   -------   -------
Income (loss) from operations..........................       (75)           36         (656)   (3,181)   (5,117)
                                                           ------        ------      -------   -------   -------
Interest income (expense), net.........................        --            --           (1)       29         2
                                                           ------        ------      -------   -------   -------
Net income (loss)......................................    $  (75)       $   36      $  (657)  $(3,152)  $(5,115)
                                                           ======        ======      =======   =======   =======
Basic and diluted net loss per share...................    $(0.01)       $(0.00)     $ (0.05)  $ (0.21)  $ (0.32)
                                                           ======        ======      =======   =======   =======
Shares used in computing basic and diluted net loss per
  share................................................    14,184        14,184       14,184    15,295    15,957
                                                           ======        ======      =======   =======   =======
Unaudited pro forma basic and diluted net loss per
  share................................................    $   --        $   --      $    --   $    --   $ (0.24)
                                                           ======        ======      =======   =======   =======
Shares used in computing unaudited pro forma basic and
  diluted net loss per share...........................        --            --           --        --    21,128
                                                           ======        ======      =======   =======   =======
YEAR ENDED DECEMBER 31,
                                                              ----------------------------------------
                                                                 1995       1996     1997       1998
                                                              -----------   -----   -------   --------
                                                              (UNAUDITED)
                                                                           (IN THOUSANDS)
BALANCE SHEET DATA
Cash and cash equivalents...................................     $   8      $  26   $ 1,904   $  5,048
Working capital.............................................      (389)      (667)   (4,836)    (2,247)
Total assets................................................        97        256     2,745      9,934
Deferred revenue............................................       183        276     5,668      6,666
Stockholders' deficit.......................................      (302)      (702)   (4,335)   (10,741)
19
22
 
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
     The following should be read in conjunction with Student Advantage's
Financial Statements and related Notes and the other financial information
appearing elsewhere in this prospectus. In addition to historical information,
the following discussion and other parts of this prospectus contain
forward-looking information that involves risks and uncertainties. Student
Advantage's actual results could differ materially from those anticipated by
such forward-looking information due to factors discussed under "Risk Factors"
and elsewhere in this prospectus.
 
OVERVIEW
 
     Student Advantage is dedicated to serving the needs of college students
through its leading membership program and Web site. Our revenue is generated
from subscription revenue and other revenue.
 
     Subscription revenue is derived from membership sales. Memberships are sold
in three different ways. Most are sold to AT&T and distributed in conjunction
with an AT&T calling card. The membership cards associated with these membership
sales are co-branded and serve as both the Student Advantage membership
identification card and an AT&T calling card. We earn a fee from AT&T for each
of these memberships, with a current minimum commitment by AT&T of 1.25 million
memberships per academic year. During the years ended December 31, 1997 and
1998, AT&T accounted for approximately 77% and 95% of subscription revenue.
Memberships are also sold by Student Advantage to colleges, universities and
university organizations for distribution free of charge to students. In
addition, Student Advantage sells memberships directly to students for a
membership fee that is currently $20 per year. Subscription revenue is
recognized ratably from the date of subscription to the end of the annual
membership period, which ends on August 31 of each year.
 
     Other revenue includes advertising, marketing service and commerce revenue.
Advertising revenue consists primarily of fees for advertisements placed in SAM,
the Student Advantage magazine, sponsorship fees paid by vendors for inclusion
in the member guide, and fees for banner advertisements and sponsorships on our
Web site. Marketing services revenue is derived primarily from providing
tailored marketing services to businesses seeking to market their products and
services to college students. These services include organizing and executing
marketing tours that travel to college campuses, staffing tables in college
locations to solicit potential student customers on behalf of businesses and
providing media planning and placement. Commerce revenue includes primarily
transaction-based fees earned for reselling products and services on behalf of
business partners. To date, commerce revenue has included primarily fees that we
receive from AT&T for obtaining completed applications from students for AT&T
calling cards. In connection with each application accepted by AT&T, we also
earn membership fees that are included in subscription revenue.
 
     We began operations in 1992 as a sole proprietorship, converted to a
general partnership in 1995, converted to a limited liability company in 1996
and became a C Corporation in 1998. From inception through December 1997, our
revenue was derived primarily from annual membership fees. Since that time, we
have expanded our product and service offerings through internal growth as well
as acquisitions.
 
     In December 1997, we completed our acquisition of The Main Quad, Inc. which
owned and operated Web sites focused on providing content for students. These
Web sites serve as the basis for Student Advantage's current online activities.
In January 1998, we completed our acquisition of Collegiate Advantage, Inc. a
provider of marketing and promotional services to businesses targeting college
students. The acquisition of Collegiate Advantage marked our entrance into the
marketing services business. These acquisitions were accounted for under the
purchase method of accounting, and the results of operations of each of the
acquired companies have been included in our financial statements since their
respective dates of acquisition. Goodwill and other intangible assets in the
aggregate amount of $1.4 million were recorded in connection with these and
other acquisitions and are being amortized over the economic lives of the
related assets, ranging from two to five years. As of December 31, 1998, a
balance of approximately
                                       20
23
 
$617,000 remained to be amortized. We may be required to pay additional
contingent consideration, estimated to be approximately $625,000, to the former
owners of Collegiate Advantage.
 
     On April 1, 1999, Student Advantage completed its acquisitions of The
Travel Holding Group, LLC and The Campus Agency, LLC. The Campus Agency provides
media planning and strategy consulting services to the U.S. student travel
market. The Travel Holding Group is a reseller of Eurail passes. These
acquisitions have been accounted for under the purchase method of accounting,
and the results of operations of each company will be included in our results
beginning on the acquisition date. Goodwill and other intangible assets in the
aggregate amount of $280,000 were recorded in connection with these acquisitions
and will be amortized over three years. Because the historical results of Campus
Agency and Travel Holding Group are not material, pro forma financial
information has not been presented.
 
     In the future we may pursue additional acquisitions to obtain complementary
products, services and technologies. There are no assurances that the
acquisitions we already have completed, or any acquisitions that we may complete
in the future, will produce the anticipated revenue, earnings or business
synergies.
 
     We recorded deferred compensation of approximately $4.2 million in the year
ended December 31, 1998, representing the difference between the exercise price
of stock options granted in 1998 and the fair market value of the underlying
common stock at the date of grant. The difference is recorded as a reduction of
stockholders' equity and is being amortized over the vesting period of the
applicable options, typically four years. Of the total deferred compensation
amount, approximately $800,000 had been amortized as of December 31, 1998. The
amortization of deferred compensation is recorded as an operating expense. We
currently expect to amortize the following remaining amounts of deferred
compensation annually:
1999...................................................    $1,070,000
2000...................................................     1,015,000
2001...................................................       958,000
2002...................................................       320,000
Student Advantage has experienced substantial net losses since 1996 and, as
of December 31, 1998, had an accumulated deficit of $11.6 million. Student
Advantage expects to increase its expenditures in all areas in order to execute
its business plan. As a result, Student Advantage believes that it will continue
to incur operating losses and negative cash flows from operations for the
foreseeable future and that the rate at which such losses will be incurred may
increase from current levels.
 
                                       21
24
 
RESULTS OF OPERATIONS
 
     The following table sets forth results of operations data for Student
Advantage as a percentage of total revenue for the periods presented:
YEAR ENDED DECEMBER 31,
                                                              -----------------------
                                                              1996     1997     1998
                                                              ----     ----     ----
Revenue
  Subscription..............................................   63.2%    78.3%    41.1%
  Other.....................................................   36.8     21.7     58.9
                                                              -----    -----    -----
     Total revenue..........................................  100.0    100.0    100.0
                                                              -----    -----    -----
 
Costs and expenses
  Cost of subscription revenue..............................   31.4     69.3     14.0
  Cost of other revenue.....................................   29.2      8.2     42.0
  Product development.......................................   29.3     38.7     14.8
  Sales and marketing.......................................   20.6     22.2     27.1
  General and administrative................................   25.3     39.2     20.9
  Depreciation and amortization.............................    2.1      6.3      5.9
  Stock-based compensation..................................     --       --      4.6
                                                              -----    -----    -----
     Total costs and expenses...............................  137.9    183.9    129.3
                                                              -----    -----    -----
Loss from operations........................................  (37.9)   (83.9)   (29.3)
Interest income (expense), net..............................   (0.1)     0.8      0.0
                                                              -----    -----    -----
Net loss....................................................  (38.0)%  (83.1)%  (29.3)%
                                                              =====    =====    =====
COMPARISON OF YEAR ENDED DECEMBER 31, 1998 WITH YEAR ENDED DECEMBER 31, 1997
 
     Revenue. Total revenue increased from $3.8 million in 1997 to $17.4 million
in 1998. The increase in revenue was due in part to the significant increase in
subscription revenue from $3.0 million in 1997 to $7.2 million in 1998, mostly
due to memberships purchased by AT&T. The increase in other revenue was
attributable primarily to both: (1) the addition of Student Advantage's
marketing services business, which was acquired from Collegiate Advantage on
January 1, 1998, and (2) an increase in commerce revenue due primarily to fees
for obtaining calling card applications for AT&T, which began in the third
quarter of 1998. The increase in other revenue was attributable to a lesser
extent to increased advertising revenues related to the Student Advantage
magazine and the Student Advantage Web site. The first two issues of the Student
Advantage magazine shipped in the fourth quarter of 1998.
 
     AT&T accounted for approximately 62% and 68% of total revenue for 1997 and
1998. Additionally, AT&T accounted for approximately 77% and 95% of subscription
revenue for 1997 and 1998, and 9% and 49% of other revenue for 1997 and 1998. No
other single customer accounted for 10% or more of total revenues for 1997 or
1998.
 
     Cost of Subscription Revenue. Cost of subscription revenue consists of the
costs associated with the fulfillment of membership subscriptions and customer
service. Cost of subscription revenue decreased from $2.6 million in 1997 to
$2.4 million in 1998, due primarily to increased fulfillment efficiencies.
 
     Cost of Other Revenue. Cost of other revenue consists of the cost of
advertising, marketing services and commerce. Advertising costs include
production and mailing costs for the magazine, as well as costs incurred for the
Student Advantage Web site. Marketing services costs include the direct and
indirect costs associated with planning and implementing events and promotions,
media placement and other marketing services. Commerce costs include
personnel-related costs associated primarily with acquiring calling card
customers. Cost of other revenue increased from $309,000 in 1997 to $7.3 million
in 1998. The increase in cost of other revenue is due primarily to the addition
of Collegiate Advantage and its
 
                                       22
25
 
marketing services business in 1998 and the commencement of activities under the
AT&T marketing agreement, entered into in the third quarter of 1998, under which
Student Advantage visits college campuses to acquire calling card customers for
AT&T. Costs associated with the production of SAM, which shipped for the first
time in the fourth quarter of 1998, also contributed to the increase.
 
     Product Development. Product development expenses consist primarily of
personnel-related costs associated with the development and enhancement of the
membership products, which include the Student Advantage membership card, the
Student Advantage magazine and the studentadvantage.com Web site. Product
development expenses increased from $1.5 million in 1997 to $2.6 million in
1998. The increase is primarily due to Student Advantage's increased investment
in enhancing and improving the functionality of its Web site and other related
costs.
 
     Sales and Marketing. Sales and marketing expenses consist primarily of
personnel and other costs related to our sales and marketing programs. These
expenses increased from $843,000 in 1997 to $4.7 million in 1998. The increase
in sales and marketing expenses was due, in large part, to increased
expenditures related to building brand awareness, expanding and servicing the
customer base of partners, selling more online advertising, and supporting the
marketing services business. In 1998, we incurred additional sales and marketing
expenses as a result of the acquisition of the Collegiate Advantage business.
 
     General and Administrative.  General and administrative expenses consist
primarily of costs related to general corporate functions, including executive
management, finance, human resources, facilities, and legal. General and
administrative expenses increased from $1.5 million in 1997 to $3.6 million in
1998. The increase in general and administrative expenses is primarily due to
facilities and personnel-related costs.
 
     Depreciation and Amortization.  Depreciation and amortization expenses
increased from $239,000 in 1997 to $1.0 million in 1998. Amortization expense
increased as a result of the amortization over five years of goodwill and other
intangible assets related to the acquisitions of Collegiate Advantage and The
Main Quad. Depreciation expense increased primarily as a result of fixed asset
purchases in 1998.
 
     Stock-Based Compensation.  We recorded deferred compensation of $4.2
million in the year ended December 31, 1998. Of this amount, $808,000 is being
recorded as an expense in 1998. The remainder is being amortized over the
remaining vesting period of the individual options.
 
     Interest Income (Expense), Net.  Interest income, net includes interest
income from cash balances and interest expense related to Student Advantage's
financing obligations. Interest income, net decreased from $29,000 in 1997 to
$2,000 in 1998. The decrease is a result of interest due on borrowings under our
line of credit which was offset later in the year by interest income earned on
cash balances as a result of the issuance of preferred stock in October 1998, as
well as interest from a promissory note to a stockholder. Additionally, Student
Advantage incurred interest expense related to loans from the Chief Executive
Officer, which were repaid in full in 1998.
 
     Income Taxes.  On October 20, 1998, Student Advantage converted from a
limited liability company to a C Corporation. Operating losses originating while
Student Advantage was a limited liability company do not carry over to the C
Corporation, although certain other timing items as a result of differences
resulting from accrual to cash basis adjustments will be available to Student
Advantage. For the period October 21, 1998 to December 31, 1998 Student
Advantage generated a net operating loss carryforward of $2.0 million. Student
Advantage's net operating loss carryforwards expire beginning in 2018. Certain
future changes in the share ownership of Student Advantage, as defined in the
Tax Reform Act of 1996, may restrict the utilization of carryforwards. A
valuation allowance has been recorded for the entire deferred tax asset as a
result of uncertainties regarding the utilization of the asset due to Student
Advantage's lack of earnings history.
 
                                       23
26
 
COMPARISON OF YEAR ENDED DECEMBER 31, 1997 WITH YEAR ENDED DECEMBER 31, 1996
 
     Revenue.  Total revenue increased from $1.7 million in 1996 to $3.8 million
in 1997. The increase in revenue was due primarily to an increase in
subscription revenue from $1.1 million in 1996 to $3.0 million in 1997. The
increase in subscriptions was due to the commencement of Student Advantage's
membership agreement with AT&T, under which AT&T purchased membership
subscriptions for distribution to students. Other revenue increased from
$637,000 in 1996 to $821,000 in 1997, due primarily to increased advertising
revenue and, to a lesser extent, an increase in commerce revenue.
 
     AT&T accounted for approximately 62% of total revenues in 1997. No other
single customer accounted for 10% or more of revenues in 1996 or 1997.
 
     Cost of Subscription Revenue.  Cost of subscription revenue increased from
$543,000 in 1996 to $2.6 million in 1997. This increase is due primarily to the
increased costs associated with fulfilling new membership subscriptions, as well
as costs related to the addition of personnel to support the growth in revenues.
 
     Cost of Other Revenue.  Cost of other revenue decreased from $506,000 in
1996 to $309,000 in 1997, due primarily to lower advertising costs.
 
     Product Development.  Product development expenses increased from $507,000
in 1996 to $1.5 million in 1997. The increase is primarily due to the continued
investment in the membership subscription business. During 1997, Student
Advantage continued to develop new products to offer to support the membership
subscription business as well as enhance and grow the base of corporate
partners.
 
     Sales and Marketing.  Sales and marketing expenses increased from $356,000
in 1996 to $843,000 in 1997. The increase in sales and marketing is due to
increased expenditures to support the membership subscription business, which
grew significantly in 1997 with the addition of the AT&T membership agreement.
 
     General and Administrative.  General and administrative expenses increased
from $437,000 in 1996 to $1.5 million in 1997. The increase in general and
administrative expenses is primarily due to the increase in facilities costs and
an increase in the number of personnel hired during the year to support the
growth in Student Advantage's business.
 
     Depreciation and Amortization.  Depreciation and amortization expenses
increased from $37,000 in 1996 to $239,000 in 1997, primarily due to the
amortization of goodwill and other intangible assets resulting from
acquisitions.
 
     Interest Income (Expense), Net.  Interest income (expense), net includes
interest income from Student Advantage's cash balances and interest expense
related to Student Advantage's financing obligations. Interest income increased
from $1,000 of net interest expense in 1996 to $29,000 of net interest income in
1997. The increase is primarily due to a higher average cash and cash
equivalents balance during 1997.
 
                                       24
27
 
QUARTERLY RESULTS OF OPERATIONS
 
     The following table sets forth unaudited quarterly statement of operations
data for each of the four quarters in the year ended December 31, 1998. In the
opinion of management, the unaudited financial results include all adjustments,
consisting only of normal recurring adjustments, necessary for the fair
presentation of our results of operations for those periods. The quarterly data
should be read in conjunction with the Financial Statements and the Notes
thereto appearing elsewhere in this prospectus. The results of operations for
any quarter are not necessarily indicative of the results of operations for any
future period.
QUARTER ENDED
                                              ---------------------------------------------------------------
                                                MARCH 31,        JUNE 30,        SEPT. 30,        DEC. 31,
                                                   1998            1998             1998            1998
                                              --------------   -------------   --------------   -------------
                                                                 (UNAUDITED, IN THOUSANDS)
Revenue
  Subscription..............................      $1,738          $2,274           $1,856          $ 1,306
  Other.....................................       1,658           1,124            3,826            3,661
                                                  ------          ------           ------          -------
          Total revenue.....................       3,396           3,398            5,682            4,967
                                                  ------          ------           ------          -------
Costs and expenses
  Cost of subscription revenue..............         302             413              951              776
  Cost of other revenue.....................       1,515             854            1,572            3,390
  Product development.......................         485             812              596              695
  Sales and marketing.......................         746           1,069            1,281            1,621
  General and administrative................         508             776            1,067            1,296
  Depreciation and amortization.............         160             377              233              257
  Stock-based compensation..................          --              --               --              808
                                                  ------          ------           ------          -------
          Total costs and expenses..........       3,716           4,301            5,700            8,843
                                                  ------          ------           ------          -------
Loss from operations........................        (320)           (903)             (18)          (3,876)
                                                  ------          ------           ------          -------
Interest income (expense), net..............          15             (25)             (33)              45
                                                  ------          ------           ------          -------
Net loss....................................      $ (305)         $ (928)          $  (51)         $(3,831)
                                                  ======          ======           ======          =======
25
28
 
     The following table sets forth certain unaudited quarterly statement of
operations data expressed as a percentage of total revenues for each of the four
quarters in the period ended December 31, 1998.
QUARTER ENDED
                                              -------------------------------------------------
                                              MARCH 31,     JUNE 30,     SEPT. 30,     DEC. 31,
                                                1998          1998         1998          1998
                                              ---------     --------     ---------     --------
                                                          (UNAUDITED, IN THOUSANDS)
Revenue
  Subscription...........................        51.2%        66.9%         32.7%        26.3%
  Other..................................        48.8         33.1          67.3         73.7
                                                -----        -----         -----        -----
          Total revenue..................       100.0        100.0         100.0        100.0
                                                -----        -----         -----        -----
Costs and expenses
  Cost of subscription revenue...........         8.9         12.2          16.7         15.6
  Cost of other revenue..................        44.6         25.1          27.7         68.2
  Product development....................        14.2         23.9          10.5         14.0
  Sales and marketing....................        22.0         31.5          22.5         32.6
  General and administrative.............        15.0         22.8          18.8         26.1
  Depreciation and amortization..........         4.7         11.1           4.1          5.2
  Stock-based compensation...............          --           --            --         16.3
                                                -----        -----         -----        -----
          Total costs and expenses.......       109.4        126.6         100.3        178.0
                                                -----        -----         -----        -----
Loss from operations.....................        (9.4)       (26.6)         (0.3)       (78.0)
                                                -----        -----         -----        -----
Interest income (expense), net...........         0.4         (0.7)         (0.6)         0.9
                                                -----        -----         -----        -----
Net loss.................................        (9.0)%      (27.3)%        (0.9)%      (77.1)%
                                                =====        =====         =====        =====
Our operating results are dependent upon the college student market and
vary seasonally based upon the typical school year. We tend to sell most of our
memberships in the beginning of the fall academic term and the beginning of the
spring academic term. In addition, all of our memberships expire on August 31 of
each year. 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 is typically higher in the second and third quarters than
in the first and fourth quarters of each fiscal year. In 1998, our revenue from
advertising, marketing services and commerce was higher in the third quarter
than in other quarters in part because of increased activity associated with the
commencement of the school year. We believe that this seasonality may also occur
in subsequent years. The increase in other revenue in the third quarter of 1998
was also due to the commencement of activities under the AT&T marketing
agreement under which we receive fees for obtaining calling card applications
from students. Other revenue and the cost of other revenue were each affected in
the fourth quarter of 1998 by the publication of two issues of SAM.
 
LIQUIDITY AND CAPITAL RESOURCES
 
     Student Advantage has financed its operations primarily through the private
placement of securities, cash from operations, borrowings under its credit
facilities and loans from LLC members. In October 1998, Student Advantage
completed a private placement of equity securities to new investors and received
$9.9 million in net proceeds. As of March 31, 1999, Student Advantage had
approximately $3.7 million in cash and cash equivalents.
 
     Net cash used for operating activities was $2.7 million for 1998, compared
to $3.0 million provided by operating activities for 1997. The increase in net
cash used resulted primarily from an increase in accounts receivable of $2.7
million in 1998 and increasing net losses for 1998. The increase was partially
offset by the timing of payments of accounts payable and accrued expenses and
increased depreciation and amortization expense. Net cash in 1997 was affected
by an increase in deferred revenue of $5.4 million. Deferred revenues increased
$1.0 million in 1998 over those of 1997. Deferred revenue represents primarily
payments for membership fees not yet recognized as revenue and advance payments
for purchases of memberships and other services.
 
                                       26
29
 
     Net cash used for investing activities increased from $650,000 in 1997 to
$1.7 million in 1998. This increase was due primarily to the purchase of fixed
assets and the acquisition of Collegiate Advantage in 1998.
 
     Net cash used for financing activities was $453,000 in 1997, compared to
net cash provided by financing activities of $7.5 million in 1998. This increase
was primarily due to net cash proceeds of $9.9 million from the sale of shares
of Student Advantage preferred stock, partially offset by a distribution of $2.3
million to LLC members. In 1997, Student Advantage repurchased a member's LLC
interest for $630,000.
 
     As of April 5, 1999, the Company had a line of credit and equipment lease
credit facility with a commercial bank in an aggregate amount of $2.75 million.
The line of credit bears interest at a rate of LIBOR plus 200 basis points or
the bank's base rate. As of April 5, 1999, $1.0 million was outstanding under
the line of credit.
 
     Student Advantage has experienced a substantial increase in its
expenditures consistent with growth in operations and staffing, and anticipates
that this will continue for the foreseeable future. Additionally, Student
Advantage will continue to evaluate possible investments in businesses, products
and technologies, and plans to expand its Web infrastructure, sales and
marketing programs and aggressively promote its brand. Student Advantage
currently anticipates that its available cash resources combined with the net
proceeds for this offering will be sufficient to meet its anticipated needs for
working capital and capital expenditures for at least 12 months following this
offering.
 
RECENT ACCOUNTING PRONOUNCEMENTS
 
     In March 1998, the Accounting Standards Executive Committee ("AcSEC")
issued Statement of Position 98-1, "Accounting for the Cost of Computer Software
Developed or Obtained for Internal Use" ("SOP 98-1"). SOP 98-1 is effective for
financial statements for years beginning after December 15, 1998. SOP 98-1
provides guidance for accounting for costs of software products developed or
purchased for internal use, including when costs should be capitalized. Student
Advantage does not expect the adoption of this standard to have a material
effect on Student Advantage's results of operation, financial position or cash
flows.
 
     In April 1998, AcSEC issued SOP 98-5, "Reporting on the Costs of Start-Up
Activities" ("SOP 98-5"). SOP 98-5, which is effective for fiscal years
beginning after December 15, 1998, provides guidance on the financial reporting
of start-up costs and organization costs. It requires costs of start up
activities and organization costs to be expensed as incurred. As Student
Advantage has expensed these costs historically, the adoption of this standard
is not expected to have a significant impact on Student Advantage's results of
operations, financial position or cash flows.
 
     In June 1998, FASB issued SFAS No. 133, "Accounting for Derivatives and
Hedging Activities" ("SFAS No. 133"), which establishes accounting and reporting
standards for derivative instruments, including derivative instruments embedded
in other contracts, (collectively referred to as derivatives) and for hedging
activities. SFAS No. 133 is effective for all fiscal quarters of fiscal years
beginning after June 15, 1999. The adoption of SFAS No. 133 is not expected to
have an impact on Student Advantage's results of operations, financial position
or cash flows.
 
YEAR 2000 COMPLIANCE
 
     Many currently installed computer systems and software products are coded
to accept or recognize only two digit entries in the date code field. These
systems and software products will need to accept four digit entries to
distinguish 21st century dates from 20th century dates. As a result, computer
systems and/or software used by many companies and governmental agencies may
need to be upgraded to comply with such Year 2000 requirements or risk system
failure or miscalculations causing disruptions of normal business activities.
 
                                       27
30
 
     State of Readiness. Student Advantage does not internally develop a
significant amount of software. Student Advantage has made a preliminary
assessment of the Year 2000 readiness of its operating financial and
administrative systems, including the hardware and software that support Student
Advantage's systems. Student Advantage's assessment plan consists of:
 
     - contacting third-party vendors and licensors of material hardware,
       software and services that are both directly and indirectly related to
       the delivery of Student Advantage's services to its users,
 
     - contacting vendors of third-party systems,
 
     - assessing repair or replacement requirements,
 
     - implementing repair or replacement, and
 
     - creating contingency plans in the event of Year 2000 failures.
 
     Student Advantage is currently conducting an inventory of and developing
testing procedures for all software and other systems that it believes might be
affected by Year 2000 issues. Since third parties developed and currently
support many of the systems that we use, a significant part of this effort will
be to ensure that these third-party systems are Year 2000 compliant. We plan to
confirm this compliance through a combination of the representation by these
third parties of their products' Year 2000 compliance, as well as specific
testing of these systems. Student Advantage plans to complete this process prior
to the end of the third quarter of 1999. Until such testing is completed and
such vendors and providers are contacted, Student Advantage will not be able to
completely evaluate whether its systems will need to be revised or replaced.
 
     Costs. To date, Student Advantage has spent an immaterial amount on Year
2000 compliance issues but expects to incur an additional approximately $100,000
in connection with identifying, evaluating and addressing Year 2000 compliance
issues. Most of Student Advantage's expenses have related to, and are expected
to continue to relate to, the operating costs associated with time spent by
employees and consultants in the evaluation process and Year 2000 compliance
matters generally. Such expenses, if higher than anticipated, could have a
material adverse effect on Student Advantage's business, results of operations
and financial condition.
 
     Risks. Student Advantage is not currently aware of any Year 2000 compliance
problems relating to its systems that would have a material adverse effect on
Student Advantage's business, results of operations and financial condition,
without taking into account Student Advantage's efforts to avoid or fix such
problems. There can be no assurance that Student Advantage will not discover
Year 2000 compliance problems in its systems that will require substantial
revision. In addition, there can be no assurance that third-party software,
hardware or services incorporated into Student Advantage's material systems will
not need to be revised or replaced, all of which could be time-consuming and
expensive. The failure of Student Advantage to fix or replace its internally
developed proprietary software or third-party software, hardware or services on
a timely basis could result in lost revenues, increased operating costs, the
loss of customers and other business interruptions, any of which could have a
material adverse effect on Student Advantage's business, results of operations
and financial condition.
 
     Student Advantage is heavily dependent on a significant number of
third-party vendors to provide both network services and equipment. A
significant Year 2000-related disruption of the network, services or equipment
that third-party vendors provide to Student Advantage could cause Student
Advantage's members and visitors to consider seeking alternate sites or cause an
unmanageable burden on its customer service, which in turn could materially and
adversely affect Student Advantage's business, financial condition and results
of operations.
 
     In addition, there can be no assurance that governmental agencies, utility
companies, Internet access companies, third-party service providers and others
outside of Student Advantage's control will be Year 2000 compliant. The failure
by such entities to be Year 2000 compliant could result in a systemic failure
beyond the control of Student Advantage, such as a prolonged Internet,
telecommunications or electrical failure, which could also impair Student
Advantage's ability to deliver its services to its customers,
                                       28
31
 
decrease the use of the Internet or prevent users from accessing its Web sites
which could have a material adverse effect on Student Advantage's business,
results of operations and financial condition.
 
     Contingency Plan. As discussed above, Student Advantage is engaged in an
ongoing Year 2000 assessment and has not yet developed any contingency plans.
The results of Student Advantage's Year 2000 simulation testing and the
responses received from third-party vendors and service providers will be taken
into account in determining the nature and extent of any contingency plans.
 
                                       29
32
 
                                    BUSINESS
 
OVERVIEW
 
     Student Advantage, Inc. is dedicated to serving the needs of college
students through our leading membership program and studentadvantage.com Web
site. With our national fee-based membership program, we have created a
community of over 1,000,000 student members who receive benefits including
ongoing discounts on products and services offered by over 40 national partners
and 12,000 partners in 115 local markets. Student Advantage offers the only
ongoing discount available to college students for the products and services of
many of our partners. Through studentadvantage.com, we are leveraging our
membership base, brand name, partnerships with corporations and universities,
and existing online business with the objective of becoming the leading online
destination for students. The studentadvantage.com Web site currently offers
content, community and e-commerce targeted to college students.
 
INDUSTRY BACKGROUND
 
     College students represent a large audience with needs and interests that
are specific to their group. These students are exposed, often for the first
time, to lifestyle decisions and other challenges unique to the college
experience. With so many new experiences to manage, these students seek
information and guidance from a trusted resource able to assist them in matters
such as:
 
     - purchasing and budgeting decisions,
 
     - selecting a major or a career, or finding a job,
 
     - conducting academic research,
 
     - making lifestyle and extracurricular decisions,
 
     - finding economical travel arrangements for breaks or holidays, and
 
     - understanding financial aid alternatives.
 
     To meet the needs of this audience, businesses are offering an increasing
variety of products and services designed to capture their interest. College
students represent an attractive market opportunity for businesses because of
their significant spending power and their tendency to retain brand loyalties
after graduation. According to Student Monitor LLC, a market research company,
college students spent over $100 billion in the 1997-1998 academic year. In the
United States, there are over 15 million full-time and part-time undergraduate
and graduate students at more than 3,000 university and college campuses. The
college student population is expected to grow as there are currently 40 million
children and young adults from ages 10 to 19.
 
     Businesses have recognized the importance of college students and have
dedicated significant advertising and marketing expenditures towards this group.
However, college students have been difficult to reach in a targeted fashion
because:
 
     - they are transient, frequently changing their addresses,
 
     - the college student population has significant turnover,
 
     - colleges are increasingly seeking to limit direct marketing to students
       on campus, and
 
     - few national advertising vehicles are directed toward the college student
       population.
 
     The Internet has emerged as an attractive medium for advertisers because it
offers a level of targetability, flexibility, interactivity and measureability
not available in traditional media. College students are active users of the
Internet, highly computer literate and active in e-commerce. According to
Student Monitor, 90% of students use the Internet and 52% of these students use
the Internet at least daily. Student Monitor estimates that in 1998, 21% of
students made online purchases representing $890 million
 
                                       30
33
 
in e-commerce. According to Jupiter Communications, students will spend close to
$2.6 billion through e-commerce by the year 2002.
 
     Student Advantage believes that businesses are seeking a nationally-focused
vehicle for targeting the attractive college demographic. Many businesses that
have tried to target college students have been unsuccessful, due to the
inherent difficulties in reaching this group. Marketing organizations seeking to
help businesses reach this market have had only limited success because they are
either limited in their geographic scope or are not able to offer a wide range
of services and channels to reach students.
 
     Furthermore, Student Advantage believes that while the Internet creates an
opportunity to reach targeted audiences, it has not been used effectively to
target college students. The major Internet navigational portal sites are
generally designed to appeal to a broad audience. These portals do not focus on
the issues that are relevant to college students, such as financial and
budgeting assistance, economical travel, lifestyle decisions and careers.
Student Advantage believes that there is a need for a comprehensive student
destination focused on the specific requirements of students for information,
guidance and other services.
 
THE STUDENT ADVANTAGE SOLUTION
 
     Student Advantage is a leading resource and trusted advocate dedicated to
serving the needs of college students. As a result, we are positioned to serve
as a point of access to this market. Through our national membership program, we
have created a community of over 1,000,000 college student members who receive
benefits including ongoing discounts on products and services offered by over 40
national partners and 12,000 local partners. Student Advantage has also created
a comprehensive online destination for college students, studentadvantage.com.
 
     College students can join the Student Advantage membership program:
 
     - by obtaining, free of charge, a co-branded card that serves as both a
       Student Advantage membership identification card, paid for by AT&T, and
       an AT&T calling card,
 
     - through programs under which universities, colleges and university
       organizations purchase memberships in bulk for distribution free of
       charge to their students, and
 
     - by paying an annual membership fee of $20.
 
     While our primary constituency is our student members, we also enable
businesses to reach the student market and enable colleges and universities to
provide a highly useful resource to students.
 
    [DIAGRAM SHOWING STUDENT ADVANTAGE IN THE CENTER WITH ARROWS POINTING TO
              CAPTIONS FOR STUDENTS, BUSINESSES AND UNIVERSITIES.]
 
     Benefits to Student Members. The Student Advantage membership program
provides college students with ongoing discounts on products and services from
national partners including Amtrak, AT&T, Foot Locker, Greyhound, Staples and
Tower Records. For example, in 1998, our members spent $10.9 million on Amtrak
fares and saved over $1.9 million by using the Student Advantage discount. The
membership program also enables students to receive discounts for products and
services in 115 local markets.
 
     Through our Web site, studentadvantage.com, we provide content, community
and commerce. The Web site offers services and information of particular
interest to college students, including discount purchasing, travel
alternatives, career and job searches, lifestyle and extracurricular decisions
and financial aid. Our Web site:
 
     - enables access to college news from over 400 colleges and universities,
 
     - provides online bulletin boards,
 
     - provides free e-mail and an online address book, calendar and document
       storage,
 
                                       31
34
 
     - offers an e-commerce marketplace, and
 
     - includes a searchable directory of partners who offer discounts for
       Student Advantage members.
 
     Student Advantage members also receive a subscription to SAM, a magazine
published by Student Advantage. SAM includes lifestyle and practical content for
students and updates on new discounts available to Student Advantage members.
 
     Benefits to Partners.  We provide a platform for our partners to market
their products and services to a large, demographically attractive market.
Student Advantage appeals to partners and advertisers because it combines:
 
     - a large and attractive demographic group,
 
     - database marketing capabilities,
 
     - a trusted brand,
 
     - program usage tracking,
 
     - quality online content, and
 
     - community interaction.
 
     By maintaining contact with students throughout their college experience
and by establishing university partnerships, we also benefit businesses by
allowing targeted and continued access for advertising and marketing efforts. In
addition, businesses that offer products and services through Student Advantage
benefit by being associated with the Student Advantage brand. For example,
according to Egghead.com, in 1998, Student Advantage members who visited
Egghead.com from studentadvantage.com were two times more likely to purchase
products than the average visitor and spent 55% more than the average visitor.
 
     Partners also benefit from our direct marketing knowledge and the expertise
of our management team in designing and implementing effective marketing
techniques to reach college students. AT&T, for example, utilizes Student
Advantage for a variety of marketing programs, primarily to increase the number
of students carrying AT&T calling cards. By partnering with us, AT&T during the
1998-99 school year exceeded its prior year's sales of calling cards to college
students by more than 300%.
 
     We maintain eight regional offices throughout the United States in order to
more effectively reach students and provide services in local markets. These
offices, which are managed by our headquarters in Boston, provide us with a
broad geographical presence and enable us to implement effective nationwide
marketing programs.
 
     Benefits to Colleges and Universities.  Colleges and universities can
generate goodwill and help reduce the cost of student life by making the Student
Advantage program readily available to students. Colleges, universities and
university organizations can endorse the membership program, co-market with us
and share in associated revenues. Schools can also purchase memberships in bulk
and offer them to their students free of charge. As colleges seek additional
revenue streams, Student Advantage can use its relationships with local
merchants and its membership card as a platform for colleges and universities to
participate in debit-card transaction revenue from off-campus transactions. We
also fund, and enlist our business partners to sponsor, on-campus student
activities and events. For example, Student Advantage co-sponsored Midnight
Madness at the University of North Carolina -- Charlotte, an event that marks
the beginning of its college basketball season.
 
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35
 
STRATEGY
 
     Our objective is to be the leading online and offline resource for college
students. Student Advantage intends to broaden and deepen its relationship with
students by serving the needs of its three key constituencies - students,
businesses and schools. The key elements of our strategy include the following:
 
     Strengthen Online Destination for Students.  Student Advantage believes
that its existing 1,000,000 members provide a platform for building the leading
online destination for students. Our goal is to establish our Web site,
studentadvantage.com, as the primary vehicle for delivery of our products and
services to students. We believe that the Internet is ideally suited for
providing our products and services and is a natural extension of our current
business. Our Web site currently offers content, community and e-commerce
services targeted specifically to college students. The Web site also allows
students to enroll in our membership program, receive customer service, and
search our directory of national and local partners who offer discounts. We
intend to enhance our online offerings by making additional content available
and by expanding our e-commerce marketplace with additional partners. We also
expect to offer additional online programming in order to personalize the Web
site for particular college campuses.
 
     Continue to Build Brand.  Student Advantage believes that building its
brand is critical to attracting and expanding its membership and Internet user
base. Our market leadership position has been driven by our membership program
and by partnering with leading national and local partners and universities. We
believe that aggressive brand-building will become increasingly important to
sustain our leadership position. We have started to allocate some of our
branding expenditures toward online branding through partnerships and
distribution agreements with leading Internet-based companies and strategic
alliances with leading advertisers. We will also continue to enhance our offline
branding both directly and through co-marketing arrangements with our partners.
Student Advantage believes that it can build online brand awareness and attract
traffic by leveraging the reach of its student membership base.
 
     Aggressively Grow Membership.  We intend to continue to grow our membership
through a variety of initiatives including:
 
     - increasing the rate of new memberships through our Web site,
 
     - increasing our number of corporate partners,
 
     - expanding our partnerships with colleges and universities, including
       selling them memberships in bulk,
 
     - expanding our on-campus tabling and marketing services,
 
     - providing members-only premium services on our Web site by introducing
       new content and services and transitioning portions of our existing
       services and content to members-only status, and
 
     - offering our program to high school students and college graduates.
 
     Enhance Relationships with Students, Businesses and Schools.  We intend to
continue to enhance our value to students by offering new products and services,
including online offerings for content, commerce and community. In addition to
increasing the number of national and local partners, Student Advantage will
provide additional services to partners, such as visitor tracking and membership
data which will allow Student Advantage to better target advertising, make
recommendations and provide for a more personalized and engaging experience.
Student Advantage will continue to enroll colleges and universities as partners
and will strengthen its relationships with schools by continuing to provide
marketing services and offering online outsourcing services.
 
     Continue to Pursue Strategic Acquisitions and Alliances.  Since inception,
we have acquired and integrated eight complementary businesses in order to
expand and strengthen our offerings to students. We plan to continue to acquire
companies or enter into alliances that offer opportunities to increase our
online traffic and acquire new technologies.
 
                                       33
36
 
PRODUCTS AND SERVICES
 
     We provide college students with discounts on a broad range of products and
services through our Student Advantage membership program, as well as valuable
resources through our Web site and other student-focused content and services
offerings. We also offer marketing services to businesses seeking to effectively
communicate with the college student population.
 
     STUDENT ADVANTAGE MEMBERSHIP PROGRAM
 
     Our membership program provides valuable savings opportunities, services
and information to college students. During the 1998-99 academic year, over
1,000,000 students at over 3,000 colleges and universities are members of the
Student Advantage program. Members typically subscribe for one-year memberships
that coincide with the academic year. Memberships are sold in three different
ways. Most are sold to AT&T and distributed in conjunction with an AT&T calling
card. These membership cards are co-branded and serve as both a Student
Advantage membership identification card and AT&T calling card. Memberships are
also sold to colleges, universities and university organizations for
distribution free of charge to students. In addition, Student Advantage sells
memberships directly to students for a membership fee that is currently $20 per
year.
 
     Upon enrollment, Student Advantage members receive a hard plastic Student
Advantage membership identification card and a member guide describing the
program and its benefits. By presenting the Student Advantage card at
participating retail locations, or by providing their membership number online,
Student Advantage members receive attractive discounts throughout the year for
products and services from both national and local partners. Student Advantage
currently offers discounts from our 40 national partners and over 12,000 local
partners in 115 local markets.
 
     National discounts available to Student Advantage members include:
 
     - 15% off Amtrak rail fares
 
     - 15% off purchases from Foot Locker
 
     - 15% off purchases from American Eagle Outfitters
 
     - $50 off any graduate school course at The Princeton Review
 
     - 15% off Greyhound bus fares
 
     STUDENT-FOCUSED CONTENT AND SERVICES
 
     studentadvantage.com
 
     Our Web site, studentadvantage.com, addresses the needs of college students
for content, community and e-commerce.
 
        Content.  Student Advantage's content offering includes up-to-date
        information on topics of interest to students, including purchasing and
        budgeting decisions, travel, career, education, entertainment, health,
        lifestyles and financial aid. For example, students may access articles
        that provide information on studying abroad or purchasing renters'
        insurance. Our content is both developed by our editors and collected
        from over 400 colleges using our U-WIRE news feed. In addition, our Web
        site provides students with information customized for their local
        market or college campus and a searchable online directory of national
        and local discounts offered by our partners. Our Web site also includes
        maps and directions to retail locations that offer discounts.
 
        Community.  The studentadvantage.com Web site offers students a number
        of community-building services. Student Advantage's online bulletin
        boards give students the opportunity to discuss topics such as
        interviewing techniques and campus life. Our Virtual Backpack service
        allows students to set up their own email account, organize contact
        information in an online
 
                                       34
37
 
        address book, store documents and keep track of important dates on an
        online calendar. We also enable students to send online greeting cards.
 
        e-Commerce.  Students can purchase a variety of products online with a
        Student Advantage discount. Members can purchase products directly from
        vendors through our marketplace or link to a Web page that is co-branded
        with a partner. Products offered online include books, software, music,
        footwear, magazines and flowers. Companies whose products can be
        purchased online through links from our Web site include Egghead.com,
        1-800-FLOWERS, University Subscription Service and Rockport Interactive.
 
     U-WIRE (University Wire)
 
     U-WIRE is a daily electronic news service of college news, sports, opinion
and entertainment content collected from over 400 college newspapers. U-WIRE can
be accessed at studentadvantage.com. U-WIRE editors select news, sports, opinion
and entertainment articles from its member newspapers and distribute content
among the college newspapers for inclusion in their print and online editions.
Student Advantage has the exclusive right to syndicate most of the U-WIRE
content electronically and to provide college news feeds to syndication
partners, which currently include Yahoo!, Excite, USAToday.com, Lexis-Nexis and
Digital City, an affiliate of America Online.
 
     SAM, The Student Advantage Magazine
 
     The Student Advantage membership includes a subscription to SAM, the
Student Advantage magazine. SAM is a magazine that is mailed directly to our
members. SAM includes lifestyle and practical content for students, updates on
new discounts and privileges available to Student Advantage members and
interactive features, such as member surveys and contests. Articles are provided
primarily by freelance writers. We use feedback from our readers to tailor
future articles and offerings to their particular interests and needs.
 
     Rail Connection
 
     Through an arrangement with CIT Tours, Corp., a representative of the
Italian State Railways, we offer Eurail passes to student members and others. We
promote our Eurail passes to Student Advantage members in travel guide books,
through direct mail and in advertisements in campus publications.
 
     CORPORATE MARKETING SERVICES
 
     We provide tailored marketing services for businesses seeking to market
their products and services to college students. Our in-depth knowledge of the
college student market, our expertise in marketing to college students and our
extensive university relationships enable us to help businesses effectively and
efficiently reach college students. Student Advantage currently provides a
variety of marketing services to businesses, including the following:
 
     - organizing and executing marketing tours that travel campus to campus,
 
     - staffing tables at on-campus college locations, such as student unions,
       to solicit potential student customers,
 
     - developing and managing programs that recruit, train and supervise
       students to represent businesses on campus,
 
     - assisting marketers who desire to sponsor on-campus events, such as movie
       screenings and concerts, and
 
     - helping marketers place advertisements in college newspapers.
 
     We also provide staffing for on-campus events and other activities for
businesses that have already designed a marketing program but lack
implementation resources and expertise at the campus level.
 
                                       35
38
 
     Our marketing services are typically offered to businesses on a fixed-cost
basis or hourly rate basis.
 
     Our marketing services group utilizes eight regional offices across the
United States. The broad geographical reach of our marketing services group
allows us to execute our services nationwide. In 1998, clients who purchased our
marketing services included Amtrak, AT&T, Coca-Cola and Visa.
 
ALLIANCES
 
     An important element of our strategy is to form alliances to assist us in
offering students products and services and in offering businesses and
advertisers an effective channel for reaching college students.
 
     AT&T
 
     Our relationship with AT&T has enabled us to rapidly expand our membership
base and strengthen our presence on college campuses as a resource associated
with quality brand products and services.
 
     In February 1997, Student Advantage and AT&T entered into a membership
agreement under which Student Advantage earns a fee from AT&T for each
membership issued in connection with a Student Advantage AT&T Calling Card, with
a minimum commitment by AT&T for 1.25 million Student Advantage memberships per
academic year. Student Advantage and AT&T agreed to market this program to
college students throughout all of their relevant college marketing channels.
Student Advantage also agreed that it would not enter into any promotional or
marketing activities with any credit card, telecommunications or multipurpose
college student identification card provider, other than AT&T. The agreement
provides that we will not allow any third party to offer a Student Advantage
membership to college students free of charge as an incentive or through any
promotion.
 
     In February 1998, we entered into a marketing agreement with AT&T under
which we agreed to promote and market AT&T's calling card services to college
students. We also agreed to provide certain marketing services focused on the
college market to AT&T. AT&T appointed Student Advantage as the exclusive
provider of tabling and non-tabling activities (which require a physical
presence by its employees on the college campus) with respect to the
solicitation of college students for the AT&T calling card service. In return,
AT&T agreed to pay us for the solicitation of each application for such service.
In addition, AT&T agreed to pay for additional marketing activities and to be
the exclusive sponsor of certain online offerings. We also granted AT&T a right
of first and last refusal to be the exclusive telecommunications advertiser for
the first four issues of the Student Advantage magazine. AT&T agreed to promote
and market the Student Advantage membership through television, mass media
marketing or other mass media advertising. We are also providing other marketing
services to AT&T in the college student market.
 
     In July 1998, AT&T exercised an option to extend the original termination
dates of the membership agreement and the marketing agreement to June 1, 2001.
However, AT&T may terminate these agreements prior to such date upon 120 days
prior notice, subject to payment of a termination fee under certain
circumstances. AT&T may also terminate the agreements if Raymond V. Sozzi, Jr.
is no longer employed as President of Student Advantage, or if he no longer owns
a minimum five percent ownership interest in Student Advantage. AT&T accounted
for 62% of our total revenues in 1997 and 68% of our total revenues in 1998.
While we are not aware of plans by AT&T to terminate its use of our services,
the termination of our relationship with AT&T, or a material reduction in the
use of our services by AT&T, would have a material adverse effect on our
business.
 
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39
 
     Partners
 
     Student Advantage offers our members discounts on products and services
from over 40 national partners and 12,000 local partners in over 115 local
markets, including rail fares, bus fares, CDs, books and clothing.
Representative national partners and local markets include:
REPRESENTATIVE NATIONAL PARTNERS                            REPRESENTATIVE LOCAL MARKETS
1-800-FLOWERS                                              Ann Arbor, Michigan
American Eagle Outfitters                                  Auburn, Alabama
Amtrak                                                     Austin, Texas
Blimpie International                                      Berkeley, California
Choice Hotels                                              Boston, Massachusetts
Dollar Rent a Car                                          Boulder, Colorado
Egghead.com                                                Chapel Hill, North Carolina
Foot Locker                                                Chicago, Illinois
Greyhound                                                  Columbus, Ohio
Hostelling International                                   Lawrence, Kansas
IBM                                                        Los Angeles, California
Jostens                                                    Madison, Wisconsin
Linens 'n Things                                           New York, New York
Pearle Vision                                              Philadelphia, Pennsylvania
Rockport Interactive                                       Princeton, New Jersey
Staples                                                    San Diego, California
The Wall Street Journal                                    Tallahassee, Florida
Tower Records                                              Washington, D.C.
For many of our national partners, the Student Advantage discount is the
only ongoing discount offered to college students. Many of our national partners
engage in co-marketing activities with Student Advantage. Student Advantage
seeks to identify and attract additional partners whose products and services
complement its offerings and who offer valuable ongoing discounts to its
members.
 
     Advertisers
 
     We provide advertisers with access to a large, demographically desirable
college student audience. We also provide advertisers with direct marketing
knowledge and expertise in designing and implementing effective advertising to
reach college students. Businesses which have purchased advertising from us,
such as advertising in SAM, sponsorship of portions of our Web site and banner
advertising, include Apple Computer, Barnes & Noble, Ford Motor Company,
Microsoft and Visa.
 
     Unlike many competitors, we are able to combine print, on-campus and Web
site advertisements. We intend to expand our in-house sales force during 1999
and offer additional banner advertising and sponsorship opportunities on our Web
site.
 
UNIVERSITY RELATIONSHIPS
 
     We believe that university relationships are critical to our success. An
important element of our strategy is to continue to develop relationships with
colleges, universities and university organizations to assist us in marketing
and selling our products and services. The Student Advantage membership program
has been endorsed by more than 30 colleges, universities and university
organizations. These schools and organizations typically agree to co-market the
Student Advantage membership program to their students and receive a percentage
of the associated membership fees. Several colleges and universities purchase
Student Advantage memberships in bulk and distribute the memberships to their
students free of charge.
 
     Colleges and universities, or university organizations from these schools,
that have endorsed the Student Advantage membership program or purchased
memberships in bulk include:
 
Arkansas State University
Auburn University
Brandeis University
Emory University
University of California-Berkeley
Florida State University
Northwestern University
University of Pennsylvania
University of Utah
Villanova University
University of Nevada, Las Vegas
University of Virginia
 
     Student Advantage has also established an off-campus debit card program for
New York University and American University. For these universities, we enroll
off-campus local merchants to participate in a debit-card program maintained by
the university.
 
                                       37
40
 
SALES AND MARKETING
 
     As of March 31, 1999, Student Advantage had a direct sales organization
consisting of 27 professionals. Five of these professionals are dedicated to the
AT&T relationship with an additional four professionals dedicated primarily to
managing our other significant partner relationships. The remaining 18
professionals are engaged in a variety of sales functions, including:
 
     - selling advertising in SAM,
 
     - selling banner advertising and sponsorships on studentadvantage.com,
 
     - enlisting additional national partners for its discount program,
 
     - seeking opportunities for partner-sponsored events and promotions
       targeted at college students, and
 
     - managing existing partner relationships
 
     In addition, we maintain a regional sales organization of 37 professionals
in eight regional offices focused primarily on enlisting and managing local
partners and providing marketing services. These offices, which are managed by
our headquarters in Boston, provide us with a broad geographical presence and
enable us to implement effective nationwide marketing programs.
 
     Student Advantage uses a variety of online and traditional marketing
programs to increase brand awareness. Our marketing goals are to create and
enhance awareness of Student Advantage as the leading resource and trusted
advocate dedicated to serving the needs of college students, the most effective
way for marketers and advertisers to reach students, and a trusted and effective
partner for colleges and universities. Our marketing strategy for each contains
a mix of online advertising, programs which drive members to our Web site,
in-store advertising in local retail locations, on-campus direct solicitation of
students, outbound e-mail, co-marketing with colleges and universities through
on-campus posters and student mailbox drops, print advertising, new media banner
campaigns, and direct mail. Student Advantage's marketing department consisted
of 14 marketing professionals as of March 31, 1999.
 
TECHNOLOGY
 
     Student Advantage has implemented a broad array of site management,
advertising management, customer interaction, registration systems,
transaction-processing and fulfillment systems using a combination of its own
proprietary technologies and commercially available, licensed technologies. Our
current strategy is to license commercially available technology whenever
possible rather than seek internally developed solutions. We use contractors to
develop the specialized software necessary for our business, such as the
software required to register members online.
 
     Consistent with our preference for off-the-shelf software components, the
hardware systems that we utilize also consist of commercially available
components. Student Advantage believes that this architecture provides the
ability to increase scale quickly and reliably, and at a relatively low cost.
Although our existing infrastructure currently exceeds present demand, we have
plans for additional upgrades in anticipation of increased demand.
 
     Our membership database is hosted at AERO Fulfillment Services and utilizes
Microsoft SQL database. Our production servers utilize Sun Microsystems, Inc.
hardware and use Netscape Web server software. Student Advantage's system
hardware is hosted at USWeb/CKS, a third-party facility in New York. A group of
systems administrators and network managers at USWeb/CKS operate our Web site,
network operations and transaction-processing systems and monitor our systems 24
hours a day.
 
     Our operations are dependent upon USWeb/CKS's and AERO's ability to
maintain their systems in effective working order and to protect their systems
against damage from fire, natural disaster, power loss, telecommunications
failure or similar events. Student Advantage's servers are powered by an
uninterruptible power supply to provide a safeguard against unexpected power
loss. Our systems are copied to backup tapes each night and stored at an
off-site storage facility for one year. In addition, the servers are
 
                                       38
41
 
equipped with redundant file systems, which allows for prompt replacement of
defective disks without interruption of service.
 
COMPETITION
 
     The market for student members and Internet services and products is
relatively new, intensely competitive and rapidly changing. With no substantial
barriers to entry, we believe that competition will continue to intensify. We
compete, directly and indirectly, for members, advertisers, partners and viewers
with the following categories of companies:
 
     - general purpose consumer online services such as America Online and
       Microsoft Network, each of which provides access to student-related
       content and services,
 
     - Web search and retrieval services, such as AltaVista, Excite, Infoseek,
       Lycos, and Yahoo!, and other high-traffic Web sites,
 
     - Web sites targeted to students generally or to students of a particular
       school,
 
     - membership programs,
 
     - publishers and distributors of traditional off-line media (such as
       television, radio and print), including those targeted to college
       students, many of which have established or may establish Web sites, and
 
     - vendors of college student information, merchandise, products and
       services distributed through other means, including retail stores, mail
       and schools.
 
     We believe that the principal competitive factors in attracting and
retaining members are:
 
     - brand recognition,
 
     - quality of content and service,
 
     - critical mass of members and partners,
 
     - number and type of discounts,
 
     - relationships with universities,
 
     - comprehensive geographic coverage,
 
     - breadth of offerings, and
 
     - cost of service.
 
     We believe that the principal competitive factor in attracting and
retaining partners, merchandisers and content providers is our ability to offer
sufficient incremental revenue from online and offline sales of products and
services. We believe that the principal competitive factors in attracting
advertisers include the demographics of our membership and user base, the number
of readers of our magazine, the number of members and users of our Web site,
cost of advertising and creative implementation of advertisement placements
across our products and services. There can be no assurance that we will be able
to compete favorably with respect to these factors.
 
     We believe that the strong Student Advantage brand combined with our
ability to deliver a targeted, demographically-attractive audience to
advertisers and partners, our existing base of over one million members, our
national and local partners and our relationships with colleges and universities
are principal competitive advantages. However, many of our competitors, current
and potential, have significantly greater financial, technical or marketing
resources. In addition, providers of Internet tools and services may be acquired
by, receive investments from, or enter into other commercial relationships with
larger, well-established and well-financed companies, such as Microsoft or
America Online. Greater competition resulting from such relationships could have
a material adverse effect on our business.
 
INTELLECTUAL PROPERTY AND PROPERTY RIGHTS
 
     Student Advantage regards its copyrights, service marks, trademarks, trade
dress, trade secrets, proprietary technology and similar intellectual property
as critical to its success, and relies on trademark and copyright law, trade
secret protection and confidentiality and/or license agreements with its
employees,
 
                                       39
42
 
customers, independent contractors, partners, and others to protect its
proprietary rights. Student Advantage strategically pursues the registration of
its trademarks and service marks. Effective trademark, service mark, copyright
and trade secret protection may not be available in every country in which
Student Advantage's products and services are made available. There can be no
assurance that the steps taken by us to protect its proprietary rights will be
adequate or that third parties will not infringe or misappropriate our
copyrights, trademarks, trade secrets, trade dress and similar proprietary
rights. In addition, there can be no assurance that other parties will not
independently develop substantially equivalent intellectual property. A failure
by us to protect our intellectual property in a meaningful manner could have a
material adverse effect on our business, financial condition and results of
operations. In addition, litigation may be necessary in the future to enforce
our intellectual property rights, to protect our trade secrets or to determine
the validity and scope of the proprietary rights of others. Such litigation
could result in substantial costs and diversion of financial and managerial
resources, which could have a material adverse effect on our business.
 
     Student Advantage has been subject to claims and expects to be subject to
legal proceedings and claims from time to time in the ordinary course of its
business, including claims of alleged infringement of the trademarks and other
intellectual property rights of third parties. Such claims, even if not
meritorious, could result in the expenditure of significant financial and
managerial resources. Further, if such claims are successful, Student Advantage
may be required to change its trademarks, alter its content and pay financial
damages. There can be no assurance that such changes of trademarks, alteration
of content or payment of financial damages will not adversely affect our
business.
 
     We may be required to obtain licenses from others to refine, develop,
market and deliver new products and services. There can be no assurance that we
will be able to obtain any such license on commercially reasonable terms or at
all or that rights granted pursuant to any licenses will be valid and
enforceable.
 
GOVERNMENT REGULATION
 
     Student Advantage is subject to various laws and regulations relating to
its business. Although there are currently few laws or regulations directly
governing access to or commerce on the Internet, due to the increasing
popularity and use of the Internet, a number of laws and regulations may be
adopted regarding user privacy, pricing, acceptable content, taxation and
quality of products and services. In addition, several telecommunications
providers have petitioned the Federal Communications Commission to regulate and
impose fees on Internet service providers and online service providers in a
manner similar to long distance telephone carriers. The adoption of any such
laws or regulations could adversely affect the costs of communicating on the
Internet and adversely affect the growth in use of the Internet, or decrease the
acceptance of the Internet as a communications and commercial medium. Moreover,
it may take years to determine the extent to which existing laws relating to
issues such as property ownership, libel and personal privacy are applicable to
the Internet. Any new laws or regulations relating to the Internet could
decrease demand for our products and services or otherwise have a material
adverse effect on our business.
 
EMPLOYEES
 
     As of March 31, 1999, Student Advantage had a total of 175 full-time
employees. Student Advantage also hires temporary employees, particularly at the
beginning of each school semester, and contract service providers as necessary.
As we continue to grow and introduce additional products and services, we expect
to hire additional employees, particularly in online product development and
sales and marketing. None of our employees is represented by a labor union or is
the subject of a collective bargaining agreement. We believe that relations with
our employees are generally good. Competition for qualified personnel in our
industry is intense, particularly among sales, online product development and
technical staff. We believe that our future success will depend in part on our
continued ability to attract, hire and retain qualified personnel.
 
                                       40
43
 
FACILITIES
 
     Student Advantage is headquartered at 280 Summer Street in Boston,
Massachusetts, where it presently leases an aggregate of approximately 30,000
square feet. Our current leases for this facility expire at various times
through 2005. We also maintain regional offices and lease space in Atlanta,
Georgia; Berkeley, California; Dallas, Texas; Evanston, Illinois; Lawrence,
Kansas; Los Angeles, California; New York, New York and Washington, D.C.
 
     We believe that our current facilities and other facilities that will be
available to us will be adequate to accommodate our needs for the foreseeable
future. There can be no assurance that we will be successful in obtaining
additional space, if required, or if such space is obtained that it will be on
terms acceptable to us.
 
LEGAL PROCEEDINGS
 
     We are not presently subject to any material legal proceedings. We may from
time to time become a party to various legal proceedings arising in the ordinary
course of our business.
 
                                       41
44
 
                                   MANAGEMENT
 
DIRECTORS, EXECUTIVE OFFICERS AND KEY EMPLOYEES
 
     The directors, executive officers and other key employees of Student
Advantage, and their ages as of March 31, 1999 are as follows:
NAME                     AGE                         POSITION
                   ----                     ---                         --------
Raymond V. Sozzi, Jr.*....................  30    Chairman of the Board, President and Chief Executive
                                                  Officer
Andrea K. Abegglen*.......................  32    Vice President, Marketing Communications
Christopher B. Andrews*...................  43    Vice President, Finance and Administration and Chief
                                                  Financial Officer
G. Todd Eichler*..........................  31    Executive Vice President, Member Management
David M. Liniado*.........................  28    Vice President, Campus Development
Daniel G. Siegel*.........................  30    Vice President, Product Development
Michael T. Fuller.........................  37    Vice President, Market Development
Mason Myers...............................  28    Vice President, Business Development
Kevin Watters.............................  27    Vice President, Marketing
William S. Kaiser(1)......................  43    Director
John Katzman(1)...........................  39    Director
Marc Turtletaub(1)........................  53    Director
---------------
(1) Member of the Audit Committee and the Compensation Committee.
 
* Executive Officer.
 
     Raymond V. Sozzi, Jr. founded Student Advantage in 1992 and has served as
Chairman of the Board of Directors, President and Chief Executive Officer of
Student Advantage since its inception. Before founding Student Advantage, Mr.
Sozzi was employed by Bain & Company, a consulting company, as an associate
consultant. Mr. Sozzi received a B.A. from Dartmouth College in 1990.
 
     Andrea K. Abegglen has served as Vice President, Marketing Communications,
of Student Advantage since May 1998. From November 1997 to April 1998, Ms.
Abegglen served as Vice President, Strategic Partnerships, of Student Advantage.
From May 1996 to October 1997, Ms. Abegglen served as Chief Operating Officer of
Student Advantage. From June 1991 to June 1993, Ms. Abegglen served as Vice
President of Crimson & Brown Associates, a recruiting firm for minority students
and professionals, and as its President from June 1993 to April 1996. Ms.
Abegglen received a B.A. from the University of Pennsylvania in 1989.
 
     Christopher B. Andrews has served as Vice President and Chief Financial
Officer of Student Advantage since September 1998 and as Vice President, Finance
and Administration, of Student Advantage since January 1999. From January 1992
to August 1998, Mr. Andrews served as Vice President, Finance and
Administration, and from July 1996 to December 1996 also served as interim
President and Chief Executive Officer of Advanced Visual Systems Inc., a
visualization software company. Mr. Andrews received a J.D. from Boston College
Law School in 1981 and a B.A. from Harvard College in 1977.
 
     G. Todd Eichler has served as Executive Vice President, Member Management,
of Student Advantage since January 1997 and served as Vice President, Marketing,
of Student Advantage from January 1995 to December 1996. From January 1991 to
December 1994, Mr. Eichler was employed by Bronner, Slosberg, Humphrey, a direct
marketing and advertising agency, as an account supervisor. From 1989 to 1991
Mr. Eichler was employed by Bain & Company as an associate consultant. Mr.
Eichler received a B.A. from Duke University in 1989.
 
     David M. Liniado has served as Vice President, Campus Development, of
Student Advantage since January 1996. From September 1994 to December 1995, Mr.
Liniado was Director of the Southern
 
                                       42
45
 
Region of Student Advantage. In May 1992 Mr. Liniado founded College Discount
Association, a student membership company, and served as its President from May
1992 to August 1994. Mr. Liniado received a B.A. from Emory University in 1993.
 
     Daniel G. Siegel has served as Vice President, Product Development, of
Student Advantage since May 1997, and served as Director of Marketing of Student
Advantage from November 1992 to July 1995. From May 1996 to August 1996, Mr.
Siegel was employed by Microsoft Corporation, a software company, to conduct a
worldwide original equipment manufacturer market study. Mr. Siegel received his
M.B.A. from the Wharton School of Business at the University of Pennsylvania in
1997. Mr. Siegel received a B.A. from the University of Michigan in 1990.
 
     Michael T. Fuller has served as Vice President, Market Development, of
Student Advantage since January 1999. From July 1995 to March 1999, Mr. Fuller
was President of both The Campus Agency, LLC, an advertising and custom
publishing company, and The Travel Holding Group, LLC, a travel marketing
company. From 1991 to June 1995, Mr. Fuller was Director, Sales and Marketing,
of Travel CUTS, a student travel company.
 
     Mason Myers has served as Vice President, Business Development, of Student
Advantage since January 1999 and served as Senior Director, New Media from
December 1997 to December 1998. Mr. Myers co-founded The Main Quad, Inc., a
student-focused Internet site, in May 1995, and served as its Co-President from
May 1995 to December 1997. From August 1994 to May 1995, Mr. Myers was employed
as a project manager by Smart Valley, Inc., a non-profit organization using the
Internet to improve the community of Silicon Valley. From January 1994 to July
1994, Mr. Myers was employed by MFS Communications, Inc., a telecommunications
company in various public relations roles. Mr. Myers received a B.A. from Duke
University in 1993.
 
     Kevin Watters has served as Vice President, Marketing, of Student Advantage
since April 1999 and served as Senior Director, New Media, of Student Advantage
from December 1997 to March 1999. Mr. Watters co-founded The Main Quad, Inc., a
student-focused Internet site, in May 1995, and served as its Co-President from
May 1995 to December 1997. From September 1993 to April 1995, Mr. Watters was
employed by The Procter & Gamble Company, a consumer products company, in its
sales management program. Mr. Watters received a B.A. from Duke University in
1993.
 
     William S. Kaiser has served as a Director of Student Advantage since
October 1998. Since 1986, Mr. Kaiser has been an employee of Greylock Management
Corporation, a venture capital company, and he is a general partner of several
venture capital funds affiliated with Greylock. Mr. Kaiser currently serves as a
Director of Clarus Corporation and Open Market, Inc.
 
     John Katzman has served as a Director of Student Advantage since March
1996. Mr. Katzman founded Princeton Review Publishing, a provider of test
preparation and admission services, and has served as its President since 1981.
 
     Marc Turtletaub has served as a Director of Student Advantage since October
1998. Mr. Turtletaub has served as Chief Executive Officer of The Money Store,
Inc., a financial services company, since 1979.
 
BOARD COMPOSITION
 
     Following this offering, the Board of Directors of Student Advantage will
be divided into three staggered classes, each of whose members will serve for a
three-year term. The Board will consist of one Class I Director (Mr. Katzman),
one Class II Director (Mr. Sozzi) and two Class III Directors (Messrs. Kaiser
and Turtletaub). At each annual meeting of stockholders, a class of directors
will be elected for a three-year term to succeed the directors of the same class
whose terms are then expiring. The terms of the Class I Director, Class II
Director and Class III Directors will expire upon the election and qualification
of successor directors at the annual meeting of stockholders to be held during
calendar years 2000, 2001 and 2002.
 
                                       43
46
 
     Each executive officer serves at the discretion of the Board of Directors
and holds office until his or her successor is elected and qualified or until
his or her earlier resignation or removal. There are no family relationships
among any of the directors or executive officers of Student Advantage. All of
the Directors were originally elected to the Board of Directors pursuant to
agreements that will terminate upon the consummation of this offering.
 
BOARD COMMITTEES
 
     The Board of Directors has a Compensation Committee composed of Messrs.
Kaiser, Katzman and Turtletaub, which makes recommendations concerning salaries
and incentive compensation for employees of Student Advantage and administers
and grants stock options under Student Advantage's stock option plans. The Board
also has an Audit Committee composed of Messrs. Kaiser, Katzman and Turtletaub,
which reviews the results and scope of the audit and other services provided by
Student Advantage's independent public auditors.
 
DIRECTOR COMPENSATION
 
     We do not currently compensate directors for attending meetings of the
Board of Directors or committee meetings of the Board of Directors. Directors
are reimbursed for reasonable expenses incurred in attending board meetings.
 
EXECUTIVE COMPENSATION
 
     The following table sets forth information concerning the compensation
during the year ended December 31, 1998 of Student Advantage's Chief Executive
Officer and all other executive officers whose salary and bonus for such fiscal
year equaled or exceeded $100,000, collectively referred to as the Named
Executive Officers.
 
                           SUMMARY COMPENSATION TABLE
LONG-TERM
                                                                          COMPENSATION
                                                                             AWARDS
                                                                          ------------
                                                  ANNUAL COMPENSATION      SECURITIES
                                                -----------------------    UNDERLYING       ALL OTHER
         NAME AND PRINCIPAL POSITIONS           SALARY($)   BONUS($)(1)    OPTIONS(#)    COMPENSATION($)
         ----------------------------           ---------   -----------   ------------   ---------------
Raymond V. Sozzi, Jr..........................   $93,798     $150,000            --          $6,000(2)
  Chairman of the Board,
  President and Chief Executive Officer
G. Todd Eichler...............................   106,475       50,000            --              --
  Executive Vice President,
  Member Management
David M. Liniado..............................    85,340       15,000        90,000           6,882(2)
  Vice President, Campus
  Development
---------------
(1) Represents the bonus earned by each of the Named Executive Officers for
    services performed in fiscal 1998 based upon Student Advantage's operating
    performance during 1998. Such amounts have not yet been paid.
 
(2) Includes an automobile allowance of $6,000.
 
                                       44
47
 
                        OPTION GRANTS DURING FISCAL 1998
 
     The following table sets forth information as to options granted to the
Named Executive Officers during the year ended December 31, 1998. No stock
appreciation rights were granted during such fiscal year.
INDIVIDUAL GRANTS                      POTENTIAL REALIZABLE
                             ---------------------------------------------------       VALUE AT ASSUMED
                             NUMBER OF     PERCENT OF                               ANNUAL RATES OF STOCK
                             SECURITIES   TOTAL OPTIONS                             PRICE APPRECIATION FOR
                             UNDERLYING    GRANTED TO     EXERCISE                     OPTION TERM (2)
                              OPTIONS     EMPLOYEES IN      PRICE     EXPIRATION    ----------------------
           NAME              GRANTED(1)    FISCAL YEAR    PER SHARE      DATE          5%           10%
           ----              ----------   -------------   ---------   ----------    --------      --------
Raymond V. Sozzi, Jr.......        --           --             --            --           --            --
G. Todd Eichler............        --           --             --            --           --            --
David M. Liniado...........    90,000          3.9%         $0.33      12/10/08     $264,370      $420,964
---------------
(1) This option to purchase shares of common stock was granted under the 1998
    Stock Incentive Plan and vests as to 25% of the underlying common stock on
    January 1, 2000 and as to an additional 25% per year thereafter.
 
(2) Amounts that may be realized upon exercise of the options immediately before
    the expiration of their term, assuming the specified compound rates of
    appreciation (5% and 10%) on the market value of the common stock on the
    date of option grant over the term of the options. Market value is based on
    the value used in calculating stock-based compensation expense included in
    our financial statements. These numbers are calculated based on rules
    promulgated by the Securities and Exchange Commission and do not reflect
    Student Advantage's estimate of future stock price growth. Actual gains, if
    any, on stock option exercises and common stock holdings are dependent on
    the timing of exercise and the future performance of the common stock. There
    can be no assurance that the rates of appreciation assumed in this table can
    be achieved or that the amounts reflected will be received by the
    individuals. Assuming the fair market value of the common stock at the date
    of grant was the assumed initial public offering price of $     per share,
    the potential realizable value of the option held by Mr. Liniado at a 5%
    assumed annual rate of stock price appreciation would be $     and at a 10%
    assumed annual rate of stock price appreciation would be $     .
 
                         FISCAL YEAR-END OPTION VALUES
 
     The following table sets forth information with respect to unexercised
options held as of December 31, 1998 by each of the Named Executive Officers. No
options were exercised during 1998 by any of the Named Executive Officers.
NUMBER OF SHARES UNDERLYING           VALUE OF UNEXERCISED
                                               UNEXERCISED OPTIONS               IN-THE-MONEY OPTIONS
                                                AT FISCAL YEAR-END              AT FISCAL YEAR-END (1)
                                           ----------------------------      ----------------------------
                  NAME                     EXERCISABLE    UNEXERCISABLE      EXERCISABLE    UNEXERCISABLE
                  ----                     -----------    -------------      -----------    -------------
Raymond V. Sozzi, Jr.....................        --              --                --               --
G. Todd Eichler..........................        --              --                --               --
David M. Liniado.........................        --          90,000                --         $162,300
---------------
(1) Calculated by determining the difference between the exercise price ($0.33)
    and the deemed fair market value of the securities underlying the options at
    December 31, 1998. Fair market value is based on the value used in
    calculating stock-based compensation expense included in our financial
    statements.
 
                                       45
48
 
STOCK PLANS
 
     1998 Stock Incentive Plan
 
     Student Advantage's 1998 Stock Incentive Plan and a related plan for
California employees, collectively referred to as the Incentive Plan, were
adopted by the Board of Directors and approved by the stockholders of Student
Advantage on December 10, 1998. As of April 5, 1999, 120,000 shares of common
stock had been issued upon exercise of options granted under the Incentive Plan.
As of that date, options to purchase 2,222,550 shares of common stock at a
weighted average exercise price of $0.35 per share were outstanding.
 
     The Incentive Plan provides for the grant of incentive stock options
intended to qualify under Section 422 of the Internal Revenue Code of 1986, as
amended, non-statutory stock options, restricted stock awards and other
stock-based awards, collectively referred to as Awards. As of April 5, 1999, a
total of 5,277,450 shares of common stock were reserved for future grants under
the Incentive Plan.
 
     All officers, employees, directors, consultants and advisors of Student
Advantage and its subsidiaries are eligible to receive Awards under the
Incentive Plan. Under present law, however, incentive stock options may only be
granted to employees.
 
     Student Advantage may grant options at an exercise price less than, equal
to or greater than the fair market value of the common stock on the date of
grant. Under present law, incentive stock options and options intended to
qualify as performance-based compensation under Section 162(m) of the Internal
Revenue Code may not be granted at an exercise price less than the fair market
value of the common stock on the date of grant (or less than 110% of the fair
market value in the case of incentive stock options granted to optionees holding
more than 10% of the voting power of Student Advantage). The Incentive Plan
permits the Board of Directors to determine how optionees may pay the exercise
price of their options, including by cash, check or in connection with a
"cashless exercise" through a broker, by surrender to Student Advantage of
shares of common stock, by delivery to Student Advantage of a promissory note,
or by any combination of the permitted forms of payment.
 
     The Board of Directors has the authority to adopt, amend and repeal the
administrative rules, guidelines and practices relating to the Incentive Plan.
It may delegate authority under the Incentive Plan to one or more committees of
the Board of Directors and, subject to certain limitations, to one or more
executive officers of Student Advantage. The Board of Directors has authorized
the Compensation Committee to administer the Incentive Plan, including the
granting of options to executive officers. Subject to any applicable limitations
contained in the Incentive Plan, the Board of Directors, the Compensation
Committee or any other committee or executive officer to whom the Board of
Directors delegates authority, as the case may be, selects the recipients of
awards and determines:
 
     - the number of shares of common stock covered by options and the dates
       upon which such options become exercisable,
 
     - the exercise price of options,
 
     - the duration of options, and
 
     - the number of shares of common stock subject to any restricted stock or
       other stock-based awards and the terms and conditions of such awards,
       including the conditions for repurchase, issue price and repurchase
       price.
 
     In the event of a merger or other acquisition event, the Board of Directors
is authorized to provide for outstanding options or other stock-based Awards to
be assumed or substituted for by the acquiror and if not so assumed the Board
shall provide for the acceleration of the vesting of awards. The option
agreements evidencing grants under the Incentive Plan generally provide for the
acceleration of the vesting of options with respect to 50% of the unvested
shares in the event of a change in control of Student Advantage.
 
                                       46
49
 
     No award may be granted under the Incentive Plan after December 2008, but
the vesting and effectiveness of awards previously granted may extend beyond
that date. The Board of Directors may amend, suspend or terminate the Incentive
Plan or any portion thereof at any time.
 
     1999 Employee Stock Purchase Plan
 
     The Board of Directors adopted Student Advantage's 1999 Employee Stock
Purchase Plan in April 1999, subject to stockholder approval. The Purchase Plan
authorizes the issuance of up to a total of 450,000 shares of common stock to
participating employees.
 
     All employees of Student Advantage, including directors of Student
Advantage who are employees, and all employees of any participating
subsidiaries:
 
     - whose customary employment is more than 20 hours per week for more than
       five months in any calendar year,
 
     - who have been employed by Student Advantage for at least three months
       prior to enrolling, and
 
     - who are employed on the first day of a designated payroll deduction
       period (the "offering period")
 
are eligible to participate in the Purchase Plan. Employees who would
immediately after the grant own five percent or more of the total combined
voting power or value of the stock of Student Advantage or any subsidiary are
not eligible to participate.
 
     On the first day of an offering period, Student Advantage will grant to
each eligible employee who has elected to participate in the Purchase Plan an
option to purchase shares of common stock as follows: the employee may authorize
an amount (up to 10%, or such lesser amount as shall be determined by the Board,
of such employee's base pay) to be deducted by Student Advantage from such
employee's base pay during the offering period. On the last day of the offering
period, the employee is deemed to have exercised the option, at the option
exercise price, to the extent of accumulated payroll deductions. Under the terms
of the Purchase Plan, the option price is an amount equal to 85% of the closing
price per share of the common stock on either the first day or the last day of
the offering period, whichever is lower. In no event may an employee purchase in
any one offering period a number of shares which exceeds the number of shares
determined by dividing the product of (1) $2,083 and (2) the number of months in
the offering period by the closing market price of a share of common stock on
the commencement date of the offering period or such other number as may be
determined by the Board prior to the commencement date of the offering period.
The Compensation Committee may, in its discretion, choose an offering period of
12 months or less for each offering and may choose a different offering period
for each offering.
 
     An employee who is not a participant on the last day of the offering
period, as a result of voluntary withdrawal or termination of employment or for
any other reason, is not entitled to exercise any option, and the employee's
accumulated payroll deductions will be refunded. However, upon termination of
employment because of death, the employee's beneficiary has certain rights to
elect to exercise the option to purchase the shares that the accumulated payroll
deductions in the participant's account would purchase at the date of death.
 
     Because participation in the Purchase Plan is voluntary, Student Advantage
cannot now determine the number of shares of common stock to be purchased by any
particular current executive officer, by all current executive officers as a
group or by non-executive employees as a group.
 
401(k) PLAN
 
     Student Advantage has a 401(k) plan, which is intended to qualify under
Sections 401(a) and 401(k) of the Internal Revenue Code. Generally, all
employees are eligible to participate in the 401(k) plan after they have
complete one year of service.
 
     Eligible employees electing to participate in the 401(k) plan may defer a
portion of their compensation, on a pre-tax basis, by making a contribution to
the 401(k) plan. The maximum
 
                                       47
50
 
contribution is fixed in Section 401(k) of the Internal Revenue Code. The
contribution limit for 1998 was $10,000. In April of 1998, Student Advantage
began matching employee contributions to the 401(k) plan. Student Advantage made
matching contributions of $0.50 for each $1.00 contributed by the employee to
the plan, up to 6% of the employee's gross earnings in 1998, subject to the
foregoing limit. Eligible employees who elect to participate in the 401(k) plan
are generally vested in Student Advantage's matching contribution after four
years of service. Student Advantage contributed an aggregate of $61,000 in 1998
to the 401(k) plan.
 
EMPLOYMENT AGREEMENTS
 
     In March 1996, Student Advantage entered into an employment agreement with
Mr. Sozzi, which was amended in October 1998. The employment agreement provides
for an initial term of employment expiring on January 1, 1999 and automatically
renews for successive one-year terms, unless terminated by either party prior to
such renewal. The employment agreement provides for a base salary of $150,000 in
1999, and a bonus at a target level of $75,000 to be determined in discretion of
the Board of Directors. Pursuant to the employment agreement, if we terminate
Mr. Sozzi's employment without cause, Mr. Sozzi is entitled to receive severance
benefits, for a period of 18 months following his termination, equal to (1) his
base salary; (2) bonus payments at the fixed rate of $75,000 per year for each
year or portion thereof; (3) continued participation in all employee benefits;
and (4) outplacement services. In addition, Mr. Sozzi has agreed to certain
confidentiality, noncompetition and nonsolicitation provisions. Student
Advantage has purchased and presently maintains a key person life insurance
policy in the amount of $20.0 million on the life of Mr. Sozzi.
 
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
 
     The compensation committee of the Board of Directors consists of Messrs.
Kaiser, Katzman and Turtletaub, neither of whom has been an officer or employee
of Student Advantage at any time since our inception. No executive officer of
Student Advantage serves as a member of the board of directors or compensation
committee (or other committee serving an equivalent function) of any other
entity that has one or more executive officers serving as a member of our Board
of Directors or compensation committee. Prior to the formation of the
compensation committee, the Board of Directors made decisions relating to the
compensation of executive officers.
 
LIMITATION OF LIABILITY AND INDEMNIFICATION MATTERS
 
     Our amended and restated certificate of incorporation limits the liability
of directors to the maximum extent permitted by Delaware law. Delaware law
provides that a corporation's certificate of incorporation may contain a
provision eliminating or limiting the personal liability of a director for
monetary damages for breach of their fiduciary duties as directors, except for
liability (1) for any breach of their duty of loyalty to the corporation or its
stockholders, (2) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (3) for unlawful payments
of dividends or unlawful stock repurchases or redemptions as provided in Section
174 of the Delaware General Corporation Law or (4) for any transaction from
which the director derived an improper personal benefit.
 
     Our amended and restated certificate of incorporation provides that we
shall indemnify our directors, officers and employee benefit plan fiduciaries to
the fullest extent permitted by law. Our amended and restated certificate of
incorporation permits us to advance expenses incurred by an indemnified director
or officer in connection with the defense of any action or proceeding arising
out of such director's or officer's status or service as a director or officer
of Student Advantage upon an undertaking by such director or officer to repay
such advances if it is ultimately determined that such director or officer is
not entitled to such indemnification.
 
     We have entered into agreements to indemnify our directors and officers, in
addition to the indemnification provided for in our amended and restated
certificate of incorporation. These agreements, among other things, indemnify
our directors and officers for certain expenses (including attorneys' fees and
 
                                       48
51
 
associated legal expenses), judgments, fines and amounts paid in settlement
amounts, actually and reasonably incurred by any such person's services as a
director or officer of Student Advantage or any other company or enterprise to
which the person provides services at the request of Student Advantage, if such
officer or director acted in good faith and in a manner which he or she
reasonably believed to be in, or not opposed to the best interests of Student
Advantage or with respect to any criminal proceeding, had no reasonable cause to
believe that his or her conduct was unlawful. We believe that these provisions
and agreements are necessary to attract and retain qualified directors and
officers.
 
                                       49
52
 
                              CERTAIN TRANSACTIONS
 
EQUITY FINANCING
 
     On October 20, 1998, Greylock IX Limited Partnership and Marc Turtletaub
each purchased an aggregate of 625,000 preferred membership units (which
converted into 625,000 shares of Series A convertible preferred stock) from
certain members of our predecessor LLC, including Messrs. Sozzi, Eichler,
Siegel, Liniado, Ms. Abegglen, and The Main Quad, Inc., for an aggregate
purchase price of $10.0 million. On October 20, 1998, Student Advantage also
sold 625,000 shares of Series A convertible preferred stock to Greylock IX
Limited Partnership and 625,000 shares of Series A convertible preferred stock
to Marc Turtletaub, for an aggregate purchase price of $10.0 million. Mr.
Kaiser, who is a General Partner of the General Partner of Greylock IX Limited
Partnership, and Mr. Turtletaub each became a director of Student Advantage in
October 1998. Upon completion of this offering, these outstanding shares of
preferred stock will automatically be converted into an aggregate of 7,500,000
shares of common stock.
 
PRINCETON REVIEW PUBLISHING
 
     In March 1996, we entered into an Investment Agreement with Princeton
Review Publishing, L.L.C. Pursuant to this agreement, Princeton Review purchased
2,479 membership units in Student Advantage, LLC, our predecessor LLC, for an
aggregate purchase price of $250,000. Mr. Katzman, a director of Student
Advantage, is the President of Princeton Review Publishing. In connection with
this transaction, the predecessor LLC also:
 
     - issued a convertible promissory note to Princeton Review in the principal
       amount of $75,000, bearing interest at 8.5% per year, which was paid in
       September 1997, and
 
     - issued a secured promissory note to Princeton Review in the principal
       amount of $100,000, bearing interest at 8.5% per year, which was paid in
       September 1998.
 
     In September 1997, Student Advantage redeemed 1,498 of Princeton Review's
2,479 membership units in the predecessor LLC for an aggregate purchase price of
$630,000. In addition, Student Advantage borrowed $125,000 from Princeton
Review. This borrowing was repaid on October 23, 1998. In October 1998,
Princeton Review's remaining 981 membership units were converted into 1,854,378
shares of Student Advantage.
 
     In October 1998, Mr. Sozzi entered into an agreement with Princeton Review
requiring Mr. Sozzi to purchase up to 234,375 shares of preferred stock of
Student Advantage at $8.00 per share upon the election of Princeton Review.
Princeton Review exercised this put option on November 24, 1998 and consented to
the purchase of all 234,375 shares of preferred stock by Mr. Siegel and Mr.
Eichler, in addition to Mr. Sozzi.
 
     Student Advantage entered into an agreement in March 1996 with Princeton
Review, pursuant to which:
 
     - Princeton Review provides space on its Web site for Student Advantage to
       market its programs,
 
     - Princeton Review agreed to certain non-compete restrictions,
 
     - Student Advantage agreed to promote certain of Princeton Review's
       products, and
 
     - Student Advantage agreed not to permit competitors of Princeton Review to
       participate in certain Student Advantage programs.
 
OTHER AGREEMENTS
 
     In February 1995, Student Advantage entered into an agreement with David M.
Liniado d/b/a DML Enterprises. Mr. Liniado is an executive officer of Student
Advantage. Under this agreement, Student Advantage agreed to allow DML to market
discounts on products and services using the Student Advantage name in the
southeastern United States. In February 1996, Student Advantage acquired DML's
business and assets. DML received 111 membership units in the predecessor LLC
and the right to 35% of Student Advantage's pre-tax earnings derived from such
southeastern U.S. markets in 1996, 1997 and 1998. In April 1997, Student
Advantage issued an additional 239 membership units in satisfaction of its
                                       50
53
 
obligation to pay DML 35% of its earnings derived from that region. The balance
of DML's total membership units as of October 20, 1998 have been converted into
567,630 shares of Student Advantage.
 
     In December 1997, Student Advantage entered into an Asset Purchase
Agreement with The Main Quad, Inc. under which Student Advantage purchased
certain assets, including U-WIRE and Virtual Backpack, for $263,500 and 270
membership units in the predecessor LLC. In connection with this agreement, the
predecessor LLC entered into an ancillary agreement entitling The Main Quad,
Inc. to a certain number of additional membership interests, depending on the
valuation of Student Advantage in its initial public offering. In October 1998,
Student Advantage issued to Main Quad an additional 480 membership units in
satisfaction of this obligation. The balance of The Main Quad Inc.'s total
membership units held as of October 20, 1998 have been converted into 1,275,048
shares of Student Advantage. In connection with the asset purchase agreement,
Student Advantage entered into a three year employment agreement, dated May 1,
1997, with Mr. Myers, co-founder of The Main Quad, Inc. Pursuant to the
agreement, Mr. Myers' base salary was $55,000 for the first year, $60,000 for
the second year and $65,000 for the third year of his employment. Student
Advantage also entered into an employment agreement with Kevin Watters,
co-founder of The Main Quad, Inc., on similar terms.
 
     Mr. Sozzi, the President, Chief Executive Officer and Chairman of the Board
of Directors of Student Advantage, loaned Student Advantage $400,000 on April
21, 1998 at an interest rate of 3%. Student Advantage repaid this loan on August
3, 1998. Mr. Sozzi loaned $300,000 to Student Advantage on August 17, 1998;
$200,000 on August 31, 1998; $100,000 on September 4, 1998 and $250,000 on
September 18, 1998, all at an interest rate of approximately 6% per year.
Student Advantage repaid all of these loans on October 29, 1998.
 
     Student Advantage loaned Mr. Siegel, Vice President, Product Development of
Student Advantage, $60,000 on February 9, 1998 at an interest rate per year of
approximately 6%. This loan was paid in late 1998. Mr. Siegel loaned the company
$100,000 on April 21, 1998 without interest. Student Advantage repaid this loan
on May 11, 1998.
 
     In May 1996, Ms. Abegglen, Vice President, Marketing Communications of
Student Advantage, borrowed $164,914 from Student Advantage in connection with
the purchase of membership units in the predecessor LLC. This borrowing, with
interest at 5% per year, was repaid in December 1998.
 
     In December 1998, Student Advantage granted Christopher B. Andrews, an
executive officer of the company, an option under the 1998 Stock Incentive Plan
to purchase 202,500 shares of common stock at an exercise price of $0.33 per
share. This option vests as to 16 2/3% of the shares on December 10, 1998,
8 1/3% of the shares on September 22, 1999, and 25% on each September 22 for
three years thereafter.
 
     All future transactions, including loans between us and our officers,
directors, principal stockholders and their affiliates will be approved by a
majority of the Board of Directors, including a majority of the disinterested
directors on the Board of Directors, and will be on terms no less favorable to
us than could be obtained from unaffiliated third parties.
 
DISTRIBUTIONS TO MEMBERS OF PREDECESSOR LIMITED LIABILITY COMPANY
 
     During April 1998, Student Advantage LLC distributed to its LLC members an
aggregate of approximately $1,043,000 so that they could pay their estimated tax
liability with respect to the 1997 taxable income of the LLC. These members
included, among others, Mr. Sozzi, Mr. Eichler, Mr. Siegel, Princeton Review,
Ms. Abegglen, Mr. Liniado and The Main Quad, Inc. In November 1998, Student
Advantage distributed to its members the remainder of the LLC's 1997 taxable
income (approximately $1,277,000). To the extent Princeton Review's tax
liability on the LLC's taxable income for 1997 and 1998 exceeds its estimated
tax liability, Student Advantage agreed to indemnify Princeton Review for such
excess. Student Advantage also has agreed to distribute to its former LLC
members approximately 45% of the LLC's 1998 taxable income (expected to be a
nominal amount) so that they can pay their tax liability with respect to the
1998 taxable income of the LLC for the period between January 1, 1998 and
October 20, 1998, which was the date on which the LLC was converted to a C
Corporation.
 
                                       51
54
 
                             PRINCIPAL STOCKHOLDERS
 
     The following table sets forth information regarding the beneficial
ownership of the common stock of Student Advantage as of March 31, 1999, and as
adjusted to reflect the sale of the shares of common stock offered by this
prospectus, by:
 
     - each person or entity, or group of affiliated persons or entities, who
       Student Advantage knows beneficially owns five percent or more of the
       common stock,
 
     - each director and Named Executive Officer of Student Advantage, and
 
     - all directors and executive officers of Student Advantage as a group.
 
     Unless otherwise indicated, (1) each person or entity named in the table
has sole voting power and investment power (or shares such power with his or her
spouse) with respect to all shares of capital stock listed as beneficially owned
by such person or entity and (2) the address of each beneficial owner is c/o
Student Advantage, Inc., 280 Summer Street, Boston, Massachusetts 02210.
PERCENTAGE OF
                                                                                          COMMON
                                                                                    STOCK OUTSTANDING
                                                                                   --------------------
                                                            SHARES BENEFICIALLY     BEFORE      AFTER
                 NAME OF BENEFICIAL OWNER                        OWNED(1)          OFFERING    OFFERING
                 ------------------------                   -------------------    --------    --------
Raymond V. Sozzi, Jr.(2)..................................            7,626,183      31.1%
Greylock IX Limited Partnership(3)........................            3,750,000      15.3
William S. Kaiser(3)......................................            3,750,000      15.3
Marc Turtletaub...........................................            3,750,000      15.3
Daniel G. Siegel..........................................            2,229,912       9.1
G. Todd Eichler...........................................            2,229,912       9.1
Princeton Review Publishing, L.L.C.(4)....................            1,620,003       6.6
John Katzman(4)...........................................            1,620,003       6.6
Mason Myers(5)(6).........................................            1,335,048       5.4
Kevin Watters(5)(6).......................................            1,323,048       5.4
The Main Quad, Inc.(5)....................................            1,275,048       5.2
David M. Liniado(6).......................................              657,630       2.7
All executive officers and directors as a group (9
  persons)(7).............................................           22,871,847      92.7%
---------------
* Less than 1%
 
(1) The number of shares beneficially owned by each stockholder is determined
    under rules promulgated by the Securities and Exchange Commission, and the
    information is not necessarily indicative of beneficial ownership for any
    other purpose. Under such rules, beneficial ownership includes any shares as
    to which the individual or entity has sole or shared voting power or
    investment power and any shares as to which the individual or entity has the
    right to acquire beneficial ownership within 60 days after March 31, 1999
    through the exercise of any stock option or other right. The inclusion
    herein of such shares, however, does not constitute an admission that the
    named stockholder is a direct or indirect beneficial owner of such shares.
 
(2) Consists of shares held of record by Mr. Sozzi. Does not include a total of
    7,628,814 shares of common stock over which Mr. Sozzi has voting control
    pursuant to an irrevocable proxy granted under a Voting Agreement and Proxy
    dated October 20, 1998. Counting these shares, Mr. Sozzi may be deemed to
    beneficially own a total of 15,254,997 shares, or 62.3% of the outstanding
    common stock prior to this offering. The Voting Agreement and Proxy and the
    proxy granted thereunder terminate upon the consummation of this offering.
 
(3) Consists of 3,750,000 shares held of record by Greylock IX Limited
    Partnership. Mr. Kaiser is a general partner of Greylock IX GP Limited
    Partnership, the general partner of Greylock IX Limited Partnership.
    Greylock IX GP Limited Partnership has sole voting and investment power with
    respect to these shares. Mr. Kaiser disclaims beneficial ownership of such
    shares, except to the extent of his
 
                                       52
55
 
    pecuniary interest therein. The address for Greylock IX Limited Partnership
    and Greylock IX GP Limited Partnership is One Federal Street, Boston,
    Massachusetts 02110.
 
(4) Consists of 1,620,003 shares held of record by Princeton Review Publishing,
    L.L.C. Mr. Katzman is President of Princeton Review Publishing, L.L.C. Mr.
    Katzman disclaims beneficial ownership of such shares, except to the extent
    of his pecuniary interest therein. The address for Princeton Review
    Publishing is 2315 Broadway, New York, New York 10024.
 
(5) Consists of 1,275,048 shares held of record by The Main Quad, Inc. Messrs.
    Myers and Watters are each stockholders, directors and officers of The Main
    Quad, Inc. Messrs. Myers and Watters share investment and voting power with
    respect to these shares. Messrs. Myers and Watters disclaim beneficial
    ownership of such shares, except to the extent of their pecuniary interest
    therein.
 
(6) Includes all shares subject to options held by Messrs. Myers, Watters and
    Liniado, which are immediately exercisable in full. Any shares acquired upon
    exercise are subject to vesting over a four-year period.
 
(7) See footnotes 2 through 6 above.
 
                                       53
56
 
                          DESCRIPTION OF CAPITAL STOCK
 
     After this offering, the authorized capital stock of Student Advantage will
consist of 100,000,000 shares of common stock, $0.01 par value per share, and
5,000,000 shares of preferred stock, $0.01 par value per share. As of April 5,
1999, there were outstanding (1) 16,253,892 shares of common stock held by 12
stockholders of record, (2) 2,747,036 shares of convertible preferred stock
(convertible into 8,241,108 shares of common stock) held by 11 stockholders of
record and (3) options to purchase an aggregate of 2,222,550 shares of common
stock.
 
     The following summary of certain provisions of our securities and various
provisions of our amended and restated certificate of incorporation and our
amended and restated bylaws is not intended to be complete and is qualified by
reference to the provisions of applicable law and to our amended and restated
certificate of incorporation and amended and restated bylaws included as
exhibits to the Registration Statement of which this prospectus is a part. See
"Additional Information."
 
COMMON STOCK
 
     Holders of common stock are entitled to one vote for each share held on all
matters submitted to a vote of stockholders and do not have cumulative voting
rights. Accordingly, holders of a majority of the shares of common stock
entitled to vote in any election of directors may elect all of the directors
standing for election. Holders of common stock are entitled to receive
proportionately any such dividends declared by the Board of Directors, subject
to any preferential dividend rights of outstanding preferred stock. Upon the
liquidation, dissolution or winding up of Student Advantage, the holders of
common stock are entitled to receive ratably the net assets of Student Advantage
available after the payment of all debts and other liabilities and subject to
the prior rights of any outstanding preferred stock. Holders of common stock
have no preemptive, subscription, redemption or conversion rights. The
outstanding shares of common stock are, and the shares offered by Student
Advantage in this offering will be, when issued and paid for, fully paid and
nonassessable. The rights, preferences and privileges of holders of common stock
are subject to the rights of the holders of shares of any series of preferred
stock which Student Advantage may designate and issue in the future. Certain
holders of common stock have the right to require Student Advantage to register
their shares of common stock under the Securities Act in certain circumstances.
See "Shares Eligible for Future Sale."
 
PREFERRED STOCK
 
     Under the terms of our amended and restated certificate of incorporation,
the Board of Directors is authorized to issue such shares of preferred stock in
one or more series without stockholder approval. The Board has discretion to
determine the rights, preferences, privileges and restrictions, including voting
rights, dividend rights, conversion rights, redemption privileges and
liquidation preferences of each series of preferred stock.
 
     The purpose of authorizing the Board of Directors to issue preferred stock
and determine its rights and preferences is to eliminate delays associated with
a stockholder vote on specific issuances. The issuance of preferred stock, while
providing desirable flexibility in connection with possible acquisitions and
other corporate purposes, could make it more difficult for a third party to
acquire, or could discourage a third party from acquiring, a majority of the
outstanding voting stock of Student Advantage. Student Advantage has no present
plans to issue any shares of preferred stock.
 
DELAWARE ANTI-TAKEOVER LAW AND CERTAIN CHARTER AND BY-LAW PROVISIONS
 
     Student Advantage is subject to the provisions of Section 203 of the
General Corporation Law of Delaware. In general, the statute prohibits a
publicly held Delaware corporation from engaging in a "business combination"
with an "interested stockholder" for a period of three years after the date of
the transaction in which the person became an interested stockholder, unless the
business combination is approved in a prescribed manner. A "business
combination" includes mergers, asset sales and other transactions resulting in a
financial benefit to the interested stockholder. Subject to certain exceptions,
an
                                       54
57
 
"interested stockholder" is a person who, together with affiliates and
associates, owns, or within three years did own, 15% or more of the
corporation's voting stock.
 
     The amended and restated bylaws provide for the division of the Board of
Directors into three classes as nearly equal in size as possible with staggered
three-year terms. Under the amended and restated bylaws, any vacancy on the
Board of Directors, including a vacancy resulting from an enlargement of the
Board of Directors, may only be filled by vote of a majority of the directors
then in office. The classification of the Board of Directors and the limitation
on and filling of vacancies could make it more difficult for a third party to
acquire, or discourage a third party from acquiring, control of Student
Advantage.
 
     The amended and restated bylaws also provide that after this offering, any
action required or permitted to be taken by the stockholders of Student
Advantage at an annual meeting or special meeting of stockholders may only be
taken if it is properly brought before such meeting and may not be taken by
written action in lieu of a meeting. The amended and restated bylaws further
provide that special meetings of the stockholders may only be called by the
Chairman of the Board, the President or the Board of Directors. In order for any
matter to be considered "properly brought" before a meeting, a stockholder must
comply with certain requirements regarding advance notice and provide certain
information to Student Advantage. These provisions could have the effect of
delaying until the next stockholders meeting stockholder actions which are
favored by the holders of a majority of the outstanding voting securities of
Student Advantage. These provisions could also discourage a third party from
making a tender offer for the common stock, because even if it acquired a
majority of the outstanding voting securities of Student Advantage, it would be
able to take action as a stockholder (such as electing new directors or
approving a merger) only at a duly called stockholders' meeting and not by
written consent.
 
TRANSFER AGENT AND REGISTRAR
 
     The transfer agent and registrar for the common stock is BankBoston, N.A.
 
                                       55
58
 
                        SHARES ELIGIBLE FOR FUTURE SALE
 
     Prior to this offering, there has been no public market for our common
stock. We cannot predict the effect, if any, that sales of shares of common
stock to the public or the availability of shares for sale to the public will
have on the market price of the common stock prevailing from time to time.
Nevertheless, if a significant number of shares of common stock are sold in the
public market, or if people believe that such sales may occur, the prevailing
market price of our common stock could decline and could impair our future
ability to raise capital through the sale of our equity securities.
 
     Upon completion of this offering, we will have an aggregate of      shares
of common stock outstanding, assuming no exercise of the underwriters'
over-allotment option and no exercise of options outstanding at March 31, 1999.
Of the outstanding shares, the      shares sold in this offering will be freely
tradeable, without restriction under the Securities Act of 1933, except for any
such shares which may be acquired by an "affiliate" of Student Advantage, which
shares will be subject to the volume limitations of Rule 144 under the
Securities Act. As defined in Rule 144, an "affiliate" of an issuer is a person
who, directly or indirectly, through one or more intermediaries, controls or is
controlled by, or is under common control with, such issuer. Substantially all
of the remaining      shares of common stock outstanding will be "restricted
securities" as that phrase is defined in Rule 144 and may not be resold in the
absence of registration under the Securities Act or pursuant to an exemption
from such registration, including the exemption provided by Rule 144 under the
Securities Act.
 
     In connection with this offering, our directors, officers and stockholders,
holding 24,495,000 shares in the aggregate, have agreed that, without the prior
written consent of BancBoston Robertson Stephens Inc. on behalf of the
underwriters, during the period ending 180 days after the date of this
prospectus, they will not directly or indirectly offer to sell, contract to
sell, or otherwise sell, dispose of, loan, pledge, or grant any right with
respect to, any shares of common stock or any securities convertible into or
exchangeable for shares of common stock, whether such shares or any such
securities are then owned by such person or are thereafter acquired directly
from us.
 
     Subject to the foregoing and to the lock-up agreements, under Rule 144 as
currently in effect, beginning 180 days after the date of this prospectus,
holders of restricted securities will be entitled to sell a number of shares of
common stock within any three-month period equal to the greater of 1% of the
then outstanding shares of the common stock (approximately      shares following
the offering) or the average weekly reported volume of trading of the common
stock on the Nasdaq National Market during the four calendar weeks preceding
such sale, provided that certain manner of sale and notice requirements and
requirements as to the availability of current public information concerning
Student Advantage are satisfied.
 
     Immediately after the offering, there will be options to purchase
approximately      shares of common stock outstanding. Subject to the provisions
of the lock-up agreements described below, holders of these options may rely on
the resale provisions of Rule 701 under the Securities Act, which permits
nonaffiliates to sell shares without having to comply with the current public
information, holding period, volume limitation or notice provisions of Rule 144
and permits affiliates to sell their shares without having to comply with the
holding period provision of Rule 144, in each case beginning 90 days after the
consummation of this offering. In addition, immediately after this offering,
Student Advantage intends to file a registration statement on Form S-8 covering
all options granted under the 1998 Stock Incentive Plan. Shares of common stock
registered under such registration statement will, subject to Rule 144 volume
limitations applicable to affiliates, be available for sale in the open market,
unless such shares are subject to vesting restrictions with Student Advantage or
the lock-up agreements described above. See "Management--Stock Plans--1998 Stock
Incentive Plan."
 
     We have agreed not to sell or otherwise dispose of any shares of common
stock during the 180-day period following the date of the prospectus, except
that we may issue shares in connection with certain acquisitions and issue, and
grant options to purchase, shares of common stock under the 1998 Stock Incentive
Plan and the 1999 Employee Stock Purchase Plan.
 
                                       56
59
 
     Following this offering, under specified conditions and subject to
customary exceptions, holders of 16,746,186 shares of common stock will have
demand registration rights with respect to their shares of common stock (subject
to the 180-day lock-up arrangement described above) to require us to register
their shares of common stock under the Securities Act, and they will have rights
to participate in any future registration of securities by us. We are not
required to effect more than two demand registrations on behalf of these
holders.
 
                                       57
60
 
                                  UNDERWRITING
 
     The underwriters named below, acting through their representatives,
BancBoston Robertson Stephens Inc., Prudential Securities Incorporated and Volpe
Brown Whelan & Company, LLC have severally agreed with us and the selling
stockholders subject to the terms and conditions of the underwriting agreement,
to purchase from us and them the number of shares of common stock set forth
opposite their names below. The underwriters are committed to purchase and pay
for all such shares if any are purchased.
NUMBER
                        UNDERWRITER                           OF SHARES
                        -----------                           ---------
BancBoston Robertson Stephens Inc. .........................
Prudential Securities Incorporated..........................
Volpe Brown Whelan & Company, LLC...........................
 
                                                               -------
          Total.............................................
                                                               =======
The underwriters' representatives have advised us that the underwriters
propose to offer the shares of common stock to the public at the initial public
offering price set forth on the cover page of this prospectus and to certain
dealers at such price less a concession not in excess of $     per share, of
which $     per share may be reallowed to other dealers. After the initial
public offering, the public offering price, concession, and reallowance to
dealers may be reduced by the representatives. No such reduction shall change
the amount of proceeds to be received by us as set forth on the cover page of
this prospectus.
 
     The underwriters have informed us that they do not intend to confirm sales
to any accounts over which they exercise discretionary authority.
 
     Over-Allotment Option.  We have granted to the underwriters an option,
exercisable during the 30-day period after the date of this prospectus, to
purchase up to      additional shares of common stock at the same price per
share as we will be paid for the      shares that the underwriters have agreed
to purchase. To the extent that the underwriters exercise such option, each of
the underwriters will have a firm commitment to purchase approximately the same
percentage of such additional shares that the number of shares of common stock
to be purchased by it shown in the above table represents as a percentage of the
     shares offered hereby. If purchased, such additional shares will be sold by
the underwriters on the same terms as those on which the      shares are being
sold. We will be obligated, pursuant to the option, to sell shares to the extent
the option is exercised. The underwriters may exercise such option only to cover
over-allotments made in connection with the sale of the shares of common stock
offered hereby. If such option is exercised in full, the total public offering
price, underwriting discounts and commissions and proceeds to company will be
$     million, $     million and $     million, respectively.
 
     Directed Share Program.  At our request, the underwriters have reserved up
to      shares of common stock to be issued by us and offered hereby for sale,
at the initial public offering price, to business associates and certain persons
otherwise related to Student Advantage. The number of shares of common stock
available for sale to the general public will be reduced to the extent such
individuals purchase such reserved shares. Any reserved shares which are not so
purchased will be offered by the underwriters to the general public on the same
basis as the other shares offered hereby.
 
     Indemnity.  The Underwriting Agreement contains covenants of indemnity
between the underwriters and us against certain civil liabilities, including
liabilities under the Securities Act and liabilities arising from breaches of
representation and warranties contained in the underwriting agreement.
 
                                       58
61
 
     Lock-Up Agreements.  Each director, officer and stockholder of Student
Advantage has agreed, during the period ending 180 days after the date of this
prospectus (the "lock-up period"), subject to certain exceptions, not to offer
to sell, contract to sell, or otherwise sell, dispose of, loan, pledge or grant
any rights with respect to any shares of common stock or any options, warrants
to purchase any shares of common stock, or any securities convertible into or
exchangeable for shares of common stock owned as of the date of this prospectus
or thereafter acquired directly by such holders or with respect to which they
have the power of disposition, without the prior written consent of BancBoston
Robertson Stephens Inc. However, BancBoston Robertson Stephens Inc. may, in its
sole discretion and at any time without notice, release all or any portion of
securities subject to the lock-up agreement. There are no existing agreements
between the representatives of the underwriters and any of our stockholders
providing consent to the sale of shares prior to the expiration of the lock-up
period.
 
     Future Sales.  In addition, we have agreed that during the lock-up period
we will not, without the prior written consent of BancBoston Robertson Stephens
Inc., subject to certain exceptions, (1) consent to the disposition of any
shares held by stockholders subject to lock-up agreements prior to the
expiration of the lock-up period or (2) issue, sell, contract to sell, or
otherwise dispose of, any shares of common stock, any options to purchase any
shares of common stock or any securities convertible into, exercisable for or
exchangeable for shares of common stock other than (a) our sale of shares in
this offering, (b) the issuance of common stock upon the exercise of outstanding
options and the issuance of options under existing stock option and incentive
plans, provided such common stock and the common stock issuable upon the
exercise of such options cannot be transferred prior to the expiration of the
lock-up period and (c) the issuance of shares in connection with certain
acquisitions that cannot be sold on the public market during the lock-up period.
See "Shares Eligible for Future Sale."
 
     Listing.  Application has been made to have the shares of common stock
approved for quotation on the Nasdaq National Market under the symbol "STAD."
 
     No Prior Public Market.  Prior to this offering, there has been no public
market for the common stock. Consequently, the initial public offering price for
the common stock offered by this prospectus will be determined through
negotiations among us and the representatives of the underwriters. Among the
factors to be considered in such negotiations are prevailing market conditions,
certain of our financial information, market valuations of other companies that
we and the representatives of the underwriters believe to be comparable to us,
estimates of our business potential, the present state of our development and
other factors deemed relevant.
 
     Stabilization.  The underwriters have advised us that, pursuant to
Regulation M under the Securities Act, certain persons participating in the
offering may engage in transactions, including stabilizing bids, syndicate
covering transactions or the imposition of penalty bids, that may have the
effect of stabilizing or maintaining the market price of the common stock at a
level above that which might otherwise prevail in the open market. A
"stabilizing bid" is a bid for or the purchase of common stock on behalf of the
underwriters for the purpose of fixing or maintaining the price of the common
stock. A "syndicate covering transaction" is the bid for or the purchase of the
common stock on behalf of the underwriters to reduce a short position incurred
by the underwriters in connection with this offering. A "penalty bid" is an
arrangement permitting the representatives to reclaim the selling concession
otherwise accruing to an underwriter or syndicate member in connection with this
offering if the common stock originally sold by such underwriter or syndicate
member is purchased by the representatives of the underwriters in a syndicate
covering transaction and has therefore not been effectively placed by such
underwriter or syndicate member. The representatives of the underwriters have
advised us that such transactions may be effected on the Nasdaq National Market
or otherwise and, if commenced, may be discontinued at any time.
 
                                 LEGAL MATTERS
 
     The validity of the shares of common stock offered hereby will be passed
upon for Student Advantage by Hale and Dorr LLP, Boston, Massachusetts, and for
the underwriters by Testa, Hurwitz & Thibeault, LLP, Boston, Massachusetts.
                                       59
62
 
                                    EXPERTS
 
     The audited financial statements included in this Prospectus have been
audited by
PricewaterhouseCoopers LLP. The companies and periods covered by these audits
are indicated in the individual accountant's reports. Such financial statements
have been so included in reliance of the reports of PricewaterhouseCoopers LLP
given the authority of said firm as experts in auditing and accounting.
 
                             ADDITIONAL INFORMATION
 
     We have filed with the Securities and Exchange Commission a Registration
Statement on Form S-1. This prospectus, which is a part of the Registration
Statement, does not contain all of the information included in the Registration
Statement. Certain information is omitted and you should refer to the
Registration Statement and its exhibits. With respect to references made in this
prospectus to any contract, agreement or other document of Student Advantage,
such references are not necessarily complete and you should refer to the
exhibits attached to the Registration Statement for copies of the actual
contract, agreement or other document. You may review a copy of the Registration
Statement, including exhibits, at the Commission's public reference room at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 or Seven World
Trade Center, 13th Floor, New York, New York 10048 or Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Please call the Commission
at 1-800-SEC-0330 for further information on the operation of the public
reference rooms.
 
     We will also file annual, quarterly and current reports, proxy statements
and other information with the Commission. You may read and copy any reports,
statements or other information on file at the public reference rooms. You can
also request copies of these documents, for a copying fee, by writing to the
Commission.
 
     Our Commission filings and the Registration Statement can also be reviewed
by accessing the Commission's Internet site at http://www.sec.gov, which
contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission.
 
                                       60
63
 
                            STUDENT ADVANTAGE, INC.
                         INDEX TO FINANCIAL STATEMENTS
PAGE
                                                              ----
STUDENT ADVANTAGE, INC.
Report of Independent Accountants...........................   F-2
Balance Sheet as of December 31, 1997 and 1998..............   F-3
Statement of Operations for the years ended December 31,
  1996, 1997 and 1998.......................................   F-4
Statement of Changes in Redeemable Convertible Preferred
  Stock and Stockholders' Deficit for the years ended
  December 31, 1996, 1997 and 1998..........................   F-5
Statement of Cash Flows for the years ended December 31,
  1996, 1997 and 1998.......................................   F-6
Notes to Financial Statements...............................   F-8
 
COLLEGIATE ADVANTAGE, INC.
Report of Independent Accountants...........................  F-18
Balance Sheet as of December 31, 1997.......................  F-19
Statement of Operations for the year ended December 31,
  1997......................................................  F-20
Statement of Changes in Stockholders' Equity for the year
  ended December 31, 1997...................................  F-21
Statement of Cash Flows for the year ended December 31,
  1997......................................................  F-22
Notes to Financial Statements...............................  F-23
 
THE MAIN QUAD, INC.
Report of Independent Accountants...........................  F-26
Balance Sheet as of December 6, 1997........................  F-27
Statement of Operations for the period from January 1, 1997
  through December 6, 1997..................................  F-28
Statement of Changes in Stockholders' Deficit for the period
  from January 1, 1997 through December 6, 1997.............  F-29
Statement of Cash Flows for the period from January 1, 1997
  through December 6, 1997..................................  F-30
Notes to Financial Statements...............................  F-31
F-1
64
 
                       REPORT OF INDEPENDENT ACCOUNTANTS
 
To the Board of Directors and Stockholders
  of Student Advantage, Inc.
 
     The common stock split described in Note 1 to the financial statements has
not been consummated at April 7, 1999. When it has been consummated, we will be
in a position to furnish the following report:
 
     "In our opinion, the accompanying balance sheet and the related statements
of operations, of changes in redeemable convertible preferred stock and
stockholders' deficit and of cash flows present fairly, in all material
respects, the financial position of Student Advantage, Inc. at December 31, 1997
and 1998, and the results of its operations and its cash flows for each of the
three years in the period ended December 31, 1998 in conformity with generally
accepted accounting principles. These financial statements are the
responsibility of the Company's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above."
 
PricewaterhouseCoopers LLP
 
Boston, Massachusetts
April 5, 1999
 
                                       F-2
65
 
                            STUDENT ADVANTAGE, INC.
 
                                 BALANCE SHEET
                       (IN THOUSANDS, EXCEPT SHARE DATA)
DECEMBER 31,         PRO FORMA
                                                           -------------------    DECEMBER 31,
                                                            1997        1998          1998
                                                           -------    --------    ------------
                                                                                  (UNAUDITED)
ASSETS
Current assets:
  Cash and cash equivalents..............................  $ 1,904    $  5,048      $  5,048
  Accounts receivable (net of allowance for doubtful
     accounts of $70, at December 31, 1997 and December
     31, 1998, respectively).............................      142       2,867         2,867
  Prepaid expenses and other current assets..............       87         317           317
                                                           -------    --------      --------
          Total current assets...........................    2,133       8,232         8,232
Property and equipment, net..............................      235       1,085         1,085
Intangible assets, net...................................      377         617           617
                                                           -------    --------      --------
          Total assets...................................  $ 2,745    $  9,934      $  9,934
                                                           =======    ========      ========
 
                   LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND
                                    STOCKHOLDERS' DEFICIT
Current liabilities:
  Accounts payable.......................................  $   441    $  1,659      $  1,659
  Accrued compensation...................................      362         977           977
  Other accrued expenses.................................      273       1,177         1,177
  Deferred revenue.......................................    5,668       6,666         6,666
  Notes payable to stockholder...........................      225          --            --
                                                           -------    --------      --------
          Total current liabilities......................    6,969      10,479        10,479
                                                           -------    --------      --------
Series A redeemable convertible preferred stock; $1 par
  value; Authorized: 4,000,000 shares; Issued: 1,588,688
  and 2,952,568 shares at December 31, 1997 and 1998,
  respectively; Outstanding: 1,383,156 and 2,747,036
  shares at December 31, 1997 and 1998 actual,
  respectively; no shares issued and outstanding at
  December 31, 1998 pro forma (unaudited)................      111      10,196            --
                                                           -------    --------      --------
Commitments and contingencies (Notes 3 and 11)...........
Stockholders' deficit:
  Common stock, $.01 par value; Authorized: 45,000,000
     shares; Issued: 17,121,651 and 18,348,957 at
     December 31, 1997 and 1998, respectively;
     Outstanding: 14,906,586 and 16,133,892 shares at
     December 31, 1997 and 1998 actual, respectively;
     24,375,000 shares outstanding at December 31, 1998
     pro forma (unaudited)...............................      171         183           272
  Additional paid-in capital.............................      228       4,692        14,799
  Accumulated deficit....................................   (4,104)    (11,623)      (11,623)
  Treasury stock (at cost)...............................     (630)       (630)         (630)
  Deferred compensation..................................       --      (3,363)       (3,363)
                                                           -------    --------      --------
          Total stockholders' deficit....................   (4,335)    (10,741)         (545)
                                                           -------    --------      --------
          Total liabilities, redeemable convertible
            preferred stock and stockholders' deficit....  $ 2,745    $  9,934      $  9,934
                                                           =======    ========      ========
The accompanying notes are an integral part of these financial statements.
                                       F-3
66
 
                            STUDENT ADVANTAGE, INC.
 
                            STATEMENT OF OPERATIONS
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)
YEAR ENDED DECEMBER 31,
                                                              -----------------------------
                                                               1996       1997       1998
                                                              -------    -------    -------
Revenue
  Subscription..............................................  $ 1,093    $ 2,971    $ 7,174
  Other.....................................................      637        821     10,269
                                                              -------    -------    -------
          Total revenue.....................................    1,730      3,792     17,443
                                                              -------    -------    -------
Costs and expenses
  Cost of subscription revenue..............................      543      2,628      2,442
  Cost of other revenue.....................................      506        309      7,331
  Product development.......................................      507      1,469      2,588
  Sales and marketing.......................................      356        843      4,717
  General and administrative................................      437      1,485      3,647
  Depreciation and amortization.............................       37        239      1,027
  Stock-based compensation..................................       --         --        808
                                                              -------    -------    -------
          Total costs and expenses..........................    2,386      6,973     22,560
                                                              -------    -------    -------
Loss from operations........................................     (656)    (3,181)    (5,117)
Interest income (expense), net..............................       (1)        29          2
                                                              -------    -------    -------
Net loss....................................................  $  (657)   $(3,152)   $(5,115)
                                                              =======    =======    =======
Basic and diluted net loss per share........................  $ (0.05)   $ (0.21)   $ (0.32)
                                                              =======    =======    =======
Shares used in computing basic and diluted net loss per
  share.....................................................   14,184     15,295     15,957
                                                              =======    =======    =======
Unaudited pro forma basic and diluted net loss per share....  $    --    $    --    $ (0.24)
                                                              =======    =======    =======
Shares used in computing unaudited pro forma basic and
  diluted net loss per share................................       --         --     21,128
                                                              =======    =======    =======
The accompanying notes are an integral part of these financial statements.
                                       F-4
67
 
                            STUDENT ADVANTAGE, INC.
 
STATEMENT OF CHANGES IN REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS'
                                    DEFICIT
                       (IN THOUSANDS, EXCEPT SHARE DATA)
REDEEMABLE
                                               CONVERTIBLE
                                             PREFERRED STOCK           COMMON STOCK        ADDITIONAL
                                          ---------------------   ----------------------    PAID-IN     ACCUMULATED   TREASURY
                                            SHARES      AMOUNT      SHARES     PAR VALUE    CAPITAL       DEFICIT      STOCK
                                          -----------   -------   ----------   ---------   ----------   -----------   --------
Balance, January 1, 1996................    1,031,914   $   41    11,121,162     $111        $ (152)     $   (295)     $  --
Issuance of preferred and common
  stock.................................      340,129       13     3,665,652       37           200            --
Net loss................................                                                                     (657)        --
                                          -----------   -------   ----------     ----        ------      --------      -----
Balance, December 31, 1996..............    1,372,043       54    14,786,814      148            48          (952)        --
Issuance of preferred and common
  stock.................................      119,368       19     1,286,453       13            56
Issuance of preferred and common stock
  upon cancellation of notes payable....       27,440        5       295,736        3            16
Issuance of preferred and common stock
  in satisfaction of obligation to
  stockholder...........................       32,792        9       353,404        3            30
Repurchase of 205,532 shares of
  preferred stock and 2,215,065 shares
  of common stock.......................                                                                                (630)
Issuance of preferred and common stock
  in connection with the acquisition of
  The Main Quad.........................       37,045       24       399,244        4            78
Net loss................................                                                                   (3,152)
                                          -----------   -------   ----------     ----        ------      --------      -----
Balance, December 31, 1997..............    1,588,688      111    17,121,651      171           228        (4,104)      (630)
Issuance of preferred stock, net of
  issuance costs of $84.................    1,250,000   10,000                                                (84)
Issuance of preferred and common stock
  in connection with the acquisition of
  The Main Quad.........................       65,858       49       709,768        7           169
Issuance of preferred and common stock
  in exchange for note receivable.......       48,022       36       517,538        5           124
Distributions to stockholders...........                                                                   (2,320)
Deferred compensation relating to grants
  of stock options......................                                                      4,171
Compensation relating to grants of stock
  options...............................
Net loss................................                                                                   (5,115)
                                          -----------   -------   ----------     ----        ------      --------      -----
Balance, December 31, 1998..............    2,952,568   $10,196   18,348,957     $183        $4,692      $(11,623)     $(630)
                                          ===========   =======   ==========     ====        ======      ========      =====
TOTAL
                                            DEFERRED     STOCKHOLDERS'
                                          COMPENSATION      DEFICIT
                                          ------------   -------------
Balance, January 1, 1996................    $     --       $   (336)
Issuance of preferred and common
  stock.................................                        237
Net loss................................          --           (657)
                                            --------       --------
Balance, December 31, 1996..............          --           (756)
Issuance of preferred and common
  stock.................................                         69
Issuance of preferred and common stock
  upon cancellation of notes payable....                         19
Issuance of preferred and common stock
  in satisfaction of obligation to
  stockholder...........................                         33
Repurchase of 205,532 shares of
  preferred stock and 2,215,065 shares
  of common stock.......................                       (630)
Issuance of preferred and common stock
  in connection with the acquisition of
  The Main Quad.........................                         82
Net loss................................                     (3,152)
                                            --------       --------
Balance, December 31, 1997..............          --         (4,335)
Issuance of preferred stock, net of
  issuance costs of $84.................                        (84)
Issuance of preferred and common stock
  in connection with the acquisition of
  The Main Quad.........................                        176
Issuance of preferred and common stock
  in exchange for note receivable.......                        129
Distributions to stockholders...........                     (2,320)
Deferred compensation relating to grants
  of stock options......................      (4,171)            --
Compensation relating to grants of stock
  options...............................         808            808
Net loss................................                     (5,115)
                                            --------       --------
Balance, December 31, 1998..............      (3,363)      $(10,741)
                                            ========       ========
See Note 1 for information on stock split.
 
   The accompanying notes are an integral part of these financial statements.
                                       F-5
68
 
                            STUDENT ADVANTAGE, INC.
 
                            STATEMENT OF CASH FLOWS
                                 (IN THOUSANDS)
YEAR ENDED DECEMBER 31,
                                                              ---------------------------
                                                              1996      1997       1998
                                                              -----    -------    -------
CASH FLOWS FROM OPERATING ACTIVITIES
  Net loss..................................................  $(657)   $(3,152)   $(5,115)
  Adjustments to reconcile net loss to net cash provided by
     (used for) operating activities:
     Depreciation and amortization..........................     37        239      1,027
     Reserve for bad debts..................................     --         70         --
     Compensation expense relating to issuance of equity....     --         --        808
     Changes in assets and liabilities
       Accounts receivable..................................    (34)       (44)    (2,725)
       Prepaid expenses and other current assets............      7        (79)      (230)
       Accounts payable.....................................    266         82      1,218
       Accrued compensation.................................     --        273        615
       Accrued expenses.....................................     17        199        704
       Deferred revenue.....................................     93      5,392        998
                                                              -----    -------    -------
       Net cash provided by (used for) operating
          activities........................................   (271)     2,980     (2,700)
                                                              =====    =======    =======
CASH FLOWS FROM INVESTING ACTIVITIES
  Purchases of fixed assets.................................    (16)      (220)    (1,037)
  Acquisitions of businesses for cash.......................   (135)      (429)      (655)
                                                              -----    -------    -------
       Net cash used for investing activities...............   (151)      (649)    (1,692)
                                                              =====    =======    =======
CASH FLOWS FROM FINANCING ACTIVITIES
  Proceeds from sale of preferred stock, net................    250         88      9,916
  Repayment of note from stockholder........................     --         --        165
  Proceeds from long-term debt..............................     --         39         --
  Proceeds from short-term debt -- related party............    190         50      1,410
  Repayment of short-term debt -- related party.............     --         --     (1,635)
  Repurchase of common and preferred stock..................     --       (630)        --
  Distributions to stockholders.............................     --         --     (2,320)
                                                              -----    -------    -------
       Net cash provided by (used for) financing
          activities........................................    440       (453)     7,536
                                                              -----    -------    -------
Net increase in cash and cash equivalents...................     18      1,878      3,144
                                                              -----    -------    -------
Cash and cash equivalents, beginning of year................      8         26      1,904
                                                              -----    -------    -------
Cash and cash equivalents, end of year......................  $  26    $ 1,904    $ 5,048
                                                              =====    =======    =======
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION AND
  NON-CASH INVESTING AND FINANCING ACTIVITIES
Cash paid during the year for interest......................  $   1    $    28    $    87
                                                              =====    =======    =======
During 1997, the Company issued 37,045 shares of Preferred Stock and
399,244 shares of Common Stock in connection with the acquisition of a company.
 
     During 1997, the Company issued 27,440 shares of Preferred Stock and
295,736 shares of Common Stock in exchange for the cancellation of a $24,000
note payable.
 
                                       F-6
69
                            STUDENT ADVANTAGE, INC.
 
                     STATEMENT OF CASH FLOWS --(CONTINUED)
 
     During 1997, the Company issued 32,792 shares of Preferred Stock and
353,404 shares of Common Stock in satisfaction of an obligation to a
stockholder.
 
     During 1998, the Company issued 65,858 shares of Preferred Stock and
709,768 shares of Common Stock in connection with a contingent payment relating
to a 1997 acquisition of a company.
 
     During 1998, the Company issued 48,022 shares of Preferred Stock and
517,538 shares of Common Stock in exchange for a note receivable of $165,000.
 
   The accompanying notes are an integral part of these financial statements.
                                       F-7
70
 
                            STUDENT ADVANTAGE, INC.
 
                         NOTES TO FINANCIAL STATEMENTS
 
1.  ORGANIZATION, NATURE OF BUSINESS AND BASIS OF PRESENTATION
 
     Student Advantage, Inc. (the "Company") provides college students with
discounts on a broad range of products and services nationwide through the
Student Advantage membership program, as well as its Web site and magazine.
Student Advantage also offers marketing services to corporations seeking to
communicate effectively with the college student market.
 
     Student Advantage, Inc. is the surviving entity of a reorganization of
Student Advantage, LLC, a limited liability corporation. In October 1998,
Student Advantage, LLC effected a recapitalization pursuant to which 10,911
outstanding Members' Interests converted into a total of 6,875,000 Members'
Interests, 1,497,036 of which were Preferred Members' Interests and 5,377,964 of
which were Common Members' Interests. Each Member received the proportion of
Preferred and Common Members' Interests that corresponded to such Member's
proportion of the 10,911 Members' Interests that existed immediately prior to
the recapitalization. Immediately following such recapitalization, certain
Members sold an aggregate of 1,250,000 Preferred Members' Interests to two
investors for aggregate consideration of $10 million. Immediately following such
transaction, the Company was reorganized from an "LLC" to a "C" corporation, and
as part of such reorganization, each Member received the number of shares of
common stock and of preferred stock of the Company that was equal to the number
of common and preferred Members' Interests that such Member held immediately
prior to the reorganization. The assets and liabilities of the limited liability
corporation were transferred to Student Advantage at historical cost. The
recapitalization and reorganization have been accounted for retroactively in the
accompanying financial statements.
 
     Student Advantage operates in one segment and is subject to the risks and
uncertainties common to growing companies, including reliance on certain
customers, growth and commercial acceptance of the Internet, dependence on
principal products and services and third-party technology, activities of
competitors, dependence on key personnel such as Ray Sozzi, Student Advantage's
Chief Executive Officer, and limited operating history.
 
     Student Advantage has also experienced substantial net losses since its
inception and, as of December 31, 1998, had an accumulated deficit of $11.6
million. Such losses and accumulated deficit resulted primarily from significant
costs incurred in the development of the Company's products and services and the
preliminary establishment of the Company's infrastructure. For the foreseeable
future, the Company expects to continue to experience growth in its operating
expenses in order to execute its current business plan. As a result, the
Company's business plan indicates that additional financing would be required to
support its planned expenditures. In the event that an initial public offering
is not completed on a timely basis, the Company would likely seek such funding
through a private financing.
 
     On April 5, 1999, the Company declared a 3-for-1 stock split in the form of
a stock dividend, subject to stockholder approval. All periods presented have
been restated to reflect the stock dividend.
 
2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
  Cash and Cash Equivalents
 
     Student Advantage considers all highly liquid investments purchased with an
original maturity of three months or less to be cash equivalents. Student
Advantage invests its excess cash in money markets and certificates of deposit,
which are subject to minimal credit and market risk. Student Advantage's cash
equivalents are classified as available-for-sale and are recorded at cost which
approximates fair value.
 
                                       F-8
71
                            STUDENT ADVANTAGE, INC.
 
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
 
  Revenue Recognition
 
     The Company derives subscription revenue from membership fees related to
enrolling students in the Student Advantage Membership program. Subscription
income is recognized ratably over the remaining term of the membership
agreements. Other revenue includes advertising, marketing services, and
commerce. The Company derives revenue from advertisements placed in SAM, the
Student Advantage magazine, and on its Web site. Revenue from fees related to
advertisements placed in SAM are recognized when the magazine is shipped to
members. Web site advertising revenue is recognized as the related impressions
are displayed, provided that no significant obligations remain and collection of
the related receivable is probable. Marketing services revenue is derived from
providing tailored marketing services to corporations seeking to market their
products and services to college students. Fees from marketing services are
recognized as the related services are rendered, provided that no significant
obligations remain and collection of the related receivable is probable.
Commerce revenue includes primarily transaction-based fees earned from reselling
products and services on behalf of the Company's business partners. 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.
 
  Fair Value of Financial Instruments
 
     The carrying amounts of Student Advantage's financial instruments, which
include cash equivalents, accrued expenses, notes payable and redeemable
convertible preferred stock, approximate their fair values at December 31, 1997
and 1998.
 
  Concentrations of Credit Risk and Significant Customers
 
     Financial instruments which potentially expose the Company to concentration
of credit risk primarily are comprised of trade accounts receivable. Management
believes its credit policies are prudent and reflect normal industry terms and
business risk. The Company does not anticipate non-performance by the
counterparties and, accordingly, does not require collateral. The Company
maintains reserves for potential credit losses and such losses, in the
aggregate, have not exceeded management's expectations. For the years ended
December 31, 1997 and 1998, one customer accounted for 62% and 68% of total
revenue, respectively. At December 31, 1997, three customers accounted for 62%
of accounts receivable, and at December 31, 1998, one customer accounted for 67%
of accounts receivable.
 
  Product Development
 
     Costs incurred in the product development by Student Advantage are expensed
as incurred.
 
  Property and Equipment
 
     Fixed assets are recorded at cost and depreciated over their estimated
useful lives, generally three to five years, using the straight-line method.
Repair and maintenance costs are expensed as incurred.
 
  Intangible Assets
 
     Intangible assets include the excess of the purchase price over
identifiable net assets acquired in acquisitions. Such assets include goodwill,
customer lists, noncompete agreements, Web sites and other intangible assets,
which are being amortized over the estimated economic lives of such assets
ranging from two to five years. Accumulated amortization was $231,000 and
$871,000 at December 31, 1997 and 1998, respectively.
 
                                       F-9
72
                            STUDENT ADVANTAGE, INC.
 
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
 
  Accounting for Stock-Based Compensation
 
     Student Advantage accounts for stock-based awards to employees using the
intrinsic value method as prescribed by Accounting Principles Board ("APB")
Opinion No. 25, "Accounting for Stock Issued to Employees," and related
interpretations. Accordingly, no compensation expense is recorded for options
issued to employees in fixed amounts and with fixed exercise prices at least
equal to the fair market value of Student Advantage's common stock at the date
of grant. Student Advantage has adopted the provisions of SFAS No. 123,
"Accounting for Stock-Based Compensation," through disclosure only (Note 8). All
stock-based awards to non-employees are accounted for at their fair value in
accordance with SFAS No. 123.
 
  Income Taxes
 
     Prior to its reorganization as a C Corporation in 1998 (Note 1), Student
Advantage was treated as a Limited Liability Corporation for federal and state
income tax purposes. Accordingly, no provision for corporate income taxes was
recorded during this period and all losses were passed through to Student
Advantage LLC's members. At the time of its reorganization, Student Advantage
adopted the liability method of accounting for income taxes as set forth in SFAS
No. 109, "Accounting for Income Taxes."
 
  Advertising Expense
 
     Student Advantage recognizes advertising expense as incurred. Advertising
expense was approximately $182,000, $158,000 and $371,000 for the years ended
December 31, 1996, 1997 and 1998, respectively.
 
  Use of Estimates
 
     The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
 
  Unaudited Pro Forma Balance Sheet
 
     Upon the closing of Student Advantage's anticipated initial public
offering, all 2,747,036 of the outstanding shares of Series A preferred stock
(Note 6) will automatically convert into 8,241,108 shares of common stock. This
conversion has been reflected in the unaudited pro forma balance sheet as of
December 31, 1998.
 
  Net Loss Per Share and Unaudited Pro Forma Net Loss Per Share
 
     Net loss per share is computed under SFAS No. 128, "Earnings Per Share".
Basic net loss per share is computed using the weighted average number of
shares. Diluted loss per share does not differ from basic loss per share since
potential common shares from conversion of preferred stock and exercise of stock
options are anti-dilutive for all periods presented. Pro forma basic and diluted
net loss per share have been calculated assuming the conversion of all
outstanding shares of Series A preferred stock into common shares, as if the
shares had converted immediately upon their issuance.
 
  Recently Issued Accounting Pronouncements
 
     In June 1997, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 130, "Reporting Comprehensive Income". This statement establishes standards
for the reporting and display of
 
                                      F-10
73
                            STUDENT ADVANTAGE, INC.
 
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
 
comprehensive income and its components. SFAS No. 130 was effective for Student
Advantage's fiscal year ended December 31, 1998. Adoption of SFAS No. 130 is for
presentation purposes only and had no effect on Student Advantage's financial
position or results of operations.
 
     In June 1997, the FASB issued SFAS No. 131, "Disclosures about Segments of
an Enterprise and Related Information" which supersedes SFAS No. 14, "Financial
Reporting for Segments of a Business Enterprise". This statement changes the way
public business enterprises report segment information, including financial and
descriptive information about their selected segment information. Under SFAS No.
131, operating segments are defined as revenue-producing components of the
enterprise which are generally used internally for evaluating segment
performance. SFAS No. 131 is effective for Student Advantage's fiscal year
ending December 31, 1998 and will not affect Student Advantage's financial
position or results of operations.
 
     In February 1998, the FASB issued SFAS No. 132, "Employers' Disclosures
about Pensions and Other Postretirement Benefits". SFAS No. 132 standardizes the
disclosure requirements for pensions and other postretirement benefits and is
effective for Student Advantage's fiscal year ended December 31, 1998. SFAS No.
132 relates to disclosure only and will not affect Student Advantage's financial
position or results of operations.
 
     In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities". The new standard establishes accounting and
reporting standards for derivative instruments, including certain derivative
instruments embedded in other contracts, (collectively referred to as
derivatives) and for hedging activities. SFAS No. 133 is effective for all
fiscal quarters of fiscal years beginning after June 15, 1999 and is effective
for Student Advantage's fiscal year ending December 31, 1999. Student Advantage
does not expect the adoption of SFAS No. 133 to have a material effect on its
financial position or results of operations.
 
     In March 1998, the Accounting Standards Executive Committee ("AcSEC")
issued Statement of Position ("SOP") 98-1, "Accounting for the Cost of Computer
Software Developed or Obtained for Internal Use" ("SOP 98-1"). SOP 98-1 is
effective for financial statements for years beginning after December 15, 1998.
SOP 98-1 provides guidance over accounting for computer software development or
obtained for internal use including the requirement to capitalize specified
costs and amortization of such costs. Student Advantage does not expect the
adoption of this standard to have a material effect on Student Advantage's
financial position or results of operation.
 
     In April 1998, AcSEC issued SOP 98-5, "Reporting on the Costs of Start-Up
Activities". Start-up activities are defined broadly as those one-time
activities related to opening a new facility, introducing a new product or
service, conducting business in a new territory, conducting business with a new
class of customer, commencing some new operation or organizing a new entity.
Under SOP 98-5, the cost of start-up activities should be expensed as incurred.
SOP 98-5 is effective for Student Advantage's fiscal 1999 financial statements
and Student Advantage does not expect its adoption to have a material effect on
its financial position or results of operations.
 
3.  ACQUISITIONS
 
     All acquisitions by Student Advantage, since its inception, have been
accounted for as purchases. Accordingly, the purchase price of each transaction
has been allocated to the assets acquired and liabilities assumed based on the
fair value of such assets and liabilities at the respective acquisition dates.
 
     In March 1996, Student Advantage completed its acquisition of The Passport,
Inc. ("Passport"), a company that operated student discount programs. Student
Advantage paid $100,000 in cash and assumed liabilities of $35,000 in exchange
for the net assets of Passport, which consisted primarily of customer lists,
non-compete agreements and other intangible assets. Accordingly, the operating
results of Passport have
                                      F-11
74
                            STUDENT ADVANTAGE, INC.
 
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
 
been included in Student Advantage's financial statements since the date of
acquisition. Student Advantage is amortizing these intangible assets on a
straight-line basis over a three-year period.
 
     In December 1997, Student Advantage completed its acquisition of The Main
Quad, Inc. ("Main Quad"), a company that owned and operated Web sites focused on
students. Student Advantage paid $272,000 in cash and issued 399,244 shares of
common stock and 37,045 shares of preferred stock with an aggregate estimated
fair value of $106,000 in exchange for the net assets of The Main Quad, which
consisted of certain office equipment as well as Web sites, customer lists,
non-compete agreements and other intangible assets. Student Advantage is
amortizing these tangible and intangible assets on a straight-line basis over a
two-year period. The agreement also provided for the payment of additional
consideration by Student Advantage upon the resolution of certain contingencies.
In 1998, the agreement was amended to eliminate the contingency provisions, and
Student Advantage agreed to issue an additional 709,768 shares of common stock
and 65,858 shares of preferred stock with an aggregate fair value of $225,000
which has been recorded as additional cost of the assets acquired. The operating
results of The Main Quad have been included in Student Advantage's financial
statements since the date of acquisition.
 
     In December 1997, Student Advantage completed its acquisition of Loci, Inc.
("Loci"), a company that owned and operated a Web site focused on students.
Student Advantage paid approximately $100,000 in cash in exchange for the net
assets of Loci, which consisted of the Web site, customer lists, non-compete
agreements and other intangible assets. Accordingly, the operating results of
Loci have been included in Student Advantage's financial statements since the
date of acquisition. Student Advantage is amortizing these intangible assets on
a straight-line basis over a three-year period.
 
     Student Advantage entered into an agreement effective January 1, 1998 for
the purchase of Collegiate Advantage, Inc., a provider of marketing and
promotional services to the college community. The cost of the acquisition
consisted of $601,000 in cash (including transaction costs) and the assumption
of liabilities of $275,000. During 1998, the Company paid additional contingent
consideration of $50,000. Student Advantage may be required to pay additional
consideration based on future performance of the former Collegiate Advantage
business. The following unaudited pro forma data summarizes the results of
operations for the year ended December 31, 1997 as if the acquisition of
Collegiate Advantage had been completed on January 1, 1997. The pro forma data
gives effect to actual operating results prior to the acquisition and
adjustments to interest income and amortization of goodwill and other intangible
assets. These pro forma amounts do not purport to be indicative of the results
that would have actually been obtained if the acquisition had occurred on
January 1, 1997 or that may be obtained in the future.
FOR THE YEAR ENDED
                                                              DECEMBER 31, 1997
                                                          -------------------------
                                                          (UNAUDITED, IN THOUSANDS,
                                                           EXCEPT PER SHARE DATA)
Net revenue.............................................           $ 8,641
Net loss................................................            (3,560)
Net loss per common share:
  Basic and diluted.....................................           $ (0.23)
F-12
75
                            STUDENT ADVANTAGE, INC.
 
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
 
4.  PROPERTY AND EQUIPMENT
 
          Property and equipment consist of the following (in thousands):
DECEMBER 31,
                                                              --------------
                                                              1997     1998
                                                              ----    ------
Furniture and fixtures......................................  $ 17    $   50
Computer equipment and software.............................   164       673
Equipment...................................................    90       196
Leasehold improvements......................................    --       389
                                                              ----    ------
                                                               271     1,308
Less: Accumulated depreciation and amortization.............    36       223
                                                              ----    ------
                                                              $235    $1,085
                                                              ====    ======
Depreciation and amortization expense with respect to property and
equipment for the years ended December 31, 1996, 1997 and 1998 was $3,000,
$20,000 and $187,000, respectively.
 
5.  BORROWINGS
 
     At December 31, 1997, the Company had two notes payable from a stockholder
in the aggregate amount of $225,000. These notes were fully repaid in 1998.
 
     During 1998, the Company entered into a $1,250,000 line of credit agreement
with a bank expiring in April of 1999. The agreement is subject to certain
financial covenants as defined in the agreement, and the assets of the Company
collateralize the related obligation. Borrowings under the agreement bear
interest at the bank's rate, which at December 31, 1998 was 9.25%. During 1998,
the Company borrowed $1,250,000 under the agreement. There were no borrowing
outstanding at December 31, 1998.
 
     In April 1999, this line of credit agreement was replaced with and
superseded by a new line of credit agreement which provides for borrowings of up
to $2.75 million, including a $250,000 equipment line of credit. The terms of
this line of credit agreement require the maintenance of certain minimum
financial ratios and conditions and includes other covenants similar to those in
the initial agreement. A termination of the Company's agreements with AT&T would
give the bank the right to terminate the credit agreement. All borrowings under
this line of credit agreement bear interest at LIBOR plus 200 basis points or at
the bank's rate, and expires in June 2000.
 
6.  PREFERRED STOCK
 
     The Series A preferred stockholders have the following rights and
privileges:
 
  Voting Rights
 
     Each holder of the Series A preferred stock is entitled to a number of
votes equal to the number of shares of common stock into which each share of
such stock is convertible. With respect to the election of directors, the Series
A preferred stockholders, voting as a single class, may elect two directors.
 
  Conversion
 
     Each share of Series A preferred stock is convertible, at the option of the
holder, into three shares of common stock, subject to certain anti-dilution
adjustments. Each share of the Series A preferred stock will automatically
convert into three shares of common stock upon the closing of an underwritten
public
 
                                      F-13
76
                            STUDENT ADVANTAGE, INC.
 
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
 
offering of Student Advantage's common stock at a price to the public of at
least $4.10 per share resulting in aggregate proceeds to Student Advantage of at
least $15 million.
 
  Dividend Rights
 
     The Series A preferred stockholders are not entitled to receive any
dividends unless declared by Student Advantage's Board of Directors. In the
event that dividends are paid on the common stock, the Series A preferred
stockholders are entitled to receive dividends at the same rate and at the same
time as the common stockholders, with each share of Series A preferred stock
being treated as equal to the number of shares of common stock into which each
share of such stock is convertible.
 
  Liquidation Preferences
 
     In the event of any liquidation, dissolution or winding up of Student
Advantage, the Series A preferred stockholders are entitled to receive, in
preference to the holders of the common stock, an amount equal to the greater of
$8.00 per share, subject to certain anti-dilutive adjustments, or such amount as
would have been payable had such shares been converted to common stock just
prior to liquidation. Any assets remaining following the initial distribution to
the preferred stockholders shall be available for distribution ratably among the
common stockholders only.
 
  Redemption
 
     On October 16, 2003, at the request of at least one-third of the holders of
the Series A preferred stock, Student Advantage shall redeem the then
outstanding shares of Series A preferred stock from each holder that requests
redemption. Upon redemption, each holder of the Series A will be entitled to
receive a cash payment equal to $8.00 per share plus any declared but unpaid
dividends.
 
  Undesignated Preferred Stock
 
     On April 5, 1999 Student Advantage's Board of Directors approved, subject
to stockholder approval, 5,000,000 shares of undesignated preferred stock.
Issuances of the undesignated preferred stock may be made at the discretion of
the Board of Directors (without stockholder approval), in one or more series and
with such designations, rights and preferences as determined by the Board. As a
result, the undesignated preferred stock may have dividend, liquidation,
conversion, redemption, voting or other rights which may be more expansive than
the rights of holders of and the common stock.
 
7.  COMMON STOCK
 
  Authorized Shares
 
     On April 5, 1999, Student Advantage's Board of Directors approved, subject
to stockholder approval, an increase in the authorized shares of common stock,
$0.01 par value, to 100,000,000.
 
8.  STOCK AWARD PLANS
 
  1998 Stock Incentive Plan
 
     Under the 1998 Incentive Stock Plan, the Board of Directors may award
options and restricted stock or other stock-based awards. Incentive stock
options may not be granted at less than the fair market value of Student
Advantage's common stock at the date of grant, for a term not to exceed ten
years and generally vesting over a four-year period. The exercise price under
each non-qualified stock option shall be specified by the Board of Directors.
Awards made under the 1998 Stock Plan may be made at the discretion of the Board
of Directors with terms to be defined therein.
 
                                      F-14
77
                            STUDENT ADVANTAGE, INC.
 
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
 
     On April 5, 1999, the Board approved, subject to stockholder approval, an
increase in the 1998 Stock Plan providing for the issuance of up to an aggregate
7,500,000 shares of Student Advantage common stock to eligible employees,
officers, directors, consultants and advisors of Student Advantage.
 
     Prior to 1998, there was no compensation expense recognized for stock
option grants made by Student Advantage under APB Opinion No. 25. For the year
ended December 31, 1998, compensation expense recognized for stock option grants
totaled $808,000. Had compensation cost for Student Advantage's option grants
been determined based on the fair value at the date of grant consistent with the
method prescribed by SFAS No. 123, Student Advantage's net loss and net loss per
share would have increased to the pro forma amounts indicated below:
YEAR ENDED
                                                       DECEMBER 31, 1998
                                                     ---------------------
                                                     (IN THOUSANDS, EXCEPT
                                                        PER SHARE DATA)
Net loss:
  As reported......................................         $(5,115)
  Pro forma........................................          (5,139)
Basic and diluted net loss per share...............
  As reported......................................            0.32
  Pro forma........................................            0.32
Because the determination of the fair value of all options granted after
Student Advantage becomes a public entity will include an expected volatility
factor, because additional option grants are expected to be made subsequent to
December 31, 1998, and because most options vest over several years, the pro
forma effects of applying the fair value method may be material to the results
of operations in future years.
 
     Under SFAS No. 123, the fair value of each employee option grant is
estimated on the date of grant using the Black-Scholes option pricing model to
apply the minimum value method with the following weighted-average assumptions
used for grants made during the year ended December 31, 1998: no dividend yield;
risk free interest rates of 4.54%; no volatility; and an expected option term of
4 years.
 
     Stock option activity during the year ended December 31, 1998 was as
follows:
OUTSTANDING OPTIONS
                                                         ----------------------
                                                                      WEIGHTED-
                                                                       AVERAGE
                                                          NUMBER      EXERCISE
                                                         OF SHARES      PRICE
                                                         ---------    ---------
Outstanding -- January 1, 1998
  Granted (weighted average fair value of $1.86).......  2,313,000      $0.33
  Exercised............................................         --
  Canceled.............................................         --
                                                         ---------      -----
Outstanding -- December 31, 1998.......................  2,313,000      $0.33
                                                         =========      =====
As of December 31, 1998, 1,887,000 shares were available for grant under
the 1998 Stock Plan.
 
     The following table summarizes information about stock options outstanding
at December 31, 1998:
VESTED AND EXERCISABLE
                         WEIGHTED-AVERAGE   ----------------------------
                            REMAINING                   WEIGHTED-AVERAGE
EXERCISE     NUMBER      CONTRACTUAL LIFE   NUMBER OF       EXERCISE
 PRICE     OUTSTANDING      (IN YEARS)       SHARES          PRICE
--------   -----------   ----------------   ---------   ----------------
$0.33      2,313,000          9.31           450,535        $0.33
F-15
78
                            STUDENT ADVANTAGE, INC.
 
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
 
  1999 Employee Stock Purchase Plan
 
     On April 5, 1999, the Board of Directors authorized, subject to stockholder
approval, the 1999 Employee Stock Purchase Plan (the "Purchase Plan"). The
Purchase Plan provides for the issuance of up to 450,000 shares of Student
Advantage's common stock to eligible employees. Under the Purchase Plan, Student
Advantage is authorized to make one or more offerings during which employees may
purchase shares of common stock through payroll deductions made over the term of
the offering. The per-share purchase price at the end of each offering is equal
to 85% of the closing price of the common stock at the beginning or end of the
offering period (as defined by the Purchase Plan), whichever is lower. Student
Advantage has made no determination as to when the first offering period under
the Purchase Plan will commence.
 
  Deferred Compensation
 
     During 1998, Student Advantage granted stock options to purchase 2,313,000
shares of its common stock with an exercise price of $0.33 per share. Student
Advantage recorded compensation expense and deferred compensation relating to
these options totaling $808,000 and $4.2 million, respectively, representing the
differences between the estimated fair market value of the common stock on the
date of grant and the exercise price. Compensation relating to options which
vested immediately upon grant was expensed in full at the date of grant, while
compensation related to options which vest over time was recorded as a component
of stockholders' deficit and is being amortized over the vesting periods of the
related options.
 
9.  INCOME TAXES
 
     Deferred tax assets are comprised of the following:
DECEMBER 31, 1998
                                                       -----------------
Deferred tax assets:
  Deferred revenue...................................     $ 2,400,000
  Net operating loss carryforwards...................         800,000
  Non current assets.................................         200,000
  Accruals...........................................         300,000
  Deferred compensation..............................         300,000
  Other..............................................         100,000
                                                          -----------
          Total deferred tax assets..................       4,100,000
Deferred tax asset valuation allowance...............      (4,100,000)
                                                          -----------
                                                          $        --
                                                          ===========
The Company has provided a full valuation allowance for the deferred tax
assets since it is more likely than not that these future benefits will not be
realized. If the Company achieves future profitability, a significant portion of
these deferred tax assets could be available to offset future income taxes.
 
     At December 31, 1998, the Company has a net operating loss carryforward for
federal and state purposes of approximately $2 million which expires through
2018.
 
     Under the Internal Revenue Code, certain substantial changes in the
Company's ownership could result in an annual limitation on the amount of net
operating loss and tax credit carryforwards which can be utilized in future
years.
 
                                      F-16
79
                            STUDENT ADVANTAGE, INC.
 
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
 
10.  EMPLOYEE SAVINGS PLAN
 
     During 1998, Student Advantage adopted an employee retirement savings plan
under Section 401(k) of the Internal Revenue Code which covers substantially all
employees. Under the terms of the 401(k) Plan, employees may contribute a
percentage of their salary, up to a maximum of 20%. Student Advantage
contributed $61,000 to the 401(k) Plan on behalf of its employees during 1998.
 
11.  COMMITMENTS AND CONTINGENCIES
 
     Student Advantage leases its operating facility and certain office
equipment under noncancelable operating lease agreements. Rent expense under
these leases for the years ended December 31, 1996, 1997 and 1998, totalled
approximately $44,000, $246,000 and $722,000, respectively.
 
     Future minimum lease payments under noncancelable operating leases at
December 31, 1998 are as follows:
OPERATING
                                                             LEASES
                                                           ----------
1999.....................................................  $  799,000
2000.....................................................     708,000
2001.....................................................     496,000
2002.....................................................     437,000
2003.....................................................     437,000
Thereafter...............................................     238,000
                                                           ----------
Total minimum lease payments.............................  $3,115,000
                                                           ==========
Legal Proceedings
 
     Student Advantage is from time to time subject to legal proceedings and
claims which 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 Student Advantage's financial position or
results of operations.
 
12.  SUBSEQUENT EVENT
 
     On April 1, 1999, Student Advantage completed its acquisitions of The
Travel Holding Group, LLC and The Campus Agency, LLC. The Campus Agency provides
media planning and strategy consulting services to the U.S. student travel
market. The Travel Holding Group is a reseller of Eurail passes. The
acquisitions have been accounted for under the purchase method of accounting and
the results of operations of each company will be included in Student
Advantage's results beginning on the acquisition date. Goodwill and other
intangible assets in the aggregate amount of $280,000 were recorded in
connection with these acquisitions and will be amortized over 3 years. Because
the historical results of Campus Agency and Travel Holding Group are immaterial,
pro forma financial information has not been presented.
 
                                      F-17
80
 
                       REPORT OF INDEPENDENT ACCOUNTANTS
 
To the Board of Directors and Stockholders
  of Student Advantage, Inc.
 
     In our opinion, the accompanying balance sheet and the related statements
of operations, of changes in stockholders' equity and of cash flows present
fairly, in all material respects, the financial position of Collegiate
Advantage, Inc. at December 31, 1997, and the results of its operations and its
cash flows for the year then ended, in conformity with generally accepted
accounting principles. These financial statements are the responsibility of the
Company's management; our responsibility is to express an opinion on these
financial statements based on our audit. We conducted our audit of these
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for the opinion expressed above.
 
/s/ PricewaterhouseCoopers LLP
 
PricewaterhouseCoopers LLP
 
Boston, Massachusetts
April 5, 1999
 
                                      F-18
81
 
                           COLLEGIATE ADVANTAGE, INC.
 
                                 BALANCE SHEET
                               DECEMBER 31, 1997
ASSETS
Current assets
  Cash......................................................  $  304,665
  Accounts receivable (net of allowance for doubtful
     accounts of $20,000)...................................     851,195
  Costs in excess of billings...............................      65,337
  Prepaid expenses and other current assets.................      25,442
                                                              ----------
          Total current assets..............................   1,246,639
Fixed assets, net...........................................     275,630
Deposits....................................................      15,194
                                                              ----------
          Total assets......................................  $1,537,463
                                                              ==========
                  LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
  Accrued payroll...........................................  $  131,099
  Accounts payable..........................................     265,470
  Deferred revenue..........................................     371,092
                                                              ----------
          Total current liabilities.........................     767,661
                                                              ----------
Commitments (Note 4)
Stockholders' equity
  Capital stock, no par value; 15,000 shares authorized; 100
     shares issued and outstanding at December 31, 1997.....       2,000
  Retained earnings.........................................     767,802
                                                              ----------
          Total stockholders' equity........................     769,802
                                                              ----------
          Total liabilities and stockholders' equity........  $1,537,463
                                                              ==========
The accompanying notes are an integral part of these financial statements.
                                      F-19
82
 
                           COLLEGIATE ADVANTAGE, INC.
 
                            STATEMENT OF OPERATIONS
                      FOR THE YEAR ENDED DECEMBER 31, 1997
Revenue.....................................................  $4,849,270
Cost of revenue.............................................   3,812,075
                                                              ----------
  Gross profit..............................................   1,037,195
General and administrative expenses.........................   1,207,580
                                                              ----------
  Loss from operations......................................    (170,385)
                                                              ----------
Interest and other income:
  Interest income...........................................      10,209
  Other income..............................................      17,611
                                                              ----------
                                                                  27,820
                                                              ----------
Net loss....................................................  $ (142,565)
                                                              ==========
The accompanying notes are an integral part of these financial statements.
                                      F-20
83
 
                           COLLEGIATE ADVANTAGE, INC.
 
                  STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                      FOR THE YEAR ENDED DECEMBER 31, 1997
COMMON STOCK
                                                   ------------------
                                                             CARRYING     RETAINED
                                                   SHARES     VALUE       EARNINGS       TOTAL
                                                   ------    --------    ----------    ----------
Balance at December 31, 1996.....................   100       $2,000     $1,041,517    $1,043,517
Net loss.........................................                          (142,565)     (142,565)
Dividends paid...................................                          (131,150)     (131,150)
                                                    ---       ------     ----------    ----------
Balance at December 31, 1997.....................   100       $2,000     $  767,802    $  769,802
                                                    ===       ======     ==========    ==========
The accompanying notes are an integral part of these financial statements.
                                      F-21
84
 
                           COLLEGIATE ADVANTAGE, INC.
 
                            STATEMENT OF CASH FLOWS
                      FOR THE YEAR ENDED DECEMBER 31, 1997
CASH FLOWS FROM OPERATING ACTIVITIES
  Net loss..................................................  $(142,565)
  Adjustments to reconcile net income to net cash provided
     by operating activities:
     Depreciation and amortization..........................    110,691
     Changes in operating assets and liabilities
       Accounts receivable..................................   (132,065)
       Costs in excess of billings..........................     37,531
       Prepaid expenses and other current assets............     12,353
       Accrued payroll......................................    131,099
       Accounts payable.....................................     15,039
       Deferred revenue.....................................    353,092
                                                              ---------
          Net cash provided by operating activities.........    385,175
                                                              ---------
CASH FLOWS FROM INVESTING ACTIVITIES
  Purchases of fixed assets.................................    (88,516)
                                                              ---------
CASH FLOWS FROM FINANCING ACTIVITIES
  Dividends paid............................................   (131,150)
                                                              ---------
Net increase in cash........................................    165,509
Cash, beginning of year.....................................    139,156
                                                              ---------
Cash, end of year...........................................  $ 304,665
                                                              =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
  Cash paid during the year for interest....................  $     338
                                                              =========
The accompanying notes are an integral part of these financial statements.
                                      F-22
85
 
                           COLLEGIATE ADVANTAGE, INC.
 
                         NOTES TO FINANCIAL STATEMENTS
 
1.  ORGANIZATION, NATURE OF BUSINESS AND BASIS OF PRESENTATION
 
     Collegiate Advantage, Inc. operates in one business segment and is engaged
primarily in providing promotional, marketing and advertising services on
college campuses throughout the United States.
 
2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
  Use of Estimates
 
     The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates.
 
  Cash
 
     All highly liquid investments with an original maturity of three months or
less are considered to be cash equivalents. The Company maintains its cash in
bank deposit accounts which at times, may exceed federally insured limits. The
Company does not believe that it is exposed to significant credit risk
concerning cash and cash equivalents.
 
  Accounts Receivable, Concentration of Credit Risk and Significant Customers
 
     Financial statements which potentially expose the Company to concentrations
of credit risk include accounts receivable. The Company does not require
collateral but closely monitors amounts receivable from customers.
 
     During 1997, the Company earned approximately 61% of its revenue from one
customer. Additionally, the Company had $433,222 of accounts receivable and
$371,092 of deferred revenue related to this customer at December 31, 1997.
 
  Fixed Assets
 
     Fixed assets are recorded at cost and depreciated using the straight-line
method over their estimated useful lives. Maintenance and repairs costs are
expensed as incurred.
 
  Income Taxes
 
     Collegiate Advantage has elected, by consent of its stockholders, to be
taxed under the provisions of Subchapter S of the Internal Revenue Code for
income tax return purposes. Under these provisions, the Company does not pay
Federal income taxes on its taxable income. Instead, the stockholders are liable
for individual Federal income taxes on the Company's taxable income. Thus, the
Company does not incur Federal income tax obligations.
 
  Advertising Expense
 
     Collegiate Advantage recognizes advertising expense as incurred.
Advertising expense was approximately $11,469 for the year ended December 31,
1997.
 
                                      F-23
86
                           COLLEGIATE ADVANTAGE, INC.
 
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
 
  Revenue Recognition
 
     Revenue is recognized as services are performed, provided that all
significant obligations have been fulfilled and collection of the related
receivable is probable. Billings and payments in advance of the recognition of
revenue are recorded as deferred revenue.
 
3.  FIXED ASSETS
 
     Fixed assets consist of the following:
ESTIMATED
                                                       USEFUL LIVES    DECEMBER 31,
                                                        (IN YEARS)         1997
                                                       ------------    ------------
Computers and equipment..............................     5              $374,381
Furniture and fixtures...............................   5 - 7              37,523
Motor vehicles.......................................     3               107,626
Leasehold improvements...............................     3                23,050
                                                                         --------
                                                                          542,580
Less -- accumulated depreciation and amortization....                    (266,950)
                                                                         --------
                                                                         $275,630
                                                                         ========
Depreciation and amortization expense totaled $110,691 for the year ended
December 31, 1997.
 
4.  COMMITMENTS
 
  Service Agreement
 
     During 1997, Collegiate Advantage negotiated the redemption of a 50%
stockholder's interest in the Company. The stock was purchased directly from the
50% stockholder by another stockholder of the Company. In connection with this
arrangement, the Company entered into a service consulting agreement with the
former stockholder which expires on December 31, 2000 unless terminated earlier
under the provisions of the agreement. The Company is required to pay $25,000 on
the last day of each calendar quarter commencing on March 31, 1998.
 
  Leases
 
     Collegiate Advantage leases its facilities and certain equipment under
operating leases extending through 1998. In addition to rent, Collegiate
Advantage is responsible for incremental operating costs, including real estate
taxes, on each property. Expenses incurred under these leases during the year
ended December 31, 1997 totaled $193,483.
 
     Future minimum lease payments under operating leases are as follows:
1998......................................................  $187,099
1999......................................................    91,290
                                                            --------
                                                            $278,389
                                                            ========
5.  EMPLOYEE BENEFIT PLANS
 
     During 1995, Collegiate Advantage implemented a defined contribution profit
sharing plan covering all eligible employees. Employer contributions are at the
discretion of management. Collegiate Advantage elected not to make any
contributions to the plan in 1997.
 
                                      F-24
87
                           COLLEGIATE ADVANTAGE, INC.
 
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
 
     In addition, Collegiate Advantage established an employee savings and
profit sharing plan during 1995. Employees may contribute to the employee
savings plan subject to the provisions of Code Section 401(k) of the Internal
Revenue Code. Collegiate Advantage matches employee contributions up to 6.0% of
eligible compensation. Collegiate Advantage contributed $20,031 to this plan in
1997.
 
6.  LINE OF CREDIT
 
     During 1997, the Company entered into a $450,000 line of credit agreement
with a bank. Borrowings under the agreement bear interest at the bank's prime
rate plus 0.5% (9.0% at December 31, 1997). At December 31, 1997, there were no
advances outstanding under this line of credit.
 
7.  RELATED PARTY TRANSACTIONS
 
     During 1997, Collegiate Advantage, Inc. paid $373,883 to Event Staffers,
L.L.C., a related company under common control, for payroll services provided to
Collegiate Advantage and related administrative expenses.
 
8.  SUBSEQUENT EVENT
 
     The Company entered into an agreement effective January 1, 1998 to be
purchased by Student Advantage. Student Advantage, paid $601,000 and assumed
$275,000 of the Company's liabilities in connection with the acquisition.
Student Advantage may be required to pay additional consideration based on the
future performance of the Company's former business.
 
                                      F-25
88
 
                       REPORT OF INDEPENDENT ACCOUNTANTS
 
To the Board of Directors and Stockholders
  of Student Advantage, Inc.
 
     In our opinion, the accompanying balance sheet and the related statements
of operations, of changes in stockholders' deficit and of cash flows present
fairly, in all material respects, the financial position of The Main Quad, Inc.
at December 6, 1997, and the results of its operations and its cash flows for
the period from January 1, 1997 through December 6, 1997, in conformity with
generally accepted accounting principles. These financial statements are the
responsibility of the Company's management; our responsibility is to express an
opinion on these financial statements based on our audit. We conducted our audit
of these statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for the opinion expressed above.
 
/s/ PricewaterhouseCoopers LLP
 
PricewaterhouseCoopers LLP
 
Boston, Massachusetts
April 5, 1999
 
                                      F-26
89
 
                              THE MAIN QUAD, INC.
 
                                 BALANCE SHEET
                                DECEMBER 6, 1997
ASSETS
Current assets
  Accounts receivable.......................................  $  32,743
  Prepaid expenses..........................................      5,800
                                                              ---------
          Total current assets..............................     38,543
Fixed assets, net...........................................     18,431
                                                              ---------
          Total assets......................................  $  56,974
                                                              =========
                 LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
  Accounts payable..........................................  $  45,608
  Advance from Student Advantage............................     25,000
  Current portion of capital lease obligations..............     10,019
  Notes payable founders and related parties................    187,511
                                                              ---------
          Total current liabilities.........................    268,138
Capital lease obligations...................................      1,790
                                                              ---------
          Total liabilities.................................    269,928
                                                              ---------
Commitments (Note 6)
Stockholders' deficit
  Series A Preferred Stock, $0.50 par value; 500,000 shares
     authorized; 120,000 shares issued and outstanding at
     December 6, 1997.......................................     60,000
  Series B Preferred Stock, $0.55 par value; 570,000 shares
     authorized; 387,724 shares issued and outstanding at
     December 6, 1997.......................................    213,248
  Common Stock, $0.01 par value; 5,000,000 shares
     authorized; 1,560,000 shares issued and outstanding at
     December 6, 1997.......................................     15,600
  Stock subscription receivable.............................    (13,120)
  Accumulated deficit.......................................   (488,682)
                                                              ---------
          Total stockholders' deficit.......................   (212,954)
                                                              ---------
          Total liabilities and stockholders' deficit.......  $  56,974
                                                              =========
The accompanying notes are an integral part of these financial statements.
                                      F-27
90
 
                              THE MAIN QUAD, INC.
 
                            STATEMENT OF OPERATIONS
          FOR THE PERIOD FROM JANUARY 1, 1997 THROUGH DECEMBER 6, 1997
Revenue.....................................................  $  96,908
Cost of revenue.............................................     46,118
                                                              ---------
  Gross profit..............................................     50,790
                                                              ---------
Operating expenses
  Product development.......................................     31,232
  Selling and marketing.....................................     22,313
  General and administrative................................    125,531
                                                              ---------
                                                                179,076
                                                              ---------
  Net loss..................................................  $(128,286)
                                                              =========
The accompanying notes are an integral part of these financial statements.
                                      F-28
91
 
                              THE MAIN QUAD, INC.
 
                 STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT
          FOR THE PERIOD FROM JANUARY 1, 1997 THROUGH DECEMBER 6, 1997
SERIES A             SERIES B
                             PREFERRED STOCK     PREFERRED STOCK        COMMON STOCK
                            -----------------   ------------------   -------------------   SUBSCRIPTION   ACCUMULATED
                            SHARES    AMOUNT    SHARES     AMOUNT     SHARES     AMOUNT     RECEIVABLE      DEFICIT       TOTAL
                            -------   -------   -------   --------   ---------   -------   ------------   -----------   ---------
Balance, January 1,
  1997....................  120,000   $60,000                        1,560,000   $15,600     $(13,120)     $(360,396)   $(297,916)
Issuance of Series B
  Preferred Stock.........                      387,724   $213,248                                                        213,248
Net loss..................                                                                                  (128,286)    (128,286)
                            -------   -------   -------   --------   ---------   -------     --------      ---------    ---------
Balance, December 6,
  1997....................  120,000   $60,000   387,724   $213,248   1,560,000   $15,600     $(13,120)     $(488,682)   $(212,954)
                            =======   =======   =======   ========   =========   =======     ========      =========    =========
The accompanying notes are an integral part of these financial statements.
 
                                      F-29
92
 
                              THE MAIN QUAD, INC.
 
                            STATEMENT OF CASH FLOWS
          FOR THE PERIOD FROM JANUARY 1, 1997 THROUGH DECEMBER 6, 1997
CASH FLOWS FROM OPERATING ACTIVITIES
  Net loss..................................................  $(128,286)
  Adjustments to reconcile net loss to net cash used for
     operating activities:
     Depreciation and amortization..........................     28,582
     Changes in operating assets and liabilities
       Accounts receivable..................................    (24,480)
       Prepaid expenses.....................................     (2,850)
       Other assets.........................................     45,285
       Accounts payable.....................................    (24,060)
       Accrued expenses.....................................     (9,736)
       Deferred revenue.....................................       (550)
                                                              ---------
       Net cash used for operating activities...............   (116,095)
                                                              ---------
CASH FLOWS FROM INVESTING ACTIVITIES
  Purchases of fixed assets.................................     (1,359)
                                                              ---------
CASH FLOWS FROM FINANCING ACTIVITIES
  Proceeds from issuance of Series B Preferred Stock........    213,248
  Advance from Student Advantage............................     25,000
  Repayment of notes........................................   (110,234)
  Payment of capital leases.................................    (10,607)
                                                              ---------
       Net cash provided by financing activities............    117,407
                                                              ---------
Net decrease in cash........................................        (47)
Cash, beginning of period...................................         47
                                                              ---------
Cash, end of period.........................................  $      --
                                                              =========
Supplemental disclosure of cash flow information
  Cash paid for interest....................................  $   2,275
                                                              =========
The accompanying notes are an integral part of these financial statements.
 
                                      F-30
93
 
                              THE MAIN QUAD, INC.
 
                         NOTES TO FINANCIAL STATEMENTS
 
1.  NATURE OF THE BUSINESS
 
     The Main Quad, Inc. (the "Company") is organized as a California
corporation. The Company also runs a comprehensive Web site positioned as an
online collection of services and content for students in the United States.
 
2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
  Revenue Recognition
 
     The Company derives revenue from advertisements placed on its Web site and
from providing other advertising services to corporate sponsors participating in
the network. Sponsor advertising revenue is recognized when all significant
obligations have been fulfilled and collection of the related receivable is
probable. Web site advertising revenue is recognized as the related impressions
are displayed, provided that no significant obligations of the Company remain
and collection of the related receivable is probable.
 
  Use of Estimates
 
     The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
 
  Concentration of Credit Risk and Significant Customers
 
     Financial instruments which potentially expose the Company to concentration
of credit risk include accounts receivable. The Company does not require
collateral but closely monitors amounts receivable from customers.
 
     Revenue of approximately $27,000 (28%) and $14,500 (15%) was attributable
to two separate customers during the period from January 1, 1997 through
December 6, 1997.
 
  Fixed Assets
 
     Fixed assets are recorded at cost and depreciated using the straight-line
method over their estimated useful lives. Maintenance and repair costs are
expenses as incurred.
 
3.  FIXED ASSETS
 
     Fixed assets consist of the following:
ESTIMATED
                                                        USEFUL LIFE    DECEMBER 6,
                                                          (YEARS)         1997
                                                        -----------    -----------
Computer equipment and software.......................       3          $ 26,646
Furniture and fixtures................................       5             3,250
Office equipment......................................       5            35,332
                                                                        --------
                                                                          65,228
Less -- accumulated depreciation and amortization.....                   (46,797)
                                                                        --------
                                                                        $ 18,431
                                                                        ========
F-31
94
                              THE MAIN QUAD, INC.
 
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
 
     Depreciation and amortization expense totaled $28,572 for the period from
January 1, 1997 through December 6, 1997.
 
4.  BORROWINGS
 
     The Company's borrowings consist of the following at December 6, 1997:
DECEMBER 6,
                                                                            1997
                                                                         -----------
Notes payable, founders:
Non-interest bearing promissory notes payable to founders.............    $ 21,215
Notes payable, other related parties:
  Non-interest bearing promissory notes payable to other related
     parties..........................................................     166,296
                                                                          --------
                                                                          $187,511
                                                                          ========
5.  SERIES A AND SERIES B PREFERRED STOCK
 
     The Series A and Series B Preferred Stock have the following
characteristics:
 
  Voting
 
     Except with regard to actions on which the Series A and Series B
Stockholders are entitled to vote as a separate class, the holders of Series A
and Series B Preferred Stock vote together with all other classes and series of
stock on all actions to be taken by the stockholders of the Company.
 
  Dividends
 
     The holders of the outstanding Series A and Series B Preferred Stock shall
be entitled to receive, when and as declared by the Board of Directors,
dividends at the rate of 8% ($0.04) per share per annum, payable in preference
and priority to any payment of any dividend on Common Stock. Such preferential
dividend rights of the Series A and Series B Preferred Stock shall have equal
priority to one another. Such dividends shall not be cumulative, and no right to
such dividends shall accrue to holders of Series A or Series B Preferred Stock
unless declared by the Board of Directors.
 
  Liquidation Preference
 
     In the event of any liquidation, dissolution, or winding-up of the Company,
the holders of Series A and Series B Preferred Stock are entitled to receive,
prior to and in preference to holders of Common Stock, the amount equal to the
original purchase price for their respective series of Preferred Stock on a pro
rata basis with all Preferred Stockholders, plus an amount equal to all declared
but unpaid dividends on the Series A and Series B Preferred Stock.
 
  Conversion
 
     Each share of Series A and Series B Preferred Stock may be converted, at
the option of the holders thereof, at any time after the date of the issuance,
into one share of Common Stock, subject to adjustment in the event of stock
split, combination or recapitalization.
 
  Warrants
 
     In connection with the issuance of Series A and Series B Preferred Stock,
the Company issued warrants to purchase 40,000 shares of Series A Preferred
Stock and 69,093 shares of Series B Preferred
 
                                      F-32
95
                              THE MAIN QUAD, INC.
 
                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
 
Stock at their respective par values. These warrants are immediately
exercisable, and will terminate five years from the date of issuance, unless the
Company's initial sale of its Common Stock in a public offering or the
acquisition of the Company occurs prior to that date.
 
6.  COMMON STOCK
 
     Each share of Common Stock entitles the holder to one vote on all matters
submitted to a vote of the Company's stockholders. Common stockholders are
entitled to receive dividends, if any, as may be declared by the Board of
Directors, subject to the preferential dividend rights of the Series A and
Series B Preferred stockholders.
 
7.  COMMITMENTS
 
     The Company leases its office space and certain office equipment under
non-cancelable operating and capital leases. Total rent expense under these
leases was approximately $41,600 for the period from January 1, 1997 through
December 6, 1997.
 
     Future minimum lease commitments at December 6, 1997 are as follows:
CAPITAL
YEAR ENDING DECEMBER 31,                                     LEASES
------------------------                                     -------
1998.....................................................    $11,063
1999.....................................................      1,844
                                                             -------
                                                              12,097
Less: portion representing interest......................     (1,098)
                                                             -------
                                                             $11,809
                                                             =======
There are no lease commitments for the period from December 7, 1997 through
December 31, 1997.
 
8.  SUBSEQUENT EVENT
 
     In December of 1997, the Company was purchased by Student Advantage.
Student Advantage paid $272,000 in cash and issued 270 Members' Interests with
an estimated fair value of $106,000 in exchange for the net assets of the
Company, which consisted of certain office equipment as well as customer lists,
non-compete agreements and other intangible assets. In 1998, the agreement was
amended to eliminate the contingency provisions, and Student Advantage agreed to
issue an additional 480 Members' Interests with an aggregate fair value of
$225,000.
 
                                      F-33
96
     [The graphic on the inside back cover is a triangle centered in the middle
of the page with the terms students, universities and businesses on each point
of the triangle.

     A circle in the middle of the triangle has 3 arrows pointing towards
students, businesses and universities and represents Student Advantage as the
intersection of these three communities. The Student Advantage logo is at the
top of the page and the heading Student Advantage is centered beneath the logo.]
97
 
                                     [LOGO]
98
 
                                    PART II
 
                     INFORMATION NOT REQUIRED IN PROSPECTUS
 
ITEM 13.  OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
 
     The following table sets forth the various expenses, in connection with the
sale and distribution of the securities being registered. All amounts shown are
estimates except for the Securities and Exchange Commission registration fee and
the NASD filing fee.
SEC registration fee........................................  $  22,379
NASD filing fee.............................................      8,550
Nasdaq National Market listing fee..........................          *
Blue Sky fees and expenses..................................          *
Transfer Agent and Registrar fees...........................     10,000
Accounting fees and expenses................................          *
Legal fees and expenses.....................................          *
Printing and mailing expenses...............................          *
Miscellaneous...............................................          *
                                                              ---------
          Total.............................................  $       *
                                                              =========
---------------
 
* To be completed by amendment.
 
ITEM 14.  INDEMNIFICATION OF DIRECTORS AND OFFICERS
 
     Article EIGHTH of the Registrant's Amended and Restated Certificate of
Incorporation (the "Restated Certificate of Incorporation") provides that no
director of the Registrant shall be personally liable for any monetary damages
for any breach of fiduciary duty as a director, except to the extent that the
Delaware General Corporation Law prohibits the elimination or limitation of
liability of directors for breach of fiduciary duty.
 
     Article NINTH of the Registrant's Amended and Restated Certificate of
Incorporation provides that a director or officer of the Registrant (a) shall be
indemnified by the Registrant against all expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement incurred in connection with any
litigation or other legal proceeding (other than an action by or in the right of
the Registrant) brought against him by virtue of his position as a director or
officer of the Registrant if he acted in good faith and in a manner he
reasonably believed to be in, or not opposed to, the best interests of the
Registrant, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful and (b) shall be
indemnified by the Registrant against all expenses (including attorneys' fees)
and amounts paid in settlement incurred in connection with any action by or in
the right of the Registrant brought against him by virtue of his position as a
director or officer of the Registrant if he acted in good faith and in a manner
he reasonably believed to be in, or not opposed to, the best interests of the
Registrant, except that no indemnification shall be made with respect to any
matter as to which such person shall have been adjudged to be liable to the
Registrant, unless the Court of Chancery of Delaware determines that, despite
such adjudication but in view of all of the circumstances, he is entitled to
indemnification of such expenses. Notwithstanding the foregoing, to the extent
that a director or officer has been successful, on the merits or otherwise,
including, without limitation, the dismissal of an action without prejudice, he
is required to be indemnified by the Registrant against all expenses (including
attorneys' fees) incurred in connection therewith. Expenses shall be advanced to
a director or officer at his request, unless it is determined that he did not
act in good faith and in a manner he reasonably believed to be in, or not
opposed to, the best interests of the Registrant, and, with respect to any
criminal action or proceeding had reasonable cause to believe that his conduct
was unlawful, provided that he undertakes to repay the amount advanced if it is
ultimately determined that he is not entitled to indemnification for such
expenses.
 
                                      II-1
99
 
     Indemnification is required to be made unless the Registrant determines
that the applicable standard of conduct required for indemnification has not
been met. In the event of a determination by the Registrant that the director or
officer did not meet the applicable standard of conduct required for
indemnification, or if the Registrant fails to make an indemnification payment
within 60 days after such payment is claimed by such person, such person is
permitted to petition the court to make an independent determination as to
whether such person is entitled to indemnification. As a condition precedent to
the right of indemnification, the director or officer must give the Registrant
notice of the action for which indemnity is sought and the Registrant has the
right to participate in such action or assume the defense thereof.
 
     Article NINTH of the Registrant's Amended and Restated Certificate of
Incorporation further provides that the indemnification provided therein is not
exclusive, and provides that in the event that the Delaware General Corporation
Law is amended to expand the indemnification permitted to directors or officers
the Registrant must indemnify those persons to the fullest extent permitted by
such law as so amended.
 
     Section 145 of the Delaware General Corporation Law provides that a
corporation has the power to indemnify a director, officer, employee or agent of
the corporation and certain other persons serving at the request of the
corporation in related capacities against amounts paid and expenses incurred in
connection with an action or proceeding to which he is or is threatened to be
made a party by reason of such position, if such person shall have acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation, and, in any criminal proceeding, if such person
had no reasonable cause to believe his conduct was unlawful; provided that, in
the case of actions brought by or in the right of the corporation, no
indemnification shall be made with respect to any matter as to which such person
shall have been adjudged to be liable to the corporation unless and only to the
extent that the adjudicating court determines that such indemnification is
proper under the circumstances.
 
     The Registrant has entered into agreements to indemnify its directors and
officers, in addition to the indemnification provided for in the Registrant's
Amended and Restated Certificate of Incorporation. These agreements, among other
things, indemnify the Registrant's directors and officers for certain expenses
(including attorneys' fees and associated legal expenses), judgments, fines and
amounts paid in settlement amounts, actually and reasonably incurred by any such
person's services as a director or officer of the Registrant or any other
company or enterprise to which the person provides services at the request of
the Registrant, if such officer or director acted in good faith and in a manner
which he or she reasonably believed to be in, or not opposed to the best
interests of the Registrant and with respect to any criminal proceeding, had no
reasonable cause to believe his conduct was unlawful.
 
     Under Section 7 of the Underwriting Agreement, the Underwriters are
obligated, under certain circumstances, to indemnify directors and officers of
the Registrant against certain liabilities, including liabilities under the
Securities Act. Reference is made to the form of Underwriting Agreement filed as
Exhibit 1 hereto.
 
ITEM 15.  RECENT SALES OF UNREGISTERED SECURITIES
 
     Set forth in chronological order is information regarding shares of common
stock issued and options granted by the Registrant since March 1996. Further
included is the consideration, if any, received by the Registrant for such
shares, warrants and options and information relating to the section of the
Securities Act of 1933, as amended (the "Securities Act"), or rule of the
Securities and Exchange Commission under which exemption from registration was
claimed.
 
     (a) Issuances of Capital Stock.
 
     1. In February 1996, Student Advantage LLC issued 111 membership units of
        the predecessor LLC to David Liniado in connection with the purchase of
        certain assets from David M. Liniado d/b/a DML Enterprises.
 
                                      II-2
100
 
     2. In March 1996, Student Advantage LLC sold 2,479 membership units in the
        predecessor LLC to Princeton Review Publishing, L.L.C. for $250,000.
 
     3. In May 1996, Ms. Abegglen exercised options to purchase 350 membership
        units of the predecessor LLC.
 
     4. In April 1997, Student Advantage LLC issued 239 membership units to Mr.
        Liniado in satisfaction of obligations under an asset purchase
        agreement.
 
     5. In December 1997, Student Advantage issued 270 membership units to The
        Main Quad, Inc. in connection with an asset purchase agreement. In
        October 1998, Student Advantage issued an additional 480 membership
        units in satisfaction of obligations under an ancillary agreement to
        such asset purchase agreement.
 
     6. On October 20, 1998, in connection with the recapitalization of Student
        Advantage LLC, Student Advantage, Inc. issued a total of 16,133,892
        shares of common stock and 1,497,036 shares of Series A convertible
        preferred stock (convertible into 4,491,108 shares of common stock) in
        exchange for LLC interests.
 
     7. On October 20, 1998, the Registrant sold an aggregate of 1,250,000
        shares of Series A Convertible Preferred Stock (convertible into
        3,750,000 shares of common stock) to Greylock IX Limited Partnership and
        Marc Turtletaub for $10.0 million.
 
     (b) Certain Grants and Exercises of Stock Options. The Registrant's 1998
Stock Incentive Plan and the 1998 California Stock Incentive Plan were adopted
by the Board of Directors and approved by the stockholders of the Registrant on
December 10, 1998. As of April 5, 1999, options to purchase 120,000 shares of
common stock had been exercised for a consideration of $40,000 under the
Registrant's 1998 Stock Incentive Plan and options to purchase 2,222,550 shares
of common stock were outstanding under the Registrant's 1998 Stock Incentive
Plan.
 
     The securities issued in the foregoing transactions were either (i) offered
and sold in reliance upon exemptions from Securities Act registration set forth
in Sections 3(b) and 4(2) of the Securities Act, or any regulations promulgated
thereunder, relating to sales by an issuer not involving any public offering, or
(ii) in the case of certain options to purchase shares of common stock and
shares of common stock issued upon the exercise of such options, such offers and
sales were made in reliance upon an exemption from registration under Rule 701
of the Securities Act. No underwriters were involved in the foregoing sales of
securities
 
                                      II-3
101
 
ITEM 16.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
 
(a) EXHIBITS
EXHIBIT
  NO.                             DESCRIPTION
-------                           -----------
1        Form of Underwriting Agreement.*
 3.1      Certificate of Incorporation of the Registrant, as amended.
 3.2      Amended and Restated Certificate of Incorporation of the
          Registrant, to be effective upon the closing of this
          offering.*
 3.3      Restated Bylaws of the Registrant, as amended.
 3.4      Amended and Restated By-Laws of the Registrant, to be
          effective upon the closing of this offering.*
 4.1      Specimen certificate for shares of common stock.*
 5        Opinion of Hale and Dorr LLP.*
10.1      1998 Stock Incentive Plan, including form of stock option
          agreement for incentive stock option.
10.2      1999 Employee Stock Purchase Plan.*
10.3      Loan and Security Agreement between US Trust Bank and the
          Company, dated March 31, 1999.*
10.4      Form of Indemnification Agreement between the Company and
          each of its directors and officers.
10.5      Investor Rights Agreement, dated as of October 20, 1998,
          among the Company and certain stockholders.
10.6      Employment Agreement, dated March 25, 1996, between the
          Company and Raymond V. Sozzi, Jr., as amended by First
          Amendment to Employment Agreement, dated as of October 20,
          1998.
10.7      Agreement, effective as of February 1, 1997, between AT&T
          Communications, Inc. and the Company.*
10.8      Marketing Agreement, effective February 1, 1998, between
          AT&T Corp. and the Company.*
10.9      Notice of AT&T's Election to Extend Agreements, dated July
          14, 1998.*
10.10     Leases for premises at 280 Summer Street, Boston,
          Massachusetts.
10.11     Investment Agreement, dated March 25, 1996, between the
          Company and Princeton Review Publishing, L.L.C.
10.12     Letter Agreement, dated September 8, 1997, between the
          Company and Princeton Review Publishing, L.L.C.
10.13     Letter Agreement, dated October 20, 1998, between the
          Company and Princeton Review Publishing, L.L.C.
10.14     Master Services Agreement, dated December 22, 1997, between
          USWEB NY Central and the Company.*
10.15     Promissory Note (Equipment) to USTrust dated March 31,
          1999.*
10.16     Master Note to US Trust Bank March 31, 1999.*
11.1      Statement re: Computation of net loss per share and
          unaudited pro forma net loss per share.
23.1      Consent of PricewaterhouseCoopers LLP (Student Advantage,
          Inc.)
23.2      Consent of PricewaterhouseCoopers LLP (Collegiate Advantage,
          Inc.)
23.3      Consent of PricewaterhouseCoopers LLP (The Main Quad, Inc.)
23.4      Consent of Hale and Dorr LLP (included in Exhibit 5).*
24        Power of Attorney (included on page II-6).
27        Financial Data Schedule.
---------------
 
* To be filed by amendment.
 
                                      II-4
102
 
(b) FINANCIAL STATEMENT SCHEDULES
 
     All schedules have been omitted because they are not required or because
the required information is given in the Registrant's Financial Statements or
Notes thereto.
 
ITEM 17.  UNDERTAKINGS
 
     Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions contained in the Amended and Restated
Certificate of Incorporation of the Registrant and the laws of the State of
Delaware, or otherwise, the Registrant has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
 
     The undersigned Registrant hereby undertakes to provide to the Underwriters
at the closing specified in the Underwriting Agreement certificates in such
denominations and registered in such names as required by the Underwriters to
permit prompt delivery to each purchaser.
 
     The undersigned Registrant hereby undertakes that:
 
     (1) For purposes of determining any liability under the Securities Act, the
         information omitted from the form of prospectus filed as part of this
         Registration Statement in reliance upon Rule 430A and contained in a
         form of prospectus filed by the Registrant pursuant to Rule 424(b)(1)
         or (4) or 497(h) under the Securities Act shall be deemed to be part of
         this Registration Statement as of the time it was declared effective.
 
     (2) For the purpose of determining any liability under the Securities Act,
         each post-effective amendment that contains a form of prospectus shall
         be deemed to be a new registration statement relating to the securities
         offered therein, and the offering of such securities at that time shall
         be deemed to be the initial bona fide offering thereof.
 
                                      II-5
103
 
                                   SIGNATURES
 
     Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Boston, Massachusetts, on this 7th
day of April, 1999.
                                          STUDENT ADVANTAGE, INC.
 
                                          By:   /s/ RAYMOND V. SOZZI, JR.
                                            ------------------------------------
                                              Raymond V. Sozzi, Jr.
                                              Chairman of the Board, President
                                              and Chief Executive Officer
 
                        POWER OF ATTORNEY AND SIGNATURES
 
     We, the undersigned officers and directors of Student Advantage, Inc.,
hereby severally constitute and appoint Raymond V. Sozzi, Jr., Christopher B.
Andrews and Mark G. Borden, and each of them singly, our true and lawful
attorneys with full power to them, and each of them singly, to sign for us and
in our names in the capacities indicated below, the Registration Statement on
Form S-1 filed herewith and any and all pre-effective and post-effective
amendments to said Registration Statement, and any subsequent Registration
Statement for the same offering which may be filed under Rule 462(b), and
generally to do all such things in our names and on our behalf in our capacities
as officers and directors to enable Student Advantage, Inc. to comply with the
provisions of the Securities Act of 1933, as amended, and all requirements of
the Securities and Exchange Commission, hereby ratifying and confirming our
signatures as they may be signed by our said attorneys, or any of them, to said
Registration Statement and any and all amendments thereto or to any subsequent
Registration Statement for the same offering which may be filed under Rule
462(b).
 
     Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE                                 TITLE                        DATE
              ---------                                 -----                        ----
/s/ RAYMOND V. SOZZI, JR.         Chairman of the Board, President and    April 7, 1999
--------------------------------------  Chief Executive Officer
        Raymond V. Sozzi, Jr.
 
      /s/ CHRISTOPHER B. ANDREWS        Vice President, Finance and             April 7, 1999
--------------------------------------  Administration, Treasurer and
        Christopher B. Andrews          Secretary (Principal Financial and
                                        Accounting Officer)
 
        /s/ WILLIAM S. KAISER           Director                                April 7, 1999
--------------------------------------
          William S. Kaiser
 
           /s/ JOHN KATZMAN             Director                                April 7, 1999
--------------------------------------
             John Katzman
 
         /s/ MARC TURTLETAUB            Director                                April 7, 1999
--------------------------------------
           Marc Turtletaub
II-6
104
 
                                 EXHIBIT INDEX
EXHIBIT
  NO.                             DESCRIPTION
-------                           -----------
1        Form of Underwriting Agreement.*
 3.1      Certificate of Incorporation of the Registrant, as amended.
 3.2      Amended and Restated Certificate of Incorporation of the
          Registrant, to be effective upon the closing of this
          offering.*
 3.3      Restated Bylaws of the Registrant, as amended.
 3.4      Amended and Restated By-Laws of the Registrant, to be
          effective upon the closing of this offering.*
 4.1      Specimen certificate for shares of common stock.*
 5        Opinion of Hale and Dorr LLP.*
10.1      1998 Stock Incentive Plan, including form of stock option
          agreement for incentive stock option.
10.2      1999 Employee Stock Purchase Plan.*
10.3      Loan and Security Agreement between US Trust Bank and the
          Company, dated March 31, 1999.*
10.4      Form of Indemnification Agreement between the Company and
          each of its directors and officers.
10.5      Investor Rights Agreement, dated as of October 20, 1998,
          among the Company and certain stockholders.
10.6      Employment Agreement, dated March 25, 1996, between the
          Company and Raymond V. Sozzi, Jr., as amended by First
          Amendment to Employment Agreement, dated as of October 20,
          1998.
10.7      Agreement, effective as of February 1, 1997, between AT&T
          Communications, Inc. and the Company.*
10.8      Marketing Agreement, effective February 1, 1998, between
          AT&T Corp. and the Company.*
10.9      Notice of AT&T's Election to Extend Agreements, dated July
          14, 1998.*
10.10     Leases for premises at 280 Summer Street, Boston,
          Massachusetts.
10.11     Investment Agreement, dated March 25, 1996, between the
          Company and Princeton Review Publishing, L.L.C.
10.12     Letter Agreement, dated September 8, 1997, between the
          Company and Princeton Review Publishing, L.L.C.
10.13     Letter Agreement, dated October 20, 1998, between the
          Company and Princeton Review Publishing, L.L.C.
10.14     Master Services Agreement, dated December 22, 1997, between
          USWEB NY Central and the Company.*
10.15     Promissory Note (Equipment) to US Trust dated March 31,
          1999.*
10.16     Master Note to US Trust Bank March 31, 1999.*
11.1      Statement Re: Computation of net loss per share and
          unaudited pro forma net loss per share.
23.1      Consent of PricewaterhouseCoopers LLP (Student Advantage,
          Inc.)
23.2      Consent of PricewaterhouseCoopers LLP (Collegiate Advantage,
          Inc.)
23.3      Consent of PricewaterhouseCoopers LLP (The Main Quad, Inc.)
23.4      Consent of Hale and Dorr LLP (included in Exhibit 5).*
24        Power of Attorney (included on page II-6).
27        Financial Data Schedule.
---------------
 
* To be filed by amendment.