<PAGE>   1

    AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 8, 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) 912-2000
    (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) 912-2000
               (Name, address, including zip code, and telephone
               number, including area code, of agent for service)

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

                                   COPIES TO:

                              MARK G. BORDEN, ESQ.
                               HALE AND DORR LLP
                                60 STATE STREET
                          BOSTON, MASSACHUSETTS 02109
                           TELEPHONE: (617) 526-6000
                            TELECOPY: (617) 526-5000

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

    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.  [X]

    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>
============================================================================================================================
<S>                                          <C>                 <C>                 <C>                 <C>
                                                                      PROPOSED            PROPOSED
                                                                       MAXIMUM             MAXIMUM
             TITLE OF SHARES TO                 AMOUNT TO BE       OFFERING PRICE         AGGREGATE           AMOUNT OF
               BE REGISTERED                     REGISTERED         PER SHARE(1)      OFFERING PRICE(1)   REGISTRATION FEE
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------
<S>                                          <C>                 <C>                 <C>                 <C>
Common Stock, $0.01 par value...............      1,219,447           $22.21875          $27,094,588           $7,153
============================================================================================================================
</TABLE>

---------------
(1)  Determined in accordance with Rule 457(c) under the Securities Act of 1933,
     as amended, as the average of the bid and asked price of the common stock
     on the Nasdaq National Market on December 6, 1999.

    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 CONTAINED IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE
      CHANGED. THE SELLING STOCKHOLDERS NAMED IN THIS PROSPECTUS CANNOT SELL
      THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
      SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN
      OFFER TO SELL THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THESE
      SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.

                 SUBJECT TO COMPLETION, DATED DECEMBER 8, 1999

PROSPECTUS

                            [STUDENT ADVANTAGE LOGO]

                            STUDENT ADVANTAGE, INC.

                                1,219,447 SHARES

                                  COMMON STOCK

     Student Advantage previously issued 2,438,875 shares of common stock to the
former stockholders of University Netcasting, Inc. in connection with our
acquisition of that company. This prospectus relates to resales of 1,219,447 of
those shares.

     We will not receive any of the proceeds from the sale of the shares.

     We have agreed to pay certain expenses in connection with the registration
of the shares and to indemnify the selling stockholders against certain
liabilities. The selling stockholders will pay all underwriting discounts and
selling commissions, if any, in connection with the sale of the shares.

     The selling stockholders, or their pledgees, donees, transferees or other
successors in interest, may offer the shares through public or private
transactions at prevailing market prices, at prices related to prevailing market
prices or at privately negotiated prices. Our common stock is traded on the
Nasdaq National Market ("Nasdaq") under the symbol "STAD." On December 6, 1999,
the closing sale price of the common stock on Nasdaq was $22.25 per share.

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

                 INVESTING IN THE COMMON STOCK INVOLVES RISKS.
                    SEE "RISK FACTORS" BEGINNING ON PAGE 4.

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

     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.

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

                The date of this Prospectus is           , 1999.
<PAGE>   3

     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. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE
SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY
JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. THE INFORMATION CONTAINED
IN THIS PROSPECTUS IS ACCURATE ONLY AS OF THE DATE OF THIS PROSPECTUS. IN THIS
PROSPECTUS, "STUDENT ADVANTAGE," "WE," "US" AND "OUR" REFER TO STUDENT
ADVANTAGE, INC. AND ITS SUBSIDIARIES.

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

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                              PAGE
                                                              ----
<S>                                                           <C>
Summary.....................................................    1
Risk Factors................................................    4
Forward-Looking Statements..................................   13
Use of Proceeds.............................................   13
Market Price of Common Stock................................   13
Dividend Policy.............................................   13
Selected Consolidated Financial Data........................   14
Management's Discussion and Analysis of Financial Condition
  and Results of Operations.................................   16
Business....................................................   29
Management..................................................   42
Certain Transactions........................................   49
Principal Stockholders......................................   52
Selling Stockholders........................................   54
Description of Capital Stock................................   56
Plan of Distribution........................................   58
Legal Matters...............................................   59
Experts.....................................................   59
Additional Information......................................   59
Index to Financial Statements...............................  F-1
</TABLE>

                                        i
<PAGE>   4

--------------------------------------------------------------------------------
                                    SUMMARY

     This summary highlights information contained elsewhere in this prospectus.
This summary may not contain all of the information that you should consider
before investing in our common stock. You should read the entire prospectus
carefully, including "Risk Factors" and the financial statements and the related
notes.

                               STUDENT ADVANTAGE

OUR BUSINESS..................  Student Advantage is dedicated to serving the
                                needs of college students through our leading
                                membership program and our network of web sites,
                                including studentadvantage.com, UWIRE.com and
                                FANSonly.com. 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.
                                We seek to enhance our brand online and provide
                                additional services to our members, businesses
                                and colleges with the objective of becoming the
                                leading online network of web sites 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 resource for their students and
                                  an opportunity for cost savings and increased
                                  revenue.

                                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.

                                We generated total revenue of $19.4 million in
                                1998 and $18.3 million in the first nine months
                                of 1999, and incurred a net loss of $10.5
                                million in 1998 and $14.2 million in the first
                                nine months of 1999.

OUR PRODUCTS AND SERVICES.....  Membership in Student Advantage provides
                                students with discounts on products and services
                                offered by over 55 national sponsors, including
                                Amtrak(R), Foot Locker, Greyhound, Staples,
                                Tower Records, textbooks.com and Barnes & Noble
                                College Bookstores, and over 15,000
                                participating locations in 125 local markets.
                                Student members also receive SAM, the Student
                                Advantage magazine.

                                A key component of our strategy is to make our
                                studentadvantage.com web site the centerpiece of
                                our membership program. We currently offer
                                content and services to all students through
                                studentadvantage.com, including our proprietary
                                U-WIRE news feed; community through online
                                bulletin boards and articles offering advice on
                                student life; and e-commerce through sponsors
                                including Staples, Greyhound, 1-800-FLOWERS.com
                                and textbooks.com. In order to receive discounts
                                on the products offered through our web site,
                                students must join our membership program.

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


                                        1
<PAGE>   5

                                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.

                                We also provide tailored marketing services for
                                businesses seeking to market their products to
                                college students. Through our membership program
                                and network of web sites, 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, total discretionary spending
                                by college students in the 1997-1998 academic
                                year exceeded $105 billion.

                                In the United States, there are over 15 million
                                full-time and part-time undergraduate and
                                graduate students at more than 3,500 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.

RECENT DEVELOPMENTS...........  In October 1999, we acquired Voice FX
                                Corporation, a leading provider of internet and
                                interactive voice response services to colleges
                                and universities. Voice FX has secured a total
                                of over 55 contracts for its services. In
                                several cases, a single college or university
                                has entered into more than one contract for
                                Voice FX's services. Through these
                                relationships, Voice FX has been able to market
                                products and services to students in a targeted
                                manner, including while students are checking
                                their grades and financial aid status through
                                Voice FX's internet and telephone services.

                                In November 1999, we made an equity investment
                                of approximately $4.3 million in edu.com, Inc.,
                                a privately held e-commerce company focused on
                                the student market. Additionally, we entered
                                into a two-year marketing and distribution
                                agreement with edu.com.
                         ------------------------------

     Student Advantage's principal executive offices are located at 280 Summer
Street, Boston, Massachusetts 02210 and our telephone number at that location is
(617) 912-2000. Our principal web site is located at www.studentadvantage.com.
Information contained on any of our web sites is not part of this prospectus.

                                        2
<PAGE>   6

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

                      SUMMARY CONSOLIDATED FINANCIAL DATA
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

     Set forth below are summary consolidated statements of operations data for
the years ended December 31, 1994, 1995, 1996, 1997 and 1998, and for the nine
months ended September 30, 1998 and 1999, and summary balance sheet data as of
September 30, 1999. 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." All amounts for all periods presented have been restated to reflect
the acquisition of University Netcasting, Inc. in June 1999, which was accounted
for as a pooling of interests.

     Effective June 18, 1999, University Netcasting, Inc.'s fiscal year end was
changed from March 31 to December 31 to conform to Student Advantage's fiscal
year end. University Netcasting, Inc.'s results of operations for the years
ended March 31, 1995, 1996, 1997, 1998 and 1999 have been included in Student
Advantage's December 31, 1994, 1995, 1996, 1997 and 1998 results, respectively.
University Netcasting's results of operations for the nine months ended December
31, 1998 have been included in Student Advantage's nine months ended September
30, 1998 results, respectively. Accordingly, University Netcasting's operations
for the three months ended March 31, 1999 will be included in Student
Advantage's results for both of the year ended December 31, 1998 and 1999 (when
presented). Total revenue and net loss for University Netcasting for the three
months ended March 31, 1999 were $682,000 and $1.6 million, respectively. This
net loss amount has been reported as an adjustment to the consolidated
accumulated deficit.

<TABLE>
<CAPTION>
                                                                                                           NINE MONTHS ENDED
                                                            YEAR ENDED DECEMBER 31,                          SEPTEMBER 30,
                                            --------------------------------------------------------   -------------------------
                                               1994          1995        1996      1997       1998        1998          1999
                                            -----------   -----------   -------   -------   --------   -----------   -----------
                                            (UNAUDITED)   (UNAUDITED)                                  (UNAUDITED)   (UNAUDITED)
<S>                                         <C>           <C>           <C>       <C>       <C>        <C>           <C>
STATEMENT OF OPERATIONS DATA
Total revenue.............................    $  155        $   769     $ 1,838   $ 4,815   $ 19,360     $13,710      $ 18,321
Total costs and expenses..................       984          2,982       4,480    11,566     30,017      18,833        33,262
Net loss..................................      (829)        (2,216)     (2,638)   (6,828)   (10,536)     (5,058)      (14,181)
Basic and diluted net loss per share......    $(0.06)       $ (0.16)    $ (0.18)  $ (0.41)  $  (0.59)    $ (0.29)     $  (0.57)
Shares used in computing basic and diluted
  net loss per share......................    14,184         14,184      14,384    16,588     17,710      17,492        24,776
Unaudited pro forma basic and diluted net
  loss per share(1).......................                                                  $  (0.46)    $ (0.23)     $  (0.47)
Shares used in computing unaudited pro
  forma basic and diluted net loss per
  share...................................                                                    22,772      21,785        29,877
</TABLE>

<TABLE>
<CAPTION>
                                                              SEPTEMBER 30, 1999
                                                              ------------------
                                                                 (UNAUDITED)
<S>                                                           <C>
BALANCE SHEET DATA
Cash and cash equivalents...................................        $6,884
Marketable securities.......................................        35,340
Working capital.............................................        35,103
Total assets................................................        56,644
Deferred revenue............................................         8,295
Stockholders' equity........................................        40,838
</TABLE>

---------------
(1) Pro forma information is based on the conversion of all outstanding shares
    of our convertible preferred stock into shares of common stock.

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


                                        3
<PAGE>   7

                                  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.

WE HAVE EXPERIENCED LOSSES IN THE PAST AND EXPECT FUTURE LOSSES

     We have not achieved profitability and expect to continue to incur
operating losses for the foreseeable future. We incurred net losses of $6.8
million in 1997, $10.5 million in 1998 and $14.2 million in the first nine
months of 1999. As of September 30, 1999, our accumulated deficit was $38.7
million. We expect to continue to incur significant operating and capital
expenditures and, as a result, we will need to generate significant revenue to
achieve and maintain profitability.

     We 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 AND A DECLINE
IN REVENUE FROM AT&T WOULD ADVERSELY AFFECT OUR RESULTS

     We have a relationship with AT&T as our exclusive telecommunications
partner 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, and

     - marketing services.

     In 1997, we derived $2.4 million, or 50%, of our total revenue from AT&T.
In 1998, we derived $11.8 million, or 61%, of our total revenue from AT&T. For
the nine months ended September 30, 1999, we derived $10.9 million, or 60%, of
our total revenue from AT&T. To date, almost all of our members have received
their Student Advantage memberships at no charge from AT&T by either electing to
apply for an AT&T calling card in connection with their Student Advantage
membership or by receiving a free Student Advantage membership from AT&T. We
obtain these members as a result of AT&T's distribution of free 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. 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.

     We are in discussions with AT&T with respect to the possible restructuring
of our agreements with AT&T. There can be no assurance that such discussions
will result in any restructuring.

                                        4
<PAGE>   8

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

     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 possible
inability to:

     - sustain historical revenue growth rates,

     - generate sufficient revenue to achieve and maintain profitability,

     - implement our business model,

     - maintain the satisfaction of our members,

     - 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 is no longer employed as our president, AT&T can terminate
its agreements with us.

OUR RELATIONSHIP WITH AT&T COULD HINDER OUR ABILITY TO ATTRACT ADDITIONAL
SPONSORS

     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, without the consent of AT&T, from entering into a relationship with another
sponsor that will distribute our memberships free to students as an incentive or
through any promotion. Our relationship with AT&T could hinder our ability to
attract additional national sponsors, in particular sponsors who may be
interested in purchasing memberships for distribution to students.

WE MAY NOT SUCCESSFULLY IMPLEMENT OUR INTERNET STRATEGY

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

     - establish our network of web sites as the primary vehicle for delivery of
       our products and services, including member registration and renewal,
       information regarding national and local sponsors, and customer service,

     - expand our web sites to include more content and services for students
       and encourage our members to use the sites so that they become more
       attractive for advertisers, and

     - establish our network of web sites as an effective e-commerce platform.

     Our failure to successfully implement our internet strategy could have a
material adverse effect on our business.

OUR ABILITY TO GENERATE SIGNIFICANT REVENUES FROM ONLINE ACTIVITIES AND INTERNET
ADVERTISING IS UNCERTAIN

     It is unclear whether companies implementing an internet community business
model will generate sufficient revenues to achieve and maintain profitability.
Our ability to generate significant revenues from advertisers, sponsors and
other businesses 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

                                        5
<PAGE>   9

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 other internet-related activities, our
business model depends in part on increasing the amount of such revenue.

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

     Our operating results are dependent upon the college student market and we
expect them to vary seasonally based upon the typical school year. We tend to
sell most of our memberships in the beginning of the fall and winter academic
terms. All of these memberships expire on August 31 of each year. Because the
aggregate number of memberships within a school year increases as new members
are added beginning on September 1, and we recognize revenue from memberships
ratably over the period from the time of subscription until the end of our
membership year, our subscription revenue will typically be higher in the first
and second quarters than in the fourth quarter of each fiscal year. It is
difficult to determine how the third quarter will typically compare, since it
includes two calendar months from the end of a membership year and the first
month of the subsequent membership year.

     Our limited operating history and rapid growth make it difficult for us to
more fully assess the impact of seasonal factors on our business. Nevertheless,
because our business is dependent upon the student market, we expect that our
other revenue may be subject to seasonal fluctuations associated with the
typical school year. In particular, other revenue can be expected to be higher
during the third and fourth quarters due to increased activity associated with
the commencement of the school year. Conversely, the second quarter may have the
least amount of other revenue since it includes the months at the end of a
school year.

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

     In addition to the seasonal fluctuations described above, our revenues and
operating results may vary from quarter to quarter for a variety of other
reasons, such as the timing of revenues from corporate sponsors or non-recurring
charges incurred in connection with acquisitions.

     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. To date,
we have not maintained sufficient data to determine the specific number of
members who renew on a yearly basis. A failure to acquire new members 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 sponsors, 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

                                        6
<PAGE>   10

to acquire or maintain alliances and relationships with colleges and
universities could have a material adverse effect on our business. In addition,
our agreements with a number of our sponsors preclude us from entering into
similar arrangements with their competitors. This restriction may prevent us in
some cases from offering attractive additional discounts to our members.

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, and we have been denied
access to certain college and university campuses. To date, we have not
maintained sufficient data to determine the specific number of colleges and
universities which have denied us access to their campuses. Any inability to
directly contact students on campus could have a material adverse effect on our
business.

WE FACE SIGNIFICANT COMPETITION ON THE INTERNET, WHICH COULD ADVERSELY AFFECT
OUR BUSINESS

     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 sites 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 AltaVista, Excite, Infoseek, Lycos and
       Yahoo!.

     The number of web sites competing for the attention and spending of
advertisers and consumers, including college students, has increased and we
expect it to continue to increase. This market is rapidly evolving and barriers
to entry are low, enabling newcomers to launch competing sites at relatively low
cost.

     Increased competition could result in price reductions, reduced margins or
loss of market share, any of which could adversely affect our business. Please
see "Business -- Competition."

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

                                        7
<PAGE>   11

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

     As part of our business strategy, we plan to acquire or make investments in
complementary businesses, products, services or technologies to increase our
online traffic and obtain new 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.

     We recently acquired several businesses, including University Netcasting,
Inc., a leading operator of official athletic web sites for colleges,
universities and college sports associations, and Voice FX Corporation, a
leading provider of internet and interactive voice response services to colleges
and universities. Achieving the anticipated benefits of these acquisitions will
depend in part upon whether the integration of these businesses is accomplished
in an efficient, effective and timely manner. In some cases, the difficulty
associated with integrating these businesses may be increased by the necessity
of coordinating geographically separated organizations. There can be no
assurance that the anticipated benefits of these acquisitions will be achieved.

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 $1.8 million in 1996 to $19.4 million in 1998 to
$18.3 million in the first nine months of 1999. During that same time period we
increased from fewer than 50 to more than 275 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.

OUR CURRENT FINANCIAL AND MANAGEMENT INFORMATION SYSTEMS MAY BE INADEQUATE TO
SUPPORT FUTURE OPERATIONS

     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 six months. If we incur delays or
difficulties in implementing an appropriate accounting system, our business
could be adversely affected.

OUR MANAGEMENT TEAM HAS LIMITED EXPERIENCE IN RUNNING A PUBLIC COMPANY

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

                                        8
<PAGE>   12

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. We may require
additional financing if capital requirements vary materially from those
currently planned.

     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 Student Advantage, 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.

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 Corporation'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, however we are developing a formal
disaster recovery program.

     Our network of web sites must accommodate a high volume of traffic and
deliver frequently updated information. Our web sites have in the past and may
in the future experience slower response times or decreased traffic for a
variety of reasons. These types of occurrences could cause users to perceive our
web sites 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 network of web sites.
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.

                                        9
<PAGE>   13

     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 sites 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 sites 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.

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

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

     On August 3, 1999, we filed an action in the United States District Court
for the Southern District of New York against CollegeClub.com, alleging among
other things, that CollegeClub.com has committed false advertising, unfair
competition, and tortious interference with contract in connection with
CollegeClub.com's promotion and marketing of its services, including but not
limited to the Discount Directory in its web site. We seek monetary damages and
equitable relief, including a preliminary and permanent injunction. As part of
its response, CollegeClub.com has filed counterclaims against us alleging
similar conduct on our part. CollegeClub.com seeks monetary damages and
equitable relief, including injunctive relief. We plan to vigorously oppose the
counterclaims alleged by CollegeClub.com and believe we have meritorious
defenses to each such counterclaim. However, due to the inherently uncertain
nature of litigation and the fact that discovery has not yet been completed, our
business may be adversely affected in the context of a trial or as a result of a
negotiated settlement. We filed a motion for a preliminary

                                       10
<PAGE>   14

injunction on October 18, 1999. On November 29, 1999, the court granted our
motion in part, and by order dated November 30, 1999, the court issued a
preliminary injunction against CollegeClub.com, which ordered CollegeClub.com to
take certain actions designed to remedy certain of the problems that are the
subject of the complaint.

THE INABILITY TO IDENTIFY OUR WEB SITE VISITORS MAY LIMIT THE EFFECTIVENESS OF
OUR SALES AND MARKETING EFFORTS

     Web sites typically place certain "cookies" on a user's hard drive without
the user's knowledge or consent. Cookies are small files of information about an
internet user's movement through the internet that are stored on the hard drive
of the user's computer. 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 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.

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 AND WE
MAY INFRINGE THE INTELLECTUAL PROPERTY RIGHTS OF OTHERS

     We believe that protection of our patent, 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:

     - patent, trademark and copyright law,

     - trade secret protection, and

     - confidentiality agreements with employees, customers, independent
       contractors, sponsors and others.

     Despite our best efforts, we cannot assure you that our intellectual
property rights will not be infringed, violated or legally imitated. Failure to
protect our intellectual property could have a material adverse effect on our
business.

     We have been, and expect to be, sued or named as a defendant in the future
for infringement of the trademark and other intellectual property rights of
third parties. Any such proceedings or claims could have a material adverse
effect on our business, financial condition and results of operations.

                                       11
<PAGE>   15

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.

     We have made an assessment of the Year 2000 readiness of our operating,
financial and administrative systems, including the hardware and software that
support our systems. Since third parties developed and currently support many of
the systems that we use, a significant part of this effort was to ensure that
these third-party systems are Year 2000 compliant. We have confirmed this
compliance solely through a combination of the representation by these third
parties of their products' Year 2000 compliance as well as reviews of Year 2000
readiness documentation from our vendors. Despite this effort, we cannot be
certain that none of the third party software, hardware or services incorporated
in our material systems will need to be revised or replaced. 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

     Based on the number of shares outstanding on October 31, 1999, our
executive officers, directors and affiliated entities together beneficially own
approximately 67% of our outstanding common stock. As a result, these
stockholders will 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 STOCK PRICE OF TECHNOLOGY COMPANIES, PARTICULARLY INTERNET-RELATED
COMPANIES, COULD BE EXTREMELY VOLATILE AND MAY RESULT IN LITIGATION AGAINST US

     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. 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 ON DECEMBER 15, 1999 COULD ADVERSELY AFFECT OUR
STOCK PRICE

     Upon expiration of lock-up agreements with the underwriters of the
company's initial public offering on December 15, 1999, approximately 24 million
shares of common stock, in addition to the shares covered by this prospectus,
will be eligible for resale in accordance with the provisions of the Securities
Act. If our stockholders sell substantial amounts of our common stock in the
public market, the market price of our common stock could fall.

                                       12
<PAGE>   16

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.

                           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.

                                USE OF PROCEEDS

     Student Advantage will not receive any proceeds from the sale of the shares
covered by this prospectus.

                          MARKET PRICE OF COMMON STOCK

     Our common stock began trading on the Nasdaq Stock Market's National Market
System on June 18, 1999 under the symbol "STAD." Prior to that time there had
been no market for our common stock. The table below sets forth the high and low
closing sale prices for our common stock for the periods indicated:

<TABLE>
<CAPTION>
                                                         HIGH       LOW
                                                       --------   --------
<S>                                                    <C>        <C>
June 18 -- June 30, 1999.............................  $   9.50   $   7.50
July 1 -- September 30, 1999.........................  $13.9375   $10.0625
October 1 -- December 6, 1999........................  $  22.25   $ 12.125
</TABLE>

     The closing sale price of our common stock on December 6, 1999 was $22.25
per share.

                                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.

                                       13
<PAGE>   17

                      SELECTED CONSOLIDATED FINANCIAL DATA

     The following selected consolidated 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 selected financial
data as of September 30, 1999, and for the nine months ended September 30, 1998
and 1999 are derived from unaudited financial statements included elsewhere in
this prospectus. In the opinion of management, the unaudited financial
statements have been prepared on a basis consistent with the audited financial
statements which appear elsewhere in this prospectus and include all
adjustments, which are only normal recurring adjustments, necessary for a fair
presentation of the financial position and results of operations for the
unaudited periods. The historical results presented are not necessarily
indicative of future results. 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. All amounts for all periods presented
have been restated to reflect the acquisition of University Netcasting, Inc. in
June 1999, which was accounted for as a pooling of interests.

     Effective June 18, 1999, University Netcasting, Inc.'s fiscal year end was
changed from March 31 to December 31 to conform to Student Advantage's fiscal
year end. University Netcasting, Inc.'s results of operations for the years
ended March 31, 1995, 1996, 1997, 1998 and 1999 have been included in Student
Advantage's December 31, 1994, 1995, 1996, 1997 and 1998 results, respectively.
University Netcasting's results of operations for the three and nine months
ended December 31, 1998 have been included in Student Advantage's three and nine
months ended September 30, 1998 results, respectively. Accordingly, University
Netcasting's operations for the three months ended March 31, 1999 will be
included in Student Advantage's results for both of the year ended December 31,
1998 and 1999 (when presented). Total revenue and net loss for University
Netcasting for the three months ended March 31, 1999 were $682,000 and $1.6
million, respectively. This net loss amount has been reported as an adjustment
to the consolidated accumulated deficit.

<TABLE>
<CAPTION>
                                                                                                               NINE MONTHS
                                                                                                                  ENDED
                                                             YEAR ENDED DECEMBER 31,                          SEPTEMBER 30,
                                             --------------------------------------------------------   -------------------------
                                                1994          1995        1996      1997       1998        1998          1999
                                             -----------   -----------   -------   -------   --------   -----------   -----------
                                             (UNAUDITED)   (UNAUDITED)                                  (UNAUDITED)   (UNAUDITED)
                                                                    (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                          <C>           <C>           <C>       <C>       <C>        <C>           <C>
STATEMENT OF OPERATIONS DATA

Revenue
  Subscription.............................   $    131       $   420     $ 1,093   $ 2,971   $  7,174     $ 5,868      $  6,194
  Other....................................         24           349         745     1,844     12,186       7,842        12,127
                                              --------       -------     -------   -------   --------     -------      --------
    Total revenue..........................        155           769       1,838     4,815     19,360      13,710        18,321
                                              --------       -------     -------   -------   --------     -------      --------
Costs and expenses
  Cost of subscription revenue.............        126           160         543     2,628      2,442       1,666         1,989
  Cost of other revenue....................         --           135         570       702      7,867       4,305         8,888
  Product development......................        292         1,151       1,516     3,253      4,948       3,510         6,169
  Sales and marketing......................         57           671         536     1,905      7,313       4,948         8,067
  General and administrative...............        508           864       1,208     2,727      5,484       3,310         6,186
  Depreciation and amortization............          1             1         107       351      1,155       1,094         1,126
  Stock-based compensation.................         --            --          --        --        808          --           837
                                              --------       -------     -------   -------   --------     -------      --------
    Total costs and expenses...............        984         2,982       4,480    11,566     30,017      18,833        33,262
                                              --------       -------     -------   -------   --------     -------      --------
  Loss from operations.....................       (829)       (2,213)     (2,642)   (6,751)   (10,657)     (5,123)      (14,941)
  Interest income (expense), net...........         --            (3)          4       (77)       121          65           760
                                              --------       -------     -------   -------   --------     -------      --------
  Net loss.................................   $   (829)      $(2,216)    $(2,638)  $(6,828)  $(10,536)    $(5,058)     $(14,181)
                                              ========       =======     =======   =======   ========     =======      ========
  Basic and diluted net loss per share.....   $  (0.06)      $ (0.16)    $ (0.18)  $ (0.41)  $  (0.59)    $ (0.29)     $  (0.57)
                                              ========       =======     =======   =======   ========     =======      ========
  Shares used in computing basic and
    diluted net loss per share.............     14,184        14,184      14,384    16,588     17,710      17,492        24,776
                                              ========       =======     =======   =======   ========     =======      ========
  Unaudited pro forma basic and diluted
    net loss per share.....................                                                  $  (0.46)    $ (0.23)     $  (0.47)
                                                                                             ========     =======      ========
  Shares used in computing unaudited pro
    forma basic and diluted net loss per
    share..................................                                                    22,772      21,785        29,877
                                                                                             ========     =======      ========
</TABLE>

                                       14
<PAGE>   18

<TABLE>
<CAPTION>
                                                                      YEAR ENDED DECEMBER 31,
                                                              ----------------------------------------   SEPTEMBER 30,
                                                                 1995       1996     1997       1998         1999
                                                              ----------   ------   -------   --------   -------------
                                                              (UNAUDITED)                                (UNAUDITED)
                                                                                 (IN THOUSANDS)
<S>                                                           <C>          <C>      <C>       <C>        <C>
BALANCE SHEET DATA
Cash and cash equivalents...................................   $    47     $  702   $ 5,806   $  6,140      $ 6,884
Marketable securities.......................................        --         --        --         --       35,340
Working capital.............................................      (928)      (114)   (1,670)    (2,355)      35,103
Total assets................................................       338      1,118     7,217     11,704       56,644
Deferred revenue............................................       183        276     5,970      7,064        8,295
Redeemable convertible preferred stock......................        --         54       111     10,196           --
Stockholders' equity (deficit)..............................    (1,065)       (70)   (1,024)   (10,548)      40,838
</TABLE>

                                       15
<PAGE>   19

                      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 network of web sites. Our revenue is
generated from subscription revenue and other revenue.

     Subscription revenue is derived from membership sales. Memberships are sold
in three different ways. Almost all 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. In certain cases,
renewal of a co-branded membership card is subject to a minimum level of usage
of AT&T services during the prior twelve months. 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 1997 and 1998 and the first nine
months of 1999, AT&T accounted for approximately 77%, 95% and 94% of
subscription revenue. Memberships are also sold by Student Advantage to
colleges, universities and university organizations for distribution free of
charge to students. In the 1998-1999 academic year, five colleges, universities
and university organizations purchased memberships 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 commerce, marketing services and advertising
revenue. Commerce revenue includes primarily transaction-based fees earned for
reselling products and services on behalf of other businesses. 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 and the resale of
Eurail passes. In connection with each application accepted by AT&T, we also
earn membership fees that are included in subscription revenue. 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. 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 sites.

     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.
We acquired substantially all the assets of The Main Quad for $272,000 and the
issuance of 1,417,720 shares of common stock. 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. We acquired substantially all the assets of Collegiate Advantage for
$651,000

                                       16
<PAGE>   20

and the assumption of $275,000 in liabilities. We are also required to make
payments totaling $715,000 to Collegiate Advantage in three installments ending
on January 31, 2001. As of September 30, 1999, $325,000 remain outstanding.
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.

     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. We acquired
substantially all of the assets of The Campus Agency and The Travel Holding
Group for a promissory note in the amount of $330,000. These acquisitions have
been accounted for under the purchase method of accounting, and the results of
operations of each company have been included in our results beginning on the
acquisition date. Goodwill and other intangible assets in the aggregate amount
of $305,000 were recorded in connection with these acquisitions and will be
amortized over three years.

     On May 27, 1999, we acquired substantially all of the assets of Mentor
Interactive Corp., a provider of internet-based research tools and related
materials, in exchange for 18,056 shares of common stock and a warrant to
purchase 24,000 shares of common stock at a purchase price of $11.08 per share
with an aggregate estimated fair value of approximately $300,000. This
acquisition has been accounted for under the purchase method of accounting and
the results of Mentor Interactive Corp. have been included in our results
beginning on the acquisition date. Goodwill and other intangible assets in the
aggregate amount of $312,000 were recorded in connection with the acquisition
and are being amortized over a three year period.

     On June 11, 1999, we acquired Transaction Service Providers, Inc., a
provider of debit card services to college students and local merchants, in a
transaction accounted for as a pooling of interests. Because the historical
results of operations and financial position of Transaction Services Providers
were immaterial to Student Advantage, prior period financial statements have not
been restated and Transaction Service Providers' results of operations have been
included in our results as of April 1, 1999. In connection with the acquisition,
we issued 195,000 shares of common stock to the stockholders of Transaction
Service Providers.

     On June 18, 1999, we acquired all of the outstanding capital stock of
University Netcasting, Inc. in exchange for 2,438,875 shares of our common stock
and the assumption of options to purchase a total of 66,634 shares of our common
stock. University Netcasting is a leading operator of official athletic web
sites for colleges, universities and college sports associations. Through its
FANSonly Network, FANSonly.com, University Netcasting provides sports fans with
comprehensive online information and analysis on college sports. This
acquisition was accounted for using the pooling-of-interests method and,
accordingly, the historic consolidated financial statements of Student Advantage
prior to the acquisition have been restated to reflect the financial position,
results of operations and cash flows of University Netcasting.

     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.

     On June 23, 1999, we completed an initial public offering of 6,000,000
shares of our common stock resulting in net proceeds to us of approximately
$44.6 million. Upon the closing of the initial public offering, each outstanding
share of our redeemable convertible preferred stock converted into shares of
common stock on a three-for-one basis. On July 21, 1999, we issued an additional
900,000 shares of common stock as a result of the full exercise of the
underwriters' over-allotment option. We received additional net proceeds of $6.7
million as a result of such exercise.

                                       17
<PAGE>   21

     On July 21, 1999, we entered into a marketing agreement with Lycos, Inc. In
connection with the transaction, Lycos was granted a warrant to purchase 550,000
shares of our common stock at a price of $10.875 per share. The Lycos warrant
terminates on July 21, 2002 and is exercisable on or after July 21, 2000. We
valued the Lycos warrant at $2.2 million, which will be recognized as a sales
and marketing expense on a straight-line basis over the thirty-month term of the
marketing agreement.

     We recorded deferred compensation of $4.2 million in the year ended
December 31, 1998 and $228,000 in the first quarter of 1999, representing the
difference between the exercise price of stock options granted 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, $808,000 had been amortized as of December 31,
1998 and an additional $837,000 had been amortized during the nine months ended
September 30, 1999. The amortization of deferred compensation is recorded as an
operating expense. We currently expect to amortize the following remaining
amounts of deferred compensation as of September 30, 1999 in the periods
indicated:

<TABLE>
<S>                                                           <C>
October 1, 1999 -- December 31, 1999........................  $  282,000
January 1, 2000 -- December 31, 2000........................   1,073,000
January 1, 2001 -- December 31, 2001........................   1,015,000
January 1, 2002 -- December 31, 2002........................     384,000
</TABLE>

     Student Advantage has experienced substantial net losses since 1996 and, as
of September 30, 1999, had an accumulated deficit of $38.7 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.

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

RECENT EVENTS

     On October 7, 1999, Student Advantage acquired Voice FX Corporation, a
leading provider of internet and interactive voice response services to colleges
and universities. In connection with the acquisition, we paid approximately $1.1
million in cash, issued 430,082 shares of our common stock and assumed options
to purchase a total of 59,687 shares of our common stock. The acquisition has
been accounted for under the purchase method of accounting and the results of
operations will be included in our results of operations beginning on the
acquisition date. Goodwill and other intangible assets in the aggregate amount
of $6.3 million will be recorded in connection with the acquisition and will be
amortized on a straight-line basis over expected useful lives of between three
and five years.

     On November 12, 1999 Student Advantage made an equity investment in
edu.com, Inc., a privately held e-commerce company. We paid approximately $4.3
million in cash for approximately 922,000 shares of Series B preferred stock of
edu.com. We are accounting for our investment in edu.com on the cost basis of
accounting. Additionally, we entered into a two-year marketing and distribution
agreement with edu.com. The agreement provides, among other things, that edu.com
will become Student Advantage's exclusive technology e-commerce partner and
rewards program provider, that the parties will pursue certain promotional
initiatives on each other's behalf, and that edu.com will make certain payments
to Student Advantage, including $2.0 million payable over the term of the
agreement.

                                       18
<PAGE>   22

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>
                                                                              NINE MONTHS
                                                                                 ENDED
                                                                             SEPTEMBER 30,
                                                  YEAR ENDED DECEMBER 31,     (UNAUDITED)
                                                  -----------------------    --------------
                                                  1996     1997     1998     1998     1999
                                                  -----    -----    -----    -----    -----
<S>                                               <C>      <C>      <C>      <C>      <C>
Revenue
  Subscription................................      59%      62%      37%      43%      34%
  Other.......................................      41       38       63       57       66
                                                  ----     ----      ---      ---      ---
          Total revenue.......................     100      100      100      100      100
                                                  ----     ----      ---      ---      ---
Costs and expenses
  Cost of subscription revenue................      30       55       13       12       11
  Cost of other revenue.......................      31       15       41       31       49
  Product development.........................      82       67       25       26       34
  Sales and marketing.........................      29       39       38       36       44
  General and administrative..................      66       57       28       24       34
  Depreciation and amortization...............       6        7        6        8        6
  Stock-based compensation....................      --       --        4       --        4
                                                  ----     ----      ---      ---      ---
          Total costs and expenses............     244      240      155      137      182
                                                  ----     ----      ---      ---      ---
Loss from operations..........................    (144)    (140)     (55)     (37)     (82)
Interest income (expense), net................       0       (2)       1        0        5
                                                  ----     ----      ---      ---      ---
Net loss......................................    (144)%   (142)%    (54)%    (37)%    (77)%
                                                  ====     ====      ===      ===      ===
</TABLE>

     Comparison of the Nine Months Ended September 30, 1999 with the Nine Months
Ended September 30, 1998

     Revenue.  Total revenues increased to $18.3 million for the nine months
ended September 30, 1999 from $13.7 million for the nine months ended September
30, 1998. This increase was due primarily to an increase in other revenue to
$12.1 million in the nine months ended September 30, 1999, from $7.8 million for
the nine months ended September 30, 1998. The increase in other revenue was
primarily due to $1.4 million related to an agreement entered into in February
1998 with AT&T to provide management and execution of AT&T's on-campus marketing
initiatives, under which we did not derive any revenue during the first nine
months of 1998. Additionally, the AT&T marketing agreement was not in effect
until the third quarter of 1998. Other factors contributing to the increase were
web advertising revenue, advertising revenue from three issues of Student
Advantage magazine which had not yet been published in the first three quarters
of 1998, revenue from the sale of Eurail passes as a result of the Company's
acquisition of The Travel Holding Group business on April 1, 1999 and revenue as
a result of the Company's acquisition of The Campus Agency business on April 1,
1999. Marketing services revenue increased primarily due to the signing of
several contracts not in effect in the third quarter of 1998 and was offset, in
part, by the expiration of a contract which was in effect during the first
quarter of 1998.

     AT&T accounted for approximately 60% and 62% of total revenue for the nine
months ended September 30, 1999 and the nine months ended September 30, 1998,
respectively. Additionally, AT&T accounted for approximately 94% and 95% of
subscription revenue and 42% and 38% of other revenue for the nine months ended
September 30, 1999 and the nine months ended September 30, 1998, respectively.
No other single customer accounted for 10% or more of total revenues for the
nine months ended September 30, 1999 or the nine months ended September 30,
1998, respectively.

     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 increased to $2.0 million for the nine
months ended September 30, 1999 from $1.7 million for the nine months ended

                                       19
<PAGE>   23

September 30, 1998, due primarily to an increase in costs related to the
fulfillment of our membership subscriptions.

     Cost of subscription revenue as a percentage of subscription revenue
increased to 32.1% for the nine months ended September 30, 1999 from 28.4% for
the nine months ended September 30, 1998. Membership fulfillment costs, which
are recorded when the membership is fulfilled, increased as the volume of
memberships increased in the fall of 1999. However, because the revenue
associated with these memberships is recognized over the remaining term of the
memberships, much of the revenue associated with the memberships fulfilled in
the fall of 1999 will not be recognized until 2000.

     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. It also includes royalties paid to organizations,
primarily colleges, universities and athletic associations for the use of
organizational information and indicia (name and logo), and for supplying sports
activity content for Student Advantage to include in the FANSonly.com web sites.
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 for AT&T and costs associated
with the sale of Eurail passes. Cost of other revenue increased to $8.9 million
for the nine months ended September 30, 1999 from $4.3 million for the nine
months ended September 30, 1998. This increase is due primarily to an increase
of $1.6 million in costs associated with the Student Advantage magazine, of
which three issues were distributed during the nine months ended September 30,
1999 and no issues were distributed during the same period in 1998. The
acquisitions of The Travel Holding Group and The Campus Agency businesses during
the nine months ended September 30, 1999 contributed $1.4 million in expense.
Additionally, costs associated with providing services relating to an AT&T
on-campus marketing program and the AT&T marketing agreement, the latter of
which was first incurred in the third quarter of 1998, contributed to the
increase. Other increases in marketing services expenses primarily attributable
to the signing of several contracts not in effect in the first nine months of
1998 were offset, in part, by the expiration of a contract which was in effect
during the first quarter of 1998.

     Cost of other revenue as a percentage of other revenue increased to 73.3%
for the nine months ended September 30, 1999 from 54.9% for the nine months
ended September 30, 1998. This increase was due primarily to a larger portion of
other revenue consisting of lower margin activities associated with the
marketing services business acquired from Collegiate Advantage, the services
delivered under both the AT&T marketing agreement and the AT&T on-campus
marketing program, and the Rail Connection and Campus Agency businesses acquired
from The Travel Holdings Group, LLC. The increase in cost of other revenues as a
percentage of total revenue is also due to costs associated with the production
of SAM, which exceeded revenue from the production of SAM.

     Product Development.  Product development expenses consist primarily of
personnel-related and consulting costs associated with the development and
enhancement of membership products, which include the Student Advantage
membership card, the Student Advantage magazine, and the studentadvantage.com
and FANSonly.com web sites. Product development expenses increased to $6.2
million for the nine months ended September 30, 1999 from $3.5 million for the
nine months ended September 30, 1998. The increase is primarily due to $1.4
million incurred in connection with the re-launch of studentadvantage.com in
September 1999 and the development of our customer database, as well as
additional personnel related costs.

     Sales and Marketing.  Sales and marketing expenses consist primarily of
personnel and other costs related to our sales and marketing programs. Sales and
marketing expenses increased to $8.1 million for the nine months ended September
30, 1999 from $4.9 million for the nine months ended September 30, 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 addition, in connection with the

                                       20
<PAGE>   24

Lycos, Inc. marketing agreement entered into in the third quarter of 1999, we
recorded a warrant valued at $2.2 million. Of this amount, $220,000 was
amortized to sales and marketing expense in the nine months ended September 30,
1999. The remainder is being amortized on a straight line basis over the
remaining term of the agreement.

     General and Administrative.  General and administrative expenses consist
primarily of costs related to general corporate functions, including executive
management, finance, human resources, facilities, accounting and legal. General
and administrative expenses increased to $6.2 million for the nine months ended
September 30, 1999 from $3.3 million for the nine months ended September 30,
1998. The increase in general and administrative expenses is primarily due to
acquisition costs of $1.3 million related to the acquisitions of University
Netcasting, Inc. and Transaction Service Providers, Inc., and increases in
facilities, legal, accounting and personnel related costs.

     Depreciation and Amortization.  Depreciation and amortization expenses
remained virtually unchanged at $1.1 million for the nine months ended September
30, 1999 and the nine months ended September 30, 1998. Decreases in amortization
expense as a result of certain intangible assets becoming completely amortized
during the first nine months of 1999, were offset by increases in depreciation
expense as a result of fixed asset purchases during 1999.

     Stock-Based Compensation.  We recorded deferred compensation of $4.2
million in the year ended December 31, 1998 and an additional $228,000 for the
nine months ended September 30, 1999. Of this amount, $1.6 million has been
amortized to expense to date, of which $837,000 was recorded as an expense
during the nine months ended September 30, 1999. The remainder is being
amortized over the remaining vesting period of the individual options.

     Interest Income (Expense), Net.  Interest income (expense), net includes
interest income from cash balances and interest expense related to Student
Advantage's financing obligations. Interest income (expense), net increased to
$760,000 for the nine months ended September 30, 1999 from $65,000 for the nine
months ended September 30, 1998. The increase is a result of interest income
earned on higher average cash and cash equivalents balance during the nine
months ended September 30, 1999 compared to that of the nine months ended
September 30, 1998.

  Comparison of Year Ended December 31, 1998 with Year Ended December 31, 1997

     Revenue.  Total revenue increased from $4.8 million in 1997 to $19.4
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
from $1.8 million in 1997 to $12.2 million in 1998 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 50% and 61% of total revenue for 1997 and
1998. Additionally, AT&T accounted for approximately 77% and 95% of subscription
revenue for 1997 and 1998, and 4% and 41% 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 decreased from
$2.6 million in 1997 to $2.4 million in 1998, due primarily to decreased costs
associated with fulfilling membership subscriptions.

     Cost of subscription revenue as a percentage of subscription revenue
decreased from 88.5% in 1997 to 34.0% in 1998. This decrease was due primarily
to the timing of the recognition of revenue and expenses associated with the
commencement of activities under the AT&T membership agreement in 1997.
Membership fulfillment costs, which are recorded when the membership is
fulfilled, increased significantly

                                       21
<PAGE>   25

as the volume of memberships increased in the Fall of 1997. However, because the
revenue associated with these memberships is recognized over the remaining term
of the memberships, much of the revenue associated with the memberships
fulfilled in the Fall of 1997 was not recognized until 1998.

     Cost of Other Revenue.  Cost of other revenue increased from $702,000 in
1997 to $7.9 million in 1998. The increase in cost of other revenue was due
primarily to the addition of Collegiate Advantage and its 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.

     Cost of other revenue as a percentage of other revenue increased from 38.1%
in 1997 to 64.6% in 1998. This increase was due primarily to a larger portion of
other revenue consisting of lower margin activities associated with the
marketing services business acquired from Collegiate Advantage and the services
delivered under the AT&T marketing agreement. The increase in cost of other
revenues as a percentage of total revenue is also due to costs associated with
the production of SAM, which exceeded revenue from the production of SAM.

     Product Development.  Product development expenses increased from $3.3
million in 1997 to $4.9 million in 1998. The increase was primarily due to
increased investment in enhancing and improving the functionality of our web
site and other related costs.

     Sales and Marketing.  Sales and marketing expenses increased from $1.9
million in 1997 to $7.3 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 sponsors, 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 increased
from $2.7 million in 1997 to $5.5 million in 1998. The increase in general and
administrative expenses was primarily due to facilities and personnel-related
costs.

     Depreciation and Amortization.  Depreciation and amortization expenses
increased from $351,000 in 1997 to $1.2 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 was
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 increased from an
expense $77,000 in 1997 to income of $121,000 in 1998. The increase was a result
of interest income earned on cash balances as a result of the conversion of the
notes payable to convertible preferred stock and the issuance of convertible
preferred stock in February, April, and October of 1998, as well as interest
from a promissory note to a stockholder, which were offset by interest due on
borrowings under our line of credit and notes payable to stockholders.
Additionally, Student Advantage incurred interest expense related to loans from
its chief executive officer, which were repaid in full in 1998.

     Comparison of Year Ended December 31, 1997 with Year Ended December 31,
1996

     Revenue.  Total revenue increased from $1.8 million in 1996 to $4.8 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
$745,000 in 1996 to $1.8 million in 1997, due primarily to increased advertising
revenue and, to a lesser extent, an increase in commerce revenue.

                                       22
<PAGE>   26

     AT&T accounted for approximately 50% 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 was 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 subscription revenue as a percentage of subscription revenue
increased from 49.7% in 1996 to 88.5% in 1997. This increase was due primarily
to the timing of the recognition of revenue and expenses associated with the
commencement of activities under the AT&T membership agreement in 1997.

     Cost of Other Revenue.  Cost of other revenue increased from $570,000 in
1996 to $702,000 in 1997, due primarily to higher advertising costs.

     Cost of other revenue as a percentage of other revenue decreased from 76.5%
in 1996 to 38.1% in 1997 due primarily to reduced costs of advertising as a
percentage of advertising revenue and slightly offset by the costs associated
with the increased commerce revenue.

     Product Development.  Product development expenses increased from $1.5
million in 1996 to $3.3 million in 1997. The increase was 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 sponsors.

     Sales and Marketing.  Sales and marketing expenses increased from $536,000
in 1996 to $1.9 million in 1997. The increase in sales and marketing was due to
increased expenditures to support the membership subscription business, which
grew significantly in 1997 with the addition of the AT&T membership agreement,
as well as, the online advertising business related to the University Netcasting
business.

     General and Administrative.  General and administrative expenses increased
from $1.2 million in 1996 to $2.7 million in 1997. The increase in general and
administrative expenses was 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 $107,000 in 1996 to $351,000 in 1997, primarily due to the
amortization of goodwill and other intangible assets resulting from
acquisitions.

     Interest Income (Expense), Net.  Interest income decreased from $4,000 of
net interest income in 1996 to $77,000 of net interest expense in 1997. The
decrease was a result of interest due on borrowings under our line of credit and
loans from our Chief Executive Officer.

                                       23
<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 and each
of the three quarters in the nine month period ended September 30, 1999. In the
opinion of management, the unaudited financial statements have been prepared on
a basis consistent with the audited financial statements which appear elsewhere
in this prospectus and include all adjustments, which are only normal recurring
adjustments, necessary for a fair presentation of the financial position and
results of operations for the unaudited periods. The quarterly data should be
read in conjunction with "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and 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. All amounts for all periods have been restated to reflect the
acquisition of University Netcasting, Inc. in June 1999, which was accounted for
as a pooling of interests.

<TABLE>
<CAPTION>
                                                                             QUARTER ENDED
                                        ---------------------------------------------------------------------------------------
                                        MARCH 31,    JUNE 30,    SEPT. 30,    DEC. 31,    MARCH 31,    JUNE 30,   SEPTEMBER 30,
                                          1998         1998        1998         1998        1999         1999         1999
                                        ---------    --------    ---------    --------    ---------    --------   -------------
                                                                       (UNAUDITED, IN THOUSANDS)
<S>                                     <C>          <C>         <C>          <C>         <C>          <C>        <C>
Revenue
  Subscription........................   $ 1,738     $ 2,274      $ 1,856     $ 1,306      $ 1,668     $ 2,366       $ 2,160
  Other...............................     1,873       1,377        4,593       4,343        3,239       2,426         6,463
                                         -------     -------      -------     -------      -------     -------       -------
    Total revenue.....................     3,611       3,651        6,449       5,649        4,907       4,792         8,623
                                         -------     -------      -------     -------      -------     -------       -------
Costs and expenses
  Cost of subscription revenue........       302         413          951         776          320         484         1,185
  Cost of other revenue...............     1,595         944        1,767       3,562        2,676       2,147         4,065
  Product development.................       918       1,363        1,228       1,379        1,257       1,553         3,359
  Sales and marketing.................     1,167       1,621        2,160       2,375        2,120       2,837         3,109
  General and administrative..........       781       1,122        1,408       1,925        1,823       2,552         1,814
  Depreciation and amortization.......       271         488          335         359          370         364           392
  Stock-based compensation............        --          --           --         808          273         282           282
                                         -------     -------      -------     -------      -------     -------       -------
    Total costs and expenses..........     5,034       5,951        7,849      11,184        8,839      10,219        14,206
                                         -------     -------      -------     -------      -------     -------       -------
Loss from operations..................    (1,423)     (2,300)      (1,400)     (5,535)      (3,932)     (5,427)       (5,583)
Interest income (expense), net........        53          22          (10)         57           73          50           637
                                         -------     -------      -------     -------      -------     -------       -------
Net loss..............................   $(1,370)    $(2,278)     $(1,410)    $(5,478)     $(3,859)    $(5,377)      $(4,946)
                                         =======     =======      =======     =======      =======     =======       =======
</TABLE>

<TABLE>
<CAPTION>
                                                                      PERCENTAGE OF TOTAL REVENUE
                                        ---------------------------------------------------------------------------------------
                                        MARCH 31,    JUNE 30,    SEPT. 30,    DEC. 31,    MARCH 31,    JUNE 30,   SEPTEMBER 30,
                                          1998         1998        1998         1998        1999         1999         1999
                                        ---------    --------    ---------    --------    ---------    --------   -------------
                                                                              (UNAUDITED)
<S>                                     <C>          <C>         <C>          <C>         <C>          <C>        <C>
Revenue
  Subscription........................      48.1%       62.3%        28.8%       23.1%        34.0%       49.4%         25.0%
  Other...............................      51.9        37.7         71.2        76.9         66.0        50.6          75.0
                                         -------     -------      -------     -------      -------     -------       -------
    Total revenue.....................     100.0       100.0        100.0       100.0        100.0       100.0         100.0
                                         -------     -------      -------     -------      -------     -------       -------
Costs and expenses
  Cost of subscription revenue........       8.4        11.3         14.7        13.7          6.5        10.1          13.7
  Cost of other revenue...............      44.2        25.9         27.4        63.1         54.5        44.8          47.1
  Product development.................      25.4        37.3         19.0        24.4         25.6        32.4          39.0
  Sales and marketing.................      32.3        44.4         33.5        42.0         43.2        59.2          36.1
  General and administrative..........      21.6        30.7         21.8        34.1         37.2        53.3          21.0
  Depreciation and amortization.......       7.5        13.4          5.2         6.3          7.5         7.6           4.5
  Stock-based compensation............        --          --           --        14.3          5.6         5.9           3.3
                                         -------     -------      -------     -------      -------     -------       -------
    Total costs and expenses..........     139.4       163.0        121.6       197.9        180.1       213.3         164.7
                                         -------     -------      -------     -------      -------     -------       -------
Loss from operations..................     (39.4)      (63.0)       (21.6)      (97.9)       (80.1)     (113.3)        (64.7)
Interest income (expense), net........       1.5         0.6         (0.2)        1.0          1.5         1.0           7.4
                                         -------     -------      -------     -------      -------     -------       -------
Net loss..............................     (37.9)%     (62.4)%      (21.8)%     (96.9)%      (78.6)%    (112.3)%       (57.3)%
                                         =======     =======      =======     =======      =======     =======       =======
</TABLE>

                                       24
<PAGE>   28

     Our operating results are dependent upon the college student market and we
expect them to vary seasonally based upon the typical school year. We tend to
sell most of our memberships in the beginning of the fall and winter academic
terms. All of these memberships expire on August 31 of each year. Because the
aggregate number of memberships within a school year increases as new members
are added beginning on September 1, and we recognize revenue from memberships
ratably over the period from the time of subscription until the end of our
membership year, our subscription revenue will typically be higher in the first
and second quarters than in the fourth quarter of each fiscal year. It is
difficult to determine how the third quarter will typically compare, since it
includes two calendar months from the end of a membership year and the first
month of the subsequent membership year.

     Our limited operating history and rapid growth make it difficult for us to
more fully assess the impact of seasonal factors on our business. Nevertheless,
because our business is dependent upon the student market, we expect that our
other revenue may be subject to seasonal fluctuations associated with the
typical school year. In particular, other revenue can be expected to be higher
during the third and fourth quarters due to increased activity associated with
the commencement of the school year. Conversely, the second quarter may have the
least amount of other revenue since it includes the months at the end of a
school year.

     In 1998, our other revenue was higher in the third and fourth quarters than
in other quarters due in part to the seasonality factor noted above and in part
to the commencement of activities under the AT&T marketing agreement, under
which we receive fees for obtaining calling card applications from students. The
Student Advantage Magazine, SAM, began publication in the fourth quarter of
1998. Other revenue and the cost of other revenue were each affected in the
fourth quarter of 1998 and the first quarter of 1999 by the publication of two
issues of SAM in each of those quarters.

     Partly because of the seasonality factor noted above and partly because SAM
was not published in the second quarter, other revenue in the second quarter of
1999 was significantly less than it was in the third and fourth quarters of 1998
and the first quarter of 1999. In the third quarter of 1999, similar to the
third quarter of 1998, we experienced a significant increase in other revenue.
This increase in other revenue was due in part to the commencement of a new
academic year, related increased marketing services and other back-to-school
activities and the publishing of an issue of SAM. Partly because of the
seasonality factor noted above, subscription revenue for the third quarter of
1999 decreased from the second quarter of 1999.

LIQUIDITY AND CAPITAL RESOURCES

     Student Advantage has financed its operations primarily through the private
placement and public offering 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. In June 1999, we completed our
initial public offering selling 6.0 million shares of common stock and raising
$44.6 million, net of offering costs. On July 21, 1999, an additional 900,000
shares were issued by Student Advantage as a result of the full exercise of the
underwriters' over-allotment option, resulting in additional net proceeds of
$6.7 million. As of September 30, 1999, Student Advantage had $42.2 million in
cash, cash equivalents and marketable securities.

     Net cash provided by operating activities was $852,000 for 1997, net cash
used for operating activities was $7.2 million in 1998 and $13.5 million for the
nine months ended September 30, 1999. Net cash used in the first nine months of
1999 was primarily a result of a net loss of $14.2 million and increase in
accounts receivable of $3.3 million and prepaid, other current assets and other
assets of $1.9 million. These increases were partially offset by an increase in
deferred revenue of $1.2 million and an increase in accrued expenses of $2.1
million. Net cash used for operations for 1998 resulted primarily from an
increase in accounts receivable of $2.7 million in 1998 and a net loss of $10.5
million 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 provided by operations in 1997 was affected by an
increase in deferred revenue of $5.7 million. Deferred revenue represents
primarily payments for

                                       25
<PAGE>   29

membership fees not yet recognized as revenue and advance payments for purchases
of memberships and other services.

     Net cash used for investing activities was $786,000 in 1997, $2.0 million
in 1998 and $38.0 million in the first nine months of 1999. The net cash used
for investing activities in the first nine months of 1999 was primarily due to
$35.3 million used for purchases of marketable securities, net of proceeds from
the sale of marketable securities, and to a lesser extent the purchase of fixed
assets and the acquisitions of the Travel Holding Group and Campus Agency
businesses. Net cash used for investing activities in 1998 was due primarily to
the purchase of fixed assets and the acquisition of Collegiate Advantage in
1998. In 1997, Student Advantage used cash for investing activities to purchase
fixed assets and for its acquisition of The Main Quad.

     Net cash provided by financing activities was $5.0 million in 1997, $9.5
million in 1998, and $50.5 million in the first nine months of 1999. The net
cash provided by financing activities in the first nine months of 1999 was
primarily the result of the proceeds of $49.9 million in connection with sales
of the Student Advantage's common stock. Cash provided by financing activities
in 1998 was primarily due to net cash proceeds of $11.9 million from the sale of
shares of Student Advantage common and preferred stock, partially offset by a
distribution of $2.3 million to LLC members. In 1997, Student Advantage
generated cash from financing activities through the sale of common and
preferred stock for net proceeds of $4.7 million offset by the repurchase of a
member's LLC interest for $630,000.

     Student Advantage has a $2.75 million bank line of credit and equipment
lease credit facility, which expires on June 30, 2000. The line of credit bears
interest at a rate of LIBOR plus 2% or the bank's base rate. The line of credit
and equipment lease credit facility is secured by all of the assets of Student
Advantage. As of September 30, 1999, no amounts were outstanding under either
the line of credit or the equipment lease credit facility.

     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 will be sufficient to
meet its anticipated needs for working capital and capital expenditures for at
least 12 months following the date of this prospectus.

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, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivatives and Hedging Activities" ("SFAS No. 133"). The new
standard 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

                                       26
<PAGE>   30

all fiscal quarters of fiscal years beginning after June 15, 1999 and is
effective for Student Advantage's fiscal year ending December 31, 2000. Student
Advantage does not expect the adoption of SFAS No. 133 to have a material effect
on its financial position or results of operations. On July 7, 1999, the FASB
issued SFAS 137, "Accounting for Derivative Instruments and Hedging Activities -
Deferral of the Effective Date of FASB Statement No. 133 - an amendment to FASB
Statement No. 133." SFAS 133, as amended, by SFAS 137, is effective for Student
Advantage's fiscal year ending December 31, 2001.

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.

     State of Readiness. Student Advantage does not internally develop a
significant amount of software. Student Advantage has made an 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 has completed all phases of the assessment plan. Since
third parties developed and currently support many of the systems that we use, a
significant part of this effort was to ensure that these third-party systems are
Year 2000 compliant. We confirmed this compliance based solely on
representations by these third parties of their products' Year 2000 compliance,
as well as reviews of Year 2000 readiness documentation from our vendors.

     Costs. To date, Student Advantage has spent an immaterial amount on Year
2000 compliance issues, and does not expect to incur any additional significant
amounts identifying, evaluating or 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 existing employees
in the evaluation and planning process and Year 2000 compliance matters.

     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. We have received certificates or reports from our significant third
party vendors indicating that their systems are Year 2000 compliant or
identifying remaining corrective actions. We cannot be certain that we will
discover all Year 2000 compliance problems in our systems. In addition, we
cannot be certain that none of the third-party software, hardware or services
incorporated into our material systems will need to be revised or replaced,
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.

                                       27
<PAGE>   31

     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, 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 developed contingency plans. The results of
Student Advantage's Year 2000 simulation testing and the responses received from
third-party vendors and service providers has been taken into account in
determining the nature and extent of any contingency plans.

                                       28
<PAGE>   32

                                    BUSINESS

OVERVIEW

     Student Advantage, Inc. is dedicated to serving the needs of college
students through our leading membership program and our network of web sites,
including studentadvantage.com, FANSonly.com and UWIRE.com. 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 55 national sponsors and 15,000 participating locations
in 125 local markets. Discounts are made available to students both through our
studentadvantage.com web site and at sponsors' retail locations. Student
Advantage offers the only ongoing discount available to college students for the
products and services of many of our sponsors. We seek to enhance our brand
online and provide additional services to our members, sponsors and colleges
with the objective of becoming the leading online network of web sites for
students. Our network of web sites 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,
total discretionary spending by college students in the 1997-1998 academic year
exceeded $105 billion. In the United States, there are over 15 million full-time
and part-time undergraduate and graduate students at more than 3,500 university
and college campuses. The college student population is also 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

                                       29
<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 restricted 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, commerce and other services.

THE STUDENT ADVANTAGE SOLUTION

     Student Advantage is a leading resource and trusted advocate dedicated to
serving the needs of college students both online and offline. As a result, we
are positioned to serve as a point of access to this market. Through our
national membership program and our network of web sites, 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 55 national
sponsors and 15,000 participating locations in 125 local markets.

     Student Advantage has created a comprehensive online destination for
college students, studentadvantage.com, as well as additional online content
destinations focused on addressing specific needs of college students, including
the FANSonly official college and university athletic sites and the
U-WIRE college and university newspaper site.

     College students can join the Student Advantage membership program:

     - by obtaining, free of charge subject to credit approval by AT&T, a
       co-branded card that serves as both a Student Advantage membership
       identification card and an AT&T calling card;

     - through programs under which certain universities, colleges or university
       organizations or other sponsors purchase memberships in bulk for
       distribution free of charge to their students; or

     - 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.

                                       30
<PAGE>   34

<TABLE>
<S>                                               <C>
                                                                      STUDENTS
                                                   A community of over 1,000,000 student members
                                                    receive a variety of services and benefits,
                                                    including ongoing discounts on products and
                                                                      services

                  UNIVERSITIES                                        [STUDENT
             Students at over 3,000                                  ADVANTAGE
           colleges and universities                                   LOGO]
               are members of the
               Student Advantage
                    program

<S>                                               <C>
                                                                     BUSINESSES
                                                             Over 55 national sponsors
                                                      and over 15,000 participating locations
                                                                in 125 local markets


</TABLE>

     Benefits to Students. Through our network of web sites, including
studentadvantage.com, we have created an attractive online destination for
students. Our web sites provide content, community and e-commerce focused on
addressing the needs of college students. Our web sites offer services and
information targeted to college students, including discount purchasing, travel
alternatives, college sporting news, career and job searches, lifestyle and
extracurricular decisions and financial aid information. Our web sites:

     - enable access to college news from approximately 500 colleges and
       universities,

     - offer an e-commerce marketplace,

     - provide online bulletin boards,

     - provide free e-mail and an online address book, calendar and document
       storage for Student Advantage members, and

     - include a searchable directory of sponsors that offer discounts for
       Student Advantage members.

     The Student Advantage membership program provides college students with
ongoing discounts on products and services from national sponsors including
Amtrak, Foot Locker, Greyhound, Staples, Tower Records, textbooks.com and Barnes
& Noble College Bookstores. For example, in 1998, our members spent $10.9
million on Amtrak(R) 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 125 local markets.

     Student Advantage members also receive a subscription to SAM, the Student
Advantage magazine. SAM includes lifestyle and practical content for students
and updates on new discounts available to Student Advantage members.

     Benefits to Sponsors. We provide a platform for our sponsors to market
their products and services to a large, demographically attractive market.
Student Advantage appeals to sponsors and advertisers because it combines:

     - a large and attractive demographic group,

     - database marketing capabilities,

     - a trusted brand,

                                       31
<PAGE>   35

     - program usage tracking,

     - quality online and offline content, and

     - community interaction.

     By maintaining contact with students throughout their college experience
and by establishing relationships with universities, 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.

     Sponsors 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.

     We maintain ten 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. In partnership with Student
Advantage, colleges and universities can generate goodwill with students and
help reduce the cost of student life by making the Student Advantage membership
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.

     Colleges and universities are seeking to enhance their service offerings to
students and obtain additional revenue streams. Through growth of our existing
product and service offerings and through our recent acquisitions of University
Netcasting, Transaction Service Providers and Voice FX, Student Advantage is
able to provide a college or university with revenue opportunities and student
services, including:

     - operation of a college, university or college sport association's
       official athletic web site, including content, community and e-commerce
       offerings,

     - management of a college's or university's debit-card programs, and

     - technology solutions that enable students and alumni to access or request
       academic information online and by telephone, including grades, financial
       aid status and transcripts.

STRATEGY

     Our objective is to be the leading online and offline resource for college
students. We intend to broaden and deepen our relationship with students by
serving the needs of our three key constituencies -- students, businesses and
schools. The key elements of our strategy include the following:

     Strengthen Online Destination for Students. We believe that our existing
1,000,000 members provide a platform for building the leading online destination
for students. Our goal is to establish our network of web sites, 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 sites currently offer
content, community and e-commerce services targeted specifically to college
students. The web sites also allow students to enroll in our membership program,
receive customer service, and search our directory of national and local
sponsors that offer discounts. We intend to enhance our online offerings by
making additional content available and by expanding our e-commerce marketplace
with additional sponsors. We also expect to offer additional online programming
in order to personalize our web sites for particular college campuses.

     Continue to Build Brand. We believe that building our brand is critical to
attracting and expanding our membership and internet user base. Our market
leadership position has been driven by our

                                       32
<PAGE>   36

membership program and by partnering with leading national and local sponsors
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 sponsors. Student Advantage believes that it can build online brand
awareness and attract traffic by utilizing 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 by promoting
       online membership sales and by increasing the number of e-commerce
       sponsors to attract web site visitors,

     - increasing our number of corporate sponsors,

     - 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,

     - offering our program to high school students and college graduates, and

     - selling memberships in bulk either through corporate sponsorship or
       direct to universities.

     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, community and e-commerce. In addition to
increasing the number of national and local sponsors, Student Advantage will
provide additional services to sponsors, 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 establish and strengthen its relationships
with colleges and universities by continuing to provide marketing services and
by enabling schools to outsource certain online services.

     Continue to Pursue Strategic Acquisitions and Alliances. Since inception,
we have acquired and integrated ten complementary businesses in order to expand
and strengthen our offerings to students. We plan to continue to acquire
companies, make equity investments or enter into alliances that offer
opportunities to increase our online traffic and obtain new technologies.

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 sites 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 were 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. To date, almost all of our members have received their Student Advantage
memberships at no charge from AT&T by either electing to apply for an AT&T
calling card in connection with their Student Advantage membership or by
receiving a free Student Advantage membership from AT&T. The AT&T/Student
Advantage membership cards are co-branded and serve as both a Student Advantage
membership identification card and an AT&T calling card. Memberships are also
sold to colleges, universities and university organizations for distribution
free of charge to students. In addition, students may purchase memberships
directly from Student Advantage for a membership fee that is currently $20 per
year.

                                       33
<PAGE>   37

     Upon enrollment, Student Advantage members receive a 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 sponsors. We receive payments from certain
of our national sponsors when Student Advantage members purchase products and
services from them. Student Advantage currently offers discounts from over 55
national sponsors and 15,000 participating locations in 125 local markets.

     National discounts available to Student Advantage members include:

     - 15% off Amtrak(R) rail fares

     - 15% off Greyhound bus fares

     - 15% off purchases from Foot Locker, Lady Foot Locker and Kids Foot Locker

     - $5 off purchases of at least $25 or $10 off purchases of at least $50
       from Staples

  Student-Focused Content and Services

     Our Network of Web Sites

     Our network of web sites, including studentadvantage.com, FANSonly.com and
UWIRE.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, college sports, 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 approximately 500 colleges using our U-WIRE news feed.
     In addition, our studentadvantage.com web site provides students with
     information relevant for their local market or college campus and a
     searchable online directory of national and local discounts offered by our
     sponsors. Our web site also includes maps and directions to retail
     locations that offer discounts.

          Community. Our web sites offer students a number of community-building
     services. Student Advantage's online bulletin boards give students the
     opportunity to discuss topics such as interviewing techniques, college
     sports and campus life. We allow students to set up their own e-mail
     account, organize contact information in an online 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 directly purchase travel-related products,
     Eurail passes and official athletic site merchandise at our sites. In
     addition, Student Advantage members 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 sponsor. Products offered online include school and
     office supplies, books, software, music, footwear, magazines and flowers.
     In order to receive discounts on the products offered through our web site,
     students must join our membership program. Companies whose products can be
     purchased online through links from our web site include Staples.com,
     textbooks.com, Greyhound and 1-800-FLOWERS.com.

     U-WIRE (University Wire)

     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 approximately 500 colleges using our U-WIRE news
feed.

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<PAGE>   38

     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.

  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.

     In October 1999, we expanded our corporate marketing services through our
acquisition of Voice FX Corporation, a provider of internet and interactive
voice response telephone services to colleges and universities. Voice FX has
secured a total of over 55 contracts for its services. In several cases, a
single college or university has entered into more than one contract for Voice
FX's services. Through these contractual relationships, Voice FX has secured
marketing rights that enable businesses to promote products and services, in a
targeted manner, to students. Certain corporate marketing clients of Voice FX
also use Voice FX's integrated voice response services for general consumer
marketing.

     Our marketing services are typically offered to businesses on a fixed-cost
basis or hourly rate basis.

     Our marketing services group utilizes ten regional offices across the
United States. The broad geographical reach of our marketing services group
allows us to execute our services nationwide. In 1999, clients who purchased our
marketing services included Amtrak(R), AT&T, Coca-Cola, textbooks.com, New
Balance and Lee Jeans.

ALLIANCES

     An important element of our strategy is to form alliances to assist us in
offering products and services to students 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 agreed that, without the consent of

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<PAGE>   39

AT&T, 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,
without the consent of AT&T, any third party, other than certain colleges,
universities and university organizations based on their size, to offer a
Student Advantage membership to college students free of charge.

     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, at certain colleges and universities designated by AT&T, 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, 68% of our total revenues in 1998 and 69%
of our total revenues in the first quarter of 1999. 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.

     Student Advantage is in discussions with AT&T with respect to the possible
restructuring of its agreements with AT&T. There can be no assurance that such
discussions will result in any restructuring.

  Lycos

     In July 1999, we entered into a strategic alliance with Lycos, Inc. to gain
marketing and distribution for studentadvantage.com and to sell Student
Advantage memberships. As part of the alliance, Lycos links to a co-branded
version of studentadvantage.com from lycos.com and promotes the co-branded web
site through the Lycos network. Student Advantage and Lycos share in the
advertising, e-commerce and membership sales revenue generated from the
co-branded version of studentadvantage.com.

  edu.com

     In November 1999, we entered into a strategic alliance with edu.com, Inc.
to provide edu.com with marketing and distribution within both the
studentadvantage.com web site and the Student Advantage membership program, and
to promote edu.com as our exclusive technology e-commerce destination and member
rewards partner. We will receive $2.0 million in cash over the two year term of
our agreement with edu.com. In addition, edu.com will promote the Student
Advantage membership at the edu.com web site and will provide exclusive benefits
to Student Advantage members for shopping at edu.com.

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<PAGE>   40

  Sponsors

     Student Advantage offers its members discounts on products and services
from over 55 national sponsors and over 15,000 participating locations in 125
local markets, including rail fares, bus fares, CDs, school supplies, books and
clothing. Representative national sponsors and local markets include:

REPRESENTATIVE NATIONAL SPONSORS           REPRESENTATIVE LOCAL MARKETS

1-800-FLOWERS.COM                          Ann Arbor, Michigan
AAA                                        Auburn, Alabama
Amtrak                                     Austin, Texas
Barnes & Noble                             Berkeley, California
  College Bookstores                       Boston, Massachusetts
Champs Sports                              Boulder, Colorado
Choice Hotels International                Chapel Hill, North Carolina
Foot Locker                                Chicago, Illinois
Franklin Covey                             Columbus, Ohio
Greyhound                                  Lawrence, Kansas
Hostelling International                   Los Angeles, California
Rockport                                   Madison, Wisconsin
Samsonite                                  New York, New York
Staples                                    Philadelphia, Pennsylvania
textbooks.com                              San Diego, California
The Princeton Review                       Tallahassee, Florida
Tower Records                              Washington, D.C.

     Some of our national sponsors, including Amtrak(R), Staples, Staples.com
and Tower Records, offer the Student Advantage discount as the only ongoing
discount offered specifically to college students. Many of our national sponsors
engage in co-marketing activities with Student Advantage. Student Advantage
seeks to identify and attract additional sponsors 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 attractive
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 Amtrak, Capital One, Microsoft and textbooks.com. Unlike
many of our competitors, we are able to combine our online and offline marketing
and media capabilities to offer a comprehensive marketing package to our
corporate partners. Integrated marketing offerings include print, on-campus and
web site sponsorships.

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 50 colleges, universities and university
organizations. These schools and organizations typically agree to co-market the
Student Advantage membership program to their students. Co-marketing includes
sending a letter to students explaining the program with an application for
membership, and receiving a percentage of the associated membership fees.

     Colleges and universities, or university organizations from these schools,
that have endorsed the Student Advantage membership program include:

Arkansas State University
Auburn University
Boston College
Emory University
University of California -- Santa Barbara
University of Chicago

University of North Carolina -- Charlotte
University of Pennsylvania
University of Utah
Villanova University
University of Virginia
Yale University

     In addition, a limited number colleges and universities have purchased
Student Advantage memberships in bulk, at varying discounts depending on volume,
and distributed the memberships to their students free of charge.

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<PAGE>   41

     Student Advantage has also established contractual relationships with many
colleges and universities whereby Student Advantage acts as a service provider
to the college or university. Service provider relationships include athletic
office web site operation, hosting and management through the FANSonly brand,
school newspaper online publishing and syndication through the U-WIRE brand,
grade and financial aid status reporting and transcript processing through Voice
FX, and debit card program operation and management through either the SA Cash
brand or private-labeled under the college's or university's brands.

SALES AND MARKETING

     As of September 30, 1999, Student Advantage had a direct sales organization
consisting of 34 professionals. Thirteen of these professionals are dedicated to
the AT&T relationship with an additional nine professionals dedicated primarily
to managing our other significant sponsor relationships. The remaining 12
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 sponsors for its discount program,

     - seeking opportunities for corporate-sponsored events and promotions
       targeted at college students, and

     - managing existing sponsor relationships

     In addition, we maintain a regional sales organization of 28 professionals
in ten regional offices focused primarily on enlisting and managing local
sponsors 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
resource 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 employed 12 marketing professionals
as of September 30, 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 USWeb and utilizes Microsoft SQL 7
database software. Our production servers utilize Sun Microsystems, Inc.
hardware and use Netscape web server software. Student Advantage's system
hardware is hosted at USWeb Corporation (doing business as USWeb/CKS), a third-

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<PAGE>   42

party facility in New York, and Exodus, a third party facility in Massachusetts
and California. A group of systems administrators and network managers at
USweb/CKS and Exodus 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 & Exodus' 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 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 in the web site market, we believe that competition will
continue to intensify. We compete, directly and indirectly, for members,
advertisers, sponsors 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, such as web sites developed by Campus Pipeline, College Club,
       Student.Net Publishing and CommonPlaces,

     - membership programs, such as programs offered by Memberworks and Cendant,

     - 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 sponsors,

     - 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 sponsors, 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 sponsors, our existing base of over 1,000,000 members, our
national and local sponsors and our relationships with colleges and universities
are principal

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<PAGE>   43

competitive advantages. We are not able to reliably estimate the number of our
direct competitors. 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 patent, copyrights, service marks,
trademarks, trade dress, trade secrets, proprietary technology and similar
intellectual property as critical to its success, and relies on patent,
trademark and copyright law, trade secret protection and confidentiality and/or
license agreements with its employees, customers, independent contractors,
sponsors, and others to protect its proprietary rights. Student Advantage
strategically pursues the registration of its trademarks and service marks.
However, effective patent, trademark, service mark, copyright and trade secret
protection may not be available. There can be no assurance that the steps taken
by us to protect our proprietary rights will be adequate or that third parties
will not infringe or misappropriate our patent, 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.

     "Student Advantage", "U-WIRE", "The Main Quad", "FANSonly", "Rail
Connection", "Voice FX", "Campus Direct" and "Green Card" 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.

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

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<PAGE>   44

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 November 30, 1999, Student Advantage had a total of 293 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.

FACILITIES

     Student Advantage is headquartered at 280 Summer Street in Boston,
Massachusetts, where it presently leases an aggregate of approximately 39,000
square feet. Our current leases for this facility expire at various times
through 2005. We also maintain regional offices and lease space in Berkeley,
California; Carlsbad, California; Los Angeles, California; Atlanta, Georgia;
Chicago, Illinois; Hanover, New Hampshire; New York, New York; Conshohocken,
Pennsylvania; Dallas, Texas; 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

     On August 3, 1999, Student Advantage filed an action in the United States
District Court for the Southern District of New York against CollegeClub.com,
alleging among other things, that CollegeClub.com has committed false
advertising, unfair competition and tortious interference with contract in
connection with, CollegeClub.com's promotion and marketing of its services,
including but not limited to the Discount Directory in its web site. We seek
monetary damages and equitable relief, including a preliminary and permanent
injunction. As part of its response, CollegeClub.com has filed counterclaims
against us alleging similar conduct on our part. CollegeClub.com seeks monetary
damages and equitable relief, including injunctive relief. We plan to vigorously
oppose the counterclaims alleged by CollegeClub.com and believe we have
meritorious defenses to each such counterclaim. We filed a motion for a
preliminary injunction on October 18, 1999. On November 29, 1999, the court
granted our motion in part, and by order dated November 30, 1999, the court
issued a preliminary injunction against CollegeClub.com which ordered
CollegeClub.com to take certain actions designed to remedy certain of the
problems that are the subject of the complaint.

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<PAGE>   45

                                   MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

     The directors and executive officers of Student Advantage, and their ages
as of November 30, 1999, are as follows:

<TABLE>
<CAPTION>
            NAME              AGE                             POSITION
            ----              ---                             --------
<S>                           <C>   <C>
Raymond V. Sozzi, Jr.+......   31   Chairman of the Board of Directors, President and Chief
                                    Executive Officer
Christopher B. Andrews......   44   Vice President, Finance and Administration, and Chief
                                    Financial Officer
G. Todd Eichler.............   32   Executive Vice President, Business Services
Mason L. Myers..............   29   Executive Vice President, Student and University Services
Ronald J. Kos...............   58   Chief Operating Officer
Andrea K. Abegglen..........   33   Vice President, Marketing Communications
Daniel G. Siegel............   31   Vice President, Product Development
John M. Connolly............   47   Director
William S. Kaiser++.........   44   Director
John S. Katzman++...........   40   Director
Marc J. Turtletaub++........   53   Director
Charles E. Young............   67   Director
</TABLE>

---------------
 + Member of the Stock Option Committee.

++ Member of the Audit Committee and the Compensation Committee.

     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.

     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, Business Services
of Student Advantage since December 1999, and served as Executive Vice
President, Member Management of Student Advantage from January 1997 to December
1999 and 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 Inc., 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.

     Mason L. Myers has served as Executive Vice President, Student and
University Services of Student Advantage since December 1999, and served as Vice
President, Business Development of Student Advantage from January 1999 to
December 1999 and as Senior Director, New Media of Student Advantage 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

                                       42
<PAGE>   46

telecommunications company, in various public relations roles. Mr. Myers
received a B.A. from Duke University in 1993.

     Ronald J. Kos has served as Chief Operating Officer of Student Advantage
since May 1999. From February 1998 to May 1999, Mr. Kos was Senior Vice
President, Marketing and Operations, of iVillage, Inc., an online women's
network. From September 1994 to February 1998, Mr. Kos was President of the
Signal Ridge Group, a national consulting practice that he founded. From April
1991 to August 1994, Mr. Kos was Senior Vice President in charge of marketing
and sales services activities at Hasbro, Inc., a toy designer and manufacturer.
Mr. Kos received a M.B.A. from the University of Southern California and a B.S.
from the United States Air Force Academy.

     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 1993 to April 1996, Ms. Abegglen served as
President of Crimson & Brown Associates, a recruiting firm for minority students
and professionals, and as its Vice President from June 1991 to June 1993. Ms.
Abegglen received a B.A. from the University of Pennsylvania in 1989.

     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 an
M.B.A. from the Wharton School of Business at the University of Pennsylvania in
1997 and a B.A. from the University of Michigan in 1990.

     John M. Connolly has served as a Director of Student Advantage since May
1999. Mr. Connolly founded Mainspring, Inc., an internet e-strategy service
firm, and has served as its President and Chief Executive Officer since June
1996. In July 1989, Mr. Connolly founded Course Technology, Inc., a publishing
company focused on the higher education market, and served as its President and
Chief Executive Officer from July 1989 to April 1996. From August 1994 to April
1996, Mr. Connolly was also employed by the International Thomson Publishing
Company, a publishing company, as Chief Executive Officer of its Media Group.

     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, Open Market, Inc. and Red Hat, Inc.

     John S. Katzman has served as a Director of Student Advantage since March
1996. Mr. Katzman founded The Princeton Review, a provider of test preparation
and admission services, and has served as its President since 1981.

     Marc J. 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.

     Charles E. Young has served as a Director of Student Advantage since
September 1999. Dr. Young has served as President of the University of Florida
since November 1999. Dr. Young served as Chancellor of the University of
California Los Angeles (UCLA) from September 1968 to June 1997, and served as
Chancellor Emeritus of UCLA from July 1997 to October 1999. Dr. Young currently
serves as a Director of Intel Corporation.

     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.

                                       43
<PAGE>   47

BOARD COMPOSITION

     The Board of Directors of Student Advantage is divided into three staggered
classes, each of whose members serve a three-year term. The Board consists of
two Class I Directors (Messrs. Katzman and Young), two Class II Directors
(Messrs. Connolly and Sozzi) and two Class III Directors (Messrs. Kaiser and
Turtletaub). At each annual meeting of stockholders, a class of directors is
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 Directors, Class II Directors
and Class III Directors 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.

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. The Board also has a Stock
Option Committee composed of Mr. Sozzi, which grants stock options and makes
other awards under the Student Advantage 1998 Stock Incentive Plan to employees
who are not officers in accordance with guidelines established by the Board.

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.

     On June 10, 1999, we granted John M. Connolly an option under our 1998
Stock Incentive Plan to purchase 5,000 shares of common stock at an exercise
price of $9.90 per share, in connection with his joining our Board of Directors.
On July 30, 1999, the option was amended to provide that it shall be vested in
full on such date. On September 20, 1999, we granted Mr. Connolly an option
under our 1998 Stock Incentive Plan to purchase 5,000 shares of common stock at
an exercise price of $12.25 per share. The option vests as to 25% of the shares
on each of September 20, 2000, 2001, 2002 and 2003.

     On September 20, 1999, we granted Charles E. Young an option under our 1998
Stock Incentive Plan to purchase 10,000 shares of common stock at an exercise
price of $12.25 per share, in connection with his joining our Board of
Directors. The option vests as to 25% of the shares on each of September 20,
2000, 2001, 2002 and 2003.

                                       44
<PAGE>   48

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 1998 equaled
or exceeded $100,000.

                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                       ANNUAL COMPENSATION
                                                       -------------------    ALL OTHER
           NAME AND PRINCIPAL POSITIONS                 SALARY    BONUS(1)   COMPENSATION
           ----------------------------                --------   --------   ------------
<S>                                                    <C>        <C>        <C>
Raymond V. Sozzi, Jr...............................    $ 93,798   $150,000      $6,000(2)
  Chairman of the Board of Directors,
  President and Chief Executive Officer
G. Todd Eichler....................................     106,475     50,000          --
  Executive Vice President,
  Business Services
</TABLE>

---------------
(1) Represents the bonus earned for services performed in 1998 based upon
    Student Advantage's operating performance during 1998.

(2) Represents an automobile allowance of $6,000.

OPTION GRANTS DURING FISCAL 1998

     Student Advantage did not grant any options or stock appreciation rights
during 1998 to either of the executive officers named in the Summary
Compensation Table.

OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUES

     Neither of the executive officers named in the Summary Compensation Table
exercised any options to purchase securities of Student Advantage during 1998 or
held any such options as of December 31, 1998.

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 November 30, 1999, 897,559 shares of
common stock had been issued upon exercise of options granted under the
Incentive Plan. As of that date, options to purchase 3,835,296 shares of common
stock at a weighted average exercise price of $6.66 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 November 30, 1999,
a total of 2,767,145 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

                                       45
<PAGE>   49

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. The Board of Directors has also
authorized the Stock Option Committee to grant options and make other awards
under the Incentive Plan to employees who are not officers in accordance with
guidelines adopted by the Board. Subject to any applicable limitations contained
in the Incentive Plan, the Board of Directors, the Compensation Committee, the
Stock Option 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 and
restricted stock agreements evidencing grants of Awards under the Incentive Plan
generally provide in the event of a change in control of Student Advantage for
the acceleration of the vesting of options and other stock-based Awards with
respect to the number of shares that would have vested on a monthly vesting
schedule through the date of the change in control and 50% of the remaining
unvested shares.

     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, which was approved by the stockholders in May 1999.
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 a 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.

                                       46
<PAGE>   50

     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 exercise 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
full months in the offering period by the closing market price of a share of
common stock on the first business day 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 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 contribution is fixed in Section 401(k) of the
Internal Revenue Code. The contribution limit for 1998 was $10,000. In April
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 the
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.

                                       47
<PAGE>   51

     In May 1999, Student Advantage entered into a letter agreement with Ronald
J. Kos and agreed to employ him as its Chief Operating Officer. Student
Advantage agreed to pay Mr. Kos an annual base salary of $150,000 and an annual
performance bonus with a target of $75,000, based upon the achievement of
certain performance objectives. We granted Mr. Kos options to purchase an
aggregate of 650,001 shares of common stock at an exercise price of $9.90 per
share. The options vest as to 25% of the shares on December 1, 1999 and as to an
additional 25% on each of May 3, 2001, May 3, 2002 and May 3, 2003. The option
agreements for Mr. Kos provide for the acceleration of vesting in the event of a
change in control of Student Advantage with respect to the number of shares that
would have vested on a monthly vesting schedule through the date of the change
in control and 50% of the remaining unvested shares. If, following a change in
control, the successor terminates the employment of Mr. Kos without cause,
vesting of the shares will accelerate in full.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

     The Compensation Committee of the Board of Directors consists of Messrs.
Kaiser, Katzman and Turtletaub, none 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
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.

                                       48
<PAGE>   52

                              CERTAIN TRANSACTIONS

EQUITY FINANCING

     On October 20, 1998, Greylock IX Limited Partnership and Marc J. Turtletaub
each purchased an aggregate of 625,000 preferred membership units (which
converted into 625,000 shares of Series A convertible preferred stock) for which
each of them paid $5.0 million. Greylock IX Limited Partnership and Mr.
Turtletaub purchased these membership units from certain members of Student
Advantage LLC, our predecessor LLC, including Messrs. Sozzi, Eichler, Siegel and
Liniado and Ms. Abegglen, each of whom is an executive officer of Student
Advantage, and The Main Quad, Inc. (now known as TMQ Ventures, Inc.), an entity
controlled by Mr. Myers, an executive officer of Student Advantage. Messrs.
Sozzi, Eichler, Siegel, Liniado and Turtletaub, Ms. Abegglen, The Main Quad and
Greylock IX Limited Partnership then exchanged the membership units held by each
of them for convertible preferred stock and common stock of Student Advantage.
On October 20, 1998, Student Advantage also sold 625,000 shares of convertible
preferred stock to each of Greylock IX Limited Partnership and Marc J.
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. On
June 23, 1999, all of these shares of convertible preferred stock were 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 the predecessor LLC for an aggregate purchase price of
$250,000. Mr. Katzman, a director of Student Advantage, is the President of
Princeton Review. In connection with this transaction, the predecessor LLC also:

     -  borrowed $75,000 and issued Princeton Review a convertible promissory
        note bearing interest at 8.5% per year, which was paid in September
        1997, and

     -  borrowed $100,000 and issued Princeton Review a secured promissory note
        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, which was repaid on October 23, 1998. In October 1998, Princeton
Review's remaining 981 membership units were converted into 1,450,587 shares of
common stock and 134,597 shares of convertible preferred stock (convertible into
403,791 shares of common stock).

     In October 1998, Mr. Sozzi entered into an agreement with Princeton Review
requiring Mr. Sozzi to purchase up to 78,125 shares of convertible 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 the 78,125 shares of convertible 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.

                                       49
<PAGE>   53

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 complete satisfaction of
its obligation to pay DML 35% of its earnings derived from that region. On
October 20, 1998 the balance of DML's total membership units were converted into
517,536 shares of common stock and 16,698 shares of convertible preferred stock
(convertible into 50,094 shares of common stock).

     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, for $272,000 in cash 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 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 The Main Quad an additional 480 membership units in satisfaction of
this obligation. The Main Quad's total membership units held as of October 20,
1998 were converted into 1,109,013 shares of common stock and 55,345 shares of
convertible preferred stock (convertible into 166,035 shares of common stock).
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. 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, on similar terms.

     Mr. Sozzi, the Chairman of the Board of Directors, President and Chief
Executive Officer of Student Advantage, loaned Student Advantage $400,000 on
April 21, 1998 at an interest rate of 3% per year, which was repaid 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,
and an executive officer of Student Advantage, $60,000 on February 9, 1998 at an
interest rate per year of approximately 6% per year, which was paid in late
1998. Mr. Siegel loaned Student Advantage $100,000 on April 21, 1998 without
interest, which was repaid on May 11, 1998.

     In January 1998, Ms. Abegglen, Vice President, Marketing Communications,
and an executive officer 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 a rate of 5% per year, was repaid in
December 1998.

     In December 1998, Student Advantage granted Christopher B. Andrews, Vice
President, Finance and Administration and an executive officer of Student
Advantage, 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. In
December 1998, Student Advantage also granted David M. Liniado, Vice President,
Campus Development, an option under the 1998 Stock Incentive Plan to purchase
90,000 shares of common stock at an exercise price of $0.33 per share. This
option vests as to 25% of shares on each of January 1, 2000, 2001, 2002 and
2003. The options granted to Messrs. Andrews and Liniado are immediately
exercisable in full, subject to repurchase by Student Advantage at the exercise
price upon termination of the executive officer's employment prior to vesting in
the shares. The option agreements for each of Messrs. Andrews and Liniado
provide for the acceleration of vesting in the

                                       50
<PAGE>   54

event of a change in control of Student Advantage with respect to the number of
shares that would have vested on a monthly vesting schedule through the date of
the change in control and 50% of the remaining unvested shares. If, following a
change in control, the successor terminates the employment of the executive
officer without cause or the executive officer terminates his employment for
certain reasons, vesting of the shares will accelerate in full.

     In October 1999, Student Advantage granted Mr. Myers, Executive Vice
President, Student and University Services of Student Advantage, options under
the 1998 Stock Incentive Plan to purchase an aggregate of 300,000 shares of
common stock at an exercise price of $12.25 per share. The options vest as to
25% of the shares on each of October 19, 2000, October 19, 2001, October 19,
2002 and October 19, 2003. The option agreements for Mr. Myers provide for the
acceleration of vesting in the event of a change in control of Student Advantage
with respect to the number of shares that would have vested on a monthly vesting
schedule through the date of the change in control and 50% of the remaining
unvested shares.

DISTRIBUTIONS TO MEMBERS OF PREDECESSOR LIMITED LIABILITY COMPANY

     During April 1998, the predecessor 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 predecessor LLC. These
LLC members included, among others, Mr. Sozzi, Mr. Eichler, Mr. Siegel,
Princeton Review, Ms. Abegglen, Mr. Liniado and The Main Quad. In November 1998,
Student Advantage distributed to the former members the remainder of the
predecessor LLC's 1997 taxable income (approximately $1,277,000). To the extent
Princeton Review's tax liability on the predecessor 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 agreed to
distribute to its former LLC members approximately 45% of the predecessor LLC's
1998 taxable income so that they can pay their tax liability with respect to the
1998 taxable income of the predecessor LLC for the period between January 1,
1998 and October 20, 1998, which was the date on which the predecessor LLC was
converted to a C Corporation. Student Advantage does not expect to make any such
distribution because it did not have taxable income in 1998.

                                       51
<PAGE>   55

                             PRINCIPAL STOCKHOLDERS

     The following table sets forth information regarding the beneficial
ownership of the common stock of Student Advantage as of October 31, 1999:

     -  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 of Student Advantage and each executive officer named in
        the Summary Compensation Table, 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. The
number of shares of common stock outstanding used in calculating the percentage
for each person listed includes the shares of common stock underlying options
held by such person that are exercisable within 60 days of October 31, 1999, but
excludes shares of common stock underlying options held by any other person.
Percentage of beneficial ownership is based on 35,213,559 shares of common stock
outstanding as of October 31, 1999.

<TABLE>
<CAPTION>
                                                                                   PERCENTAGE OF
                                                           SHARES BENEFICIALLY         COMMON
     NAME OF BENEFICIAL OWNER                                     OWNED          STOCK OUTSTANDING
     ------------------------                              -------------------   -----------------
<S>                                                              <C>                   <C>
     Raymond V. Sozzi, Jr................................         7,714,683              21.9%
     Greylock IX Limited Partnership(1)..................         3,750,000              10.6
     William S. Kaiser(1)................................         3,750,000              10.6
     Marc J. Turtletaub..................................         3,750,000              10.6
     Daniel G. Siegel....................................         2,225,912               6.3
     G. Todd Eichler.....................................         2,224,912               6.3
     Princeton Review Publishing, L.L.C.(2)..............         1,620,003               4.6
     John S. Katzman(2)..................................         1,620,003               4.6
     Mason L. Myers(3)...................................         1,335,048               3.8
     John M. Connolly(4).................................             5,000               *
     Charles E. Young(5).................................             2,632               *
     All executive officers and directors as a
       group (12 persons)(6).............................        23,791,897              67.0%
</TABLE>

---------------
 *   Less than 1%.

(1)  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 pecuniary interest therein. The
     address for Greylock IX Limited Partnership and Greylock IX GP Limited
     Partnership is One Federal Street, Boston, Massachusetts 02110.

(2)  Consists of 1,620,003 shares held of record by Princeton Review Publishing,
     L.L.C. Mr. Katzman is the President of Princeton Review Publishing. 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.

(3)  Includes 1,275,048 shares held of record by TMQ Ventures, Inc. (formerly
     known as The Main Quad, Inc.) Mr. Myers is a stockholder, director and a
     Co-President of TMQ Ventures, Inc. Mr. Myers shares investment and voting
     power with respect to these shares. Mr. Myers disclaim beneficial ownership
     of such shares, except to the extent of his pecuniary interest therein.
     Includes

                                       52
<PAGE>   56

     45,000 shares subject to options held by Mr. Myers, which are immediately
     exercisable in full. Any shares acquired upon exercise are subject to
     vesting over a four-year period and are subject to repurchase by Student
     Advantage at the exercise price upon termination of Mr. Myers' employment
     prior to vesting in the shares. In the event of a change in control of
     Student Advantage, vesting of the shares will accelerate in part. If,
     following a change in control, the successor terminates the employment of
     the executive officer without cause or the executive officer terminates his
     employment for certain reasons, vesting of the shares will accelerate in
     full.

(4)  Consists of 5,000 shares subject to presently exercisable options held by
     Mr. Connolly.

(5)  Consists of 2,632 shares subject to presently exercisable options held by
     Mr. Young.

(6)  Includes 297,632 shares subject to options held by the executive officers,
     which are immediately exercisable in full.

                                       53
<PAGE>   57

                                SELLING STOCKHOLDERS

     The selling stockholders are former stockholders of University Netcasting,
Inc., which we acquired on June 18, 1999. We issued a total of 2,438,875 shares
of common stock to the selling stockholders in connection with the acquisition
and agreed to register 50% of such shares under the Registration Statement of
which this prospectus constitutes a part. The following table sets forth, to the
knowledge of Student Advantage, certain information about the selling
stockholders as of November 30, 1999.

<TABLE>
<CAPTION>
                                         NUMBER OF SHARES OF                           NUMBER OF SHARES OF
                                            COMMON STOCK                                  COMMON STOCK
                                         BENEFICIALLY OWNED     NUMBER OF SHARES OF    BENEFICIALLY OWNED
                                              PRIOR TO             COMMON STOCK               AFTER
      NAME OF SELLING STOCKHOLDER          OFFERING(1)(2)         OFFERED HEREBY        OFFERING(1)(2)(3)
      ---------------------------        -------------------    -------------------    -------------------
<S>                                      <C>                    <C>                    <C>
iXL Enterprises, Inc.(4)...............        625,834                314,628                311,206
Stipa Investments, L.P.................        550,710                276,861                273,849
Brentwood Associates(5)................        371,200                186,616                184,584
Sorrento Ventures(6)...................        269,964                135,721                134,243
Richard B. Beedon(7)(8)................         94,762                 46,449                 48,313
William Patrick Battle.................         74,025                 37,215                 36,810
William R. Battle III(9)...............         74,025                 37,215                 36,810
Lawrence & Company.....................         71,590                 35,991                 35,599
Jeffrey Padnos(9)(10)..................         54,185                 27,241                 26,944
William Westrate.......................         48,481                 24,373                 24,108
Black Lake Group.......................         33,741                 16,963                 16,778
Winnico Holdings, Inc..................         30,845                 15,507                 15,338
SIP Investment, LLC....................         28,517                 14,337                 14,180
Douglas Padnos(10).....................         22,814                 11,470                 11,344
David Upton............................         19,963                 10,036                  9,927
Daniel Padnos(10)......................         17,110                  8,602                  8,508
Michael Shea...........................         10,932                  5,496                  5,436
Benjamin Padnos........................         10,683                  5,371                  5,312
Jay Kear(9)............................          8,883                  4,466                  4,417
B. Mason Flemming Jr...................          2,959                  1,488                  1,471
Roy W. Lessard.........................          2,959                  1,488                  1,471
Patina LLC.............................          1,234                    621                    613
J.F. Seyferth, Jr. Trust...............          1,140                    574                    566
Katheryn Fallon........................            833                    419                    414
Catherine Swormstedt...................            214                    108                    106
Ronald Inman(7)(11)....................          3,669                     80                  3,589
Benjamin Margoles(7)...................            159                     80                     79
Eric Crawford(7).......................             61                     31                     30
</TABLE>

---------------
 (1) Except as otherwise indicated, the number of shares beneficially owned is
     determined under the rules promulgated by the SEC, and the information is
     not necessarily indicative of beneficial ownership for any other purpose.
     The selling stockholders have sole voting and investment power with respect
     to all shares listed as owned by the selling stockholders. The number of
     shares listed for each stockholder as owned by such stockholder after the
     offering is fewer than 1% of the number of shares of common stock
     outstanding.

 (2) Of the total shares listed as owned by the selling stockholders, a total of
     230,622 shares are held in an escrow account to secure indemnification
     obligations to Student Advantage of the selling stockholders. It is
     expected that these shares (less any shares that may be distributed from
     the escrow account to Student Advantage in satisfaction of indemnification
     claims) will be released from escrow and distributed to the selling
     stockholders on June 18, 2000. The number of shares indicated as owned by
     each selling stockholder includes those shares (approximately 10% of the
     number of shares listed as beneficially owned by each selling stockholder)
     which such selling stockholder is entitled to receive upon distribution of
     these shares from the escrow account.

                                       54
<PAGE>   58

 (3) We do not know when or in what amounts a selling stockholder may offer
     shares for sale. The selling stockholders might not sell any of all of the
     shares offered by this prospectus. Because the selling stockholders may
     offer all or some of the shares pursuant to this offering, and because
     there are currently no agreements, arrangements or understandings with
     respect to the sale of any of the shares that will be held by the selling
     stockholders after completion of the offering, we cannot estimate the
     number of shares that will be held by the selling stockholders after
     completion of the offering. For purposes of this table, however, we have
     assumed that, after completion of the offering, none of the shares covered
     by this prospectus will be held by the selling stockholders.

 (4) U. Bertram Ellis, Jr., the Chairman and Chief Executive Officer of iXL
     Enterprises, Inc., is a former member of the Board of Directors of
     University Netcasting, Inc.

 (5) The number of shares listed as beneficially owned consists of 356,352
     shares of common stock held by Brentwood Associates VIII, L.P. and 14,848
     shares of common stock held by Brentwood Affiliates Fund, L.P. G. Bradford
     Jones, who may be deemed to beneficially own such shares, is a former
     member of the Board of Directors of University Netcasting, Inc.

 (6) The number of shares listed as beneficially owned consists of 34,056 shares
     of common stock held by Sorrento Ventures II, L.P., 100,569 shares of
     common stock held by Sorrento Ventures III, L.P., 58,057 shares of common
     stock held by Sorrento Ventures IV, L.P., 20,990 shares of common stock
     held by Sorrento Ventures CE, L.P., and 56,292 shares of common stock held
     by Sorrento Growth Partners I, L.P.

 (7) Employee or former employee of Student Advantage and/or University
     Netcasting. None of the other selling stockholders has held any position or
     office with, or has otherwise had a material relationship with, Student
     Advantage or any of its subsidiaries within the past three years.

 (8) Mr. Beedon is the former Chief Executive Officer of University Netcasting,
     Inc. and a former member of the Board of Directors of University
     Netcasting, Inc. The number of shares listed as beneficially owned includes
     2,369 shares of common stock issuable upon presently exercisable options.

 (9) Former member of the Board of Directors of University Netcasting, Inc.

(10) Does not include 33,741 shares of common stock held by the Black Lake
     Group, which Daniel Padnos, Douglas Padnos and Jeffrey Padnos may be deemed
     to beneficially own.

(11) The number of shares listed as beneficially owned includes 3,510 shares of
     common stock issuable upon presently exercisable options.

                                       55
<PAGE>   59

                          DESCRIPTION OF CAPITAL STOCK

     The authorized capital stock of Student Advantage consists of 150,000,000
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 November 30, 1999, there were
outstanding (1) 35,213,559 shares of common stock held by 139 stockholders of
record and (2) options to purchase an aggregate of 3,961,617 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 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.

     Under specified conditions and subject to customary exceptions, holders of
16,454,895 shares of common stock have demand registration rights with respect
to their shares of common stock (subject to the underwriter's lock-up
arrangement entered into by such holders in connection with our initial public
offering, which expires on December 15, 1999) to require us to register their
shares of common stock under the Securities Act, and they 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. Each of
these holders waived his or its right to participate in this registration of
securities.

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 BYLAW 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

                                       56
<PAGE>   60

"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 "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 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.

                                       57
<PAGE>   61

                              PLAN OF DISTRIBUTION

     The shares covered hereby may be offered and sold from time to time by the
selling stockholders, or by their pledgees, donees, transferees or other
successors in interest. The selling stockholders will act independently of
Student Advantage in making decisions with respect to the timing, manner and
size of each sale. Such sales may be made in the over-the-counter market or
otherwise, at prices and under terms then prevailing or at prices related to the
then current market price or in negotiated transactions, including pursuant to
one or more of the following methods:

     - purchases by a broker-dealer as principal and resale by such
       broker-dealer for its own account pursuant to this prospectus;

     - ordinary brokerage transactions and transactions in which the broker
       solicits purchasers;

     - block trades in which the broker-dealer so engaged will attempt to sell
       the shares as agent but may position and resell a portion of the block as
       principal to facilitate the transaction;

     - an over-the-counter distribution in accordance with the rules of the
       Nasdaq National Market; and

     - in privately negotiated transactions.

     To the extent required, this prospectus may be amended and supplemented
from time to time to describe a specific plan of distribution. In connection
with distributions of the shares or otherwise, the selling stockholders may
enter into hedging transactions with broker-dealers or other financial
institutions. In connection with such transactions, broker-dealers or other
financial institutions may engage in short sales of the common stock in the
course of hedging the positions they assume with selling stockholders. The
selling stockholders may also sell the common stock short and redeliver the
shares to close out such short positions. The selling stockholders may also
enter into option or other transactions with broker-dealers or other financial
institutions that require the delivery to such broker-dealer or other financial
institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such transaction). The selling
stockholders may also pledge shares to a broker-dealer or other financial
institution, and, upon a default, such broker-dealer or other financial
institution may effect sales of the pledged shares pursuant to this prospectus
(as supplemented or amended to reflect such transaction). In addition, any
shares that qualify for sale pursuant to Rule 144 may be sold under Rule 144
rather than pursuant to this prospectus.

     In effecting sales, broker-dealers or agents engaged by the selling
stockholders, or by their pledgees, donees, transferees or other successors in
interest, may arrange for other broker-dealers to participate. Broker-dealers or
agents may receive commissions, discounts or concessions from the selling
stockholders, or from their pledgees, donees, transferees or other successors in
interest, in amounts to be negotiated immediately prior to the sale.

     In offering the shares covered hereby, the selling stockholders, or their
pledgees, donees, transferees or other successors in interest, and any
broker-dealers and any other participating broker-dealers who execute sales for
the selling stockholders, may be deemed to be "underwriters" within the meaning
of the Securities Act in connection with such sales, and any profits realized by
the selling stockholders and the compensation of such broker-dealers may be
deemed to be underwriting discounts and commissions.

     In order to comply with the securities laws of certain states, if
applicable, the shares must be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states the
shares may not be sold unless they have been registered or qualified for sale in
the applicable state or an exemption from the registration or qualification
requirement is available and is complied with.

     We have advised the selling stockholders that the anti-manipulation rules
of Regulation M under the Exchange Act may apply to sales of shares in the
market and to the activities of the selling stockholders and their affiliates.
In addition, we will make copies of this prospectus available to the selling
stockholders for the purpose of satisfying the prospectus delivery requirements
of the Securities Act. The selling

                                       58
<PAGE>   62

stockholders may indemnify any broker-dealer that participates in transactions
involving the sale of the shares against certain liabilities, including
liabilities arising under the Securities Act.

     At the time a particular offer of shares is made, if required, a prospectus
supplement will be distributed that will set forth the number of shares being
offered and the terms of the offering, including the name of any underwriter,
dealer or agent, the purchase price paid by any underwriter, any discount,
commission and other item constituting compensation, any discount, commission or
concession allowed or reallowed or paid to any dealer, and the proposed selling
price to the public.

     We have agreed to indemnify the selling stockholders against certain
liabilities, including certain liabilities under the Securities Act.

     We have agreed with the selling stockholders to use our reasonable best
efforts to keep the Registration Statement of which this prospectus constitutes
a part effective until the earlier of (1) such time as all of the shares covered
by this prospectus have been disposed of pursuant to and in accordance with the
Registration Statement or (2) June 18, 2000.

                                 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.

                                    EXPERTS

     The audited financial statements included in this Prospectus have been
audited by PricewaterhouseCoopers LLP, independent accountants. The companies
and periods covered by these audits are indicated in the individual reports.
Such financial statements have been so included in reliance on the reports of
PricewaterhouseCoopers LLP given on 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 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.

                                       59
<PAGE>   63

                            STUDENT ADVANTAGE, INC.
                         INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                              PAGE
                                                              ----
<S>                                                           <C>
STUDENT ADVANTAGE, INC.
Report of Independent Accountants...........................   F-2
Consolidated Balance Sheet as of December 31, 1997 and 1998
  and as of September 30, 1999 (unaudited)..................   F-3
Consolidated Statement of Operations for the years ended
  December 31, 1996, 1997 and 1998 and the nine months ended
  September 30, 1998 and 1999 (unaudited)...................   F-4
Consolidated Statement of Changes in Redeemable Convertible
  Preferred Stock and Stockholders' Equity (Deficit) for the
  years ended December 31, 1996, 1997 and 1998 and the nine
  months ended September 30, 1999 (unaudited)...............   F-5
Consolidated Statement of Cash Flows for the years ended
  December 31, 1996, 1997 and 1998 and the nine months ended
  September 30, 1998 and 1999 (unaudited)...................   F-6
Notes to Consolidated Financial Statements..................   F-7

THE MAIN QUAD, INC.
Report of Independent Accountants...........................  F-21
Balance Sheet as of December 6, 1997........................  F-22
Statement of Operations for the period from January 1, 1997
  through December 6, 1997..................................  F-23
Statement of Changes in Stockholders' Deficit for the period
  from January 1, 1997 through December 6, 1997.............  F-24
Statement of Cash Flows for the period from January 1, 1997
  through December 6, 1997..................................  F-25
Notes to Financial Statements...............................  F-26

VOICE FX CORPORATION
Report of Independent Accountants...........................  F-29
Consolidated Balance Sheet as of December 31, 1997 and
  1998......................................................  F-30
Consolidated Statement of Operations for the years ended
  December 31, 1997 and 1998 and the nine months ended
  September 30, 1998 and 1999 (unaudited)...................  F-31
Consolidated Statement of Stockholders' Equity for the years
  ended December 31, 1997 and 1998 and the nine months ended
  September 30, 1999 (unaudited)............................  F-32
Consolidated Statement of Cash Flows for the years ended
  December 31, 1997 and 1998 and the nine months ended
  September 30, 1998 and 1999 (unaudited)...................  F-33
Notes to Consolidated Financial Statements..................  F-34

UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
Unaudited Pro Forma Combined Balance Sheet as of September
  30, 1999..................................................  F-42
Unaudited Pro Forma Combined Statement of Operations for the
  nine months ended September 30, 1999......................  F-43
Unaudited Pro Forma Combined Statement of Operations for the
  year ended December 31, 1998..............................  F-44
Notes to Unaudited Pro Forma Combined Financial
  Statements................................................  F-45
</TABLE>

                                       F-1
<PAGE>   64

                       REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders
  of Student Advantage, Inc.

     In our opinion, the accompanying consolidated balance sheets and the
related consolidated statements of operations, of changes in redeemable
convertible preferred stock and stockholders' equity (deficit) and of cash flows
present fairly, in all material respects, the financial position of Student
Advantage, Inc. and its subsidiaries at December 31, 1997 and 1998, and the
results of their operations and their 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.

                                            /s/ PRICEWATERHOUSECOOPERS LLP

                                            PricewaterhouseCoopers LLP

Boston, Massachusetts
June 11, 1999, except as to Note 13
  which is as of December 3, 1999

                                       F-2
<PAGE>   65

                            STUDENT ADVANTAGE, INC.

                           CONSOLIDATED BALANCE SHEET
                       (IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
                                                                  DECEMBER 31,
                                                              --------------------    SEPTEMBER 30,
                                                                1997        1998          1999
                                                              --------    --------    -------------
                                                                                       (UNAUDITED)
<S>                                                           <C>         <C>         <C>
                           ASSETS
Current assets
  Cash and cash equivalents.................................  $  5,806    $  6,140       $ 6,884
  Marketable securities.....................................        --          --        35,340
  Accounts receivable (net of allowance for doubtful
    accounts of $70 at December 31, 1997 and 1998)..........       481       3,209         6,347
  Prepaid expenses and other current assets.................       173         352         2,238
                                                              --------    --------       -------
    Total current assets....................................     6,460       9,701        50,809
Property and equipment, net.................................       369       1,386         2,333
Intangible and other assets, net............................       388         617         3,502
                                                              --------    --------       -------
    Total assets............................................  $  7,217    $ 11,704       $56,644
                                                              ========    ========       =======

LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND
  STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities
  Accounts payable..........................................  $    713    $  1,985       $ 2,421
  Accrued compensation......................................       362       1,095         1,001
  Other accrued expenses....................................       860       1,912         3,989
  Deferred revenue..........................................     5,970       7,064         8,295
  Note payable to stockholder...............................       225          --            --
                                                              --------    --------       -------
    Total current liabilities...............................     8,130      12,056        15,706
                                                              --------    --------       -------
Notes payable...............................................        --          --           100
                                                              --------    --------       -------
    Total liabilities.......................................     8,130      12,056        15,806
                                                              --------    --------       -------
Series A redeemable convertible preferred stock; $1 par
  value; Authorized:
  4,000,000 shares; Issued: 1,588,688, 2,952,568 and 0
  shares at December 31, 1997, 1998 and September 30, 1999
  (unaudited), respectively; Outstanding: 1,383,156,
  2,747,036 and 0 shares at December 31, 1997 and 1998 and
  September 30, 1999 (unaudited), respectively..............       111      10,196            --
Commitments and contingencies (Note 12).....................
Stockholders' equity (deficit)
  Common stock, $.01 par value; Authorized: 150,000,000
    shares; Issued:
    19,210,646, 20,746,255 and 34,804,247 at December 31,
    1997 and 1998 and September 30, 1999 (unaudited),
    respectively; Outstanding: 16,995,581, 18,531,190 and
    34,790,178 at December 31, 1997 and 1998 and September
    30, 1999 (unaudited), respectively......................       192         207           348
  Additional paid-in capital................................    12,180      18,944        81,936
  Accumulated deficit.......................................   (12,766)    (25,706)      (38,683)
  Treasury stock (at cost)..................................      (630)       (630)           (9)
  Deferred compensation.....................................        --      (3,363)       (2,754)
                                                              --------    --------       -------
    Total stockholders' equity (deficit)....................    (1,024)    (10,548)       40,838
                                                              --------    --------       -------
    Total liabilities, redeemable convertible preferred
       stock and stockholders' equity (deficit).............  $  7,217    $ 11,704       $56,644
                                                              ========    ========       =======
</TABLE>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.
                                       F-3
<PAGE>   66

                            STUDENT ADVANTAGE, INC.

                      CONSOLIDATED STATEMENT OF OPERATIONS
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                                    NINE MONTHS
                                                                                       ENDED
                                                YEAR ENDED DECEMBER 31,            SEPTEMBER 30,
                                              ----------------------------   -------------------------
                                               1996      1997       1998        1998          1999
                                              -------   -------   --------   -----------   -----------
                                                                             (UNAUDITED)   (UNAUDITED)
<S>                                           <C>       <C>       <C>        <C>           <C>
Revenue
  Subscription..............................  $ 1,093   $ 2,971   $  7,174     $ 5,868      $  6,194
  Other.....................................      745     1,844     12,186       7,842        12,127
                                              -------   -------   --------     -------      --------
     Total revenue..........................    1,838     4,815     19,360      13,710        18,321
                                              -------   -------   --------     -------      --------
Costs and expenses
  Cost of subscription revenue..............      543     2,628      2,442       1,666         1,989
  Cost of other revenue.....................      570       702      7,867       4,305         8,888
  Product development.......................    1,516     3,253      4,948       3,510         6,169
  Sales and marketing.......................      536     1,905      7,313       4,948         8,067
  General and administrative................    1,208     2,727      5,484       3,310         6,186
  Depreciation and amortization.............      107       351      1,155       1,094         1,126
  Stock-based compensation..................       --        --        808          --           837
                                              -------   -------   --------     -------      --------
     Total costs and expenses...............    4,480    11,566     30,017      18,833        33,262
                                              -------   -------   --------     -------      --------
Loss from operations........................   (2,642)   (6,751)   (10,657)     (5,123)      (14,941)
Interest income (expense), net..............        4       (77)       121          65           760
                                              -------   -------   --------     -------      --------
Net loss....................................  $(2,638)  $(6,828)  $(10,536)    $(5,058)     $(14,181)
                                              =======   =======   ========     =======      ========
Basic and diluted net loss per share........  $ (0.18)  $ (0.41)  $  (0.59)    $ (0.29)     $  (0.57)
                                              =======   =======   ========     =======      ========
Shares used in computing basic and diluted
  net loss per share........................   14,384    16,588     17,710      17,492        24,776
                                              =======   =======   ========     =======      ========
Unaudited pro forma basic and diluted net
  loss per share............................                      $  (0.46)    $ (0.23)     $  (0.47)
                                                                  ========     =======      ========
Shares used in computing unaudited pro forma
  basic and diluted net loss per share......                        22,772      21,785        29,877
                                                                  ========     =======      ========
</TABLE>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.
                                       F-4
<PAGE>   67

                            STUDENT ADVANTAGE, INC.

CONSOLIDATED STATEMENT OF CHANGES IN REDEEMABLE CONVERTIBLE PREFERRED STOCK AND
                         STOCKHOLDERS' EQUITY (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   11,663,814     $116       $ 2,119      $ (3,300)     $  --
Issuance of preferred and common
 stock, net of issuance costs........     340,129         13    4,161,852       42         2,438
Issuance of common stock upon
 cancellation of notes payable and
 accrued interest....................                              68,072        1           471
Issuance of common stock for
 services............................                              84,244        1           679
Exercise of common stock options.....                                 645       --             1
Net loss.............................                                                                   (2,638)
                                       ----------   --------   ----------     ----       -------      --------      -----
Balance, December 31, 1996...........   1,372,043         54   15,978,627      160         5,708        (5,938)        --
                                       ----------   --------   ----------     ----       -------      --------      -----
Issuance of preferred and common
 stock, net of issuance costs........     119,368         19    1,988,149       20         4,657
Issuance of common stock for
 services............................                              84,040        1           677
Issuance of preferred and common
 stock upon cancellation of notes
 payable.............................      27,440          5      407,181        4           836
Issuance of preferred and common
 stock in satisfaction of obligation
 to stockholder......................      32,792          9      353,405        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
Issuance of common stock warrant.....                                                        194
Net loss.............................                                                                   (6,828)
                                       ----------   --------   ----------     ----       -------      --------      -----
Balance, December 31, 1997...........   1,588,688        111   19,210,646      192        12,180       (12,766)      (630)
                                       ----------   --------   ----------     ----       -------      --------      -----
Issuance of preferred and common
 stock, net of issuance costs........   1,250,000     10,000      271,441        3         1,997           (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 upon cancellation of notes
 payable.............................      48,022         36      517,536        5           124
Issuance of common stock for
 services............................                              36,864       --           297
Exercise of common stock options.....                                  --       --             6
Distributions to stockholders........                                                                   (2,320)
Deferred compensation relating to
 grants of stock options.............                                                      4,171
Compensation relating to grants of
 stock options.......................
Net loss.............................                                                                  (10,536)
                                       ----------   --------   ----------     ----       -------      --------      -----
Balance, December 31, 1998...........   2,952,568     10,196   20,746,255      207        18,944       (25,706)      (630)
                                       ----------   --------   ----------     ----       -------      --------      -----
Exercise of common stock options and
 warrants (unaudited)................                             910,235        9           512
Issuance of common stock and common
 stock warrants in connection with
 the acquisition of Mentor
 Interactive, Inc. (unaudited).......                              18,056       --           299
Issuance of common stock in
 connection with the acquisition of
 Transaction Service Providers
 (unaudited).........................                             195,000        2           268          (443)
Issuance of common stock in initial
 public offering, net of issuance
 costs (unaudited)...................                           6,900,000       69        49,851
Conversion of preferred stock to
 common stock in connection with the
 initial public offering
 (unaudited).........................  (2,952,568)   (10,196)   6,026,043       61         9,505                      630
Issuance of common stock for services
 (unaudited).........................                               8,658       --           108
Issuance of common stock warrant
 (unaudited).........................                                                      2,221
Deferred compensation relating to
 grants of stock options
 (unaudited).........................                                                        228
Compensation relating to grants of
 stock options (unaudited)...........
Repurchase of 14,069 shares of common
 stock (unaudited)...................                                                                                  (9)
Adjustment to conform fiscal periods
 for University Netcasting, Inc.
 (unaudited).........................                                                                    1,647
Net loss (unaudited).................                                                                  (14,181)
                                       ----------   --------   ----------     ----       -------      --------      -----
Balance September 30, 1999
 (unaudited).........................          --   $     --   34,804,247     $348       $81,936      $(38,683)     $  (9)
                                       ==========   ========   ==========     ====       =======      ========      =====

<CAPTION>

                                                          TOTAL
                                                      STOCKHOLDERS'
                                         DEFERRED        EQUITY
                                       COMPENSATION     (DEFICIT)
                                       ------------   -------------
<S>                                    <C>            <C>
Balance, January 1, 1996.............    $    --         $(1,065)
Issuance of preferred and common
 stock, net of issuance costs........                      2,480
Issuance of common stock upon
 cancellation of notes payable and
 accrued interest....................                        472
Issuance of common stock for
 services............................                        680
Exercise of common stock options.....                          1
Net loss.............................                     (2,638)
                                         -------         -------
Balance, December 31, 1996...........         --             (70)
                                         -------         -------
Issuance of preferred and common
 stock, net of issuance costs........                      4,677
Issuance of common stock for
 services............................                        678
Issuance of preferred and common
 stock upon cancellation of notes
 payable.............................                        840
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
Issuance of common stock warrant.....                        194
Net loss.............................                     (6,828)
                                         -------         -------
Balance, December 31, 1997...........         --          (1,024)
                                         -------         -------
Issuance of preferred and common
 stock, net of issuance costs........                      1,916
Issuance of preferred and common
 stock in connection with the
 acquisition of The Main Quad........                        176
Issuance of preferred and common
 stock upon cancellation of notes
 payable.............................                        129
Issuance of common stock for
 services............................                        297
Exercise of common stock options.....                          6
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.............................                    (10,536)
                                         -------         -------
Balance, December 31, 1998...........     (3,363)        (10,548)
                                         -------         -------
Exercise of common stock options and
 warrants (unaudited)................                        521
Issuance of common stock and common
 stock warrants in connection with
 the acquisition of Mentor
 Interactive, Inc. (unaudited).......                        299
Issuance of common stock in
 connection with the acquisition of
 Transaction Service Providers
 (unaudited).........................                       (173)
Issuance of common stock in initial
 public offering, net of issuance
 costs (unaudited)...................                     49,920
Conversion of preferred stock to
 common stock in connection with the
 initial public offering
 (unaudited).........................                     10,196
Issuance of common stock for services
 (unaudited).........................                        108
Issuance of common stock warrant
 (unaudited).........................                      2,221
Deferred compensation relating to
 grants of stock options
 (unaudited).........................       (228)             --
Compensation relating to grants of
 stock options (unaudited)...........        837             837
Repurchase of 14,069 shares of common
 stock (unaudited)...................                         (9)
Adjustment to conform fiscal periods
 for University Netcasting, Inc.
 (unaudited).........................                      1,647
Net loss (unaudited).................                    (14,181)
                                         -------         -------
Balance September 30, 1999
 (unaudited).........................    $(2,754)        $40,838
                                         =======         =======
</TABLE>

                   See Note 1 for information on stock split.
  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                       F-5
<PAGE>   68

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

<TABLE>
<CAPTION>
                                                                                                 NINE MONTHS ENDED
                                                                YEAR ENDED DECEMBER 31,            SEPTEMBER 30,
                                                              ----------------------------   -------------------------
                                                               1996      1997       1998        1998          1999
                                                              -------   -------   --------   -----------   -----------
                                                                                             (UNAUDITED)   (UNAUDITED)
<S>                                                           <C>       <C>       <C>        <C>           <C>
Cash flows from operating activities:
 Net loss...................................................  $(2,638)  $(6,828)  $(10,536)    $(5,058)     $(14,181)
 Adjustments to reconcile net loss to net cash provided by
   (used for) operating activities:
   Depreciation and amortization............................      107       351      1,155         861           909
   Reserve for bad debts....................................       --        70         --          --           130
   Amortization of discount on notes payable to
     stockholders...........................................       --       121         --          --            --
   Compensation expense relating to issuance of equity......       --        --        808          --           837
   Interest expense on notes payable to stockholders
     exchanged for stock....................................       --        11         --          --            --
   Issuance of stock in exchange for services...............      680       678        297         233           108
   Amortization of marketing expense associated with common
     stock warrant..........................................       --        --         --          --           220
   Changes in assets and liabilities:
     Accounts receivable....................................      (54)     (354)    (2,728)     (4,976)       (3,269)
     Prepaid expenses, other current assets and other
       assets...............................................       22      (128)      (169)       (501)       (1,886)
     Accounts payable.......................................      (29)      316      1,271       1,733           436
     Accrued compensation...................................       --       273        733         607           (94)
     Accrued expenses.......................................      (60)      648        854         547         2,077
     Deferred revenue.......................................       93     5,694      1,094       1,221         1,231
                                                              -------   -------   --------     -------      --------
     Net cash provided by (used for) operating activities...   (1,879)      852     (7,221)     (5,333)      (13,482)
                                                              =======   =======   ========     =======      ========
Cash flows from investing activities:
 Purchases of fixed assets..................................      (79)     (357)    (1,332)     (1,113)       (1,430)
 Acquisitions of businesses for cash and common stock.......     (135)     (429)      (655)       (655)       (1,199)
 Purchase of marketable securities..........................       --        --         --          --       (44,283)
 Proceeds from sale of marketable securities................       --        --         --          --         8,943
 Proceeds from sale of fixed assets.........................       --        --         --          --            16
                                                              -------   -------   --------     -------      --------
     Net cash used for investing activities.................     (214)     (786)    (1,987)     (1,768)      (37,953)
                                                              =======   =======   ========     =======      ========
Cash flows from financing activities:
 Proceeds from sale of preferred and common stock, net of
   issuance costs...........................................    2,493     4,696     11,916       2,000        49,920
 Proceeds from borrowings under line of credit..............      (70)       --         --       1,262            --
 Repayment of note from stockholder.........................       --        --        165          --            --
 Proceeds from exercise of common stock options and
   warrants.................................................        1        --          6           6           521
 Proceeds form issuance of common stock warrants............       --       194         --          --            --
 Note payable...............................................       --        --         --          --           100
 Proceeds from long-term debt...............................       --        39         --          --            --
 Proceeds from short-term debt -- related party.............      324       989      1,410       1,450            --
 Repayment of short-term debt -- related party..............       --      (250)    (1,635)       (700)           --
 Repurchase of common and preferred stock...................       --      (630)        --          --            (9)
 Distributions to stockholders..............................       --        --     (2,320)     (1,043)           --
                                                              -------   -------   --------     -------      --------
     Net cash provided by financing activities..............    2,748     5,038      9,542       2,975        50,532
                                                              =======   =======   ========     =======      ========
Adjustment to conform fiscal period of University
 Netcasting, Inc............................................       --        --         --          --         1,647
Net increase (decrease) in cash and cash equivalents........      655     5,104        334      (4,126)          744
                                                              -------   -------   --------     -------      --------
Cash and cash equivalents, beginning of period..............       47       702      5,806       5,806         6,140
                                                              -------   -------   --------     -------      --------
Cash and cash equivalents, end of period....................  $   702   $ 5,806   $  6,140     $ 1,680      $  6,884
                                                              =======   =======   ========     =======      ========
Supplemental Disclosure of Cash Flow Information:
Cash paid during the year for interest......................  $     1   $    28   $     87     $    --      $     --
                                                              =======   =======   ========     =======      ========
Cash paid during the year for taxes.........................  $    --   $     1   $      1     $    --      $     --
                                                              =======   =======   ========     =======      ========
</TABLE>

                                       F-6
<PAGE>   69

                            STUDENT ADVANTAGE, INC.

                   NOTES TO CONSOLIDATED 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 sites 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 company. In October 1998, Student
Advantage LLC effected a recapitalization pursuant to which each of the 10,911
outstanding Members' Interests converted into 137 Preferred Members' Interests
and 1,479 Common Members' Interests, (or an aggregate of 1,497,036 Preferred
Members' Interests and 16,133,892 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 $25.7
million. Such losses and accumulated deficit resulted primarily from significant
costs incurred in the development of the Company's products and services and the
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.

     In May 1999, the Company increased the number of authorized shares of
common stock to 50,000,000. On April 5, 1999, the Company declared a 3-for-1
stock split in the form of a stock dividend, which was effective on May 21,
1999. All periods presented have been restated to reflect the stock dividend.

     Subsequent to December 31, 1998, the Company acquired University
Netcastings, Inc., ("UNI") an Internet-based sports media company that provides
branded, interactive information and programming to college sports enthusiasts.
UNI's world wide web sites deliver real-time, in-depth sports content and
programming. This acquisition was accounted for as a pooling of interests and
accordingly, the historical financial statements of the Company prior to the
acquisition have been restated to include UNI's financial position, results of
operations and cash flows (see note 13).

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

  Principles of Consolidation

     The consolidated financial statements include the accounts of Student
Advantage, Inc. and its wholly-owned subsidiaries. All intercompany balances and
transactions have been eliminated in consolidation.

                                       F-7
<PAGE>   70
                            STUDENT ADVANTAGE, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

  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.

  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 sites. 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. Certain advertising arrangements include
guarantees of a minimum number of impressions. For arrangements with guarantees,
revenue is recognized based upon the lesser of: 1) ratable recognition over the
period the advertising is displayed, provided that no significant Company
obligations remain and collection of the revenues is probable, or 2) a pro-rata
portion of contract revenue based upon impressions delivered relative to minimum
guaranteed impressions to be delivered. 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 other businesses. 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 49% and 61% of total
revenue, respectively. At December 31, 1997, five customers accounted for 56% of
accounts receivable, and at December 31, 1998, one customer accounted for 60% of
accounts receivable.

  Product Development

     Costs incurred in product development by Student Advantage are expensed as
incurred.

                                       F-8
<PAGE>   71
                            STUDENT ADVANTAGE, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

  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.

  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 $210,000, $468,000 and $824,000 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.

  Cash Flow Information

     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.

     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.

                                       F-9
<PAGE>   72
                            STUDENT ADVANTAGE, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

     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.

  Unaudited Interim Financial Data

     The interim financial data as of September 30, 1999 and for the nine months
ended September 30, 1998 and 1999 have been derived from unaudited consolidated
financial statements of the Company. Management believes the Company's unaudited
consolidated financial statements have been prepared on the same basis as the
audited consolidated financial statements and include all adjustments,
consisting only of normal recurring adjustments, necessary for a fair
presentation of the financial position and results of operations for such
periods. Results for the nine months ended September 30, 1998 and September 30,
1999 have not been audited and are not necessarily indicative of results to be
expected for the full fiscal year.

  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 (see note 11).

  Reclassification

     Certain prior year amounts have been reclassified to conform to current
year presentation.

  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 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 did not
affect 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 did 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 did 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,

                                      F-10
<PAGE>   73
                            STUDENT ADVANTAGE, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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, 2000. Student Advantage does not expect the adoption of SFAS No. 133 to have
a material effect on its financial position or results of operations. On July 7,
1999, the FASB issued SFAS 137, "Accounting for Derivative Instruments and
Hedging Activities - Deferral of the Effective Date of FASB Statement No. 133 -
an amendment to FASB Statement No. 133." SFAS 133, as amended by SFAS 137, is
effective for Student Advantage's fiscal year ending December 31, 2001.

     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
purchased 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

     For acquisitions accounted for under the purchase method, 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. This acquisition was
accounted for under the purchase method of accounting; accordingly, the
operating results of Passport 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.

     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. This
acquisition was accounted for under the purchase method of accounting;
accordingly, the operating results of The Main Quad have been included in
Student Advantage's financial statements since the date of acquisition.

                                      F-11
<PAGE>   74
                            STUDENT ADVANTAGE, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

     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. This acquisition has been accounted for
under the purchase method of accounting; 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. This acquisition was accounted for under the purchase method of
accounting; accordingly, the operating results of Collegiate Advantage have been
included in Student Advantage's financial statements since January 1, 1998. 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...............................................           $ 9,664
Net loss..................................................           $(6,971)
Net loss per common share:
  Basic and diluted.......................................           $ (0.42)
</TABLE>

     On April 1, 1999, Student Advantage completed its acquisitions of The
Travel Holding Group, LLC and The Campus Agency, LLC in exchange for a
promissory note in the amount of $330,000. 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; accordingly, the results
of operations of each company have been included in Student Advantage's results
beginning on the acquisition date. Goodwill and other intangible assets in the
aggregate amount of $305,000 were recorded in connection with these acquisitions
and will be amortized over three years.

     On May 27, 1999, Student Advantage acquired substantially all of the assets
of Mentor Interactive Corp., a provider of Internet-based research tools and
related materials, in exchange for 18,056 shares of common stock and a warrant
to purchase 24,000 shares of common stock at a purchase price of $11.08 per
share with an aggregate estimated fair value of approximately $300,000. This
acquisition has been accounted for under the purchase method of accounting;
accordingly, the results of Mentor Interactive Corp. have been included in
Student Advantage's results beginning on the acquisition date. Goodwill and
other intangible assets in the aggregate of $312,000 were recorded with the
acquisition and are being amortized over a three year period.

     On June 11, 1999, Student Advantage acquired Transaction Service Providers,
Inc., a provider of debit card services to college students and local merchants.
This acquisition has been accounted for using the pooling of interests method;
because the historical results of operations and financial position of
Transaction Service Providers were immaterial to Student Advantage, prior period
financial statements have not be restated. Accordingly, Transaction Service
Providers' results of operations have been included in Student Advantage's

                                      F-12
<PAGE>   75
                            STUDENT ADVANTAGE, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

results as of April 1, 1999. In connection with the acquisition, Student
Advantage issued 195,000 shares of common stock to the stockholders of
Transaction Service Providers.

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......................................  $ 36    $   73
Computer equipment and software.............................   477     1,097
Equipment...................................................   117       238
Leasehold improvements......................................    20       412
                                                              ----    ------
                                                               650     1,820
Less: Accumulated depreciation and amortization.............   281       434
                                                              ----    ------
                                                              $369    $1,386
                                                              ====    ======
</TABLE>

     Depreciation and amortization expense with respect to property and
equipment for the years ended December 31, 1996, 1997 and 1998 was $73,000,
$132,000 and $315,000, 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 (7.40% at September 30, 1999), and expires in June 2000.

6.  PREFERRED STOCK

     Prior to the conversion of the Series A preferred stock upon the closing of
the Company's initial public offering ("IPO") (see Note 13), the Series A
preferred stockholders had the the following rights and privileges:

  Voting Rights

     Each holder of the Series A preferred stock was entitled to a number of
votes equal to the number of shares of common stock into which each share of
such stock was then convertible. With respect to the election of directors, the
Series A preferred stockholders, voting as a single class, could have elected
two directors.

                                      F-13
<PAGE>   76
                            STUDENT ADVANTAGE, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

  Conversion

     Each share of Series A preferred stock was 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 automatically converted
into three shares of common stock upon the closing of the Company's IPO on June
23, 1999 (see note 13).

  Dividend Rights

     The Series A preferred stockholders were not entitled to receive any
dividends unless declared by Student Advantage's Board of Directors. In the
event that dividends were paid on the common stock, the Series A preferred
stockholders were 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 was convertible.

  Liquidation Preferences

     In the event of any liquidation, dissolution or winding up of Student
Advantage, the Series A preferred stockholders were 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
were payable had such shares been converted to common stock just prior to
liquidation. Any assets remaining following the initial distribution to the
preferred stockholders would have been 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 would have redeemed the then
outstanding shares of Series A preferred stock from each holder that requested
redemption. Upon redemption, each holder of the Series A would have been
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 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 150,000,000.

8.  STOCK AWARD PLANS

  1995 Stock Option Plan

     In 1995, the Board of Directors of UNI adopted the 1995 Stock Option Plan
(the 1995 Plan) authorizing the issuance of incentive and non-qualified options
and UNI common stock to select employees and non-employees. Options granted
under the 1995 Plan expire in ten years or less. The vesting terms were set by
the

                                      F-14
<PAGE>   77
                            STUDENT ADVANTAGE, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1995 Plan's administrator, and were generally established with monthly vesting
over periods of four years, including cliff vesting at the end of the first year
of 25%. Stock option activity under this plan is reflected in the table below.

  1996 Stock Option Plan

     In 1996, the Board of Directors of UNI adopted the 1996 Stock Option Plan
(the 1996 Plan) authorizing the issuance of incentive and non-qualified stock to
eligible employees. Options granted under the 1996 Plan expire in ten years or
less. The vesting terms were set by the 1996 Plan's administrator, and are
generally established with monthly vesting over a four-year period and cliff
vesting at the end of the first year of 25%. Stock option activity under this
plan is reflected in the table below.

  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.

     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 the Company's option grants been
determined based on the fair value at the date of grant consistent with the
method prescribed by SFAS No. 123, 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,
                                                            ---------------------------------------
                                                               1996          1997          1998
                                                            ----------    ----------    -----------
                                                             (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                                         <C>           <C>           <C>
Net loss:
     As reported..........................................   $(2,638)      $(6,828)      $(10,536)
     Pro forma............................................    (2,641)       (6,834)       (10,574)
Basic and diluted net loss per share:
     As reported..........................................     (0.18)        (0.41)         (0.59)
     Pro forma............................................     (0.18)        (0.41)         (0.60)
</TABLE>

     Because the determination of the fair value of all options granted after
Student Advantage completed its IPO 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 years ended December 31, 1996, 1997 and 1998: no
dividend yield; risk free interest rates of 5.5%, 5.5% and 4.54%, respectively;
no volatility; and an expected option term of 7.1, 7.9 and 4 years,
respectively.

                                      F-15
<PAGE>   78
                            STUDENT ADVANTAGE, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

     Stock option activity under the Company's option plans since January 1,
1996 is as follows:

<TABLE>
<CAPTION>
                                                              OUTSTANDING OPTIONS
                                     ---------------------------------------------------------------------
                                             1996                    1997                    1998
                                     ---------------------   ---------------------   ---------------------
                                                 WEIGHTED-               WEIGHTED-               WEIGHTED-
                                                  AVERAGE                 AVERAGE                 AVERAGE
                                      NUMBER     EXERCISE     NUMBER     EXERCISE     NUMBER     EXERCISE
                                     OF SHARES     PRICE     OF SHARES     PRICE     OF SHARES     PRICE
                                     ---------   ---------   ---------   ---------   ---------   ---------
<S>                                  <C>         <C>         <C>         <C>         <C>         <C>
Outstanding -- beginning of year...   17,703       $1.05      30,320       $1.05        39,842     $2.50
  Granted, at fair value...........   13,764        1.05      13,373        5.70        37,206      4.27
  Granted, at below fair value.....       --          --          --          --     2,313,000      0.33
  Exercised........................     (645)       1.05          --          --        (1,124)     5.70
  Canceled.........................     (502)       1.05      (3,851)       2.24       (13,851)     3.94
                                      ------                  ------                 ---------
Outstanding December 31,...........   30,320       $1.05      39,842       $2.50     2,375,073     $0.41
                                      ======       =====      ======       =====     =========     =====
Exercisable at December 31,........   11,180       $1.05      24,222       $1.91       485,951     $0.49
                                      ======       =====      ======       =====     =========     =====
</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>
             OPTIONS OUTSTANDING                         OPTIONS EXERCISABLE
----------------------------------------------   ------------------------------------
   NUMBER                                            NUMBER OF
OUTSTANDING      WEIGHTED                             SHARES
   AS OF         AVERAGE                         EXERCISABLE AS OF   WEIGHTED AVERAGE
DECEMBER 31,    REMAINING     WEIGHTED AVERAGE     DECEMBER 31,          EXERCISE
    1998       LIFE (YEARS)    EXERCISE PRICE          1998               PRICE
------------   ------------   ----------------   -----------------   ----------------
<S>            <C>            <C>                <C>                 <C>
    11,470         6.2             $0.89               10,904             $0.89
    12,616         6.4             $1.45               11,500             $1.45
    31,443         8.6             $4.27                9,111             $4.27
     6,544         7.6             $5.70                3,901             $5.70
 2,313,000         9.3             $0.33              450,535             $0.33
 ---------                                            -------
 2,375,073         9.3             $0.41              485,951             $0.49
 =========                                            =======
</TABLE>

  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.

  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

                                      F-16
<PAGE>   79
                            STUDENT ADVANTAGE, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

grant, while compensation related to options which vest over time was recorded
as a component of stockholders' equity (deficit) and is being amortized over the
vesting periods of the related options.

9.  INCOME TAXES

     Deferred tax assets are comprised of the following (in thousands):

<TABLE>
<CAPTION>
                                                                         DECEMBER 31,
                                                                      ------------------
                                                                       1997       1998
                                                                      -------    -------
<S>                                                                   <C>        <C>
          Deferred tax assets:
               Deferred revenue.....................................  $    --    $ 2,400
               Start up costs.......................................      257        154
               Net operating loss carryforwards.....................    3,028      5,782
               Non current assets...................................       --        200
               Accruals.............................................       --        300
               Deferred compensation................................       --        300
               Other................................................       45        165
                                                                      -------    -------
                    Total deferred tax assets.......................    3,330      9,301
          Deferred tax asset valuation allowance....................   (3,330)    (9,301)
                                                                      -------    -------
                                                                      $    --    $    --
                                                                      =======    =======
</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, 1997 and 1998, the Company has a net operating loss
carryforward for federal and state purposes of approximately $13.2 million and
$10.6 million which expire 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.

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.

                                      F-17
<PAGE>   80
                            STUDENT ADVANTAGE, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

11.  COMPUTATION OF NET LOSS PER SHARE AND PRO FORMA NET LOSS PER SHARE

     The following table reconciles the numerator and denominator of the basic
and diluted net loss per share and the pro forma basic and diluted net loss per
share (unaudited) computations shown on the consolidated statements of
operations.

<TABLE>
<CAPTION>
                                                         (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                                                                  FOR THE NINE MONTHS
                                                      FOR THE YEARS ENDED                ENDED
                                                          DECEMBER 31,               SEPTEMBER 30,
                                                  ----------------------------    -------------------
                                                   1996      1997       1998       1998        1999
                                                  -------   -------   --------    -------    --------
                                                                                      (UNAUDITED)
<S>                                               <C>       <C>       <C>         <C>        <C>
Basic and diluted net loss per share:
Net loss........................................  $(2,638)  $(6,828)  $(10,536)   $(5,058)   $(14,181)
Basic and diluted weighted average common shares
  outstanding...................................   14,384    16,588     17,710     17,492      24,776
Basic and diluted net loss per share............  $ (0.18)  $ (0.41)  $  (0.59)   $ (0.29)   $  (0.57)
                                                  =======   =======   ========    =======    ========
Pro forma basic and diluted net loss per share
  (unaudited):
Net loss........................................                      $(10,536)   $(5,058)   $(14,181)
Shares attributable to common stock, excluding
  effects of preferred stock conversion.........                        17,710     17,492      21,636
Shares attributable to the assumed conversion of
  preferred stock upon closing of the initial
  public offering...............................                         5,062      4,293       8,241
                                                                      --------    -------    --------
Pro forma basic and diluted weighted average
  shares outstanding............................                        22,772     21,785      29,877
                                                                      ========    =======    ========
Pro forma basic and diluted net loss per
  share.........................................                      $  (0.46)   $ (0.23)   $  (0.47)
                                                                      ========    =======    ========
</TABLE>

     All outstanding options and warrants to purchase common stock were excluded
from the calculation of diluted earnings per share for all periods presented
because their inclusion would have been anti-dilutive.

12.  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, totaled
approximately $71,000, $342,000 and $914,000, respectively.

                                      F-18
<PAGE>   81
                            STUDENT ADVANTAGE, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

     Future minimum lease payments under noncancelable operating leases at
December 31, 1998 are as follows (in thousands):

<TABLE>
<CAPTION>
                                                                        OPERATING
                                                                         LEASES
                                                                        ---------
<S>                                                                      <C>
          1999........................................................   $  941
          2000........................................................      829
          2001........................................................      496
          2002........................................................      437
          2003........................................................      437
          Thereafter..................................................      238
                                                                         ------
          Total minimum lease payments................................   $3,378
                                                                         ======
</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.

  CollegeClub.com Action (Unaudited)

     On August 3, 1999, Student Advantage, Inc. filed an action in the United
States District Court for the Southern District of New York against
CollegeClub.com, alleging among other things, that CollegeClub.com has committed
false advertising, unfair competition, and tortious interference with contract
in connection with, CollegeClub.com's promotion and marketing of its services,
including but not limited to the Discount Directory in its Web site. Student
Advantage seeks monetary damages and equitable relief, including a preliminary
and permanent injunction. As part of its response, CollegeClub.com has filed
counterclaims against Student Advantage alleging similar conduct on the part of
Student Advantage. CollegeClub.com seeks monetary damages and equitable relief,
including injunctive relief. Student Advantage plans to vigorously oppose the
counterclaims alleged by CollegeClub.com and believes it has meritorious
defenses to each such counterclaim.

13.  SUBSEQUENT EVENTS

     On June 18, 1999, Student Advantage acquired all of the outstanding stock
of UNI in exchange for 2,438,875 shares of Student Advantage common stock and
the conversion of all UNI outstanding common stock options for options to
purchase 66,634 shares of Student Advantage common stock. UNI is a leading
operator of official athletic Web sites for colleges, universities and college
sports associations. Through its FANSonly Network, UNI provides sports fans with
comprehensive online information and analysis on college sports. This
acquisition was accounted for using the pooling of interests method;
accordingly, the historic consolidated financial statements of Student Advantage
prior to the acquisition have been restated to reflect the financial position,
results of operations and cash flows of UNI.

     Effective June 18, 1999, UNI's fiscal year end changed from March 31 to
December 31 to conform to Student Advantage's year end. UNI's results of
operations for the years ended March 31, 1997, 1998 and 1999 have been included
in Student Advantage's December 31, 1996, 1997 and 1998 results, respectively.
UNI's results for the nine months ended December 31, 1998 have been included in
Student Advantage's nine months ended September 30, 1998 results. Accordingly,
UNI's operations for the three months ended March 31, 1999 will be included in
Student Advantage's results for both the years ended December 31, 1998 and 1999
(when presented). Revenue and net loss for UNI for the three months ended March
31, 1999 were $682,000 and $1.6 million, respectively. This net loss has been
reported as an adjustment to the consolidated accumulated deficit.

                                      F-19
<PAGE>   82
                            STUDENT ADVANTAGE, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

     The following is a reconciliation of revenues and net loss previously
reported by Student Advantage for the years ended December 31, 1996, 1997 and
1998 and for the nine months ended September 30, 1998 and 1999, with the
combined amounts currently presented in the consolidated financial statements
for those periods (in thousands):

<TABLE>
<CAPTION>
                                                    FOR THE YEAR ENDED DECEMBER 31,
                       -----------------------------------------------------------------------------------------
                                  1996                           1997                           1998
                       ---------------------------   ----------------------------   ----------------------------
                         SA       UNI     COMBINED     SA        UNI     COMBINED     SA        UNI     COMBINED
                       ------   -------   --------   -------   -------   --------   -------   -------   --------
<S>                    <C>      <C>       <C>        <C>       <C>       <C>        <C>       <C>       <C>
Revenues.............  $1,730   $   108   $ 1,838    $ 3,792   $ 1,023   $ 4,815    $17,443   $ 1,917   $ 19,360
     Net loss........  $ (657)  $(1,981)  $(2,638)   $(3,152)  $(3,676)  $(6,828)   $(5,115)  $(5,421)  $(10,536)
</TABLE>

<TABLE>
<CAPTION>
                                                        FOR THE NINE MONTHS ENDED SEPTEMBER 30,
                                              -----------------------------------------------------------
                                                          1998                           1999
                                              ----------------------------   ----------------------------
                                                SA        UNI     COMBINED     SA        UNI     COMBINED
                                              -------   -------   --------   -------   -------   --------
                                                                      (UNAUDITED)
<S>                                           <C>       <C>       <C>        <C>       <C>       <C>
Revenues....................................  $12,476   $ 1,234   $13,710    $16,729   $ 1,592   $ 18,321
     Net loss...............................  $(1,284)  $(3,774)  $(5,058)   $(8,948)  $(5,233)  $(14,181)
</TABLE>

     On June 23, 1999, the Company completed an IPO of 6,000,000 shares of
common stock resulting in net proceeds of approximately $44.6 million. Upon
closing of the IPO, each outstanding share of redeemable convertible preferred
stock converted into shares of common stock at a three to one ratio. On July 21,
1999, an additional 900,000 shares of common stock were issued by the Company as
a result of the full exercise of the underwriters' over-allotment option. The
Company received additional net proceeds of $6.7 million as a result of the
exercise.

     On July 21, 1999, Student Advantage entered into a marketing agreement with
Lycos, Inc. In connection with the transaction, Lycos was granted a warrant (the
"Lycos warrant") to purchase 550,000 shares of Student Advantage common stock at
a price of $10.875 per share. The Lycos warrant terminates on July 21, 2002 and
is exercisable on or after July 21, 2000. The Company has valued the Lycos
warrant at $2.2 million, which is included in other assets, and which will be
recognized as a sales and marketing expense on a straight-line basis over the
thirty-month term of the marketing agreement.

     On October 7, 1999, Student Advantage acquired Voice FX Corporation, a
leading provider of internet and interactive voice response services to college
and university registrars. In connection with the acquisition, Student Advantage
paid approximately $1.1 million in cash, issued 430,082 shares of Student
Advantage common stock and agreed to assumed all outstanding options to purchase
Voice FX common stock through issuing 59,687 options to purchase common stock.
The acquisition will be accounted for under the purchase method of accounting;
accordingly, Voice FX's results of operations will be included in Student
Advantage's results of operations beginning on the acquisition date. Goodwill
and other intangible assets in the aggregate amount of $6.3 million will be
recorded in connection with the acquisition and will be amortized on a straight-
line basis over expected useful lives of between three and five years.

     On November 12, 1999, Student Advantage made an equity investment in
edu.com, Inc., a privately held e-commerce company. Student Advantage paid
approximately $4.3 million in exchange for approximately 922,000 shares of
Series B preferred stock. Student Advantage will record its investment in
edu.com on the cost basis of accounting. Additionally, Student Advantage entered
into a two-year marketing and distribution agreement with edu.com. The terms of
this agreement provide, among other things, that edu.com will become Student
Advantage's exclusive technology e-commerce partner and rewards program
provider, the parties will pursue certain promotional initiatives on each
other's behalf, and edu.com will make certain payments to Student Advantage
including $2.0 million payable over the term of the agreement.

                                      F-20
<PAGE>   83

                       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-21
<PAGE>   84

                              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-22
<PAGE>   85

                              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-23
<PAGE>   86

                              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-24
<PAGE>   87

                              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-25
<PAGE>   88

                              THE MAIN QUAD, INC.

                         NOTES TO FINANCIAL STATEMENTS

1.  NATURE OF THE BUSINESS

     The Main Quad, Inc. ("TMQ") 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

     TMQ 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 TMQ to concentration of
credit risk include accounts receivable. TMQ 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>

     Depreciation and amortization expense totaled $28,582 for the period from
January 1, 1997 through December 6, 1997.


                                      F-26
<PAGE>   89
                              THE MAIN QUAD, INC.

                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)

4.  BORROWINGS

     TMQ's borrowings consist of the following at December 6, 1997:

<TABLE>
<CAPTION>
                                                                        DECEMBER 6,
                                                                           1997
                                                                        -----------
<S>                                                                     <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 TMQ.

  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 TMQ, 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,
TMQ issued warrants to purchase 40,000 shares of Series A Preferred Stock and
69,093 shares of Series B Preferred Stock at their respective par values. These
warrants are immediately exercisable, and will terminate five years from the
date of issuance, unless TMQ's initial sale of its Common Stock in a public
offering or the acquisition of TMQ occurs prior to that date.

                                      F-27
<PAGE>   90
                              THE MAIN QUAD, INC.

                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)

6.  COMMON STOCK

     Each share of Common Stock entitles the holder to one vote on all matters
submitted to a vote of TMQ'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

     TMQ 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
                                                                        -------
                                                                         12,907
          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, TMQ 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 TMQ, 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-28
<PAGE>   91

                       REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders
  of Voice FX Corporation:

     In our opinion, the accompanying consolidated balance sheets and the
related consolidated statements of operations, of stockholders' equity and of
cash flows present fairly, in all material respects, the financial position of
Voice FX Corporation and its subsidiary at December 31, 1997 and 1998, and the
results of their operations and their cash flows for the years 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 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.

                                         /S/ PRICEWATERHOUSECOOPERS LLP

                                         PricewaterhouseCoopers LLP

Boston, Massachusetts
September 15, 1999, except as to Note 11
  which is as of October 7, 1999

                                      F-29
<PAGE>   92

                              VOICE FX CORPORATION

                          CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                   DECEMBER 31,
                                                             ------------------------    SEPTEMBER 30,
                                                                1997          1998           1999
                                                             ----------    ----------    -------------
                                                                                          (UNAUDITED)
<S>                                                          <C>           <C>           <C>
                                                ASSETS
Current assets:
  Cash and cash equivalents................................  $3,996,381    $  193,189     $  233,532
  Restricted cash..........................................     500,000            --             --
  Accounts receivable (net of allowance of $39,074, $30,106
     and $30,106 at December 31, 1997 and 1998 and
     September 30, 1999 (unaudited), respectively).........     281,899       499,977        723,548
  Prepaid expenses and other current assets................     479,970        64,023         24,583
                                                             ----------    ----------     ----------
     Total current assets..................................   5,258,250       757,189        981,663
Property and equipment, net................................   1,029,455       711,102        563,593
Other assets...............................................      21,821        27,472         27,413
                                                             ----------    ----------     ----------
          Total assets.....................................  $6,309,526    $1,495,763     $1,572,669
                                                             ==========    ==========     ==========

                                 LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable.........................................  $  671,737    $  234,706     $  346,314
  Accrued expenses.........................................     101,355        96,228        203,898
  Current portion of capital lease obligation..............      31,673        36,763         18,616
  Income taxes payable.....................................     220,000            --             --
  Deferred revenue.........................................     695,468       575,221        418,099
                                                             ----------    ----------     ----------
     Total current liabilities.............................   1,720,233       942,918        986,927
                                                             ----------    ----------     ----------
Capital lease obligation, net of current portion...........      46,844        10,080          1,175
                                                             ----------    ----------     ----------
Commitments (Note 9)
Stockholders' equity:
  Common stock, $0.01 par value; 4,000,000 shares
     authorized; 2,344,924, 3,010,095 and 3,022,595 shares
     issued and 2,344,924, 796,711 and 796,711 shares
     outstanding at December 31, 1997 and 1998 and
     September 30, 1999 (unaudited), respectively..........      23,449        30,101         30,226
  Additional paid-in capital...............................   5,382,831     5,796,816      6,855,699
  Accumulated deficit......................................    (825,550)   (2,120,891)    (3,224,756)
  Treasury stock, at cost, 2,213,384 shares at December 31,
     1998 and September 30, 1999 (unaudited)...............          --    (3,076,602)    (3,076,602)
                                                             ----------    ----------     ----------
                                                              4,580,730       629,424        584,567
Less: notes receivable from stockholders...................     (38,281)      (86,659)            --
                                                             ----------    ----------     ----------
     Total stockholders' equity............................   4,542,449       542,765        584,567
                                                             ----------    ----------     ----------
          Total liabilities and stockholders' equity.......  $6,309,526    $1,495,763     $1,572,669
                                                             ==========    ==========     ==========
</TABLE>

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


                                      F-30
<PAGE>   93

                              VOICE FX CORPORATION
                     CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                                 NINE MONTHS ENDED
                                                 YEAR ENDED DECEMBER 31,           SEPTEMBER 30,
                                                --------------------------   -------------------------
                                                   1997           1998          1998          1999
                                                -----------    -----------   -----------   -----------
                                                                             (UNAUDITED)   (UNAUDITED)
<S>                                             <C>            <C>           <C>           <C>
Revenue:
  Hardware....................................  $   637,832    $   637,166   $   637,166   $    39,885
  Services....................................      595,279      1,397,923       718,935     3,887,111
                                                -----------    -----------   -----------   -----------
     Total revenue............................    1,233,111      2,035,089     1,356,101     3,926,996
                                                -----------    -----------   -----------   -----------
Cost of revenues:
  Cost of hardware............................      443,492        444,076       444,076        33,425
  Cost of services............................      819,985      1,179,786       740,191     2,033,345
                                                -----------    -----------   -----------   -----------
     Total cost of revenues...................    1,263,477      1,623,862     1,184,267     2,066,770
                                                -----------    -----------   -----------   -----------
          Gross margin........................      (30,366)       411,227       171,834     1,860,226
                                                -----------    -----------   -----------   -----------
Operating expenses:
  Product development.........................      454,674        507,967       310,624       411,024
  Sales and marketing.........................      601,146        463,657       358,592       775,790
  General and administrative..................    1,078,071        466,583       403,368       635,623
  Stock-based compensation....................           --        326,672       326,672     1,142,837
                                                -----------    -----------   -----------   -----------
          Total operating expenses............    2,133,891      1,764,879     1,399,256     2,965,274
                                                -----------    -----------   -----------   -----------
Operating loss................................   (2,164,257)    (1,353,652)   (1,227,422)   (1,105,048)
Other income (expense):
Interest income...............................      141,243         68,217        64,044         5,128
Interest expense..............................     (214,998)        (9,906)       (7,692)       (3,945)
                                                -----------    -----------   -----------   -----------
Loss from continuing operations before
  extraordinary loss..........................   (2,238,012)    (1,295,341)   (1,171,070)   (1,103,865)
                                                -----------    -----------   -----------   -----------
Discontinued operations:
  Loss from discontinued operations...........     (613,846)            --            --            --
  Gain on disposal of discontinued operations,
     net of income taxes of $220,000..........    6,739,187             --            --            --
                                                -----------    -----------   -----------   -----------
          Total income from discontinued
            operations........................    6,125,341             --            --            --
                                                -----------    -----------   -----------   -----------
Extraordinary loss on early extinguishment of
  debt (Note 4)...............................     (838,193)            --            --            --
                                                -----------    -----------   -----------   -----------
Net income (loss).............................  $ 3,049,136    $(1,295,341)  $(1,171,070)  $(1,103,865)
                                                ===========    ===========   ===========   ===========
</TABLE>

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


                                      F-31
<PAGE>   94

                              VOICE FX CORPORATION
                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
                                                                                                                  NOTES
                                      COMMON STOCK       ADDITIONAL                      TREASURY STOCK         RECEIVABLE
                                   -------------------    PAID-IN     ACCUMULATED   ------------------------       FROM
                                    SHARES     AMOUNT     CAPITAL       DEFICIT       SHARES       AMOUNT      STOCKHOLDERS
                                   ---------   -------   ----------   -----------   ----------   -----------   ------------
<S>                                <C>         <C>       <C>          <C>           <C>          <C>           <C>
Balance, December 31, 1996.......  2,316,524   $23,165   $5,353,146   $(3,874,686)          --   $        --     $(38,281)
Exercise of common stock
  options........................     28,400       284       29,685
Net income.......................                                       3,049,136
                                   ---------   -------   ----------   -----------   ----------   -----------     --------
Balance, December 31, 1997.......  2,344,924    23,449    5,382,831      (825,550)          --            --      (38,281)
Exercise of common stock
  warrant........................    378,807     3,788
Exercise of common stock
  options........................    286,364     2,864       87,313                                               (85,177)
Purchase of common stock for
  treasury.......................                                                   (2,213,384)  $(3,076,602)
Compensation expense related to
  common stock options...........                           326,672
Repayment of loans from
  stockholders...................                                                                                  38,281
Interest on notes receivable from
  stockholders...................                                                                                  (1,482)
Net loss.........................                                      (1,295,341)
                                   ---------   -------   ----------   -----------   ----------   -----------     --------
Balance, December 31, 1998.......  3,010,095    30,101    5,796,816    (2,120,891)  (2,213,384)   (3,076,602)     (86,659)
Interest on notes receivable from
  stockholders (unaudited).......                                                                                  (1,545)
Exercise of common stock options
  (unaudited)....................     12,500       125        4,250
Forgiveness of notes receivable
  from stockholders
  (unaudited)....................                         1,054,633                                                88,204
Net loss (unaudited).............                                      (1,103,865)
                                   ---------   -------   ----------   -----------   ----------   -----------     --------
Balance, September 30, 1999
  (unaudited)....................  3,022,595   $30,226   $6,855,699   $(3,224,756)  (2,213,384)  $(3,076,602)    $     --
                                   =========   =======   ==========   ===========   ==========   ===========     ========

<CAPTION>

                                       TOTAL
                                   STOCKHOLDERS'
                                      EQUITY
                                   -------------
<S>                                <C>
Balance, December 31, 1996.......   $1,463,344
Exercise of common stock
  options........................       29,969
Net income.......................    3,049,136
                                    ----------
Balance, December 31, 1997.......    4,542,449
Exercise of common stock
  warrant........................        3,788
Exercise of common stock
  options........................        5,000
Purchase of common stock for
  treasury.......................   (3,076,602)
Compensation expense related to
  common stock options...........      326,672
Repayment of loans from
  stockholders...................       38,281
Interest on notes receivable from
  stockholders...................       (1,482)
Net loss.........................   (1,295,341)
                                    ----------
Balance, December 31, 1998.......      542,765
Interest on notes receivable from
  stockholders (unaudited).......       (1,545)
Exercise of common stock options
  (unaudited)....................        4,375
Forgiveness of notes receivable
  from stockholders
  (unaudited)....................    1,142,837
Net loss (unaudited).............   (1,103,865)
                                    ----------
Balance, September 30, 1999
  (unaudited)....................   $  584,567
                                    ==========
</TABLE>

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


                                      F-32
<PAGE>   95

                              VOICE FX CORPORATION

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                             NINE MONTHS ENDED
                                                              YEAR ENDED DECEMBER 31,          SEPTEMBER 30,
                                                             -------------------------   -------------------------
                                                                1997          1998          1998          1999
                                                             -----------   -----------   -----------   -----------
                                                                                         (UNAUDITED)   (UNAUDITED)
<S>                                                          <C>           <C>           <C>           <C>
Cash flows from operating activities:
  Net loss from continuing operations......................  $(2,238,012)  $(1,295,341)  $(1,171,070)  $(1,103,865)
  Adjustments to reconcile net loss from continuing
    operations to net cash provided by (used in) operating
    activities:
    Depreciation and amortization..........................      431,624       417,383       288,477       315,195
    Write off of previously capitalized deferred public
      offering costs.......................................      442,577            --            --            --
    Compensation expense related to common stock options...           --       326,672       326,672            --
    Accrued interest on notes receivable from
      stockholders.........................................           --        (1,482)           --        (1,545)
    Forgiveness of notes receivable from stockholders......           --            --            --     1,174,846
    Changes in operating assets and liabilities:
      Accounts receivable..................................      645,905      (218,078)      222,385      (223,571)
      Prepaid expenses and other current assets............     (370,947)      415,947       428,895         7,431
      Other assets.........................................      175,419        (5,651)       (6,001)           59
      Accounts payable and accrued expenses................     (129,104)     (442,158)     (674,101)      219,278
      Income taxes payable.................................           --      (220,000)     (220,000)           --
      Deferred revenue.....................................      858,925      (120,247)     (281,428)     (157,122)
                                                             -----------   -----------   -----------   -----------
      Cash provided by (used in) operating activities......     (183,613)   (1,142,955)   (1,086,171)      230,706
                                                             -----------   -----------   -----------   -----------
Cash flows from investing activities:
  Purchase of property and equipment.......................     (225,421)      (99,030)      (69,347)     (167,686)
  Restricted cash..........................................     (500,000)      500,000       500,000            --
                                                             -----------   -----------   -----------   -----------
      Cash provided by (used in) investing activities......     (725,421)      400,970       430,653      (167,686)
                                                             -----------   -----------   -----------   -----------
Cash flows from financing activities:
  Common stock issued upon option and warrant exercises....       29,969         8,788         8,788         4,375
  Payments on capital lease obligation.....................      (27,287)      (31,674)      (23,306)      (27,052)
  Purchase of common stock for treasury....................           --    (3,076,602)   (3,076,602)           --
  Payments received on notes receivable from
    stockholders...........................................           --        38,281        37,781            --
  Payments on long-term debt...............................   (3,300,000)           --            --            --
                                                             -----------   -----------   -----------   -----------
      Cash used in financing activities....................   (3,297,318)   (3,061,207)   (3,053,339)      (22,677)
                                                             -----------   -----------   -----------   -----------
Net cash and cash equivalents provided by discontinued
  operations...............................................    7,914,345            --            --            --
                                                             -----------   -----------   -----------   -----------
Net increase (decrease) in cash and cash equivalents.......    3,707,993    (3,803,192)   (3,708,857)       40,343
Cash and cash equivalents, beginning of period.............      288,388     3,996,381     3,996,381       193,189
                                                             -----------   -----------   -----------   -----------
Cash and cash equivalents, end of period...................  $ 3,996,381   $   193,189   $   287,524   $   233,532
                                                             ===========   ===========   ===========   ===========
Supplemental disclosure of cash flow information:
  Cash paid for interest...................................  $    92,026   $     9,906   $     7,692   $     3,945
  Cash paid for income taxes...............................  $        --   $   212,284   $   200,000   $        --
Supplemental disclosure of non-cash investing and financing
  activities:
  Issuance of common stock for notes receivable from
    stockholders...........................................  $        --   $    85,177   $    85,177   $        --
</TABLE>

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


                                      F-33
<PAGE>   96

                              VOICE FX CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.  ORGANIZATION

     Voice FX Corporation ("FX") provides Internet and interactive voice
response telephone services, primarily to colleges and universities. These
services include telephone and Internet grade reporting, financial aid status
reporting, fee payment reporting, registration, and telephone and Internet
transcript ordering. To date, all of FX's revenues have been in the U.S. and are
reported through one operating segment. During 1997, FX sold its corporate
teleservices division and its FX Direct, Inc. product sample distribution
subsidiary business.

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

  Principles of Consolidation

     The consolidated financial statements include the accounts of Voice FX
Corporation and its wholly-owned subsidiaries. All intercompany balances and
transactions have been eliminated in consolidation. FX sold its only
wholly-owned subsidiary during 1997.

  Cash, Cash Equivalents and Restricted Cash

     FX considers all highly liquid debt instruments purchased with an initial
maturity of three months or less to be cash equivalents. Restricted cash
represents amounts held in escrow associated with certain representations and
warranties made by FX in connection with its sale of its teleservices division
in 1997. The restricted cash was released to FX in full during 1998.

  Concentration of Credit Risk and Significant Customers

     Financial instruments which potentially expose FX to concentrations of
credit risk consist primarily of cash equivalents and accounts receivable. FX
invests its excess cash primarily in money market funds of major financial
institutions. FX provides credit to customers in the normal course of business.
Collateral is not required for accounts receivable, but credit evaluations of
customers' financial conditions are performed periodically. FX maintains
reserves for potential credit losses and such losses have been within
management's expectations.

     Revenues of approximately $638,000 (52%) were attributable to one customer
during 1997. Revenues of approximately $637,000 (31%) and $309,000 (15%) were
attributable to two customers during 1998. Revenues of approximately $637,000
(47%) were attributable to one customer during the nine months ended September
30, 1998 (unaudited). Revenues of approximately $3.1 million (79%) were
attributable to one customer during the nine months ended September 30, 1999
(unaudited). Accounts receivable from three customers accounted for
approximately $160,000 (50%), from two customers accounted for approximately
$403,000 (76%) and from two customer accounted for approximately $652,000 (87%)
(unaudited) of the total amounts due to FX at December 31, 1997 and 1998 and
September 30, 1999, respectively.

  Prepaid Expenses and Other Current Assets

     At December 31, 1997, prepaid expenses and other current assets included
approximately $437,000 of hardware equipment which was installed and recognized
as revenue during 1998.

  Property and Equipment

     Property and equipment are recorded at cost and depreciated using the
straight line method over their estimated useful lives. Property and equipment
held under capital leases are stated at the lower of the fair market value of
the related asset or the present value of the minimum lease payments at the
inception of the lease and are amortized using the straight-line method over the
life of the related asset or the term of the lease. Upon retirement or sale, the
cost of the assets disposed of and the related accumulated depreciation and

                                      F-34
<PAGE>   97
                              VOICE FX CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

amortization are removed from the accounts and any resulting gain or loss is
included in the determination of net income (loss). Maintenance and repair costs
are expensed as incurred.

     FX adopted Statement of Position 98-1, "Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use" ("SOP 98-1"), on
December 31, 1997. In accordance with SOP 98-1, FX capitalizes costs of software
development for internal use which meet certain criteria and amortizes such
costs on a straight-line basis over the life of the software. These assets are
included in property and equipment.

  Software Development Costs

     Costs associated with purchased software, new products and enhancements to
existing products are generally capitalized, after the establishment of
technological feasibility, and amortized as the greater of the ratio of current
revenues to total expected revenues from the product or the straight-line method
over the remaining estimated economic life of the product. To date, costs of
internally developed software which qualify for capitalization have not been
material. All other research and development expenditures are charged to product
development expense in the period incurred.

  Revenue Recognition

     FX derives revenue from annual membership fees from colleges and
universities that allow the college or university's students to utilize FX's
Internet and telephone services. Revenue from these memberships is recognized
ratably over the annual term of the agreement. FX also derives revenue from
corporate sponsors who advertise on FX's Internet website and through FX's
telephone services. Revenue from the corporate sponsors is generally a set price
per "play" of the sponsor's advertisement; accordingly, revenue from corporate
sponsors is recognized as such plays are provided. Revenue from hardware sales
is recognized when the hardware is delivered and all implementation services
have been provided. Amounts invoiced or received in advance of revenue being
earned are recorded as deferred revenue.

  General and Administrative Expense

     General and administrative expense for the year ended December 31, 1997
included costs of approximately $636,000 previously capitalized in anticipation
of an initial public offering of FX's common stock. This anticipated offering
did not occur and FX no longer has plans for such an offering; accordingly,
costs previously capitalized were expensed.

  Income Taxes

     Deferred tax assets and liabilities are determined based on the differences
between the financial statement and tax bases of assets and liabilities using
enacted tax rates in effect in the years in which the differences are expected
to reverse. Valuation allowances are provided if, based upon the weight of
available evidence, it is more likely than not that some or all of the deferred
tax assets will not be realized.

  Accounting for Stock-Based Compensation

     FX accounts for stock-based awards to employees using the intrinsic value
method as prescribed in Accounting Principles Board 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 equal to the fair market value of FX's
common stock at the date of grant. FX has adopted the provisions of Statement of
Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation," ("SFAS 123") through disclosure only. All stock-based awards to
nonemployees are accounted for in accordance with SFAS No. 123.

                                      F-35
<PAGE>   98
                              VOICE FX CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

  Comprehensive Income (Loss)

     Effective January 1, 1998, FX adopted Statement of Financial Accounting
Standards No. 130, "Reporting Comprehensive Income" ("SFAS 130"). SFAS 130
requires the reporting of comprehensive income (loss) in addition to net income
(loss). Comprehensive income (loss) is a more inclusive reporting methodology
that includes disclosure of certain financial information that historically has
not been recognized in the calculation of net income (loss). Comprehensive
income (loss) is comprised of two components, net income (loss) and other
comprehensive income (loss). During the years ended December 31, 1997 and 1998
and the nine months ended September 30, 1998 and 1999 (unaudited), FX had no
items qualifying as other comprehensive income (loss); accordingly, the adoption
of SFAS 130 had no impact on FX's financial statements.

  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, 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.

  Unaudited Interim Financial Data

     The interim financial data as of September 30, 1999 and for the nine months
ended September 30, 1998 and 1999 has been derived from unaudited financial
statements of FX. Management believes FX's unaudited financial statements have
been prepared on the same basis as the audited financial statements and include
all adjustments, consisting only of normal recurring adjustments, necessary for
a fair presentation of the financial position and results of operations for such
periods. Results for the nine months ended September 30, 1998 and 1999 have not
be audited and are not necessarily indicative of results to be expected for the
full fiscal year.

  Recent Accounting Pronouncements

     In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133 ("SFAS 133"), "Accounting for Derivative
Instruments and Hedging Activities." SFAS 133 establishes accounting and
reporting standards for derivative financial instruments, including certain
derivative instruments embedded in other contracts (collectively referred to as
derivatives) and for hedging activities. SFAS 133 is effective for all fiscal
quarters of fiscal years beginning after June 15, 2000 and is effective for FX's
fiscal year ending December 31, 2001. FX does not expect the adoption of SFAS
133 to have a material effect on its financial position or results of
operations.

     In April 1998, the Accounting Standards Executive Committee issued
Statement of Position 98-5, "Reporting on the Costs of Start-Up Activities"
("SOP 98-5"). 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 new 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 financial statements for years beginning after
December 15, 1998. FX does not expect the adoption of this standard to have a
material effect on its financial position or results of operations.

                                      F-36
<PAGE>   99
                              VOICE FX CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

3.  PROPERTY AND EQUIPMENT:

     Property and equipment consisted of the following at December 31, 1997 and
1998:

<TABLE>
<CAPTION>
                                                         ESTIMATED
                                                        USEFUL LIFE
                                                          (YEARS)                1997         1998
                                                        -----------           ----------   ----------
<S>                                             <C>                           <C>          <C>
     Computer equipment.......................               5                $1,361,641   $1,432,575
     Office furniture and equipment...........               5                    12,114       14,230
     Software.................................               3                   502,830      528,810
     Leasehold improvements...................  Shorter of estimated useful
                                                   life or life of lease          18,309       18,309
                                                                              ----------   ----------
                                                                               1,894,894    1,993,924
     Less: accumulated depreciation and
       amortization...........................                                   865,439    1,282,822
                                                                              ----------   ----------
                                                                              $1,029,455   $  711,102
                                                                              ==========   ==========
</TABLE>

     At December 31, 1997 and 1998, fixed assets under capital leases included
computer equipment with a cost of approximately $145,000 and accumulated
depreciation of approximately $77,000 and $106,000, respectively.

     Depreciation expense for the years ended December 31, 1997 and 1998 was
approximately $397,000 and $417,000, respectively.

4.  STOCKHOLDERS' EQUITY

  Notes Receivable from Stockholders

     At December 31, 1997, notes receivable from stockholders included two notes
payable to FX for common stock option exercises during 1993. These notes, which
did not have a stated interest rate, were due and paid in full during January
1998.

     In September 1998, two officers and directors exercised stock options to
purchased 243,364 shares of FX's common stock, through the issuance of
non-recourse notes payable to FX in the amount of $85,177. These notes had an
interest rate of 6% and are due in September 2003. Interest earned during the
year ended December 31, 1998 and the nine months ended September 30, 1999 was
$1,482 and $1,545, respectively, and is included in interest income. In April
1999, FX's Board of Directors approved the forgiveness of all amounts due under
these notes, resulting in a compensation charge of $1,142,837, based on the fair
value of the underlying common stock on the date the notes were forgiven. This
expense has been included in stock-based compensation expense for the nine
months ended September 30, 1999.

  Warrants

     During 1996, FX received cash proceeds totaling $3,000,000 from the
issuance of two separate notes payable. The notes had an interest rate of 13.5%.
The noteholders were issued stock purchase warrants with the right to purchase
378,807 shares of FX's common stock at a price of $0.01 per share. These
warrants were immediately exercisable. The warrants were ascribed a value of
$954,593, which was recorded as additional paid-in capital and as a discount to
the value of the note. This discount was recognized over the term of the note.
The accretion of debt discount for these warrants during 1996 was $116,400. The
notes were repaid in full during 1997 and accordingly, the remaining unamortized
discount of $838,193 was recognized as an extraordinary loss on early
extinguishment of debt in 1997. These warrants were exercised in full during
1998.

                                      F-37
<PAGE>   100
                              VOICE FX CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

  Treasury Stock

     On January 2, 1998, FX repurchased 2,213,384 shares (approximately 80%) of
its outstanding common stock. These purchases were made in privately negotiated
transactions at a price per share of $1.39. FX paid $1.21 per share of the
repurchase price in January 1998 and made payments of $0.18 per share during
July 1998 upon the release of the restricted cash balance. FX plans to use these
repurchased shares for its employee stock option plans.

5.  STOCK OPTIONS AND WARRANTS

     During 1990, FX adopted the 1990 Stock Option Plan (the "1990 Plan"), which
provides for the grant of incentive and non-qualified stock options for the
purchase of up to 800,000 shares of FX's common stock by officers, employees,
consultants and directors of FX. On March 20, 1998, the Board of Directors
approved the adoption of the 1998 Stock Option Plan (the "1998 Plan"), which
provides for the grant of incentive and non-qualified stock options up to an
aggregate of 400,000 shares of FX's common stock to employees, officers,
directors and consultants of FX. The Board of Directors is responsible for the
administration of the 1990 Plan and the 1998 Plan. The Board determines the term
of each option, the option price, the number of shares for which each option is
granted and the rate at which each option is exercisable. Generally, options
have a term of ten years and vest over a period of three to four years.
Incentive stock options may be granted to any officer or employee at an exercise
price per share of not less than the fair value per common share on the date of
the grant (not less than 110% of fair value in the case of holders of more than
10% of FX's voting stock) and with a term not to exceed ten years from the date
of grant (five years for incentive stock options granted to holders of more than
10% of FX's voting stock). Non-qualified stock options may be granted to any
officer, employee, consultant or director.

     The following table summarizes activity of FX's option plans since January
1, 1997:

<TABLE>
<CAPTION>
                                                                                  WEIGHTED
                                                                                  AVERAGE
                                                                                  EXERCISE
                                                                        SHARES     PRICE
                                                                       --------   --------
<S>                                                                    <C>        <C>
          Outstanding at December 31, 1996...........................   515,426    $2.73
               Granted...............................................        --       --
               Exercised.............................................   (28,400)    1.06
               Canceled..............................................  (132,600)    2.86
                                                                       --------
          Outstanding at December 31, 1997...........................   354,426     2.82
               Granted, at fair value................................    57,000     1.39
               Granted, at below fair value..........................   314,108     0.35
               Exercised.............................................  (286,364)    0.31
               Canceled..............................................  (334,426)    2.73
                                                                       --------
          Outstanding at December 31, 1998...........................   104,744    $0.69
                                                                       ========
</TABLE>

     As of December 31, 1997 and 1998, options to purchase 117,849 and 85,244
shares of common stock, respectively, were exercisable with weighted-average
exercise prices of $2.38 and $0.53, respectively. The weighted average fair
value per share of options granted at fair value and below fair value during
1998 was approximately $0.95 and $1.22, respectively. As of December 31, 1998,
28,892 shares were available for future grant under the 1998 Plan.

                                      F-38
<PAGE>   101
                              VOICE FX CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

     The following table summarizes the stock options outstanding at December
31, 1998:

<TABLE>
<CAPTION>
                                         WEIGHTED
                                          AVERAGE
                                         REMAINING
          EXERCISE                      CONTRACTUAL           SHARES
           PRICE         SHARES            LIFE             EXERCISABLE
          --------       -------        -----------         -----------
          <S>            <C>            <C>                 <C>
           $0.35          70,744         9.7 years             70,744
           $1.39          34,000         9.6 years             14,500
                         -------                               ------
                         104,744                               85,244
                         =======                               ======
</TABLE>

     During 1998, FX's Board of Directors authorized that all employee options
under the 1990 Plan would be eligible to be exchanged for options with an
exercise price at the then fair market value, as determined by the Board of
Directors, of $1.39 per share. Prior to the repricing, these options had
exercise prices ranging from $2.92 to $3.04 per share. This cancellation and
reissuance of stock options affected options for 286,426 shares.

     During 1998, FX granted stock options to purchase 314,108 shares of common
stock with an exercise price of $0.35 per share. Relating to these options, FX
recorded compensation expense of $326,672, representing the aggregate difference
between the estimated fair value of the common stock on the date of grant and
the exercise price of those options. As the options were immediately
exercisable, the compensation expense was fully recognized in 1998 and was also
recorded as a component of additional paid-in capital within stockholders'
equity.

     Had compensation cost been determined based on the fair value at the grant
date for awards in fiscal years 1996, 1997 and 1998 consistent with the
provisions of SFAS No. 123, FX's net losses from continuing operations before
extraordinary loss for 1997 and 1998 would have been $2,334,379 and $1,669,647,
respectively. For this purpose, the fair value of each option grant was
estimated on the grant date using the Black-Scholes option-pricing model with
the following assumptions: no dividend yield; no volatility; risk-free interest
rate of 5.5%; and an expected option term of four years. Because options vest
over several years and additional option grants are expected to be made in
future years, the above pro forma results are not representative of the pro
forma results for future years.

6.  RELATED PARTY TRANSACTIONS

     In January 1998, FX advanced a total of $32,009 to two officers and
directors. These advances were payable upon demand and did not have a stated
interest rate. In April 1999, FX's Board of Directors approved the forgiveness
of these advances, resulting in a compensation charge of $32,009. This expense
has been included in general and administrative expenses for the nine months
ended September 30, 1999.

7.  DISCONTINUED OPERATIONS

     During 1997, FX sold its sample distribution business and its corporate
teleservices division. The acquirer purchased all related assets and assumed
certain related liabilities of these businesses, including accounts receivable,
accounts payable, accrued and prepaid expenses and deferred revenue. As of
December 31, 1997 and 1998, there were no assets or liabilities related to these
businesses recorded in FX's financial statements.

     Operating results of these businesses from January 1, 1997 through the date
of disposition have been reflected within the statement of operations as
discontinued operations. Revenue of the sold businesses for the year ended
December 31, 1997 was approximately $1,124,000, which has been included within
the loss from discontinued operations.


                                      F-39
<PAGE>   102
                              VOICE FX CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

8.  INCOME TAXES

     At December 31, 1997 and 1998, FX's deferred tax assets of approximately
$150,000 and $300,000, respectively, consisted primarily of net operating loss
carryforwards. FX has provided a valuation allowance for the full amount of its
net deferred tax assets as the realization of these future benefits cannot be
reasonably assured at December 31, 1998.

     At December 31, 1998, FX had federal and state net operating loss
carryforwards of approximately $600,000 and $950,000, respectively, available to
reduce future taxable income. The federal and state net operating loss
carryforwards begin to expire in 2011.

     As a result of the 1997 sale of the teleservices and sample distribution
businesses, FX recognized a gain of approximately $6.7 million. FX utilized
approximately $3.5 million of its federal tax loss carryforwards and
approximately $1.0 million of its state tax loss carryforwards to reduce the
taxable gain. As a result, total federal and state corporate income taxes for
1997 were approximately $220,000, which are included within the gain on disposal
of discontinued operations.

9.  COMMITMENTS

     FX leases its office space under noncancelable operating leases. Total rent
expense under these operating leases for the years ended December 31, 1997 and
1998 was approximately $76,000 and $68,000, respectively. FX also leases certain
equipment under a capital lease.

     Future minimum lease payments under all noncancelable operating and capital
leases as of December 31, 1998 are as follows:

<TABLE>
<CAPTION>
                                                                     OPERATING    CAPITAL
          YEAR ENDING DECEMBER 31,                                    LEASES       LEASE
          ------------------------                                   ---------    -------
<S>                                                                  <C>          <C>
          1999.....................................................  $ 81,582     $41,332
          2000.....................................................    20,433      10,333
                                                                     --------     -------
                                                                     $102,015      51,665
                                                                     ========
          Less: amount representing interest.......................                 4,822
                                                                                  -------
          Present value of future minimum lease payments...........                46,843
          Less: amounts due within one year........................                36,763
                                                                                  -------
          Long-term portion........................................               $10,080
                                                                                  =======
</TABLE>

10.  401(K) SAVINGS PLAN

     FX has established a retirement savings plan under Section 401(k) of the
Internal Revenue Code (the "401(k) Plan"). The 401(k) Plan covers substantially
all employees of FX who meet certain requirements and allows participants to
defer a portion of their annual compensation on a pre-tax basis. The terms of
the plan provide for FX to assume the cost of plan administration. FX may make
contributions to the 401(k) Plan at the discretion of management; to date, no
contributions by FX have been made to the 401(k) Plan.

11.  SUBSEQUENT EVENT

     On October 7, 1999, FX completed a merger with Student Advantage, Inc.
whereby Student Advantage acquired all of the common stock of FX by paying
approximately $1.1 million in cash and issuing 430,082 shares of Student
Advantage common stock. Assets acquired by Student Advantage consist of all
tangible assets of FX, as well as customer relationships, patents, completed
technology and FX's workforce.


                                      F-40
<PAGE>   103

                          UNAUDITED PRO FORMA COMBINED
                              FINANCIAL STATEMENTS

     On October 7, 1999, SA Acquisition II, Inc. ("SA"), a wholly owned
subsidiary of Student Advantage, Inc. (the "Company"), merged into Voice FX
Corporation ("FX") pursuant to an Agreement and Plan of Merger by and among the
Company, SA and FX, dated September 27, 1999. At the close of the transaction,
FX became a wholly-owned subsidiary of the Company. Voice FX provides Internet
and interactive voice response telephone services to college and university
students, primarily grade reporting, transcript ordering and financial aid
status reporting.

     All of the outstanding capital stock of FX was converted into 430,082
shares of Common Stock, $.01 par value, of the Company and $1.1 million in cash.
Additionally, the Company assumed outstanding FX stock options, which were
converted into options to purchase an aggregate of 59,687 shares of Company
Common Stock. The exchange rate used to convert the capital stock and options of
FX into Common Stock and options of the Company and cash were determined as a
result of arms length negotiation.

     The accompanying unaudited pro forma combined financial statements are
presented as if the Company and FX had been operating as a combined entity. The
unaudited pro forma combined balance sheet as of September 30, 1999 presents the
financial position of the Company assuming the acquisition had occurred on
September 30, 1999. The unaudited pro forma combined statements of operations
for the nine months ended September 30, 1999 and the year ended December 31,
1998 present the results of operations of the Company assuming the acquisition
had occurred on January 1, 1999 and January 1, 1998, respectively, and included
all material pro forma adjustments necessary for this purpose. All material
adjustments to reflect the acquisition are set forth in the column "Pro Forma
Adjustments."

     The pro forma data is for informational purposes only and may not
necessarily reflect future results of operations and financial position or what
the results of operations or financial position would have been had the Company
and FX been operating as a combined entity for the specified periods. The
unaudited pro forma combined financial statements should be read in conjunction
with the historical financial statements of the Company, including the notes
thereto.

                                      F-41
<PAGE>   104

                        PRO FORMA COMBINED BALANCE SHEET
                               SEPTEMBER 30, 1999
                                 (IN THOUSANDS)
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                         STUDENT                       PRO           PRO
                                                        ADVANTAGE,    VOICE FX        FORMA         FORMA
                                                           INC.      CORPORATION   ADJUSTMENTS     COMBINED
                                                        ----------   -----------   -----------     --------
<S>                                                     <C>          <C>           <C>             <C>
                                                  ASSETS
Current Assets
  Cash and cash equivalents...........................   $  6,884      $   233       $(1,133)(a)   $  5,984
  Marketable securities...............................     35,340           --            --         35,340
  Accounts receivable, net............................      6,347          724            --          7,071
  Prepaid expenses and other current assets...........      2,238           25            --          2,263
                                                         --------      -------       -------       --------
     Total current Assets.............................     50,809          982        (1,133)        50,658
Property and equipment, net...........................      2,333          564            --          2,897
Intangible assets, net................................      3,502           --         6,344(b)       9,846
Other Assets..........................................         --           27            --             27
                                                         --------      -------       -------       --------
     Total Assets.....................................   $ 56,644      $ 1,573       $ 5,211       $ 63,428
                                                         ========      =======       =======       ========

                                   LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
  Accounts payable....................................   $  2,421      $   346       $    --       $  2,767
  Accrued compensation................................      1,001           75            --          1,076
  Other accrued expenses..............................      3,989          129           150(a)       4,268
  Deferred revenue....................................      8,295          418            --          8,713
  Current portion of capital lease obligation.........         --           19            --             19
                                                         --------      -------       -------       --------
     Total current liabilities........................     15,706          987           150         16,843
                                                         --------      -------       -------       --------
Notes payable.........................................        100           --            --            100
Capital lease obligation, net of current portion......         --            1            --              1
                                                         --------      -------       -------       --------
     Total liabilities................................     15,806          988           150         16,944
                                                         --------      -------       -------       --------
Stockholders' equity
  Common stock........................................        348           30           (26)(a)        352
  Additional paid-in capital..........................     81,936        6,857        (1,215)(a)     87,578
  Accumulated deficit.................................    (38,683)      (3,225)        3,225(a)     (38,683)
  Deferred compensation...............................     (2,754)          --            --         (2,754)
  Treasury stock, at cost.............................         (9)      (3,077)        3,077(a)          (9)
                                                         --------      -------       -------       --------
     Total Stockholder's equity.......................     40,838          585         5,061         46,484
                                                         --------      -------       -------       --------
     Total liabilities and stockholders' equity.......   $ 56,644      $ 1,573       $ 5,211       $ 63,428
                                                         ========      =======       =======       ========
</TABLE>

The accompanying notes are an integral part of the unaudited pro forma combined
                              financial statements
                                      F-42
<PAGE>   105

                   PRO FORMA COMBINED STATEMENT OF OPERATIONS
                      NINE MONTHS ENDED SEPTEMBER 30, 1999
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                        STUDENT                       PRO            PRO
                                                       ADVANTAGE,    VOICE FX        FORMA          FORMA
                                                          INC.      CORPORATION   ADJUSTMENTS      COMBINED
                                                       ----------   -----------   -----------      --------
<S>                                                    <C>          <C>           <C>              <C>
Revenue:
  Subscription.......................................   $  6,194      $    --       $    --        $  6,194
  Other..............................................     12,127        3,927            --          16,054
                                                        --------      -------       -------        --------
Total revenue........................................     18,321        3,927            --          22,248
Costs and expenses:
  Cost of subscription revenue.......................      1,989           --            --           1,989
  Cost of other revenue..............................      8,888        2,067          (296)(d)      10,659
  Product development................................      6,169          411            --           6,580
  Sales and marketing................................      8,067          776            --           8,843
  General and administrative.........................      6,186          635           (19)(d)       6,802
  Depreciation and amortization......................      1,126           --         1,437(c)(d)     2,563
  Stock-based compensation...........................        837        1,143            --           1,980
                                                        --------      -------       -------        --------
Total costs and expenses.............................     33,262        5,032         1,122          39,416
                                                        --------      -------       -------        --------
Loss from operations.................................    (14,941)      (1,105)       (1,122)        (17,168)
Interest income (expense), net.......................        760            1            --             761
                                                        --------      -------       -------        --------
Net loss.............................................   $(14,181)     $(1,104)      $(1,122)       $(16,407)
                                                        ========      =======       =======        ========
Basic and diluted net loss per share.................   $  (0.57)                                  $  (0.65)
                                                        ========                                   ========
Shares used in computing basic and diluted net loss
  per share..........................................     24,776                        430(e)       25,206
                                                        ========                    =======        ========
</TABLE>

The accompanying notes are an integral part of the unaudited pro forma combined
                              financial statements


                                      F-43
<PAGE>   106

                   PRO FORMA COMBINED STATEMENT OF OPERATIONS
                          YEAR ENDED DECEMBER 31, 1998
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                    STUDENT                         PRO            PRO
                                                   ADVANTAGE,     VOICE FX         FORMA          FORMA
                                                      INC.       CORPORATION    ADJUSTMENTS      COMBINED
                                                   ----------    -----------    -----------      --------
<S>                                                <C>           <C>            <C>              <C>
Revenue:
  Subscription...................................   $  7,174       $    --        $    --        $  7,174
  Other..........................................     12,186         2,035             --          14,221
                                                    --------       -------        -------        --------
Total revenue....................................     19,360         2,035             --          21,395
Costs and expenses:
  Cost of subscription revenue...................      2,442            --             --           2,442
  Cost of other revenue..........................      7,867         1,624           (396)(d)       9,095
  Product development............................      4,948           508             --           5,456
  Sales and marketing............................      7,313           464             --           7,777
  General and administrative.....................      5,484           466            (21)(d)       5,929
  Depreciation and amortization..................      1,155            --          1,913(c)(d)     3,068
  Stock-based compensation.......................        808           327             --           1,135
                                                    --------       -------        -------        --------
Total costs and expenses.........................     30,017         3,389          1,496          34,902
                                                    --------       -------        -------        --------
Loss from operations.............................    (10,657)       (1,354)        (1,496)        (13,507)
Interest income (expense), net...................        121            58             --             179
                                                    --------       -------        -------        --------
  Net loss.......................................   $(10,536)      $(1,296)       $(1,496)       $(13,328)
                                                    ========       =======        =======        ========
Basic and diluted net loss per share.............   $  (0.59)                                    $  (0.73)
                                                    ========                                     ========
Shares used in computing basic and diluted net
  loss per share.................................     17,710                          430(e)       18,140
                                                    ========                      =======        ========
</TABLE>

The accompanying notes are an integral part of the unaudited pro forma combined
                              financial statements


                                      F-44
<PAGE>   107

                            STUDENT ADVANTAGE, INC.
           NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS

     a.) To give effect to the elimination of Voice FX stockholders' equity and
to record the total consideration of $6.9 million paid in the acquisition of
Voice FX.

     In connection with the acquisition, Student Advantage paid $1.1 million in
cash to Voice FX shareholders and issued 430,082 shares to Voice FX
shareholders, valued at $5.0 million, in exchange for all the outstanding
capital stock of Voice FX. In addition, Student Advantage agreed to assume all
outstanding options to purchase Voice FX common stock through issuing 59,687
options to purchase common stock, valued at approximately $700,000. Student
Advantage also incurred fees of approximately $150,000 in connection with the
transaction.

     b.) To give effect to the intangible assets acquired including completed
technology ($1.2 million), assembled work force ($0.5 million), and goodwill
($4.6 million).

     c.) To reflect the amortization (on a straight-line basis) had the
acquisition occurred at the beginning of the periods presented of completed
technology, assembled work force, and goodwill recorded in connection with the
acquisition, over expected useful lives of between three and five years.

     d.) To reclassify certain expenses within cost of other revenue and general
and administrative expenses to conform to Student Advantage's historical
presentation.

     e.) The calculation of pro forma weighted-average number of shares
outstanding includes the weighted-average number of common shares outstanding of
Student Advantage for the respective periods, adjusted to give effect to the
issuance of 430,082 shares of Student Advantage's common stock in connection
with the acquisition. For the nine months ended September 30, 1999 and the year
ended December 31, 1998 the calculation does not include the effect of common
stock equivalents as their inclusion would be anti-dilutive.

                                      F-45
<PAGE>   108

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














                            [STUDENT ADVANTAGE LOGO]













================================================================================
<PAGE>   109

                                    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,
the Nasdaq National Market listing fee and the NASD filing fee.

<TABLE>
<S>                                                                <C>
     SEC registration fee........................................  $  7,153
     Accounting fees and expenses................................    50,000
     Legal fees and expenses.....................................    75,000
     Printing and mailing expenses...............................    45,000
     Miscellaneous...............................................     2,847
                                                                   --------
               Total.............................................   180,000
                                                                   ========
</TABLE>

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.

     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.

                                      II-1
<PAGE>   110

     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.

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.

 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 January 1997, Mr. Sozzi exercised options to purchase 870 membership
     units of Student Advantage LLC for $87,818.

 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 April 1997, Student Advantage LLC issued 200 membership units to Ms.
     Abegglen in satisfaction of a $24,000 note.

 6.  In December 1997, Student Advantage LLC 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.

 7.  In January 1998, Ms. Abegglen exercised options to purchase 350 membership
     units of Student Advantage LLC for $164,914.


                                      II-2
<PAGE>   111

 8.  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 membership units.

 9.  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
     an aggregate of $10.0 million.

10.  On May 27, 1999, in connection with the acquisition of substantially all of
     the assets of Mentor Interactive Corp., the Registrant issued 18,056 shares
     of common stock and a warrant to purchase 24,000 shares of common stock at
     an exercise price of $11.08 per share.

11.  On June 11, 1999, in connection with the acquisition of Transaction Service
     Providers, Inc., the Registrant issued 195,000 shares of common stock to
     the stockholders of Transaction Service Providers, Inc.

12.  On June 18, 1999, in connection with the acquisition of University
     Netcasting, Inc., the Registrant issued 2,438,875 shares of common stock to
     the stockholders of University Netcasting, Inc. and assumed options to
     purchase a total of 66,634 shares of common stock.

13.  On July 21, 1999, in connection with entering into a marketing agreement
     with Lycos, Inc., the Registrant issued a warrant to purchase 550,000
     shares of common stock at an exercise price of $10.875 per share to Lycos,
     Inc.

14.  On October 7, 1999, in connection with the acquisition of Voice FX
     Corporation, the Registrant issued 430,082 shares of common stock to the
     stockholders of Voice FX Corporation and assumed options to purchase a
     total of 59,687 shares of common stock.

     (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 June 18, 1999, options to purchase 869,811 shares of
common stock had been exercised for a consideration of $289,937 under the
Registrant's 1998 Stock Incentive Plan and options to purchase an aggregate of
3,342,039 shares of common stock were outstanding under the Registrant's 1998
Stock Incentive Plan and 1998 California 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>   112

ITEM 16.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

  (a) Exhibits

<TABLE>
<CAPTION>
EXHIBIT
  NO.                             DESCRIPTION
-------                           -----------
<C>       <S>
  2.1     Agreement and Plan of Merger, dated as of May 7, 1999, among
          Student Advantage, Inc., SA Acquisition I, Inc. and
          University Netcasting, Inc.*
  3.1     Amended and Restated Certificate of Incorporation of the
          Registrant.*
  3.2     Amended and Restated By-Laws of the Registrant.*
  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 USTrust Bank and the
          Registrant, dated March 31, 1999.*
 10.4     Form of Indemnification Agreement between the Registrant and
          each of its directors and officers.*
 10.5     Investor Rights Agreement, dated as of October 20, 1998,
          among the Registrant and certain stockholders.*
 10.6     Employment Agreement, dated March 25, 1996, between the
          Registrant 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 Registrant.+*
 10.8     Marketing Agreement, effective February 1, 1998, between
          AT&T Corp. and the Registrant.+*
 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
          Registrant and Princeton Review Publishing, L.L.C.*
 10.12    Letter Agreement, dated September 8, 1997, between the
          Registrant and Princeton Review Publishing, L.L.C.*
 10.13    Letter Agreement, dated October 20, 1998, between the
          Registrant and Princeton Review Publishing, L.L.C.*
 10.14    Mailing and Fulfillment Services Agreement, dated August 8,
          1996, between the Registrant and Aero Fulfillment Services.*
 10.15    Promissory Note (Equipment) to USTrust dated March 31,
          1999.*
 10.16    Master Note to USTrust Bank dated March 31, 1999.*
 10.17    Letter Agreement, dated May 3, 1999, between the Registrant
          and Ronald J. Kos.*
 10.18    Letter Agreement, dated May 20, 1999, between AT&T
          Communications, Inc. and the Registrant.+*
 10.19    Common Stock Purchase Warrant, dated July 21, 1999 issued to
          Lycos, Inc.**
 10.20    Sublease, dated as of May 20, 1999, between the Registrant
          and Morrison, Mahoney & Miller, LLP.
 21       Subsidiaries of the Registrant.
 23.1     Consent of PricewaterhouseCoopers LLP (Student Advantage,
          Inc.).
 23.2     Consent of PricewaterhouseCoopers LLP (Voice FX
          Corporation).
 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>

---------------
 * Incorporated herein by reference from the Registrant's Registration Statement
   on Form S-1 (File No. 333-75807).

** Incorporated herein by reference from the Registrant's Quarterly Report on
   Form 10-Q for the quarter ended June 30, 1999.

 + Confidential treatment previously granted by the Securities and Exchange
   Commission as to certain portions, which portions are omitted and filed
   separately with the Securities and Exchange Commission.

                                      II-4
<PAGE>   113

  (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

     The undersigned Registrant hereby undertakes:

     (1)  To file, during any period in which offers or sales are being made, a
          post-effective amendment to this registration statement:

          (i)    To include any prospectus required by Section 10(a)(3) of the
                 Securities Act of 1933;

          (ii)   To reflect in the prospectus any facts or events arising after
                 the effective date of the registration statement (or the most
                 recent post-effective amendment thereof) which, individually or
                 in the aggregate, represent a fundamental change in the
                 information set forth in the registration statement.
                 Notwithstanding the foregoing, any increase or decrease in
                 volume of securities offered (if the total dollar value of
                 securities offered would not exceed that which was registered)
                 and any deviation from the low or high end of the estimated
                 maximum offering range may be reflected in the form of
                 prospectus filed with the Commission pursuant to Rule 424(b)
                 if, in the aggregate, the changes in volume and price represent
                 no more than 20 percent change in the maximum aggregate
                 offering price set forth in the "Calculation of Registration
                 Fee" table in the effective registration statement.

          (iii)  To include any material information with respect to the plan of
                 distribution not previously disclosed in the registration
                 statement or any material change to such information in the
                 registration statement;

     (2)  That, for the purpose of determining any liability under the
          Securities Act of 1933, each such post-effective amendment 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.

     (3)  To remove from registration by means of a post-effective amendment any
          of the securities being registered which remain unsold at the
          termination of the offering.

     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.

                                      II-5
<PAGE>   114

                                   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 8th
day of December, 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              December 8, 1999
---------------------------------------      and Chief Executive Officer
         Raymond V. Sozzi, Jr.

      /s/ CHRISTOPHER B. ANDREWS           Vice President, Finance and                   December 8, 1999
---------------------------------------      Administration, Treasurer and
        Christopher B. Andrews               Secretary (Principal Financial
                                             and Accounting Officer)

         /s/ JOHN M. CONNOLLY              Director                                      December 8, 1999
---------------------------------------
           John M. Connolly

         /s/ WILLIAM S. KAISER             Director                                      December 8, 1999
---------------------------------------
           William S. Kaiser

          /s/ JOHN S. KATZMAN              Director                                      December 8, 1999
---------------------------------------
            John S. Katzman

        /s/ MARC J. TURTLETAUB             Director                                      December 8, 1999
---------------------------------------
          Marc J. Turtletaub

         /s/ CHARLES E. YOUNG              Director                                      December 8, 1999
---------------------------------------
           Charles E. Young
</TABLE>

                                      II-6
<PAGE>   115

                                 EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT
  NO.                             DESCRIPTION
-------                           -----------
<C>       <S>
  2.1     Agreement and Plan of Merger, dated as of May 7, 1999, among
          Student Advantage, Inc., SA Acquisition I, Inc. and
          University Netcasting, Inc.*
  3.1     Amended and Restated Certificate of Incorporation of the
          Registrant.*
  3.2     Amended and Restated By-Laws of the Registrant.*
  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 USTrust Bank and the
          Registrant, dated March 31, 1999.*
 10.4     Form of Indemnification Agreement between the Registrant and
          each of its directors and officers.*
 10.5     Investor Rights Agreement, dated as of October 20, 1998,
          among the Registrant and certain stockholders.*
 10.6     Employment Agreement, dated March 25, 1996, between the
          Registrant 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 Registrant.+*
 10.8     Marketing Agreement, effective February 1, 1998, between
          AT&T Corp. and the Registrant.+*
 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
          Registrant and Princeton Review Publishing, L.L.C.*
 10.12    Letter Agreement, dated September 8, 1997, between the
          Registrant and Princeton Review Publishing, L.L.C.*
 10.13    Letter Agreement, dated October 20, 1998, between the
          Registrant and Princeton Review Publishing, L.L.C.*
 10.14    Mailing and Fulfillment Services Agreement, dated August 8,
          1996, between the Registrant and Aero Fulfillment Services.*
 10.15    Promissory Note (Equipment) to USTrust dated March 31,
          1999.*
 10.16    Master Note to USTrust Bank dated March 31, 1999.*
 10.17    Letter Agreement, dated May 3, 1999, between the Registrant
          and Ronald J. Kos.*
 10.18    Letter Agreement, dated May 20, 1999, between AT&T
          Communications, Inc. and the Registrant.+*
 10.19    Common Stock Purchase Warrant, dated July 21, 1999 issued to
          Lycos, Inc.**
 10.20    Sublease, dated as of May 20, 1999, between the Registrant
          and Morrison, Mahoney & Miller, LLP.
 21       Subsidiaries of the Registrant.
 23.1     Consent of PricewaterhouseCoopers LLP (Student Advantage,
          Inc.).
 23.2     Consent of PricewaterhouseCoopers LLP (Voice FX
          Corporation).
 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>

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

 * Incorporated herein by reference from the Registrant's Registration Statement
   on Form S-1 (File No. 333-75807).

** Incorporated herein by reference from the Registrant's Quarterly Report on
   Form 10-Q for the quarter ended June 30, 1999.

 + Confidential treatment previously granted by the Securities and Exchange
   Commission as to certain portions, which portions are omitted and filed
   separately with the Securities and Exchange Commission.
[{"type": "S-1", "sequence": "1", "description": "STUDENT ADVANTAGE, INC.", "secsgml_size_bytes": 458362}]
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1

    AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 8, 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) 912-2000
    (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) 912-2000
               (Name, address, including zip code, and telephone
               number, including area code, of agent for service)

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

                                   COPIES TO:

                              MARK G. BORDEN, ESQ.
                               HALE AND DORR LLP
                                60 STATE STREET
                          BOSTON, MASSACHUSETTS 02109
                           TELEPHONE: (617) 526-6000
                            TELECOPY: (617) 526-5000

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

    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.  [X]

    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
============================================================================================================================
PROPOSED            PROPOSED
                                                                       MAXIMUM             MAXIMUM
             TITLE OF SHARES TO                 AMOUNT TO BE       OFFERING PRICE         AGGREGATE           AMOUNT OF
               BE REGISTERED                     REGISTERED         PER SHARE(1)      OFFERING PRICE(1)   REGISTRATION FEE
----------------------------------------------------------------------------------------------------------------------------
Common Stock, $0.01 par value...............      1,219,447           $22.21875          $27,094,588           $7,153
============================================================================================================================
---------------
(1)  Determined in accordance with Rule 457(c) under the Securities Act of 1933,
     as amended, as the average of the bid and asked price of the common stock
     on the Nasdaq National Market on December 6, 1999.

    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 CONTAINED IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE
      CHANGED. THE SELLING STOCKHOLDERS NAMED IN THIS PROSPECTUS CANNOT SELL
      THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
      SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN
      OFFER TO SELL THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THESE
      SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.

                 SUBJECT TO COMPLETION, DATED DECEMBER 8, 1999

PROSPECTUS

                            [STUDENT ADVANTAGE LOGO]

                            STUDENT ADVANTAGE, INC.

                                1,219,447 SHARES

                                  COMMON STOCK

     Student Advantage previously issued 2,438,875 shares of common stock to the
former stockholders of University Netcasting, Inc. in connection with our
acquisition of that company. This prospectus relates to resales of 1,219,447 of
those shares.

     We will not receive any of the proceeds from the sale of the shares.

     We have agreed to pay certain expenses in connection with the registration
of the shares and to indemnify the selling stockholders against certain
liabilities. The selling stockholders will pay all underwriting discounts and
selling commissions, if any, in connection with the sale of the shares.

     The selling stockholders, or their pledgees, donees, transferees or other
successors in interest, may offer the shares through public or private
transactions at prevailing market prices, at prices related to prevailing market
prices or at privately negotiated prices. Our common stock is traded on the
Nasdaq National Market ("Nasdaq") under the symbol "STAD." On December 6, 1999,
the closing sale price of the common stock on Nasdaq was $22.25 per share.

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

                 INVESTING IN THE COMMON STOCK INVOLVES RISKS.
                    SEE "RISK FACTORS" BEGINNING ON PAGE 4.

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

     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.

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

                The date of this Prospectus is           , 1999.
3

     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. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE
SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY
JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. THE INFORMATION CONTAINED
IN THIS PROSPECTUS IS ACCURATE ONLY AS OF THE DATE OF THIS PROSPECTUS. IN THIS
PROSPECTUS, "STUDENT ADVANTAGE," "WE," "US" AND "OUR" REFER TO STUDENT
ADVANTAGE, INC. AND ITS SUBSIDIARIES.

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

                               TABLE OF CONTENTS
PAGE
                                                              ----
Summary.....................................................    1
Risk Factors................................................    4
Forward-Looking Statements..................................   13
Use of Proceeds.............................................   13
Market Price of Common Stock................................   13
Dividend Policy.............................................   13
Selected Consolidated Financial Data........................   14
Management's Discussion and Analysis of Financial Condition
  and Results of Operations.................................   16
Business....................................................   29
Management..................................................   42
Certain Transactions........................................   49
Principal Stockholders......................................   52
Selling Stockholders........................................   54
Description of Capital Stock................................   56
Plan of Distribution........................................   58
Legal Matters...............................................   59
Experts.....................................................   59
Additional Information......................................   59
Index to Financial Statements...............................  F-1
i
4

--------------------------------------------------------------------------------
                                    SUMMARY

     This summary highlights information contained elsewhere in this prospectus.
This summary may not contain all of the information that you should consider
before investing in our common stock. You should read the entire prospectus
carefully, including "Risk Factors" and the financial statements and the related
notes.

                               STUDENT ADVANTAGE

OUR BUSINESS..................  Student Advantage is dedicated to serving the
                                needs of college students through our leading
                                membership program and our network of web sites,
                                including studentadvantage.com, UWIRE.com and
                                FANSonly.com. 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.
                                We seek to enhance our brand online and provide
                                additional services to our members, businesses
                                and colleges with the objective of becoming the
                                leading online network of web sites 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 resource for their students and
                                  an opportunity for cost savings and increased
                                  revenue.

                                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.

                                We generated total revenue of $19.4 million in
                                1998 and $18.3 million in the first nine months
                                of 1999, and incurred a net loss of $10.5
                                million in 1998 and $14.2 million in the first
                                nine months of 1999.

OUR PRODUCTS AND SERVICES.....  Membership in Student Advantage provides
                                students with discounts on products and services
                                offered by over 55 national sponsors, including
                                Amtrak(R), Foot Locker, Greyhound, Staples,
                                Tower Records, textbooks.com and Barnes & Noble
                                College Bookstores, and over 15,000
                                participating locations in 125 local markets.
                                Student members also receive SAM, the Student
                                Advantage magazine.

                                A key component of our strategy is to make our
                                studentadvantage.com web site the centerpiece of
                                our membership program. We currently offer
                                content and services to all students through
                                studentadvantage.com, including our proprietary
                                U-WIRE news feed; community through online
                                bulletin boards and articles offering advice on
                                student life; and e-commerce through sponsors
                                including Staples, Greyhound, 1-800-FLOWERS.com
                                and textbooks.com. In order to receive discounts
                                on the products offered through our web site,
                                students must join our membership program.

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

                                        1
5

                                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.

                                We also provide tailored marketing services for
                                businesses seeking to market their products to
                                college students. Through our membership program
                                and network of web sites, 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, total discretionary spending
                                by college students in the 1997-1998 academic
                                year exceeded $105 billion.

                                In the United States, there are over 15 million
                                full-time and part-time undergraduate and
                                graduate students at more than 3,500 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.

RECENT DEVELOPMENTS...........  In October 1999, we acquired Voice FX
                                Corporation, a leading provider of internet and
                                interactive voice response services to colleges
                                and universities. Voice FX has secured a total
                                of over 55 contracts for its services. In
                                several cases, a single college or university
                                has entered into more than one contract for
                                Voice FX's services. Through these
                                relationships, Voice FX has been able to market
                                products and services to students in a targeted
                                manner, including while students are checking
                                their grades and financial aid status through
                                Voice FX's internet and telephone services.

                                In November 1999, we made an equity investment
                                of approximately $4.3 million in edu.com, Inc.,
                                a privately held e-commerce company focused on
                                the student market. Additionally, we entered
                                into a two-year marketing and distribution
                                agreement with edu.com.
                         ------------------------------

     Student Advantage's principal executive offices are located at 280 Summer
Street, Boston, Massachusetts 02210 and our telephone number at that location is
(617) 912-2000. Our principal web site is located at www.studentadvantage.com.
Information contained on any of our web sites is not part of this prospectus.

                                        2
6

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

                      SUMMARY CONSOLIDATED FINANCIAL DATA
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

     Set forth below are summary consolidated statements of operations data for
the years ended December 31, 1994, 1995, 1996, 1997 and 1998, and for the nine
months ended September 30, 1998 and 1999, and summary balance sheet data as of
September 30, 1999. 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." All amounts for all periods presented have been restated to reflect
the acquisition of University Netcasting, Inc. in June 1999, which was accounted
for as a pooling of interests.

     Effective June 18, 1999, University Netcasting, Inc.'s fiscal year end was
changed from March 31 to December 31 to conform to Student Advantage's fiscal
year end. University Netcasting, Inc.'s results of operations for the years
ended March 31, 1995, 1996, 1997, 1998 and 1999 have been included in Student
Advantage's December 31, 1994, 1995, 1996, 1997 and 1998 results, respectively.
University Netcasting's results of operations for the nine months ended December
31, 1998 have been included in Student Advantage's nine months ended September
30, 1998 results, respectively. Accordingly, University Netcasting's operations
for the three months ended March 31, 1999 will be included in Student
Advantage's results for both of the year ended December 31, 1998 and 1999 (when
presented). Total revenue and net loss for University Netcasting for the three
months ended March 31, 1999 were $682,000 and $1.6 million, respectively. This
net loss amount has been reported as an adjustment to the consolidated
accumulated deficit.
NINE MONTHS ENDED
                                                            YEAR ENDED DECEMBER 31,                          SEPTEMBER 30,
                                            --------------------------------------------------------   -------------------------
                                               1994          1995        1996      1997       1998        1998          1999
                                            -----------   -----------   -------   -------   --------   -----------   -----------
                                            (UNAUDITED)   (UNAUDITED)                                  (UNAUDITED)   (UNAUDITED)
STATEMENT OF OPERATIONS DATA
Total revenue.............................    $  155        $   769     $ 1,838   $ 4,815   $ 19,360     $13,710      $ 18,321
Total costs and expenses..................       984          2,982       4,480    11,566     30,017      18,833        33,262
Net loss..................................      (829)        (2,216)     (2,638)   (6,828)   (10,536)     (5,058)      (14,181)
Basic and diluted net loss per share......    $(0.06)       $ (0.16)    $ (0.18)  $ (0.41)  $  (0.59)    $ (0.29)     $  (0.57)
Shares used in computing basic and diluted
  net loss per share......................    14,184         14,184      14,384    16,588     17,710      17,492        24,776
Unaudited pro forma basic and diluted net
  loss per share(1).......................                                                  $  (0.46)    $ (0.23)     $  (0.47)
Shares used in computing unaudited pro
  forma basic and diluted net loss per
  share...................................                                                    22,772      21,785        29,877
SEPTEMBER 30, 1999
                                                              ------------------
                                                                 (UNAUDITED)
BALANCE SHEET DATA
Cash and cash equivalents...................................        $6,884
Marketable securities.......................................        35,340
Working capital.............................................        35,103
Total assets................................................        56,644
Deferred revenue............................................         8,295
Stockholders' equity........................................        40,838
---------------
(1) Pro forma information is based on the conversion of all outstanding shares
    of our convertible preferred stock into shares of common stock.

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

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                                  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.

WE HAVE EXPERIENCED LOSSES IN THE PAST AND EXPECT FUTURE LOSSES

     We have not achieved profitability and expect to continue to incur
operating losses for the foreseeable future. We incurred net losses of $6.8
million in 1997, $10.5 million in 1998 and $14.2 million in the first nine
months of 1999. As of September 30, 1999, our accumulated deficit was $38.7
million. We expect to continue to incur significant operating and capital
expenditures and, as a result, we will need to generate significant revenue to
achieve and maintain profitability.

     We 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 AND A DECLINE
IN REVENUE FROM AT&T WOULD ADVERSELY AFFECT OUR RESULTS

     We have a relationship with AT&T as our exclusive telecommunications
partner 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, and

     - marketing services.

     In 1997, we derived $2.4 million, or 50%, of our total revenue from AT&T.
In 1998, we derived $11.8 million, or 61%, of our total revenue from AT&T. For
the nine months ended September 30, 1999, we derived $10.9 million, or 60%, of
our total revenue from AT&T. To date, almost all of our members have received
their Student Advantage memberships at no charge from AT&T by either electing to
apply for an AT&T calling card in connection with their Student Advantage
membership or by receiving a free Student Advantage membership from AT&T. We
obtain these members as a result of AT&T's distribution of free 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. 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.

     We are in discussions with AT&T with respect to the possible restructuring
of our agreements with AT&T. There can be no assurance that such discussions
will result in any restructuring.

                                        4
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WE HAVE A LIMITED OPERATING HISTORY AND MAY FACE DIFFICULTIES ENCOUNTERED BY
EARLY STAGE COMPANIES IMPLEMENTING AN INTERNET STRATEGY

     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 possible
inability to:

     - sustain historical revenue growth rates,

     - generate sufficient revenue to achieve and maintain profitability,

     - implement our business model,

     - maintain the satisfaction of our members,

     - 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 is no longer employed as our president, AT&T can terminate
its agreements with us.

OUR RELATIONSHIP WITH AT&T COULD HINDER OUR ABILITY TO ATTRACT ADDITIONAL
SPONSORS

     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, without the consent of AT&T, from entering into a relationship with another
sponsor that will distribute our memberships free to students as an incentive or
through any promotion. Our relationship with AT&T could hinder our ability to
attract additional national sponsors, in particular sponsors who may be
interested in purchasing memberships for distribution to students.

WE MAY NOT SUCCESSFULLY IMPLEMENT OUR INTERNET STRATEGY

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

     - establish our network of web sites as the primary vehicle for delivery of
       our products and services, including member registration and renewal,
       information regarding national and local sponsors, and customer service,

     - expand our web sites to include more content and services for students
       and encourage our members to use the sites so that they become more
       attractive for advertisers, and

     - establish our network of web sites as an effective e-commerce platform.

     Our failure to successfully implement our internet strategy could have a
material adverse effect on our business.

OUR ABILITY TO GENERATE SIGNIFICANT REVENUES FROM ONLINE ACTIVITIES AND INTERNET
ADVERTISING IS UNCERTAIN

     It is unclear whether companies implementing an internet community business
model will generate sufficient revenues to achieve and maintain profitability.
Our ability to generate significant revenues from advertisers, sponsors and
other businesses 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

                                        5
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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 other internet-related activities, our
business model depends in part on increasing the amount of such revenue.

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

     Our operating results are dependent upon the college student market and we
expect them to vary seasonally based upon the typical school year. We tend to
sell most of our memberships in the beginning of the fall and winter academic
terms. All of these memberships expire on August 31 of each year. Because the
aggregate number of memberships within a school year increases as new members
are added beginning on September 1, and we recognize revenue from memberships
ratably over the period from the time of subscription until the end of our
membership year, our subscription revenue will typically be higher in the first
and second quarters than in the fourth quarter of each fiscal year. It is
difficult to determine how the third quarter will typically compare, since it
includes two calendar months from the end of a membership year and the first
month of the subsequent membership year.

     Our limited operating history and rapid growth make it difficult for us to
more fully assess the impact of seasonal factors on our business. Nevertheless,
because our business is dependent upon the student market, we expect that our
other revenue may be subject to seasonal fluctuations associated with the
typical school year. In particular, other revenue can be expected to be higher
during the third and fourth quarters due to increased activity associated with
the commencement of the school year. Conversely, the second quarter may have the
least amount of other revenue since it includes the months at the end of a
school year.

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

     In addition to the seasonal fluctuations described above, our revenues and
operating results may vary from quarter to quarter for a variety of other
reasons, such as the timing of revenues from corporate sponsors or non-recurring
charges incurred in connection with acquisitions.

     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. To date,
we have not maintained sufficient data to determine the specific number of
members who renew on a yearly basis. A failure to acquire new members 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 sponsors, 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

                                        6
10

to acquire or maintain alliances and relationships with colleges and
universities could have a material adverse effect on our business. In addition,
our agreements with a number of our sponsors preclude us from entering into
similar arrangements with their competitors. This restriction may prevent us in
some cases from offering attractive additional discounts to our members.

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, and we have been denied
access to certain college and university campuses. To date, we have not
maintained sufficient data to determine the specific number of colleges and
universities which have denied us access to their campuses. Any inability to
directly contact students on campus could have a material adverse effect on our
business.

WE FACE SIGNIFICANT COMPETITION ON THE INTERNET, WHICH COULD ADVERSELY AFFECT
OUR BUSINESS

     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 sites 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 AltaVista, Excite, Infoseek, Lycos and
       Yahoo!.

     The number of web sites competing for the attention and spending of
advertisers and consumers, including college students, has increased and we
expect it to continue to increase. This market is rapidly evolving and barriers
to entry are low, enabling newcomers to launch competing sites at relatively low
cost.

     Increased competition could result in price reductions, reduced margins or
loss of market share, any of which could adversely affect our business. Please
see "Business -- Competition."

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

                                        7
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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

     As part of our business strategy, we plan to acquire or make investments in
complementary businesses, products, services or technologies to increase our
online traffic and obtain new 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.

     We recently acquired several businesses, including University Netcasting,
Inc., a leading operator of official athletic web sites for colleges,
universities and college sports associations, and Voice FX Corporation, a
leading provider of internet and interactive voice response services to colleges
and universities. Achieving the anticipated benefits of these acquisitions will
depend in part upon whether the integration of these businesses is accomplished
in an efficient, effective and timely manner. In some cases, the difficulty
associated with integrating these businesses may be increased by the necessity
of coordinating geographically separated organizations. There can be no
assurance that the anticipated benefits of these acquisitions will be achieved.

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 $1.8 million in 1996 to $19.4 million in 1998 to
$18.3 million in the first nine months of 1999. During that same time period we
increased from fewer than 50 to more than 275 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.

OUR CURRENT FINANCIAL AND MANAGEMENT INFORMATION SYSTEMS MAY BE INADEQUATE TO
SUPPORT FUTURE OPERATIONS

     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 six months. If we incur delays or
difficulties in implementing an appropriate accounting system, our business
could be adversely affected.

OUR MANAGEMENT TEAM HAS LIMITED EXPERIENCE IN RUNNING A PUBLIC COMPANY

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

                                        8
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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. We may require
additional financing if capital requirements vary materially from those
currently planned.

     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 Student Advantage, 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.

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 Corporation'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, however we are developing a formal
disaster recovery program.

     Our network of web sites must accommodate a high volume of traffic and
deliver frequently updated information. Our web sites have in the past and may
in the future experience slower response times or decreased traffic for a
variety of reasons. These types of occurrences could cause users to perceive our
web sites 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 network of web sites.
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.

                                        9
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     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 sites 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 sites 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.

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

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

     On August 3, 1999, we filed an action in the United States District Court
for the Southern District of New York against CollegeClub.com, alleging among
other things, that CollegeClub.com has committed false advertising, unfair
competition, and tortious interference with contract in connection with
CollegeClub.com's promotion and marketing of its services, including but not
limited to the Discount Directory in its web site. We seek monetary damages and
equitable relief, including a preliminary and permanent injunction. As part of
its response, CollegeClub.com has filed counterclaims against us alleging
similar conduct on our part. CollegeClub.com seeks monetary damages and
equitable relief, including injunctive relief. We plan to vigorously oppose the
counterclaims alleged by CollegeClub.com and believe we have meritorious
defenses to each such counterclaim. However, due to the inherently uncertain
nature of litigation and the fact that discovery has not yet been completed, our
business may be adversely affected in the context of a trial or as a result of a
negotiated settlement. We filed a motion for a preliminary

                                       10
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injunction on October 18, 1999. On November 29, 1999, the court granted our
motion in part, and by order dated November 30, 1999, the court issued a
preliminary injunction against CollegeClub.com, which ordered CollegeClub.com to
take certain actions designed to remedy certain of the problems that are the
subject of the complaint.

THE INABILITY TO IDENTIFY OUR WEB SITE VISITORS MAY LIMIT THE EFFECTIVENESS OF
OUR SALES AND MARKETING EFFORTS

     Web sites typically place certain "cookies" on a user's hard drive without
the user's knowledge or consent. Cookies are small files of information about an
internet user's movement through the internet that are stored on the hard drive
of the user's computer. 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 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.

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 AND WE
MAY INFRINGE THE INTELLECTUAL PROPERTY RIGHTS OF OTHERS

     We believe that protection of our patent, 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:

     - patent, trademark and copyright law,

     - trade secret protection, and

     - confidentiality agreements with employees, customers, independent
       contractors, sponsors and others.

     Despite our best efforts, we cannot assure you that our intellectual
property rights will not be infringed, violated or legally imitated. Failure to
protect our intellectual property could have a material adverse effect on our
business.

     We have been, and expect to be, sued or named as a defendant in the future
for infringement of the trademark and other intellectual property rights of
third parties. Any such proceedings or claims could have a material adverse
effect on our business, financial condition and results of operations.

                                       11
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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.

     We have made an assessment of the Year 2000 readiness of our operating,
financial and administrative systems, including the hardware and software that
support our systems. Since third parties developed and currently support many of
the systems that we use, a significant part of this effort was to ensure that
these third-party systems are Year 2000 compliant. We have confirmed this
compliance solely through a combination of the representation by these third
parties of their products' Year 2000 compliance as well as reviews of Year 2000
readiness documentation from our vendors. Despite this effort, we cannot be
certain that none of the third party software, hardware or services incorporated
in our material systems will need to be revised or replaced. 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

     Based on the number of shares outstanding on October 31, 1999, our
executive officers, directors and affiliated entities together beneficially own
approximately 67% of our outstanding common stock. As a result, these
stockholders will 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 STOCK PRICE OF TECHNOLOGY COMPANIES, PARTICULARLY INTERNET-RELATED
COMPANIES, COULD BE EXTREMELY VOLATILE AND MAY RESULT IN LITIGATION AGAINST US

     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. 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 ON DECEMBER 15, 1999 COULD ADVERSELY AFFECT OUR
STOCK PRICE

     Upon expiration of lock-up agreements with the underwriters of the
company's initial public offering on December 15, 1999, approximately 24 million
shares of common stock, in addition to the shares covered by this prospectus,
will be eligible for resale in accordance with the provisions of the Securities
Act. If our stockholders sell substantial amounts of our common stock in the
public market, the market price of our common stock could fall.

                                       12
16

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.

                           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.

                                USE OF PROCEEDS

     Student Advantage will not receive any proceeds from the sale of the shares
covered by this prospectus.

                          MARKET PRICE OF COMMON STOCK

     Our common stock began trading on the Nasdaq Stock Market's National Market
System on June 18, 1999 under the symbol "STAD." Prior to that time there had
been no market for our common stock. The table below sets forth the high and low
closing sale prices for our common stock for the periods indicated:
HIGH       LOW
                                                       --------   --------
June 18 -- June 30, 1999.............................  $   9.50   $   7.50
July 1 -- September 30, 1999.........................  $13.9375   $10.0625
October 1 -- December 6, 1999........................  $  22.25   $ 12.125
The closing sale price of our common stock on December 6, 1999 was $22.25
per share.

                                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.

                                       13
17

                      SELECTED CONSOLIDATED FINANCIAL DATA

     The following selected consolidated 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 selected financial
data as of September 30, 1999, and for the nine months ended September 30, 1998
and 1999 are derived from unaudited financial statements included elsewhere in
this prospectus. In the opinion of management, the unaudited financial
statements have been prepared on a basis consistent with the audited financial
statements which appear elsewhere in this prospectus and include all
adjustments, which are only normal recurring adjustments, necessary for a fair
presentation of the financial position and results of operations for the
unaudited periods. The historical results presented are not necessarily
indicative of future results. 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. All amounts for all periods presented
have been restated to reflect the acquisition of University Netcasting, Inc. in
June 1999, which was accounted for as a pooling of interests.

     Effective June 18, 1999, University Netcasting, Inc.'s fiscal year end was
changed from March 31 to December 31 to conform to Student Advantage's fiscal
year end. University Netcasting, Inc.'s results of operations for the years
ended March 31, 1995, 1996, 1997, 1998 and 1999 have been included in Student
Advantage's December 31, 1994, 1995, 1996, 1997 and 1998 results, respectively.
University Netcasting's results of operations for the three and nine months
ended December 31, 1998 have been included in Student Advantage's three and nine
months ended September 30, 1998 results, respectively. Accordingly, University
Netcasting's operations for the three months ended March 31, 1999 will be
included in Student Advantage's results for both of the year ended December 31,
1998 and 1999 (when presented). Total revenue and net loss for University
Netcasting for the three months ended March 31, 1999 were $682,000 and $1.6
million, respectively. This net loss amount has been reported as an adjustment
to the consolidated accumulated deficit.
NINE MONTHS
                                                                                                                  ENDED
                                                             YEAR ENDED DECEMBER 31,                          SEPTEMBER 30,
                                             --------------------------------------------------------   -------------------------
                                                1994          1995        1996      1997       1998        1998          1999
                                             -----------   -----------   -------   -------   --------   -----------   -----------
                                             (UNAUDITED)   (UNAUDITED)                                  (UNAUDITED)   (UNAUDITED)
                                                                    (IN THOUSANDS, EXCEPT PER SHARE DATA)
STATEMENT OF OPERATIONS DATA

Revenue
  Subscription.............................   $    131       $   420     $ 1,093   $ 2,971   $  7,174     $ 5,868      $  6,194
  Other....................................         24           349         745     1,844     12,186       7,842        12,127
                                              --------       -------     -------   -------   --------     -------      --------
    Total revenue..........................        155           769       1,838     4,815     19,360      13,710        18,321
                                              --------       -------     -------   -------   --------     -------      --------
Costs and expenses
  Cost of subscription revenue.............        126           160         543     2,628      2,442       1,666         1,989
  Cost of other revenue....................         --           135         570       702      7,867       4,305         8,888
  Product development......................        292         1,151       1,516     3,253      4,948       3,510         6,169
  Sales and marketing......................         57           671         536     1,905      7,313       4,948         8,067
  General and administrative...............        508           864       1,208     2,727      5,484       3,310         6,186
  Depreciation and amortization............          1             1         107       351      1,155       1,094         1,126
  Stock-based compensation.................         --            --          --        --        808          --           837
                                              --------       -------     -------   -------   --------     -------      --------
    Total costs and expenses...............        984         2,982       4,480    11,566     30,017      18,833        33,262
                                              --------       -------     -------   -------   --------     -------      --------
  Loss from operations.....................       (829)       (2,213)     (2,642)   (6,751)   (10,657)     (5,123)      (14,941)
  Interest income (expense), net...........         --            (3)          4       (77)       121          65           760
                                              --------       -------     -------   -------   --------     -------      --------
  Net loss.................................   $   (829)      $(2,216)    $(2,638)  $(6,828)  $(10,536)    $(5,058)     $(14,181)
                                              ========       =======     =======   =======   ========     =======      ========
  Basic and diluted net loss per share.....   $  (0.06)      $ (0.16)    $ (0.18)  $ (0.41)  $  (0.59)    $ (0.29)     $  (0.57)
                                              ========       =======     =======   =======   ========     =======      ========
  Shares used in computing basic and
    diluted net loss per share.............     14,184        14,184      14,384    16,588     17,710      17,492        24,776
                                              ========       =======     =======   =======   ========     =======      ========
  Unaudited pro forma basic and diluted
    net loss per share.....................                                                  $  (0.46)    $ (0.23)     $  (0.47)
                                                                                             ========     =======      ========
  Shares used in computing unaudited pro
    forma basic and diluted net loss per
    share..................................                                                    22,772      21,785        29,877
                                                                                             ========     =======      ========
14
18
YEAR ENDED DECEMBER 31,
                                                              ----------------------------------------   SEPTEMBER 30,
                                                                 1995       1996     1997       1998         1999
                                                              ----------   ------   -------   --------   -------------
                                                              (UNAUDITED)                                (UNAUDITED)
                                                                                 (IN THOUSANDS)
BALANCE SHEET DATA
Cash and cash equivalents...................................   $    47     $  702   $ 5,806   $  6,140      $ 6,884
Marketable securities.......................................        --         --        --         --       35,340
Working capital.............................................      (928)      (114)   (1,670)    (2,355)      35,103
Total assets................................................       338      1,118     7,217     11,704       56,644
Deferred revenue............................................       183        276     5,970      7,064        8,295
Redeemable convertible preferred stock......................        --         54       111     10,196           --
Stockholders' equity (deficit)..............................    (1,065)       (70)   (1,024)   (10,548)      40,838
15
19

                      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 network of web sites. Our revenue is
generated from subscription revenue and other revenue.

     Subscription revenue is derived from membership sales. Memberships are sold
in three different ways. Almost all 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. In certain cases,
renewal of a co-branded membership card is subject to a minimum level of usage
of AT&T services during the prior twelve months. 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 1997 and 1998 and the first nine
months of 1999, AT&T accounted for approximately 77%, 95% and 94% of
subscription revenue. Memberships are also sold by Student Advantage to
colleges, universities and university organizations for distribution free of
charge to students. In the 1998-1999 academic year, five colleges, universities
and university organizations purchased memberships 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 commerce, marketing services and advertising
revenue. Commerce revenue includes primarily transaction-based fees earned for
reselling products and services on behalf of other businesses. 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 and the resale of
Eurail passes. In connection with each application accepted by AT&T, we also
earn membership fees that are included in subscription revenue. 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. 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 sites.

     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.
We acquired substantially all the assets of The Main Quad for $272,000 and the
issuance of 1,417,720 shares of common stock. 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. We acquired substantially all the assets of Collegiate Advantage for
$651,000

                                       16
20

and the assumption of $275,000 in liabilities. We are also required to make
payments totaling $715,000 to Collegiate Advantage in three installments ending
on January 31, 2001. As of September 30, 1999, $325,000 remain outstanding.
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.

     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. We acquired
substantially all of the assets of The Campus Agency and The Travel Holding
Group for a promissory note in the amount of $330,000. These acquisitions have
been accounted for under the purchase method of accounting, and the results of
operations of each company have been included in our results beginning on the
acquisition date. Goodwill and other intangible assets in the aggregate amount
of $305,000 were recorded in connection with these acquisitions and will be
amortized over three years.

     On May 27, 1999, we acquired substantially all of the assets of Mentor
Interactive Corp., a provider of internet-based research tools and related
materials, in exchange for 18,056 shares of common stock and a warrant to
purchase 24,000 shares of common stock at a purchase price of $11.08 per share
with an aggregate estimated fair value of approximately $300,000. This
acquisition has been accounted for under the purchase method of accounting and
the results of Mentor Interactive Corp. have been included in our results
beginning on the acquisition date. Goodwill and other intangible assets in the
aggregate amount of $312,000 were recorded in connection with the acquisition
and are being amortized over a three year period.

     On June 11, 1999, we acquired Transaction Service Providers, Inc., a
provider of debit card services to college students and local merchants, in a
transaction accounted for as a pooling of interests. Because the historical
results of operations and financial position of Transaction Services Providers
were immaterial to Student Advantage, prior period financial statements have not
been restated and Transaction Service Providers' results of operations have been
included in our results as of April 1, 1999. In connection with the acquisition,
we issued 195,000 shares of common stock to the stockholders of Transaction
Service Providers.

     On June 18, 1999, we acquired all of the outstanding capital stock of
University Netcasting, Inc. in exchange for 2,438,875 shares of our common stock
and the assumption of options to purchase a total of 66,634 shares of our common
stock. University Netcasting is a leading operator of official athletic web
sites for colleges, universities and college sports associations. Through its
FANSonly Network, FANSonly.com, University Netcasting provides sports fans with
comprehensive online information and analysis on college sports. This
acquisition was accounted for using the pooling-of-interests method and,
accordingly, the historic consolidated financial statements of Student Advantage
prior to the acquisition have been restated to reflect the financial position,
results of operations and cash flows of University Netcasting.

     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.

     On June 23, 1999, we completed an initial public offering of 6,000,000
shares of our common stock resulting in net proceeds to us of approximately
$44.6 million. Upon the closing of the initial public offering, each outstanding
share of our redeemable convertible preferred stock converted into shares of
common stock on a three-for-one basis. On July 21, 1999, we issued an additional
900,000 shares of common stock as a result of the full exercise of the
underwriters' over-allotment option. We received additional net proceeds of $6.7
million as a result of such exercise.

                                       17
21

     On July 21, 1999, we entered into a marketing agreement with Lycos, Inc. In
connection with the transaction, Lycos was granted a warrant to purchase 550,000
shares of our common stock at a price of $10.875 per share. The Lycos warrant
terminates on July 21, 2002 and is exercisable on or after July 21, 2000. We
valued the Lycos warrant at $2.2 million, which will be recognized as a sales
and marketing expense on a straight-line basis over the thirty-month term of the
marketing agreement.

     We recorded deferred compensation of $4.2 million in the year ended
December 31, 1998 and $228,000 in the first quarter of 1999, representing the
difference between the exercise price of stock options granted 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, $808,000 had been amortized as of December 31,
1998 and an additional $837,000 had been amortized during the nine months ended
September 30, 1999. The amortization of deferred compensation is recorded as an
operating expense. We currently expect to amortize the following remaining
amounts of deferred compensation as of September 30, 1999 in the periods
indicated:
October 1, 1999 -- December 31, 1999........................  $  282,000
January 1, 2000 -- December 31, 2000........................   1,073,000
January 1, 2001 -- December 31, 2001........................   1,015,000
January 1, 2002 -- December 31, 2002........................     384,000
Student Advantage has experienced substantial net losses since 1996 and, as
of September 30, 1999, had an accumulated deficit of $38.7 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.

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

RECENT EVENTS

     On October 7, 1999, Student Advantage acquired Voice FX Corporation, a
leading provider of internet and interactive voice response services to colleges
and universities. In connection with the acquisition, we paid approximately $1.1
million in cash, issued 430,082 shares of our common stock and assumed options
to purchase a total of 59,687 shares of our common stock. The acquisition has
been accounted for under the purchase method of accounting and the results of
operations will be included in our results of operations beginning on the
acquisition date. Goodwill and other intangible assets in the aggregate amount
of $6.3 million will be recorded in connection with the acquisition and will be
amortized on a straight-line basis over expected useful lives of between three
and five years.

     On November 12, 1999 Student Advantage made an equity investment in
edu.com, Inc., a privately held e-commerce company. We paid approximately $4.3
million in cash for approximately 922,000 shares of Series B preferred stock of
edu.com. We are accounting for our investment in edu.com on the cost basis of
accounting. Additionally, we entered into a two-year marketing and distribution
agreement with edu.com. The agreement provides, among other things, that edu.com
will become Student Advantage's exclusive technology e-commerce partner and
rewards program provider, that the parties will pursue certain promotional
initiatives on each other's behalf, and that edu.com will make certain payments
to Student Advantage, including $2.0 million payable over the term of the
agreement.

                                       18
22

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:
NINE MONTHS
                                                                                 ENDED
                                                                             SEPTEMBER 30,
                                                  YEAR ENDED DECEMBER 31,     (UNAUDITED)
                                                  -----------------------    --------------
                                                  1996     1997     1998     1998     1999
                                                  -----    -----    -----    -----    -----
Revenue
  Subscription................................      59%      62%      37%      43%      34%
  Other.......................................      41       38       63       57       66
                                                  ----     ----      ---      ---      ---
          Total revenue.......................     100      100      100      100      100
                                                  ----     ----      ---      ---      ---
Costs and expenses
  Cost of subscription revenue................      30       55       13       12       11
  Cost of other revenue.......................      31       15       41       31       49
  Product development.........................      82       67       25       26       34
  Sales and marketing.........................      29       39       38       36       44
  General and administrative..................      66       57       28       24       34
  Depreciation and amortization...............       6        7        6        8        6
  Stock-based compensation....................      --       --        4       --        4
                                                  ----     ----      ---      ---      ---
          Total costs and expenses............     244      240      155      137      182
                                                  ----     ----      ---      ---      ---
Loss from operations..........................    (144)    (140)     (55)     (37)     (82)
Interest income (expense), net................       0       (2)       1        0        5
                                                  ----     ----      ---      ---      ---
Net loss......................................    (144)%   (142)%    (54)%    (37)%    (77)%
                                                  ====     ====      ===      ===      ===
Comparison of the Nine Months Ended September 30, 1999 with the Nine Months
Ended September 30, 1998

     Revenue.  Total revenues increased to $18.3 million for the nine months
ended September 30, 1999 from $13.7 million for the nine months ended September
30, 1998. This increase was due primarily to an increase in other revenue to
$12.1 million in the nine months ended September 30, 1999, from $7.8 million for
the nine months ended September 30, 1998. The increase in other revenue was
primarily due to $1.4 million related to an agreement entered into in February
1998 with AT&T to provide management and execution of AT&T's on-campus marketing
initiatives, under which we did not derive any revenue during the first nine
months of 1998. Additionally, the AT&T marketing agreement was not in effect
until the third quarter of 1998. Other factors contributing to the increase were
web advertising revenue, advertising revenue from three issues of Student
Advantage magazine which had not yet been published in the first three quarters
of 1998, revenue from the sale of Eurail passes as a result of the Company's
acquisition of The Travel Holding Group business on April 1, 1999 and revenue as
a result of the Company's acquisition of The Campus Agency business on April 1,
1999. Marketing services revenue increased primarily due to the signing of
several contracts not in effect in the third quarter of 1998 and was offset, in
part, by the expiration of a contract which was in effect during the first
quarter of 1998.

     AT&T accounted for approximately 60% and 62% of total revenue for the nine
months ended September 30, 1999 and the nine months ended September 30, 1998,
respectively. Additionally, AT&T accounted for approximately 94% and 95% of
subscription revenue and 42% and 38% of other revenue for the nine months ended
September 30, 1999 and the nine months ended September 30, 1998, respectively.
No other single customer accounted for 10% or more of total revenues for the
nine months ended September 30, 1999 or the nine months ended September 30,
1998, respectively.

     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 increased to $2.0 million for the nine
months ended September 30, 1999 from $1.7 million for the nine months ended

                                       19
23

September 30, 1998, due primarily to an increase in costs related to the
fulfillment of our membership subscriptions.

     Cost of subscription revenue as a percentage of subscription revenue
increased to 32.1% for the nine months ended September 30, 1999 from 28.4% for
the nine months ended September 30, 1998. Membership fulfillment costs, which
are recorded when the membership is fulfilled, increased as the volume of
memberships increased in the fall of 1999. However, because the revenue
associated with these memberships is recognized over the remaining term of the
memberships, much of the revenue associated with the memberships fulfilled in
the fall of 1999 will not be recognized until 2000.

     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. It also includes royalties paid to organizations,
primarily colleges, universities and athletic associations for the use of
organizational information and indicia (name and logo), and for supplying sports
activity content for Student Advantage to include in the FANSonly.com web sites.
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 for AT&T and costs associated
with the sale of Eurail passes. Cost of other revenue increased to $8.9 million
for the nine months ended September 30, 1999 from $4.3 million for the nine
months ended September 30, 1998. This increase is due primarily to an increase
of $1.6 million in costs associated with the Student Advantage magazine, of
which three issues were distributed during the nine months ended September 30,
1999 and no issues were distributed during the same period in 1998. The
acquisitions of The Travel Holding Group and The Campus Agency businesses during
the nine months ended September 30, 1999 contributed $1.4 million in expense.
Additionally, costs associated with providing services relating to an AT&T
on-campus marketing program and the AT&T marketing agreement, the latter of
which was first incurred in the third quarter of 1998, contributed to the
increase. Other increases in marketing services expenses primarily attributable
to the signing of several contracts not in effect in the first nine months of
1998 were offset, in part, by the expiration of a contract which was in effect
during the first quarter of 1998.

     Cost of other revenue as a percentage of other revenue increased to 73.3%
for the nine months ended September 30, 1999 from 54.9% for the nine months
ended September 30, 1998. This increase was due primarily to a larger portion of
other revenue consisting of lower margin activities associated with the
marketing services business acquired from Collegiate Advantage, the services
delivered under both the AT&T marketing agreement and the AT&T on-campus
marketing program, and the Rail Connection and Campus Agency businesses acquired
from The Travel Holdings Group, LLC. The increase in cost of other revenues as a
percentage of total revenue is also due to costs associated with the production
of SAM, which exceeded revenue from the production of SAM.

     Product Development.  Product development expenses consist primarily of
personnel-related and consulting costs associated with the development and
enhancement of membership products, which include the Student Advantage
membership card, the Student Advantage magazine, and the studentadvantage.com
and FANSonly.com web sites. Product development expenses increased to $6.2
million for the nine months ended September 30, 1999 from $3.5 million for the
nine months ended September 30, 1998. The increase is primarily due to $1.4
million incurred in connection with the re-launch of studentadvantage.com in
September 1999 and the development of our customer database, as well as
additional personnel related costs.

     Sales and Marketing.  Sales and marketing expenses consist primarily of
personnel and other costs related to our sales and marketing programs. Sales and
marketing expenses increased to $8.1 million for the nine months ended September
30, 1999 from $4.9 million for the nine months ended September 30, 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 addition, in connection with the

                                       20
24

Lycos, Inc. marketing agreement entered into in the third quarter of 1999, we
recorded a warrant valued at $2.2 million. Of this amount, $220,000 was
amortized to sales and marketing expense in the nine months ended September 30,
1999. The remainder is being amortized on a straight line basis over the
remaining term of the agreement.

     General and Administrative.  General and administrative expenses consist
primarily of costs related to general corporate functions, including executive
management, finance, human resources, facilities, accounting and legal. General
and administrative expenses increased to $6.2 million for the nine months ended
September 30, 1999 from $3.3 million for the nine months ended September 30,
1998. The increase in general and administrative expenses is primarily due to
acquisition costs of $1.3 million related to the acquisitions of University
Netcasting, Inc. and Transaction Service Providers, Inc., and increases in
facilities, legal, accounting and personnel related costs.

     Depreciation and Amortization.  Depreciation and amortization expenses
remained virtually unchanged at $1.1 million for the nine months ended September
30, 1999 and the nine months ended September 30, 1998. Decreases in amortization
expense as a result of certain intangible assets becoming completely amortized
during the first nine months of 1999, were offset by increases in depreciation
expense as a result of fixed asset purchases during 1999.

     Stock-Based Compensation.  We recorded deferred compensation of $4.2
million in the year ended December 31, 1998 and an additional $228,000 for the
nine months ended September 30, 1999. Of this amount, $1.6 million has been
amortized to expense to date, of which $837,000 was recorded as an expense
during the nine months ended September 30, 1999. The remainder is being
amortized over the remaining vesting period of the individual options.

     Interest Income (Expense), Net.  Interest income (expense), net includes
interest income from cash balances and interest expense related to Student
Advantage's financing obligations. Interest income (expense), net increased to
$760,000 for the nine months ended September 30, 1999 from $65,000 for the nine
months ended September 30, 1998. The increase is a result of interest income
earned on higher average cash and cash equivalents balance during the nine
months ended September 30, 1999 compared to that of the nine months ended
September 30, 1998.

  Comparison of Year Ended December 31, 1998 with Year Ended December 31, 1997

     Revenue.  Total revenue increased from $4.8 million in 1997 to $19.4
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
from $1.8 million in 1997 to $12.2 million in 1998 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 50% and 61% of total revenue for 1997 and
1998. Additionally, AT&T accounted for approximately 77% and 95% of subscription
revenue for 1997 and 1998, and 4% and 41% 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 decreased from
$2.6 million in 1997 to $2.4 million in 1998, due primarily to decreased costs
associated with fulfilling membership subscriptions.

     Cost of subscription revenue as a percentage of subscription revenue
decreased from 88.5% in 1997 to 34.0% in 1998. This decrease was due primarily
to the timing of the recognition of revenue and expenses associated with the
commencement of activities under the AT&T membership agreement in 1997.
Membership fulfillment costs, which are recorded when the membership is
fulfilled, increased significantly

                                       21
25

as the volume of memberships increased in the Fall of 1997. However, because the
revenue associated with these memberships is recognized over the remaining term
of the memberships, much of the revenue associated with the memberships
fulfilled in the Fall of 1997 was not recognized until 1998.

     Cost of Other Revenue.  Cost of other revenue increased from $702,000 in
1997 to $7.9 million in 1998. The increase in cost of other revenue was due
primarily to the addition of Collegiate Advantage and its 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.

     Cost of other revenue as a percentage of other revenue increased from 38.1%
in 1997 to 64.6% in 1998. This increase was due primarily to a larger portion of
other revenue consisting of lower margin activities associated with the
marketing services business acquired from Collegiate Advantage and the services
delivered under the AT&T marketing agreement. The increase in cost of other
revenues as a percentage of total revenue is also due to costs associated with
the production of SAM, which exceeded revenue from the production of SAM.

     Product Development.  Product development expenses increased from $3.3
million in 1997 to $4.9 million in 1998. The increase was primarily due to
increased investment in enhancing and improving the functionality of our web
site and other related costs.

     Sales and Marketing.  Sales and marketing expenses increased from $1.9
million in 1997 to $7.3 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 sponsors, 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 increased
from $2.7 million in 1997 to $5.5 million in 1998. The increase in general and
administrative expenses was primarily due to facilities and personnel-related
costs.

     Depreciation and Amortization.  Depreciation and amortization expenses
increased from $351,000 in 1997 to $1.2 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 was
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 increased from an
expense $77,000 in 1997 to income of $121,000 in 1998. The increase was a result
of interest income earned on cash balances as a result of the conversion of the
notes payable to convertible preferred stock and the issuance of convertible
preferred stock in February, April, and October of 1998, as well as interest
from a promissory note to a stockholder, which were offset by interest due on
borrowings under our line of credit and notes payable to stockholders.
Additionally, Student Advantage incurred interest expense related to loans from
its chief executive officer, which were repaid in full in 1998.

     Comparison of Year Ended December 31, 1997 with Year Ended December 31,
1996

     Revenue.  Total revenue increased from $1.8 million in 1996 to $4.8 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
$745,000 in 1996 to $1.8 million in 1997, due primarily to increased advertising
revenue and, to a lesser extent, an increase in commerce revenue.

                                       22
26

     AT&T accounted for approximately 50% 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 was 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 subscription revenue as a percentage of subscription revenue
increased from 49.7% in 1996 to 88.5% in 1997. This increase was due primarily
to the timing of the recognition of revenue and expenses associated with the
commencement of activities under the AT&T membership agreement in 1997.

     Cost of Other Revenue.  Cost of other revenue increased from $570,000 in
1996 to $702,000 in 1997, due primarily to higher advertising costs.

     Cost of other revenue as a percentage of other revenue decreased from 76.5%
in 1996 to 38.1% in 1997 due primarily to reduced costs of advertising as a
percentage of advertising revenue and slightly offset by the costs associated
with the increased commerce revenue.

     Product Development.  Product development expenses increased from $1.5
million in 1996 to $3.3 million in 1997. The increase was 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 sponsors.

     Sales and Marketing.  Sales and marketing expenses increased from $536,000
in 1996 to $1.9 million in 1997. The increase in sales and marketing was due to
increased expenditures to support the membership subscription business, which
grew significantly in 1997 with the addition of the AT&T membership agreement,
as well as, the online advertising business related to the University Netcasting
business.

     General and Administrative.  General and administrative expenses increased
from $1.2 million in 1996 to $2.7 million in 1997. The increase in general and
administrative expenses was 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 $107,000 in 1996 to $351,000 in 1997, primarily due to the
amortization of goodwill and other intangible assets resulting from
acquisitions.

     Interest Income (Expense), Net.  Interest income decreased from $4,000 of
net interest income in 1996 to $77,000 of net interest expense in 1997. The
decrease was a result of interest due on borrowings under our line of credit and
loans from our Chief Executive Officer.

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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 and each
of the three quarters in the nine month period ended September 30, 1999. In the
opinion of management, the unaudited financial statements have been prepared on
a basis consistent with the audited financial statements which appear elsewhere
in this prospectus and include all adjustments, which are only normal recurring
adjustments, necessary for a fair presentation of the financial position and
results of operations for the unaudited periods. The quarterly data should be
read in conjunction with "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and 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. All amounts for all periods have been restated to reflect the
acquisition of University Netcasting, Inc. in June 1999, which was accounted for
as a pooling of interests.
QUARTER ENDED
                                        ---------------------------------------------------------------------------------------
                                        MARCH 31,    JUNE 30,    SEPT. 30,    DEC. 31,    MARCH 31,    JUNE 30,   SEPTEMBER 30,
                                          1998         1998        1998         1998        1999         1999         1999
                                        ---------    --------    ---------    --------    ---------    --------   -------------
                                                                       (UNAUDITED, IN THOUSANDS)
Revenue
  Subscription........................   $ 1,738     $ 2,274      $ 1,856     $ 1,306      $ 1,668     $ 2,366       $ 2,160
  Other...............................     1,873       1,377        4,593       4,343        3,239       2,426         6,463
                                         -------     -------      -------     -------      -------     -------       -------
    Total revenue.....................     3,611       3,651        6,449       5,649        4,907       4,792         8,623
                                         -------     -------      -------     -------      -------     -------       -------
Costs and expenses
  Cost of subscription revenue........       302         413          951         776          320         484         1,185
  Cost of other revenue...............     1,595         944        1,767       3,562        2,676       2,147         4,065
  Product development.................       918       1,363        1,228       1,379        1,257       1,553         3,359
  Sales and marketing.................     1,167       1,621        2,160       2,375        2,120       2,837         3,109
  General and administrative..........       781       1,122        1,408       1,925        1,823       2,552         1,814
  Depreciation and amortization.......       271         488          335         359          370         364           392
  Stock-based compensation............        --          --           --         808          273         282           282
                                         -------     -------      -------     -------      -------     -------       -------
    Total costs and expenses..........     5,034       5,951        7,849      11,184        8,839      10,219        14,206
                                         -------     -------      -------     -------      -------     -------       -------
Loss from operations..................    (1,423)     (2,300)      (1,400)     (5,535)      (3,932)     (5,427)       (5,583)
Interest income (expense), net........        53          22          (10)         57           73          50           637
                                         -------     -------      -------     -------      -------     -------       -------
Net loss..............................   $(1,370)    $(2,278)     $(1,410)    $(5,478)     $(3,859)    $(5,377)      $(4,946)
                                         =======     =======      =======     =======      =======     =======       =======
PERCENTAGE OF TOTAL REVENUE
                                        ---------------------------------------------------------------------------------------
                                        MARCH 31,    JUNE 30,    SEPT. 30,    DEC. 31,    MARCH 31,    JUNE 30,   SEPTEMBER 30,
                                          1998         1998        1998         1998        1999         1999         1999
                                        ---------    --------    ---------    --------    ---------    --------   -------------
                                                                              (UNAUDITED)
Revenue
  Subscription........................      48.1%       62.3%        28.8%       23.1%        34.0%       49.4%         25.0%
  Other...............................      51.9        37.7         71.2        76.9         66.0        50.6          75.0
                                         -------     -------      -------     -------      -------     -------       -------
    Total revenue.....................     100.0       100.0        100.0       100.0        100.0       100.0         100.0
                                         -------     -------      -------     -------      -------     -------       -------
Costs and expenses
  Cost of subscription revenue........       8.4        11.3         14.7        13.7          6.5        10.1          13.7
  Cost of other revenue...............      44.2        25.9         27.4        63.1         54.5        44.8          47.1
  Product development.................      25.4        37.3         19.0        24.4         25.6        32.4          39.0
  Sales and marketing.................      32.3        44.4         33.5        42.0         43.2        59.2          36.1
  General and administrative..........      21.6        30.7         21.8        34.1         37.2        53.3          21.0
  Depreciation and amortization.......       7.5        13.4          5.2         6.3          7.5         7.6           4.5
  Stock-based compensation............        --          --           --        14.3          5.6         5.9           3.3
                                         -------     -------      -------     -------      -------     -------       -------
    Total costs and expenses..........     139.4       163.0        121.6       197.9        180.1       213.3         164.7
                                         -------     -------      -------     -------      -------     -------       -------
Loss from operations..................     (39.4)      (63.0)       (21.6)      (97.9)       (80.1)     (113.3)        (64.7)
Interest income (expense), net........       1.5         0.6         (0.2)        1.0          1.5         1.0           7.4
                                         -------     -------      -------     -------      -------     -------       -------
Net loss..............................     (37.9)%     (62.4)%      (21.8)%     (96.9)%      (78.6)%    (112.3)%       (57.3)%
                                         =======     =======      =======     =======      =======     =======       =======
24
28

     Our operating results are dependent upon the college student market and we
expect them to vary seasonally based upon the typical school year. We tend to
sell most of our memberships in the beginning of the fall and winter academic
terms. All of these memberships expire on August 31 of each year. Because the
aggregate number of memberships within a school year increases as new members
are added beginning on September 1, and we recognize revenue from memberships
ratably over the period from the time of subscription until the end of our
membership year, our subscription revenue will typically be higher in the first
and second quarters than in the fourth quarter of each fiscal year. It is
difficult to determine how the third quarter will typically compare, since it
includes two calendar months from the end of a membership year and the first
month of the subsequent membership year.

     Our limited operating history and rapid growth make it difficult for us to
more fully assess the impact of seasonal factors on our business. Nevertheless,
because our business is dependent upon the student market, we expect that our
other revenue may be subject to seasonal fluctuations associated with the
typical school year. In particular, other revenue can be expected to be higher
during the third and fourth quarters due to increased activity associated with
the commencement of the school year. Conversely, the second quarter may have the
least amount of other revenue since it includes the months at the end of a
school year.

     In 1998, our other revenue was higher in the third and fourth quarters than
in other quarters due in part to the seasonality factor noted above and in part
to the commencement of activities under the AT&T marketing agreement, under
which we receive fees for obtaining calling card applications from students. The
Student Advantage Magazine, SAM, began publication in the fourth quarter of
1998. Other revenue and the cost of other revenue were each affected in the
fourth quarter of 1998 and the first quarter of 1999 by the publication of two
issues of SAM in each of those quarters.

     Partly because of the seasonality factor noted above and partly because SAM
was not published in the second quarter, other revenue in the second quarter of
1999 was significantly less than it was in the third and fourth quarters of 1998
and the first quarter of 1999. In the third quarter of 1999, similar to the
third quarter of 1998, we experienced a significant increase in other revenue.
This increase in other revenue was due in part to the commencement of a new
academic year, related increased marketing services and other back-to-school
activities and the publishing of an issue of SAM. Partly because of the
seasonality factor noted above, subscription revenue for the third quarter of
1999 decreased from the second quarter of 1999.

LIQUIDITY AND CAPITAL RESOURCES

     Student Advantage has financed its operations primarily through the private
placement and public offering 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. In June 1999, we completed our
initial public offering selling 6.0 million shares of common stock and raising
$44.6 million, net of offering costs. On July 21, 1999, an additional 900,000
shares were issued by Student Advantage as a result of the full exercise of the
underwriters' over-allotment option, resulting in additional net proceeds of
$6.7 million. As of September 30, 1999, Student Advantage had $42.2 million in
cash, cash equivalents and marketable securities.

     Net cash provided by operating activities was $852,000 for 1997, net cash
used for operating activities was $7.2 million in 1998 and $13.5 million for the
nine months ended September 30, 1999. Net cash used in the first nine months of
1999 was primarily a result of a net loss of $14.2 million and increase in
accounts receivable of $3.3 million and prepaid, other current assets and other
assets of $1.9 million. These increases were partially offset by an increase in
deferred revenue of $1.2 million and an increase in accrued expenses of $2.1
million. Net cash used for operations for 1998 resulted primarily from an
increase in accounts receivable of $2.7 million in 1998 and a net loss of $10.5
million 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 provided by operations in 1997 was affected by an
increase in deferred revenue of $5.7 million. Deferred revenue represents
primarily payments for

                                       25
29

membership fees not yet recognized as revenue and advance payments for purchases
of memberships and other services.

     Net cash used for investing activities was $786,000 in 1997, $2.0 million
in 1998 and $38.0 million in the first nine months of 1999. The net cash used
for investing activities in the first nine months of 1999 was primarily due to
$35.3 million used for purchases of marketable securities, net of proceeds from
the sale of marketable securities, and to a lesser extent the purchase of fixed
assets and the acquisitions of the Travel Holding Group and Campus Agency
businesses. Net cash used for investing activities in 1998 was due primarily to
the purchase of fixed assets and the acquisition of Collegiate Advantage in
1998. In 1997, Student Advantage used cash for investing activities to purchase
fixed assets and for its acquisition of The Main Quad.

     Net cash provided by financing activities was $5.0 million in 1997, $9.5
million in 1998, and $50.5 million in the first nine months of 1999. The net
cash provided by financing activities in the first nine months of 1999 was
primarily the result of the proceeds of $49.9 million in connection with sales
of the Student Advantage's common stock. Cash provided by financing activities
in 1998 was primarily due to net cash proceeds of $11.9 million from the sale of
shares of Student Advantage common and preferred stock, partially offset by a
distribution of $2.3 million to LLC members. In 1997, Student Advantage
generated cash from financing activities through the sale of common and
preferred stock for net proceeds of $4.7 million offset by the repurchase of a
member's LLC interest for $630,000.

     Student Advantage has a $2.75 million bank line of credit and equipment
lease credit facility, which expires on June 30, 2000. The line of credit bears
interest at a rate of LIBOR plus 2% or the bank's base rate. The line of credit
and equipment lease credit facility is secured by all of the assets of Student
Advantage. As of September 30, 1999, no amounts were outstanding under either
the line of credit or the equipment lease credit facility.

     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 will be sufficient to
meet its anticipated needs for working capital and capital expenditures for at
least 12 months following the date of this prospectus.

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, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivatives and Hedging Activities" ("SFAS No. 133"). The new
standard 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

                                       26
30

all fiscal quarters of fiscal years beginning after June 15, 1999 and is
effective for Student Advantage's fiscal year ending December 31, 2000. Student
Advantage does not expect the adoption of SFAS No. 133 to have a material effect
on its financial position or results of operations. On July 7, 1999, the FASB
issued SFAS 137, "Accounting for Derivative Instruments and Hedging Activities -
Deferral of the Effective Date of FASB Statement No. 133 - an amendment to FASB
Statement No. 133." SFAS 133, as amended, by SFAS 137, is effective for Student
Advantage's fiscal year ending December 31, 2001.

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.

     State of Readiness. Student Advantage does not internally develop a
significant amount of software. Student Advantage has made an 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 has completed all phases of the assessment plan. Since
third parties developed and currently support many of the systems that we use, a
significant part of this effort was to ensure that these third-party systems are
Year 2000 compliant. We confirmed this compliance based solely on
representations by these third parties of their products' Year 2000 compliance,
as well as reviews of Year 2000 readiness documentation from our vendors.

     Costs. To date, Student Advantage has spent an immaterial amount on Year
2000 compliance issues, and does not expect to incur any additional significant
amounts identifying, evaluating or 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 existing employees
in the evaluation and planning process and Year 2000 compliance matters.

     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. We have received certificates or reports from our significant third
party vendors indicating that their systems are Year 2000 compliant or
identifying remaining corrective actions. We cannot be certain that we will
discover all Year 2000 compliance problems in our systems. In addition, we
cannot be certain that none of the third-party software, hardware or services
incorporated into our material systems will need to be revised or replaced,
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.

                                       27
31

     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, 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 developed contingency plans. The results of
Student Advantage's Year 2000 simulation testing and the responses received from
third-party vendors and service providers has been taken into account in
determining the nature and extent of any contingency plans.

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32

                                    BUSINESS

OVERVIEW

     Student Advantage, Inc. is dedicated to serving the needs of college
students through our leading membership program and our network of web sites,
including studentadvantage.com, FANSonly.com and UWIRE.com. 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 55 national sponsors and 15,000 participating locations
in 125 local markets. Discounts are made available to students both through our
studentadvantage.com web site and at sponsors' retail locations. Student
Advantage offers the only ongoing discount available to college students for the
products and services of many of our sponsors. We seek to enhance our brand
online and provide additional services to our members, sponsors and colleges
with the objective of becoming the leading online network of web sites for
students. Our network of web sites 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,
total discretionary spending by college students in the 1997-1998 academic year
exceeded $105 billion. In the United States, there are over 15 million full-time
and part-time undergraduate and graduate students at more than 3,500 university
and college campuses. The college student population is also 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

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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 restricted 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, commerce and other services.

THE STUDENT ADVANTAGE SOLUTION

     Student Advantage is a leading resource and trusted advocate dedicated to
serving the needs of college students both online and offline. As a result, we
are positioned to serve as a point of access to this market. Through our
national membership program and our network of web sites, 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 55 national
sponsors and 15,000 participating locations in 125 local markets.

     Student Advantage has created a comprehensive online destination for
college students, studentadvantage.com, as well as additional online content
destinations focused on addressing specific needs of college students, including
the FANSonly official college and university athletic sites and the
U-WIRE college and university newspaper site.

     College students can join the Student Advantage membership program:

     - by obtaining, free of charge subject to credit approval by AT&T, a
       co-branded card that serves as both a Student Advantage membership
       identification card and an AT&T calling card;

     - through programs under which certain universities, colleges or university
       organizations or other sponsors purchase memberships in bulk for
       distribution free of charge to their students; or

     - 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.

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STUDENTS
                                                   A community of over 1,000,000 student members
                                                    receive a variety of services and benefits,
                                                    including ongoing discounts on products and
                                                                      services

                  UNIVERSITIES                                        [STUDENT
             Students at over 3,000                                  ADVANTAGE
           colleges and universities                                   LOGO]
               are members of the
               Student Advantage
                    program
BUSINESSES
                                                             Over 55 national sponsors
                                                      and over 15,000 participating locations
                                                                in 125 local markets
Benefits to Students. Through our network of web sites, including
studentadvantage.com, we have created an attractive online destination for
students. Our web sites provide content, community and e-commerce focused on
addressing the needs of college students. Our web sites offer services and
information targeted to college students, including discount purchasing, travel
alternatives, college sporting news, career and job searches, lifestyle and
extracurricular decisions and financial aid information. Our web sites:

     - enable access to college news from approximately 500 colleges and
       universities,

     - offer an e-commerce marketplace,

     - provide online bulletin boards,

     - provide free e-mail and an online address book, calendar and document
       storage for Student Advantage members, and

     - include a searchable directory of sponsors that offer discounts for
       Student Advantage members.

     The Student Advantage membership program provides college students with
ongoing discounts on products and services from national sponsors including
Amtrak, Foot Locker, Greyhound, Staples, Tower Records, textbooks.com and Barnes
& Noble College Bookstores. For example, in 1998, our members spent $10.9
million on Amtrak(R) 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 125 local markets.

     Student Advantage members also receive a subscription to SAM, the Student
Advantage magazine. SAM includes lifestyle and practical content for students
and updates on new discounts available to Student Advantage members.

     Benefits to Sponsors. We provide a platform for our sponsors to market
their products and services to a large, demographically attractive market.
Student Advantage appeals to sponsors and advertisers because it combines:

     - a large and attractive demographic group,

     - database marketing capabilities,

     - a trusted brand,

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     - program usage tracking,

     - quality online and offline content, and

     - community interaction.

     By maintaining contact with students throughout their college experience
and by establishing relationships with universities, 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.

     Sponsors 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.

     We maintain ten 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. In partnership with Student
Advantage, colleges and universities can generate goodwill with students and
help reduce the cost of student life by making the Student Advantage membership
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.

     Colleges and universities are seeking to enhance their service offerings to
students and obtain additional revenue streams. Through growth of our existing
product and service offerings and through our recent acquisitions of University
Netcasting, Transaction Service Providers and Voice FX, Student Advantage is
able to provide a college or university with revenue opportunities and student
services, including:

     - operation of a college, university or college sport association's
       official athletic web site, including content, community and e-commerce
       offerings,

     - management of a college's or university's debit-card programs, and

     - technology solutions that enable students and alumni to access or request
       academic information online and by telephone, including grades, financial
       aid status and transcripts.

STRATEGY

     Our objective is to be the leading online and offline resource for college
students. We intend to broaden and deepen our relationship with students by
serving the needs of our three key constituencies -- students, businesses and
schools. The key elements of our strategy include the following:

     Strengthen Online Destination for Students. We believe that our existing
1,000,000 members provide a platform for building the leading online destination
for students. Our goal is to establish our network of web sites, 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 sites currently offer
content, community and e-commerce services targeted specifically to college
students. The web sites also allow students to enroll in our membership program,
receive customer service, and search our directory of national and local
sponsors that offer discounts. We intend to enhance our online offerings by
making additional content available and by expanding our e-commerce marketplace
with additional sponsors. We also expect to offer additional online programming
in order to personalize our web sites for particular college campuses.

     Continue to Build Brand. We believe that building our brand is critical to
attracting and expanding our membership and internet user base. Our market
leadership position has been driven by our

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membership program and by partnering with leading national and local sponsors
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 sponsors. Student Advantage believes that it can build online brand
awareness and attract traffic by utilizing 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 by promoting
       online membership sales and by increasing the number of e-commerce
       sponsors to attract web site visitors,

     - increasing our number of corporate sponsors,

     - 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,

     - offering our program to high school students and college graduates, and

     - selling memberships in bulk either through corporate sponsorship or
       direct to universities.

     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, community and e-commerce. In addition to
increasing the number of national and local sponsors, Student Advantage will
provide additional services to sponsors, 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 establish and strengthen its relationships
with colleges and universities by continuing to provide marketing services and
by enabling schools to outsource certain online services.

     Continue to Pursue Strategic Acquisitions and Alliances. Since inception,
we have acquired and integrated ten complementary businesses in order to expand
and strengthen our offerings to students. We plan to continue to acquire
companies, make equity investments or enter into alliances that offer
opportunities to increase our online traffic and obtain new technologies.

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 sites 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 were 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. To date, almost all of our members have received their Student Advantage
memberships at no charge from AT&T by either electing to apply for an AT&T
calling card in connection with their Student Advantage membership or by
receiving a free Student Advantage membership from AT&T. The AT&T/Student
Advantage membership cards are co-branded and serve as both a Student Advantage
membership identification card and an AT&T calling card. Memberships are also
sold to colleges, universities and university organizations for distribution
free of charge to students. In addition, students may purchase memberships
directly from Student Advantage for a membership fee that is currently $20 per
year.

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     Upon enrollment, Student Advantage members receive a 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 sponsors. We receive payments from certain
of our national sponsors when Student Advantage members purchase products and
services from them. Student Advantage currently offers discounts from over 55
national sponsors and 15,000 participating locations in 125 local markets.

     National discounts available to Student Advantage members include:

     - 15% off Amtrak(R) rail fares

     - 15% off Greyhound bus fares

     - 15% off purchases from Foot Locker, Lady Foot Locker and Kids Foot Locker

     - $5 off purchases of at least $25 or $10 off purchases of at least $50
       from Staples

  Student-Focused Content and Services

     Our Network of Web Sites

     Our network of web sites, including studentadvantage.com, FANSonly.com and
UWIRE.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, college sports, 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 approximately 500 colleges using our U-WIRE news feed.
     In addition, our studentadvantage.com web site provides students with
     information relevant for their local market or college campus and a
     searchable online directory of national and local discounts offered by our
     sponsors. Our web site also includes maps and directions to retail
     locations that offer discounts.

          Community. Our web sites offer students a number of community-building
     services. Student Advantage's online bulletin boards give students the
     opportunity to discuss topics such as interviewing techniques, college
     sports and campus life. We allow students to set up their own e-mail
     account, organize contact information in an online 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 directly purchase travel-related products,
     Eurail passes and official athletic site merchandise at our sites. In
     addition, Student Advantage members 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 sponsor. Products offered online include school and
     office supplies, books, software, music, footwear, magazines and flowers.
     In order to receive discounts on the products offered through our web site,
     students must join our membership program. Companies whose products can be
     purchased online through links from our web site include Staples.com,
     textbooks.com, Greyhound and 1-800-FLOWERS.com.

     U-WIRE (University Wire)

     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 approximately 500 colleges using our U-WIRE news
feed.

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     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.

  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.

     In October 1999, we expanded our corporate marketing services through our
acquisition of Voice FX Corporation, a provider of internet and interactive
voice response telephone services to colleges and universities. Voice FX has
secured a total of over 55 contracts for its services. In several cases, a
single college or university has entered into more than one contract for Voice
FX's services. Through these contractual relationships, Voice FX has secured
marketing rights that enable businesses to promote products and services, in a
targeted manner, to students. Certain corporate marketing clients of Voice FX
also use Voice FX's integrated voice response services for general consumer
marketing.

     Our marketing services are typically offered to businesses on a fixed-cost
basis or hourly rate basis.

     Our marketing services group utilizes ten regional offices across the
United States. The broad geographical reach of our marketing services group
allows us to execute our services nationwide. In 1999, clients who purchased our
marketing services included Amtrak(R), AT&T, Coca-Cola, textbooks.com, New
Balance and Lee Jeans.

ALLIANCES

     An important element of our strategy is to form alliances to assist us in
offering products and services to students 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 agreed that, without the consent of

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AT&T, 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,
without the consent of AT&T, any third party, other than certain colleges,
universities and university organizations based on their size, to offer a
Student Advantage membership to college students free of charge.

     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, at certain colleges and universities designated by AT&T, 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, 68% of our total revenues in 1998 and 69%
of our total revenues in the first quarter of 1999. 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.

     Student Advantage is in discussions with AT&T with respect to the possible
restructuring of its agreements with AT&T. There can be no assurance that such
discussions will result in any restructuring.

  Lycos

     In July 1999, we entered into a strategic alliance with Lycos, Inc. to gain
marketing and distribution for studentadvantage.com and to sell Student
Advantage memberships. As part of the alliance, Lycos links to a co-branded
version of studentadvantage.com from lycos.com and promotes the co-branded web
site through the Lycos network. Student Advantage and Lycos share in the
advertising, e-commerce and membership sales revenue generated from the
co-branded version of studentadvantage.com.

  edu.com

     In November 1999, we entered into a strategic alliance with edu.com, Inc.
to provide edu.com with marketing and distribution within both the
studentadvantage.com web site and the Student Advantage membership program, and
to promote edu.com as our exclusive technology e-commerce destination and member
rewards partner. We will receive $2.0 million in cash over the two year term of
our agreement with edu.com. In addition, edu.com will promote the Student
Advantage membership at the edu.com web site and will provide exclusive benefits
to Student Advantage members for shopping at edu.com.

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  Sponsors

     Student Advantage offers its members discounts on products and services
from over 55 national sponsors and over 15,000 participating locations in 125
local markets, including rail fares, bus fares, CDs, school supplies, books and
clothing. Representative national sponsors and local markets include:

REPRESENTATIVE NATIONAL SPONSORS           REPRESENTATIVE LOCAL MARKETS

1-800-FLOWERS.COM                          Ann Arbor, Michigan
AAA                                        Auburn, Alabama
Amtrak                                     Austin, Texas
Barnes & Noble                             Berkeley, California
  College Bookstores                       Boston, Massachusetts
Champs Sports                              Boulder, Colorado
Choice Hotels International                Chapel Hill, North Carolina
Foot Locker                                Chicago, Illinois
Franklin Covey                             Columbus, Ohio
Greyhound                                  Lawrence, Kansas
Hostelling International                   Los Angeles, California
Rockport                                   Madison, Wisconsin
Samsonite                                  New York, New York
Staples                                    Philadelphia, Pennsylvania
textbooks.com                              San Diego, California
The Princeton Review                       Tallahassee, Florida
Tower Records                              Washington, D.C.

     Some of our national sponsors, including Amtrak(R), Staples, Staples.com
and Tower Records, offer the Student Advantage discount as the only ongoing
discount offered specifically to college students. Many of our national sponsors
engage in co-marketing activities with Student Advantage. Student Advantage
seeks to identify and attract additional sponsors 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 attractive
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 Amtrak, Capital One, Microsoft and textbooks.com. Unlike
many of our competitors, we are able to combine our online and offline marketing
and media capabilities to offer a comprehensive marketing package to our
corporate partners. Integrated marketing offerings include print, on-campus and
web site sponsorships.

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 50 colleges, universities and university
organizations. These schools and organizations typically agree to co-market the
Student Advantage membership program to their students. Co-marketing includes
sending a letter to students explaining the program with an application for
membership, and receiving a percentage of the associated membership fees.

     Colleges and universities, or university organizations from these schools,
that have endorsed the Student Advantage membership program include:

Arkansas State University
Auburn University
Boston College
Emory University
University of California -- Santa Barbara
University of Chicago

University of North Carolina -- Charlotte
University of Pennsylvania
University of Utah
Villanova University
University of Virginia
Yale University

     In addition, a limited number colleges and universities have purchased
Student Advantage memberships in bulk, at varying discounts depending on volume,
and distributed the memberships to their students free of charge.

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     Student Advantage has also established contractual relationships with many
colleges and universities whereby Student Advantage acts as a service provider
to the college or university. Service provider relationships include athletic
office web site operation, hosting and management through the FANSonly brand,
school newspaper online publishing and syndication through the U-WIRE brand,
grade and financial aid status reporting and transcript processing through Voice
FX, and debit card program operation and management through either the SA Cash
brand or private-labeled under the college's or university's brands.

SALES AND MARKETING

     As of September 30, 1999, Student Advantage had a direct sales organization
consisting of 34 professionals. Thirteen of these professionals are dedicated to
the AT&T relationship with an additional nine professionals dedicated primarily
to managing our other significant sponsor relationships. The remaining 12
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 sponsors for its discount program,

     - seeking opportunities for corporate-sponsored events and promotions
       targeted at college students, and

     - managing existing sponsor relationships

     In addition, we maintain a regional sales organization of 28 professionals
in ten regional offices focused primarily on enlisting and managing local
sponsors 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
resource 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 employed 12 marketing professionals
as of September 30, 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 USWeb and utilizes Microsoft SQL 7
database software. Our production servers utilize Sun Microsystems, Inc.
hardware and use Netscape web server software. Student Advantage's system
hardware is hosted at USWeb Corporation (doing business as USWeb/CKS), a third-

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party facility in New York, and Exodus, a third party facility in Massachusetts
and California. A group of systems administrators and network managers at
USweb/CKS and Exodus 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 & Exodus' 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 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 in the web site market, we believe that competition will
continue to intensify. We compete, directly and indirectly, for members,
advertisers, sponsors 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, such as web sites developed by Campus Pipeline, College Club,
       Student.Net Publishing and CommonPlaces,

     - membership programs, such as programs offered by Memberworks and Cendant,

     - 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 sponsors,

     - 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 sponsors, 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 sponsors, our existing base of over 1,000,000 members, our
national and local sponsors and our relationships with colleges and universities
are principal

                                       39
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competitive advantages. We are not able to reliably estimate the number of our
direct competitors. 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 patent, copyrights, service marks,
trademarks, trade dress, trade secrets, proprietary technology and similar
intellectual property as critical to its success, and relies on patent,
trademark and copyright law, trade secret protection and confidentiality and/or
license agreements with its employees, customers, independent contractors,
sponsors, and others to protect its proprietary rights. Student Advantage
strategically pursues the registration of its trademarks and service marks.
However, effective patent, trademark, service mark, copyright and trade secret
protection may not be available. There can be no assurance that the steps taken
by us to protect our proprietary rights will be adequate or that third parties
will not infringe or misappropriate our patent, 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.

     "Student Advantage", "U-WIRE", "The Main Quad", "FANSonly", "Rail
Connection", "Voice FX", "Campus Direct" and "Green Card" 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.

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

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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 November 30, 1999, Student Advantage had a total of 293 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.

FACILITIES

     Student Advantage is headquartered at 280 Summer Street in Boston,
Massachusetts, where it presently leases an aggregate of approximately 39,000
square feet. Our current leases for this facility expire at various times
through 2005. We also maintain regional offices and lease space in Berkeley,
California; Carlsbad, California; Los Angeles, California; Atlanta, Georgia;
Chicago, Illinois; Hanover, New Hampshire; New York, New York; Conshohocken,
Pennsylvania; Dallas, Texas; 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

     On August 3, 1999, Student Advantage filed an action in the United States
District Court for the Southern District of New York against CollegeClub.com,
alleging among other things, that CollegeClub.com has committed false
advertising, unfair competition and tortious interference with contract in
connection with, CollegeClub.com's promotion and marketing of its services,
including but not limited to the Discount Directory in its web site. We seek
monetary damages and equitable relief, including a preliminary and permanent
injunction. As part of its response, CollegeClub.com has filed counterclaims
against us alleging similar conduct on our part. CollegeClub.com seeks monetary
damages and equitable relief, including injunctive relief. We plan to vigorously
oppose the counterclaims alleged by CollegeClub.com and believe we have
meritorious defenses to each such counterclaim. We filed a motion for a
preliminary injunction on October 18, 1999. On November 29, 1999, the court
granted our motion in part, and by order dated November 30, 1999, the court
issued a preliminary injunction against CollegeClub.com which ordered
CollegeClub.com to take certain actions designed to remedy certain of the
problems that are the subject of the complaint.

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                                   MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

     The directors and executive officers of Student Advantage, and their ages
as of November 30, 1999, are as follows:
NAME              AGE                             POSITION
            ----              ---                             --------
Raymond V. Sozzi, Jr.+......   31   Chairman of the Board of Directors, President and Chief
                                    Executive Officer
Christopher B. Andrews......   44   Vice President, Finance and Administration, and Chief
                                    Financial Officer
G. Todd Eichler.............   32   Executive Vice President, Business Services
Mason L. Myers..............   29   Executive Vice President, Student and University Services
Ronald J. Kos...............   58   Chief Operating Officer
Andrea K. Abegglen..........   33   Vice President, Marketing Communications
Daniel G. Siegel............   31   Vice President, Product Development
John M. Connolly............   47   Director
William S. Kaiser++.........   44   Director
John S. Katzman++...........   40   Director
Marc J. Turtletaub++........   53   Director
Charles E. Young............   67   Director
---------------
 + Member of the Stock Option Committee.

++ Member of the Audit Committee and the Compensation Committee.

     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.

     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, Business Services
of Student Advantage since December 1999, and served as Executive Vice
President, Member Management of Student Advantage from January 1997 to December
1999 and 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 Inc., 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.

     Mason L. Myers has served as Executive Vice President, Student and
University Services of Student Advantage since December 1999, and served as Vice
President, Business Development of Student Advantage from January 1999 to
December 1999 and as Senior Director, New Media of Student Advantage 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

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telecommunications company, in various public relations roles. Mr. Myers
received a B.A. from Duke University in 1993.

     Ronald J. Kos has served as Chief Operating Officer of Student Advantage
since May 1999. From February 1998 to May 1999, Mr. Kos was Senior Vice
President, Marketing and Operations, of iVillage, Inc., an online women's
network. From September 1994 to February 1998, Mr. Kos was President of the
Signal Ridge Group, a national consulting practice that he founded. From April
1991 to August 1994, Mr. Kos was Senior Vice President in charge of marketing
and sales services activities at Hasbro, Inc., a toy designer and manufacturer.
Mr. Kos received a M.B.A. from the University of Southern California and a B.S.
from the United States Air Force Academy.

     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 1993 to April 1996, Ms. Abegglen served as
President of Crimson & Brown Associates, a recruiting firm for minority students
and professionals, and as its Vice President from June 1991 to June 1993. Ms.
Abegglen received a B.A. from the University of Pennsylvania in 1989.

     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 an
M.B.A. from the Wharton School of Business at the University of Pennsylvania in
1997 and a B.A. from the University of Michigan in 1990.

     John M. Connolly has served as a Director of Student Advantage since May
1999. Mr. Connolly founded Mainspring, Inc., an internet e-strategy service
firm, and has served as its President and Chief Executive Officer since June
1996. In July 1989, Mr. Connolly founded Course Technology, Inc., a publishing
company focused on the higher education market, and served as its President and
Chief Executive Officer from July 1989 to April 1996. From August 1994 to April
1996, Mr. Connolly was also employed by the International Thomson Publishing
Company, a publishing company, as Chief Executive Officer of its Media Group.

     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, Open Market, Inc. and Red Hat, Inc.

     John S. Katzman has served as a Director of Student Advantage since March
1996. Mr. Katzman founded The Princeton Review, a provider of test preparation
and admission services, and has served as its President since 1981.

     Marc J. 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.

     Charles E. Young has served as a Director of Student Advantage since
September 1999. Dr. Young has served as President of the University of Florida
since November 1999. Dr. Young served as Chancellor of the University of
California Los Angeles (UCLA) from September 1968 to June 1997, and served as
Chancellor Emeritus of UCLA from July 1997 to October 1999. Dr. Young currently
serves as a Director of Intel Corporation.

     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.

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BOARD COMPOSITION

     The Board of Directors of Student Advantage is divided into three staggered
classes, each of whose members serve a three-year term. The Board consists of
two Class I Directors (Messrs. Katzman and Young), two Class II Directors
(Messrs. Connolly and Sozzi) and two Class III Directors (Messrs. Kaiser and
Turtletaub). At each annual meeting of stockholders, a class of directors is
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 Directors, Class II Directors
and Class III Directors 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.

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. The Board also has a Stock
Option Committee composed of Mr. Sozzi, which grants stock options and makes
other awards under the Student Advantage 1998 Stock Incentive Plan to employees
who are not officers in accordance with guidelines established by the Board.

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.

     On June 10, 1999, we granted John M. Connolly an option under our 1998
Stock Incentive Plan to purchase 5,000 shares of common stock at an exercise
price of $9.90 per share, in connection with his joining our Board of Directors.
On July 30, 1999, the option was amended to provide that it shall be vested in
full on such date. On September 20, 1999, we granted Mr. Connolly an option
under our 1998 Stock Incentive Plan to purchase 5,000 shares of common stock at
an exercise price of $12.25 per share. The option vests as to 25% of the shares
on each of September 20, 2000, 2001, 2002 and 2003.

     On September 20, 1999, we granted Charles E. Young an option under our 1998
Stock Incentive Plan to purchase 10,000 shares of common stock at an exercise
price of $12.25 per share, in connection with his joining our Board of
Directors. The option vests as to 25% of the shares on each of September 20,
2000, 2001, 2002 and 2003.

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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 1998 equaled
or exceeded $100,000.

                           SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
                                                       -------------------    ALL OTHER
           NAME AND PRINCIPAL POSITIONS                 SALARY    BONUS(1)   COMPENSATION
           ----------------------------                --------   --------   ------------
Raymond V. Sozzi, Jr...............................    $ 93,798   $150,000      $6,000(2)
  Chairman of the Board of Directors,
  President and Chief Executive Officer
G. Todd Eichler....................................     106,475     50,000          --
  Executive Vice President,
  Business Services
---------------
(1) Represents the bonus earned for services performed in 1998 based upon
    Student Advantage's operating performance during 1998.

(2) Represents an automobile allowance of $6,000.

OPTION GRANTS DURING FISCAL 1998

     Student Advantage did not grant any options or stock appreciation rights
during 1998 to either of the executive officers named in the Summary
Compensation Table.

OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUES

     Neither of the executive officers named in the Summary Compensation Table
exercised any options to purchase securities of Student Advantage during 1998 or
held any such options as of December 31, 1998.

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 November 30, 1999, 897,559 shares of
common stock had been issued upon exercise of options granted under the
Incentive Plan. As of that date, options to purchase 3,835,296 shares of common
stock at a weighted average exercise price of $6.66 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 November 30, 1999,
a total of 2,767,145 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

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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. The Board of Directors has also
authorized the Stock Option Committee to grant options and make other awards
under the Incentive Plan to employees who are not officers in accordance with
guidelines adopted by the Board. Subject to any applicable limitations contained
in the Incentive Plan, the Board of Directors, the Compensation Committee, the
Stock Option 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 and
restricted stock agreements evidencing grants of Awards under the Incentive Plan
generally provide in the event of a change in control of Student Advantage for
the acceleration of the vesting of options and other stock-based Awards with
respect to the number of shares that would have vested on a monthly vesting
schedule through the date of the change in control and 50% of the remaining
unvested shares.

     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, which was approved by the stockholders in May 1999.
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 a 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.

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     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 exercise 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
full months in the offering period by the closing market price of a share of
common stock on the first business day 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 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 contribution is fixed in Section 401(k) of the
Internal Revenue Code. The contribution limit for 1998 was $10,000. In April
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 the
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.

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     In May 1999, Student Advantage entered into a letter agreement with Ronald
J. Kos and agreed to employ him as its Chief Operating Officer. Student
Advantage agreed to pay Mr. Kos an annual base salary of $150,000 and an annual
performance bonus with a target of $75,000, based upon the achievement of
certain performance objectives. We granted Mr. Kos options to purchase an
aggregate of 650,001 shares of common stock at an exercise price of $9.90 per
share. The options vest as to 25% of the shares on December 1, 1999 and as to an
additional 25% on each of May 3, 2001, May 3, 2002 and May 3, 2003. The option
agreements for Mr. Kos provide for the acceleration of vesting in the event of a
change in control of Student Advantage with respect to the number of shares that
would have vested on a monthly vesting schedule through the date of the change
in control and 50% of the remaining unvested shares. If, following a change in
control, the successor terminates the employment of Mr. Kos without cause,
vesting of the shares will accelerate in full.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

     The Compensation Committee of the Board of Directors consists of Messrs.
Kaiser, Katzman and Turtletaub, none 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
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.

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                              CERTAIN TRANSACTIONS

EQUITY FINANCING

     On October 20, 1998, Greylock IX Limited Partnership and Marc J. Turtletaub
each purchased an aggregate of 625,000 preferred membership units (which
converted into 625,000 shares of Series A convertible preferred stock) for which
each of them paid $5.0 million. Greylock IX Limited Partnership and Mr.
Turtletaub purchased these membership units from certain members of Student
Advantage LLC, our predecessor LLC, including Messrs. Sozzi, Eichler, Siegel and
Liniado and Ms. Abegglen, each of whom is an executive officer of Student
Advantage, and The Main Quad, Inc. (now known as TMQ Ventures, Inc.), an entity
controlled by Mr. Myers, an executive officer of Student Advantage. Messrs.
Sozzi, Eichler, Siegel, Liniado and Turtletaub, Ms. Abegglen, The Main Quad and
Greylock IX Limited Partnership then exchanged the membership units held by each
of them for convertible preferred stock and common stock of Student Advantage.
On October 20, 1998, Student Advantage also sold 625,000 shares of convertible
preferred stock to each of Greylock IX Limited Partnership and Marc J.
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. On
June 23, 1999, all of these shares of convertible preferred stock were 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 the predecessor LLC for an aggregate purchase price of
$250,000. Mr. Katzman, a director of Student Advantage, is the President of
Princeton Review. In connection with this transaction, the predecessor LLC also:

     -  borrowed $75,000 and issued Princeton Review a convertible promissory
        note bearing interest at 8.5% per year, which was paid in September
        1997, and

     -  borrowed $100,000 and issued Princeton Review a secured promissory note
        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, which was repaid on October 23, 1998. In October 1998, Princeton
Review's remaining 981 membership units were converted into 1,450,587 shares of
common stock and 134,597 shares of convertible preferred stock (convertible into
403,791 shares of common stock).

     In October 1998, Mr. Sozzi entered into an agreement with Princeton Review
requiring Mr. Sozzi to purchase up to 78,125 shares of convertible 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 the 78,125 shares of convertible 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.

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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 complete satisfaction of
its obligation to pay DML 35% of its earnings derived from that region. On
October 20, 1998 the balance of DML's total membership units were converted into
517,536 shares of common stock and 16,698 shares of convertible preferred stock
(convertible into 50,094 shares of common stock).

     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, for $272,000 in cash 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 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 The Main Quad an additional 480 membership units in satisfaction of
this obligation. The Main Quad's total membership units held as of October 20,
1998 were converted into 1,109,013 shares of common stock and 55,345 shares of
convertible preferred stock (convertible into 166,035 shares of common stock).
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. 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, on similar terms.

     Mr. Sozzi, the Chairman of the Board of Directors, President and Chief
Executive Officer of Student Advantage, loaned Student Advantage $400,000 on
April 21, 1998 at an interest rate of 3% per year, which was repaid 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,
and an executive officer of Student Advantage, $60,000 on February 9, 1998 at an
interest rate per year of approximately 6% per year, which was paid in late
1998. Mr. Siegel loaned Student Advantage $100,000 on April 21, 1998 without
interest, which was repaid on May 11, 1998.

     In January 1998, Ms. Abegglen, Vice President, Marketing Communications,
and an executive officer 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 a rate of 5% per year, was repaid in
December 1998.

     In December 1998, Student Advantage granted Christopher B. Andrews, Vice
President, Finance and Administration and an executive officer of Student
Advantage, 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. In
December 1998, Student Advantage also granted David M. Liniado, Vice President,
Campus Development, an option under the 1998 Stock Incentive Plan to purchase
90,000 shares of common stock at an exercise price of $0.33 per share. This
option vests as to 25% of shares on each of January 1, 2000, 2001, 2002 and
2003. The options granted to Messrs. Andrews and Liniado are immediately
exercisable in full, subject to repurchase by Student Advantage at the exercise
price upon termination of the executive officer's employment prior to vesting in
the shares. The option agreements for each of Messrs. Andrews and Liniado
provide for the acceleration of vesting in the

                                       50
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event of a change in control of Student Advantage with respect to the number of
shares that would have vested on a monthly vesting schedule through the date of
the change in control and 50% of the remaining unvested shares. If, following a
change in control, the successor terminates the employment of the executive
officer without cause or the executive officer terminates his employment for
certain reasons, vesting of the shares will accelerate in full.

     In October 1999, Student Advantage granted Mr. Myers, Executive Vice
President, Student and University Services of Student Advantage, options under
the 1998 Stock Incentive Plan to purchase an aggregate of 300,000 shares of
common stock at an exercise price of $12.25 per share. The options vest as to
25% of the shares on each of October 19, 2000, October 19, 2001, October 19,
2002 and October 19, 2003. The option agreements for Mr. Myers provide for the
acceleration of vesting in the event of a change in control of Student Advantage
with respect to the number of shares that would have vested on a monthly vesting
schedule through the date of the change in control and 50% of the remaining
unvested shares.

DISTRIBUTIONS TO MEMBERS OF PREDECESSOR LIMITED LIABILITY COMPANY

     During April 1998, the predecessor 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 predecessor LLC. These
LLC members included, among others, Mr. Sozzi, Mr. Eichler, Mr. Siegel,
Princeton Review, Ms. Abegglen, Mr. Liniado and The Main Quad. In November 1998,
Student Advantage distributed to the former members the remainder of the
predecessor LLC's 1997 taxable income (approximately $1,277,000). To the extent
Princeton Review's tax liability on the predecessor 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 agreed to
distribute to its former LLC members approximately 45% of the predecessor LLC's
1998 taxable income so that they can pay their tax liability with respect to the
1998 taxable income of the predecessor LLC for the period between January 1,
1998 and October 20, 1998, which was the date on which the predecessor LLC was
converted to a C Corporation. Student Advantage does not expect to make any such
distribution because it did not have taxable income in 1998.

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                             PRINCIPAL STOCKHOLDERS

     The following table sets forth information regarding the beneficial
ownership of the common stock of Student Advantage as of October 31, 1999:

     -  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 of Student Advantage and each executive officer named in
        the Summary Compensation Table, 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. The
number of shares of common stock outstanding used in calculating the percentage
for each person listed includes the shares of common stock underlying options
held by such person that are exercisable within 60 days of October 31, 1999, but
excludes shares of common stock underlying options held by any other person.
Percentage of beneficial ownership is based on 35,213,559 shares of common stock
outstanding as of October 31, 1999.
PERCENTAGE OF
                                                           SHARES BENEFICIALLY         COMMON
     NAME OF BENEFICIAL OWNER                                     OWNED          STOCK OUTSTANDING
     ------------------------                              -------------------   -----------------
Raymond V. Sozzi, Jr................................         7,714,683              21.9%
     Greylock IX Limited Partnership(1)..................         3,750,000              10.6
     William S. Kaiser(1)................................         3,750,000              10.6
     Marc J. Turtletaub..................................         3,750,000              10.6
     Daniel G. Siegel....................................         2,225,912               6.3
     G. Todd Eichler.....................................         2,224,912               6.3
     Princeton Review Publishing, L.L.C.(2)..............         1,620,003               4.6
     John S. Katzman(2)..................................         1,620,003               4.6
     Mason L. Myers(3)...................................         1,335,048               3.8
     John M. Connolly(4).................................             5,000               *
     Charles E. Young(5).................................             2,632               *
     All executive officers and directors as a
       group (12 persons)(6).............................        23,791,897              67.0%
---------------
 *   Less than 1%.

(1)  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 pecuniary interest therein. The
     address for Greylock IX Limited Partnership and Greylock IX GP Limited
     Partnership is One Federal Street, Boston, Massachusetts 02110.

(2)  Consists of 1,620,003 shares held of record by Princeton Review Publishing,
     L.L.C. Mr. Katzman is the President of Princeton Review Publishing. 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.

(3)  Includes 1,275,048 shares held of record by TMQ Ventures, Inc. (formerly
     known as The Main Quad, Inc.) Mr. Myers is a stockholder, director and a
     Co-President of TMQ Ventures, Inc. Mr. Myers shares investment and voting
     power with respect to these shares. Mr. Myers disclaim beneficial ownership
     of such shares, except to the extent of his pecuniary interest therein.
     Includes

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     45,000 shares subject to options held by Mr. Myers, which are immediately
     exercisable in full. Any shares acquired upon exercise are subject to
     vesting over a four-year period and are subject to repurchase by Student
     Advantage at the exercise price upon termination of Mr. Myers' employment
     prior to vesting in the shares. In the event of a change in control of
     Student Advantage, vesting of the shares will accelerate in part. If,
     following a change in control, the successor terminates the employment of
     the executive officer without cause or the executive officer terminates his
     employment for certain reasons, vesting of the shares will accelerate in
     full.

(4)  Consists of 5,000 shares subject to presently exercisable options held by
     Mr. Connolly.

(5)  Consists of 2,632 shares subject to presently exercisable options held by
     Mr. Young.

(6)  Includes 297,632 shares subject to options held by the executive officers,
     which are immediately exercisable in full.

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                                SELLING STOCKHOLDERS

     The selling stockholders are former stockholders of University Netcasting,
Inc., which we acquired on June 18, 1999. We issued a total of 2,438,875 shares
of common stock to the selling stockholders in connection with the acquisition
and agreed to register 50% of such shares under the Registration Statement of
which this prospectus constitutes a part. The following table sets forth, to the
knowledge of Student Advantage, certain information about the selling
stockholders as of November 30, 1999.
NUMBER OF SHARES OF                           NUMBER OF SHARES OF
                                            COMMON STOCK                                  COMMON STOCK
                                         BENEFICIALLY OWNED     NUMBER OF SHARES OF    BENEFICIALLY OWNED
                                              PRIOR TO             COMMON STOCK               AFTER
      NAME OF SELLING STOCKHOLDER          OFFERING(1)(2)         OFFERED HEREBY        OFFERING(1)(2)(3)
      ---------------------------        -------------------    -------------------    -------------------
iXL Enterprises, Inc.(4)...............        625,834                314,628                311,206
Stipa Investments, L.P.................        550,710                276,861                273,849
Brentwood Associates(5)................        371,200                186,616                184,584
Sorrento Ventures(6)...................        269,964                135,721                134,243
Richard B. Beedon(7)(8)................         94,762                 46,449                 48,313
William Patrick Battle.................         74,025                 37,215                 36,810
William R. Battle III(9)...............         74,025                 37,215                 36,810
Lawrence & Company.....................         71,590                 35,991                 35,599
Jeffrey Padnos(9)(10)..................         54,185                 27,241                 26,944
William Westrate.......................         48,481                 24,373                 24,108
Black Lake Group.......................         33,741                 16,963                 16,778
Winnico Holdings, Inc..................         30,845                 15,507                 15,338
SIP Investment, LLC....................         28,517                 14,337                 14,180
Douglas Padnos(10).....................         22,814                 11,470                 11,344
David Upton............................         19,963                 10,036                  9,927
Daniel Padnos(10)......................         17,110                  8,602                  8,508
Michael Shea...........................         10,932                  5,496                  5,436
Benjamin Padnos........................         10,683                  5,371                  5,312
Jay Kear(9)............................          8,883                  4,466                  4,417
B. Mason Flemming Jr...................          2,959                  1,488                  1,471
Roy W. Lessard.........................          2,959                  1,488                  1,471
Patina LLC.............................          1,234                    621                    613
J.F. Seyferth, Jr. Trust...............          1,140                    574                    566
Katheryn Fallon........................            833                    419                    414
Catherine Swormstedt...................            214                    108                    106
Ronald Inman(7)(11)....................          3,669                     80                  3,589
Benjamin Margoles(7)...................            159                     80                     79
Eric Crawford(7).......................             61                     31                     30
---------------
 (1) Except as otherwise indicated, the number of shares beneficially owned is
     determined under the rules promulgated by the SEC, and the information is
     not necessarily indicative of beneficial ownership for any other purpose.
     The selling stockholders have sole voting and investment power with respect
     to all shares listed as owned by the selling stockholders. The number of
     shares listed for each stockholder as owned by such stockholder after the
     offering is fewer than 1% of the number of shares of common stock
     outstanding.

 (2) Of the total shares listed as owned by the selling stockholders, a total of
     230,622 shares are held in an escrow account to secure indemnification
     obligations to Student Advantage of the selling stockholders. It is
     expected that these shares (less any shares that may be distributed from
     the escrow account to Student Advantage in satisfaction of indemnification
     claims) will be released from escrow and distributed to the selling
     stockholders on June 18, 2000. The number of shares indicated as owned by
     each selling stockholder includes those shares (approximately 10% of the
     number of shares listed as beneficially owned by each selling stockholder)
     which such selling stockholder is entitled to receive upon distribution of
     these shares from the escrow account.

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 (3) We do not know when or in what amounts a selling stockholder may offer
     shares for sale. The selling stockholders might not sell any of all of the
     shares offered by this prospectus. Because the selling stockholders may
     offer all or some of the shares pursuant to this offering, and because
     there are currently no agreements, arrangements or understandings with
     respect to the sale of any of the shares that will be held by the selling
     stockholders after completion of the offering, we cannot estimate the
     number of shares that will be held by the selling stockholders after
     completion of the offering. For purposes of this table, however, we have
     assumed that, after completion of the offering, none of the shares covered
     by this prospectus will be held by the selling stockholders.

 (4) U. Bertram Ellis, Jr., the Chairman and Chief Executive Officer of iXL
     Enterprises, Inc., is a former member of the Board of Directors of
     University Netcasting, Inc.

 (5) The number of shares listed as beneficially owned consists of 356,352
     shares of common stock held by Brentwood Associates VIII, L.P. and 14,848
     shares of common stock held by Brentwood Affiliates Fund, L.P. G. Bradford
     Jones, who may be deemed to beneficially own such shares, is a former
     member of the Board of Directors of University Netcasting, Inc.

 (6) The number of shares listed as beneficially owned consists of 34,056 shares
     of common stock held by Sorrento Ventures II, L.P., 100,569 shares of
     common stock held by Sorrento Ventures III, L.P., 58,057 shares of common
     stock held by Sorrento Ventures IV, L.P., 20,990 shares of common stock
     held by Sorrento Ventures CE, L.P., and 56,292 shares of common stock held
     by Sorrento Growth Partners I, L.P.

 (7) Employee or former employee of Student Advantage and/or University
     Netcasting. None of the other selling stockholders has held any position or
     office with, or has otherwise had a material relationship with, Student
     Advantage or any of its subsidiaries within the past three years.

 (8) Mr. Beedon is the former Chief Executive Officer of University Netcasting,
     Inc. and a former member of the Board of Directors of University
     Netcasting, Inc. The number of shares listed as beneficially owned includes
     2,369 shares of common stock issuable upon presently exercisable options.

 (9) Former member of the Board of Directors of University Netcasting, Inc.

(10) Does not include 33,741 shares of common stock held by the Black Lake
     Group, which Daniel Padnos, Douglas Padnos and Jeffrey Padnos may be deemed
     to beneficially own.

(11) The number of shares listed as beneficially owned includes 3,510 shares of
     common stock issuable upon presently exercisable options.

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                          DESCRIPTION OF CAPITAL STOCK

     The authorized capital stock of Student Advantage consists of 150,000,000
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 November 30, 1999, there were
outstanding (1) 35,213,559 shares of common stock held by 139 stockholders of
record and (2) options to purchase an aggregate of 3,961,617 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 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.

     Under specified conditions and subject to customary exceptions, holders of
16,454,895 shares of common stock have demand registration rights with respect
to their shares of common stock (subject to the underwriter's lock-up
arrangement entered into by such holders in connection with our initial public
offering, which expires on December 15, 1999) to require us to register their
shares of common stock under the Securities Act, and they 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. Each of
these holders waived his or its right to participate in this registration of
securities.

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 BYLAW 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

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"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 "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 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.

                                       57
61

                              PLAN OF DISTRIBUTION

     The shares covered hereby may be offered and sold from time to time by the
selling stockholders, or by their pledgees, donees, transferees or other
successors in interest. The selling stockholders will act independently of
Student Advantage in making decisions with respect to the timing, manner and
size of each sale. Such sales may be made in the over-the-counter market or
otherwise, at prices and under terms then prevailing or at prices related to the
then current market price or in negotiated transactions, including pursuant to
one or more of the following methods:

     - purchases by a broker-dealer as principal and resale by such
       broker-dealer for its own account pursuant to this prospectus;

     - ordinary brokerage transactions and transactions in which the broker
       solicits purchasers;

     - block trades in which the broker-dealer so engaged will attempt to sell
       the shares as agent but may position and resell a portion of the block as
       principal to facilitate the transaction;

     - an over-the-counter distribution in accordance with the rules of the
       Nasdaq National Market; and

     - in privately negotiated transactions.

     To the extent required, this prospectus may be amended and supplemented
from time to time to describe a specific plan of distribution. In connection
with distributions of the shares or otherwise, the selling stockholders may
enter into hedging transactions with broker-dealers or other financial
institutions. In connection with such transactions, broker-dealers or other
financial institutions may engage in short sales of the common stock in the
course of hedging the positions they assume with selling stockholders. The
selling stockholders may also sell the common stock short and redeliver the
shares to close out such short positions. The selling stockholders may also
enter into option or other transactions with broker-dealers or other financial
institutions that require the delivery to such broker-dealer or other financial
institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such transaction). The selling
stockholders may also pledge shares to a broker-dealer or other financial
institution, and, upon a default, such broker-dealer or other financial
institution may effect sales of the pledged shares pursuant to this prospectus
(as supplemented or amended to reflect such transaction). In addition, any
shares that qualify for sale pursuant to Rule 144 may be sold under Rule 144
rather than pursuant to this prospectus.

     In effecting sales, broker-dealers or agents engaged by the selling
stockholders, or by their pledgees, donees, transferees or other successors in
interest, may arrange for other broker-dealers to participate. Broker-dealers or
agents may receive commissions, discounts or concessions from the selling
stockholders, or from their pledgees, donees, transferees or other successors in
interest, in amounts to be negotiated immediately prior to the sale.

     In offering the shares covered hereby, the selling stockholders, or their
pledgees, donees, transferees or other successors in interest, and any
broker-dealers and any other participating broker-dealers who execute sales for
the selling stockholders, may be deemed to be "underwriters" within the meaning
of the Securities Act in connection with such sales, and any profits realized by
the selling stockholders and the compensation of such broker-dealers may be
deemed to be underwriting discounts and commissions.

     In order to comply with the securities laws of certain states, if
applicable, the shares must be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states the
shares may not be sold unless they have been registered or qualified for sale in
the applicable state or an exemption from the registration or qualification
requirement is available and is complied with.

     We have advised the selling stockholders that the anti-manipulation rules
of Regulation M under the Exchange Act may apply to sales of shares in the
market and to the activities of the selling stockholders and their affiliates.
In addition, we will make copies of this prospectus available to the selling
stockholders for the purpose of satisfying the prospectus delivery requirements
of the Securities Act. The selling

                                       58
62

stockholders may indemnify any broker-dealer that participates in transactions
involving the sale of the shares against certain liabilities, including
liabilities arising under the Securities Act.

     At the time a particular offer of shares is made, if required, a prospectus
supplement will be distributed that will set forth the number of shares being
offered and the terms of the offering, including the name of any underwriter,
dealer or agent, the purchase price paid by any underwriter, any discount,
commission and other item constituting compensation, any discount, commission or
concession allowed or reallowed or paid to any dealer, and the proposed selling
price to the public.

     We have agreed to indemnify the selling stockholders against certain
liabilities, including certain liabilities under the Securities Act.

     We have agreed with the selling stockholders to use our reasonable best
efforts to keep the Registration Statement of which this prospectus constitutes
a part effective until the earlier of (1) such time as all of the shares covered
by this prospectus have been disposed of pursuant to and in accordance with the
Registration Statement or (2) June 18, 2000.

                                 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.

                                    EXPERTS

     The audited financial statements included in this Prospectus have been
audited by PricewaterhouseCoopers LLP, independent accountants. The companies
and periods covered by these audits are indicated in the individual reports.
Such financial statements have been so included in reliance on the reports of
PricewaterhouseCoopers LLP given on 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 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.

                                       59
63

                            STUDENT ADVANTAGE, INC.
                         INDEX TO FINANCIAL STATEMENTS
PAGE
                                                              ----
STUDENT ADVANTAGE, INC.
Report of Independent Accountants...........................   F-2
Consolidated Balance Sheet as of December 31, 1997 and 1998
  and as of September 30, 1999 (unaudited)..................   F-3
Consolidated Statement of Operations for the years ended
  December 31, 1996, 1997 and 1998 and the nine months ended
  September 30, 1998 and 1999 (unaudited)...................   F-4
Consolidated Statement of Changes in Redeemable Convertible
  Preferred Stock and Stockholders' Equity (Deficit) for the
  years ended December 31, 1996, 1997 and 1998 and the nine
  months ended September 30, 1999 (unaudited)...............   F-5
Consolidated Statement of Cash Flows for the years ended
  December 31, 1996, 1997 and 1998 and the nine months ended
  September 30, 1998 and 1999 (unaudited)...................   F-6
Notes to Consolidated Financial Statements..................   F-7

THE MAIN QUAD, INC.
Report of Independent Accountants...........................  F-21
Balance Sheet as of December 6, 1997........................  F-22
Statement of Operations for the period from January 1, 1997
  through December 6, 1997..................................  F-23
Statement of Changes in Stockholders' Deficit for the period
  from January 1, 1997 through December 6, 1997.............  F-24
Statement of Cash Flows for the period from January 1, 1997
  through December 6, 1997..................................  F-25
Notes to Financial Statements...............................  F-26

VOICE FX CORPORATION
Report of Independent Accountants...........................  F-29
Consolidated Balance Sheet as of December 31, 1997 and
  1998......................................................  F-30
Consolidated Statement of Operations for the years ended
  December 31, 1997 and 1998 and the nine months ended
  September 30, 1998 and 1999 (unaudited)...................  F-31
Consolidated Statement of Stockholders' Equity for the years
  ended December 31, 1997 and 1998 and the nine months ended
  September 30, 1999 (unaudited)............................  F-32
Consolidated Statement of Cash Flows for the years ended
  December 31, 1997 and 1998 and the nine months ended
  September 30, 1998 and 1999 (unaudited)...................  F-33
Notes to Consolidated Financial Statements..................  F-34

UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
Unaudited Pro Forma Combined Balance Sheet as of September
  30, 1999..................................................  F-42
Unaudited Pro Forma Combined Statement of Operations for the
  nine months ended September 30, 1999......................  F-43
Unaudited Pro Forma Combined Statement of Operations for the
  year ended December 31, 1998..............................  F-44
Notes to Unaudited Pro Forma Combined Financial
  Statements................................................  F-45
F-1
64

                       REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders
  of Student Advantage, Inc.

     In our opinion, the accompanying consolidated balance sheets and the
related consolidated statements of operations, of changes in redeemable
convertible preferred stock and stockholders' equity (deficit) and of cash flows
present fairly, in all material respects, the financial position of Student
Advantage, Inc. and its subsidiaries at December 31, 1997 and 1998, and the
results of their operations and their 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.

                                            /s/ PRICEWATERHOUSECOOPERS LLP

                                            PricewaterhouseCoopers LLP

Boston, Massachusetts
June 11, 1999, except as to Note 13
  which is as of December 3, 1999

                                       F-2
65

                            STUDENT ADVANTAGE, INC.

                           CONSOLIDATED BALANCE SHEET
                       (IN THOUSANDS, EXCEPT SHARE DATA)
DECEMBER 31,
                                                              --------------------    SEPTEMBER 30,
                                                                1997        1998          1999
                                                              --------    --------    -------------
                                                                                       (UNAUDITED)
ASSETS
Current assets
  Cash and cash equivalents.................................  $  5,806    $  6,140       $ 6,884
  Marketable securities.....................................        --          --        35,340
  Accounts receivable (net of allowance for doubtful
    accounts of $70 at December 31, 1997 and 1998)..........       481       3,209         6,347
  Prepaid expenses and other current assets.................       173         352         2,238
                                                              --------    --------       -------
    Total current assets....................................     6,460       9,701        50,809
Property and equipment, net.................................       369       1,386         2,333
Intangible and other assets, net............................       388         617         3,502
                                                              --------    --------       -------
    Total assets............................................  $  7,217    $ 11,704       $56,644
                                                              ========    ========       =======

LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND
  STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities
  Accounts payable..........................................  $    713    $  1,985       $ 2,421
  Accrued compensation......................................       362       1,095         1,001
  Other accrued expenses....................................       860       1,912         3,989
  Deferred revenue..........................................     5,970       7,064         8,295
  Note payable to stockholder...............................       225          --            --
                                                              --------    --------       -------
    Total current liabilities...............................     8,130      12,056        15,706
                                                              --------    --------       -------
Notes payable...............................................        --          --           100
                                                              --------    --------       -------
    Total liabilities.......................................     8,130      12,056        15,806
                                                              --------    --------       -------
Series A redeemable convertible preferred stock; $1 par
  value; Authorized:
  4,000,000 shares; Issued: 1,588,688, 2,952,568 and 0
  shares at December 31, 1997, 1998 and September 30, 1999
  (unaudited), respectively; Outstanding: 1,383,156,
  2,747,036 and 0 shares at December 31, 1997 and 1998 and
  September 30, 1999 (unaudited), respectively..............       111      10,196            --
Commitments and contingencies (Note 12).....................
Stockholders' equity (deficit)
  Common stock, $.01 par value; Authorized: 150,000,000
    shares; Issued:
    19,210,646, 20,746,255 and 34,804,247 at December 31,
    1997 and 1998 and September 30, 1999 (unaudited),
    respectively; Outstanding: 16,995,581, 18,531,190 and
    34,790,178 at December 31, 1997 and 1998 and September
    30, 1999 (unaudited), respectively......................       192         207           348
  Additional paid-in capital................................    12,180      18,944        81,936
  Accumulated deficit.......................................   (12,766)    (25,706)      (38,683)
  Treasury stock (at cost)..................................      (630)       (630)           (9)
  Deferred compensation.....................................        --      (3,363)       (2,754)
                                                              --------    --------       -------
    Total stockholders' equity (deficit)....................    (1,024)    (10,548)       40,838
                                                              --------    --------       -------
    Total liabilities, redeemable convertible preferred
       stock and stockholders' equity (deficit).............  $  7,217    $ 11,704       $56,644
                                                              ========    ========       =======
The accompanying notes are an integral part of these consolidated financial
                                  statements.
                                       F-3
66

                            STUDENT ADVANTAGE, INC.

                      CONSOLIDATED STATEMENT OF OPERATIONS
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)
NINE MONTHS
                                                                                       ENDED
                                                YEAR ENDED DECEMBER 31,            SEPTEMBER 30,
                                              ----------------------------   -------------------------
                                               1996      1997       1998        1998          1999
                                              -------   -------   --------   -----------   -----------
                                                                             (UNAUDITED)   (UNAUDITED)
Revenue
  Subscription..............................  $ 1,093   $ 2,971   $  7,174     $ 5,868      $  6,194
  Other.....................................      745     1,844     12,186       7,842        12,127
                                              -------   -------   --------     -------      --------
     Total revenue..........................    1,838     4,815     19,360      13,710        18,321
                                              -------   -------   --------     -------      --------
Costs and expenses
  Cost of subscription revenue..............      543     2,628      2,442       1,666         1,989
  Cost of other revenue.....................      570       702      7,867       4,305         8,888
  Product development.......................    1,516     3,253      4,948       3,510         6,169
  Sales and marketing.......................      536     1,905      7,313       4,948         8,067
  General and administrative................    1,208     2,727      5,484       3,310         6,186
  Depreciation and amortization.............      107       351      1,155       1,094         1,126
  Stock-based compensation..................       --        --        808          --           837
                                              -------   -------   --------     -------      --------
     Total costs and expenses...............    4,480    11,566     30,017      18,833        33,262
                                              -------   -------   --------     -------      --------
Loss from operations........................   (2,642)   (6,751)   (10,657)     (5,123)      (14,941)
Interest income (expense), net..............        4       (77)       121          65           760
                                              -------   -------   --------     -------      --------
Net loss....................................  $(2,638)  $(6,828)  $(10,536)    $(5,058)     $(14,181)
                                              =======   =======   ========     =======      ========
Basic and diluted net loss per share........  $ (0.18)  $ (0.41)  $  (0.59)    $ (0.29)     $  (0.57)
                                              =======   =======   ========     =======      ========
Shares used in computing basic and diluted
  net loss per share........................   14,384    16,588     17,710      17,492        24,776
                                              =======   =======   ========     =======      ========
Unaudited pro forma basic and diluted net
  loss per share............................                      $  (0.46)    $ (0.23)     $  (0.47)
                                                                  ========     =======      ========
Shares used in computing unaudited pro forma
  basic and diluted net loss per share......                        22,772      21,785        29,877
                                                                  ========     =======      ========
The accompanying notes are an integral part of these consolidated financial
                                  statements.
                                       F-4
67

                            STUDENT ADVANTAGE, INC.

CONSOLIDATED STATEMENT OF CHANGES IN REDEEMABLE CONVERTIBLE PREFERRED STOCK AND
                         STOCKHOLDERS' EQUITY (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   11,663,814     $116       $ 2,119      $ (3,300)     $  --
Issuance of preferred and common
 stock, net of issuance costs........     340,129         13    4,161,852       42         2,438
Issuance of common stock upon
 cancellation of notes payable and
 accrued interest....................                              68,072        1           471
Issuance of common stock for
 services............................                              84,244        1           679
Exercise of common stock options.....                                 645       --             1
Net loss.............................                                                                   (2,638)
                                       ----------   --------   ----------     ----       -------      --------      -----
Balance, December 31, 1996...........   1,372,043         54   15,978,627      160         5,708        (5,938)        --
                                       ----------   --------   ----------     ----       -------      --------      -----
Issuance of preferred and common
 stock, net of issuance costs........     119,368         19    1,988,149       20         4,657
Issuance of common stock for
 services............................                              84,040        1           677
Issuance of preferred and common
 stock upon cancellation of notes
 payable.............................      27,440          5      407,181        4           836
Issuance of preferred and common
 stock in satisfaction of obligation
 to stockholder......................      32,792          9      353,405        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
Issuance of common stock warrant.....                                                        194
Net loss.............................                                                                   (6,828)
                                       ----------   --------   ----------     ----       -------      --------      -----
Balance, December 31, 1997...........   1,588,688        111   19,210,646      192        12,180       (12,766)      (630)
                                       ----------   --------   ----------     ----       -------      --------      -----
Issuance of preferred and common
 stock, net of issuance costs........   1,250,000     10,000      271,441        3         1,997           (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 upon cancellation of notes
 payable.............................      48,022         36      517,536        5           124
Issuance of common stock for
 services............................                              36,864       --           297
Exercise of common stock options.....                                  --       --             6
Distributions to stockholders........                                                                   (2,320)
Deferred compensation relating to
 grants of stock options.............                                                      4,171
Compensation relating to grants of
 stock options.......................
Net loss.............................                                                                  (10,536)
                                       ----------   --------   ----------     ----       -------      --------      -----
Balance, December 31, 1998...........   2,952,568     10,196   20,746,255      207        18,944       (25,706)      (630)
                                       ----------   --------   ----------     ----       -------      --------      -----
Exercise of common stock options and
 warrants (unaudited)................                             910,235        9           512
Issuance of common stock and common
 stock warrants in connection with
 the acquisition of Mentor
 Interactive, Inc. (unaudited).......                              18,056       --           299
Issuance of common stock in
 connection with the acquisition of
 Transaction Service Providers
 (unaudited).........................                             195,000        2           268          (443)
Issuance of common stock in initial
 public offering, net of issuance
 costs (unaudited)...................                           6,900,000       69        49,851
Conversion of preferred stock to
 common stock in connection with the
 initial public offering
 (unaudited).........................  (2,952,568)   (10,196)   6,026,043       61         9,505                      630
Issuance of common stock for services
 (unaudited).........................                               8,658       --           108
Issuance of common stock warrant
 (unaudited).........................                                                      2,221
Deferred compensation relating to
 grants of stock options
 (unaudited).........................                                                        228
Compensation relating to grants of
 stock options (unaudited)...........
Repurchase of 14,069 shares of common
 stock (unaudited)...................                                                                                  (9)
Adjustment to conform fiscal periods
 for University Netcasting, Inc.
 (unaudited).........................                                                                    1,647
Net loss (unaudited).................                                                                  (14,181)
                                       ----------   --------   ----------     ----       -------      --------      -----
Balance September 30, 1999
 (unaudited).........................          --   $     --   34,804,247     $348       $81,936      $(38,683)     $  (9)
                                       ==========   ========   ==========     ====       =======      ========      =====
TOTAL
                                                      STOCKHOLDERS'
                                         DEFERRED        EQUITY
                                       COMPENSATION     (DEFICIT)
                                       ------------   -------------
Balance, January 1, 1996.............    $    --         $(1,065)
Issuance of preferred and common
 stock, net of issuance costs........                      2,480
Issuance of common stock upon
 cancellation of notes payable and
 accrued interest....................                        472
Issuance of common stock for
 services............................                        680
Exercise of common stock options.....                          1
Net loss.............................                     (2,638)
                                         -------         -------
Balance, December 31, 1996...........         --             (70)
                                         -------         -------
Issuance of preferred and common
 stock, net of issuance costs........                      4,677
Issuance of common stock for
 services............................                        678
Issuance of preferred and common
 stock upon cancellation of notes
 payable.............................                        840
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
Issuance of common stock warrant.....                        194
Net loss.............................                     (6,828)
                                         -------         -------
Balance, December 31, 1997...........         --          (1,024)
                                         -------         -------
Issuance of preferred and common
 stock, net of issuance costs........                      1,916
Issuance of preferred and common
 stock in connection with the
 acquisition of The Main Quad........                        176
Issuance of preferred and common
 stock upon cancellation of notes
 payable.............................                        129
Issuance of common stock for
 services............................                        297
Exercise of common stock options.....                          6
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.............................                    (10,536)
                                         -------         -------
Balance, December 31, 1998...........     (3,363)        (10,548)
                                         -------         -------
Exercise of common stock options and
 warrants (unaudited)................                        521
Issuance of common stock and common
 stock warrants in connection with
 the acquisition of Mentor
 Interactive, Inc. (unaudited).......                        299
Issuance of common stock in
 connection with the acquisition of
 Transaction Service Providers
 (unaudited).........................                       (173)
Issuance of common stock in initial
 public offering, net of issuance
 costs (unaudited)...................                     49,920
Conversion of preferred stock to
 common stock in connection with the
 initial public offering
 (unaudited).........................                     10,196
Issuance of common stock for services
 (unaudited).........................                        108
Issuance of common stock warrant
 (unaudited).........................                      2,221
Deferred compensation relating to
 grants of stock options
 (unaudited).........................       (228)             --
Compensation relating to grants of
 stock options (unaudited)...........        837             837
Repurchase of 14,069 shares of common
 stock (unaudited)...................                         (9)
Adjustment to conform fiscal periods
 for University Netcasting, Inc.
 (unaudited).........................                      1,647
Net loss (unaudited).................                    (14,181)
                                         -------         -------
Balance September 30, 1999
 (unaudited).........................    $(2,754)        $40,838
                                         =======         =======
See Note 1 for information on stock split.
  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                       F-5
68

                            STUDENT ADVANTAGE, INC.
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                 (IN THOUSANDS)
NINE MONTHS ENDED
                                                                YEAR ENDED DECEMBER 31,            SEPTEMBER 30,
                                                              ----------------------------   -------------------------
                                                               1996      1997       1998        1998          1999
                                                              -------   -------   --------   -----------   -----------
                                                                                             (UNAUDITED)   (UNAUDITED)
Cash flows from operating activities:
 Net loss...................................................  $(2,638)  $(6,828)  $(10,536)    $(5,058)     $(14,181)
 Adjustments to reconcile net loss to net cash provided by
   (used for) operating activities:
   Depreciation and amortization............................      107       351      1,155         861           909
   Reserve for bad debts....................................       --        70         --          --           130
   Amortization of discount on notes payable to
     stockholders...........................................       --       121         --          --            --
   Compensation expense relating to issuance of equity......       --        --        808          --           837
   Interest expense on notes payable to stockholders
     exchanged for stock....................................       --        11         --          --            --
   Issuance of stock in exchange for services...............      680       678        297         233           108
   Amortization of marketing expense associated with common
     stock warrant..........................................       --        --         --          --           220
   Changes in assets and liabilities:
     Accounts receivable....................................      (54)     (354)    (2,728)     (4,976)       (3,269)
     Prepaid expenses, other current assets and other
       assets...............................................       22      (128)      (169)       (501)       (1,886)
     Accounts payable.......................................      (29)      316      1,271       1,733           436
     Accrued compensation...................................       --       273        733         607           (94)
     Accrued expenses.......................................      (60)      648        854         547         2,077
     Deferred revenue.......................................       93     5,694      1,094       1,221         1,231
                                                              -------   -------   --------     -------      --------
     Net cash provided by (used for) operating activities...   (1,879)      852     (7,221)     (5,333)      (13,482)
                                                              =======   =======   ========     =======      ========
Cash flows from investing activities:
 Purchases of fixed assets..................................      (79)     (357)    (1,332)     (1,113)       (1,430)
 Acquisitions of businesses for cash and common stock.......     (135)     (429)      (655)       (655)       (1,199)
 Purchase of marketable securities..........................       --        --         --          --       (44,283)
 Proceeds from sale of marketable securities................       --        --         --          --         8,943
 Proceeds from sale of fixed assets.........................       --        --         --          --            16
                                                              -------   -------   --------     -------      --------
     Net cash used for investing activities.................     (214)     (786)    (1,987)     (1,768)      (37,953)
                                                              =======   =======   ========     =======      ========
Cash flows from financing activities:
 Proceeds from sale of preferred and common stock, net of
   issuance costs...........................................    2,493     4,696     11,916       2,000        49,920
 Proceeds from borrowings under line of credit..............      (70)       --         --       1,262            --
 Repayment of note from stockholder.........................       --        --        165          --            --
 Proceeds from exercise of common stock options and
   warrants.................................................        1        --          6           6           521
 Proceeds form issuance of common stock warrants............       --       194         --          --            --
 Note payable...............................................       --        --         --          --           100
 Proceeds from long-term debt...............................       --        39         --          --            --
 Proceeds from short-term debt -- related party.............      324       989      1,410       1,450            --
 Repayment of short-term debt -- related party..............       --      (250)    (1,635)       (700)           --
 Repurchase of common and preferred stock...................       --      (630)        --          --            (9)
 Distributions to stockholders..............................       --        --     (2,320)     (1,043)           --
                                                              -------   -------   --------     -------      --------
     Net cash provided by financing activities..............    2,748     5,038      9,542       2,975        50,532
                                                              =======   =======   ========     =======      ========
Adjustment to conform fiscal period of University
 Netcasting, Inc............................................       --        --         --          --         1,647
Net increase (decrease) in cash and cash equivalents........      655     5,104        334      (4,126)          744
                                                              -------   -------   --------     -------      --------
Cash and cash equivalents, beginning of period..............       47       702      5,806       5,806         6,140
                                                              -------   -------   --------     -------      --------
Cash and cash equivalents, end of period....................  $   702   $ 5,806   $  6,140     $ 1,680      $  6,884
                                                              =======   =======   ========     =======      ========
Supplemental Disclosure of Cash Flow Information:
Cash paid during the year for interest......................  $     1   $    28   $     87     $    --      $     --
                                                              =======   =======   ========     =======      ========
Cash paid during the year for taxes.........................  $    --   $     1   $      1     $    --      $     --
                                                              =======   =======   ========     =======      ========
F-6
69

                            STUDENT ADVANTAGE, INC.

                   NOTES TO CONSOLIDATED 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 sites 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 company. In October 1998, Student
Advantage LLC effected a recapitalization pursuant to which each of the 10,911
outstanding Members' Interests converted into 137 Preferred Members' Interests
and 1,479 Common Members' Interests, (or an aggregate of 1,497,036 Preferred
Members' Interests and 16,133,892 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 $25.7
million. Such losses and accumulated deficit resulted primarily from significant
costs incurred in the development of the Company's products and services and the
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.

     In May 1999, the Company increased the number of authorized shares of
common stock to 50,000,000. On April 5, 1999, the Company declared a 3-for-1
stock split in the form of a stock dividend, which was effective on May 21,
1999. All periods presented have been restated to reflect the stock dividend.

     Subsequent to December 31, 1998, the Company acquired University
Netcastings, Inc., ("UNI") an Internet-based sports media company that provides
branded, interactive information and programming to college sports enthusiasts.
UNI's world wide web sites deliver real-time, in-depth sports content and
programming. This acquisition was accounted for as a pooling of interests and
accordingly, the historical financial statements of the Company prior to the
acquisition have been restated to include UNI's financial position, results of
operations and cash flows (see note 13).

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

  Principles of Consolidation

     The consolidated financial statements include the accounts of Student
Advantage, Inc. and its wholly-owned subsidiaries. All intercompany balances and
transactions have been eliminated in consolidation.

                                       F-7
70
                            STUDENT ADVANTAGE, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

  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.

  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 sites. 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. Certain advertising arrangements include
guarantees of a minimum number of impressions. For arrangements with guarantees,
revenue is recognized based upon the lesser of: 1) ratable recognition over the
period the advertising is displayed, provided that no significant Company
obligations remain and collection of the revenues is probable, or 2) a pro-rata
portion of contract revenue based upon impressions delivered relative to minimum
guaranteed impressions to be delivered. 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 other businesses. 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 49% and 61% of total
revenue, respectively. At December 31, 1997, five customers accounted for 56% of
accounts receivable, and at December 31, 1998, one customer accounted for 60% of
accounts receivable.

  Product Development

     Costs incurred in product development by Student Advantage are expensed as
incurred.

                                       F-8
71
                            STUDENT ADVANTAGE, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

  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.

  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 $210,000, $468,000 and $824,000 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.

  Cash Flow Information

     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.

     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.

                                       F-9
72
                            STUDENT ADVANTAGE, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

     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.

  Unaudited Interim Financial Data

     The interim financial data as of September 30, 1999 and for the nine months
ended September 30, 1998 and 1999 have been derived from unaudited consolidated
financial statements of the Company. Management believes the Company's unaudited
consolidated financial statements have been prepared on the same basis as the
audited consolidated financial statements and include all adjustments,
consisting only of normal recurring adjustments, necessary for a fair
presentation of the financial position and results of operations for such
periods. Results for the nine months ended September 30, 1998 and September 30,
1999 have not been audited and are not necessarily indicative of results to be
expected for the full fiscal year.

  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 (see note 11).

  Reclassification

     Certain prior year amounts have been reclassified to conform to current
year presentation.

  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 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 did not
affect 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 did 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 did 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,

                                      F-10
73
                            STUDENT ADVANTAGE, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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, 2000. Student Advantage does not expect the adoption of SFAS No. 133 to have
a material effect on its financial position or results of operations. On July 7,
1999, the FASB issued SFAS 137, "Accounting for Derivative Instruments and
Hedging Activities - Deferral of the Effective Date of FASB Statement No. 133 -
an amendment to FASB Statement No. 133." SFAS 133, as amended by SFAS 137, is
effective for Student Advantage's fiscal year ending December 31, 2001.

     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
purchased 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

     For acquisitions accounted for under the purchase method, 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. This acquisition was
accounted for under the purchase method of accounting; accordingly, the
operating results of Passport 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.

     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. This
acquisition was accounted for under the purchase method of accounting;
accordingly, the operating results of The Main Quad have been included in
Student Advantage's financial statements since the date of acquisition.

                                      F-11
74
                            STUDENT ADVANTAGE, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

     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. This acquisition has been accounted for
under the purchase method of accounting; 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. This acquisition was accounted for under the purchase method of
accounting; accordingly, the operating results of Collegiate Advantage have been
included in Student Advantage's financial statements since January 1, 1998. 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...............................................           $ 9,664
Net loss..................................................           $(6,971)
Net loss per common share:
  Basic and diluted.......................................           $ (0.42)
On April 1, 1999, Student Advantage completed its acquisitions of The
Travel Holding Group, LLC and The Campus Agency, LLC in exchange for a
promissory note in the amount of $330,000. 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; accordingly, the results
of operations of each company have been included in Student Advantage's results
beginning on the acquisition date. Goodwill and other intangible assets in the
aggregate amount of $305,000 were recorded in connection with these acquisitions
and will be amortized over three years.

     On May 27, 1999, Student Advantage acquired substantially all of the assets
of Mentor Interactive Corp., a provider of Internet-based research tools and
related materials, in exchange for 18,056 shares of common stock and a warrant
to purchase 24,000 shares of common stock at a purchase price of $11.08 per
share with an aggregate estimated fair value of approximately $300,000. This
acquisition has been accounted for under the purchase method of accounting;
accordingly, the results of Mentor Interactive Corp. have been included in
Student Advantage's results beginning on the acquisition date. Goodwill and
other intangible assets in the aggregate of $312,000 were recorded with the
acquisition and are being amortized over a three year period.

     On June 11, 1999, Student Advantage acquired Transaction Service Providers,
Inc., a provider of debit card services to college students and local merchants.
This acquisition has been accounted for using the pooling of interests method;
because the historical results of operations and financial position of
Transaction Service Providers were immaterial to Student Advantage, prior period
financial statements have not be restated. Accordingly, Transaction Service
Providers' results of operations have been included in Student Advantage's

                                      F-12
75
                            STUDENT ADVANTAGE, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

results as of April 1, 1999. In connection with the acquisition, Student
Advantage issued 195,000 shares of common stock to the stockholders of
Transaction Service Providers.

4.  PROPERTY AND EQUIPMENT

     Property and equipment consist of the following (in thousands):
DECEMBER 31,
                                                              --------------
                                                              1997     1998
                                                              ----    ------
Furniture and fixtures......................................  $ 36    $   73
Computer equipment and software.............................   477     1,097
Equipment...................................................   117       238
Leasehold improvements......................................    20       412
                                                              ----    ------
                                                               650     1,820
Less: Accumulated depreciation and amortization.............   281       434
                                                              ----    ------
                                                              $369    $1,386
                                                              ====    ======
Depreciation and amortization expense with respect to property and
equipment for the years ended December 31, 1996, 1997 and 1998 was $73,000,
$132,000 and $315,000, 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 (7.40% at September 30, 1999), and expires in June 2000.

6.  PREFERRED STOCK

     Prior to the conversion of the Series A preferred stock upon the closing of
the Company's initial public offering ("IPO") (see Note 13), the Series A
preferred stockholders had the the following rights and privileges:

  Voting Rights

     Each holder of the Series A preferred stock was entitled to a number of
votes equal to the number of shares of common stock into which each share of
such stock was then convertible. With respect to the election of directors, the
Series A preferred stockholders, voting as a single class, could have elected
two directors.

                                      F-13
76
                            STUDENT ADVANTAGE, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

  Conversion

     Each share of Series A preferred stock was 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 automatically converted
into three shares of common stock upon the closing of the Company's IPO on June
23, 1999 (see note 13).

  Dividend Rights

     The Series A preferred stockholders were not entitled to receive any
dividends unless declared by Student Advantage's Board of Directors. In the
event that dividends were paid on the common stock, the Series A preferred
stockholders were 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 was convertible.

  Liquidation Preferences

     In the event of any liquidation, dissolution or winding up of Student
Advantage, the Series A preferred stockholders were 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
were payable had such shares been converted to common stock just prior to
liquidation. Any assets remaining following the initial distribution to the
preferred stockholders would have been 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 would have redeemed the then
outstanding shares of Series A preferred stock from each holder that requested
redemption. Upon redemption, each holder of the Series A would have been
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 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 150,000,000.

8.  STOCK AWARD PLANS

  1995 Stock Option Plan

     In 1995, the Board of Directors of UNI adopted the 1995 Stock Option Plan
(the 1995 Plan) authorizing the issuance of incentive and non-qualified options
and UNI common stock to select employees and non-employees. Options granted
under the 1995 Plan expire in ten years or less. The vesting terms were set by
the

                                      F-14
77
                            STUDENT ADVANTAGE, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1995 Plan's administrator, and were generally established with monthly vesting
over periods of four years, including cliff vesting at the end of the first year
of 25%. Stock option activity under this plan is reflected in the table below.

  1996 Stock Option Plan

     In 1996, the Board of Directors of UNI adopted the 1996 Stock Option Plan
(the 1996 Plan) authorizing the issuance of incentive and non-qualified stock to
eligible employees. Options granted under the 1996 Plan expire in ten years or
less. The vesting terms were set by the 1996 Plan's administrator, and are
generally established with monthly vesting over a four-year period and cliff
vesting at the end of the first year of 25%. Stock option activity under this
plan is reflected in the table below.

  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.

     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 the Company's option grants been
determined based on the fair value at the date of grant consistent with the
method prescribed by SFAS No. 123, Student Advantage's net loss and net loss per
share would have increased to the pro forma amounts indicated below:
YEAR ENDED DECEMBER 31,
                                                            ---------------------------------------
                                                               1996          1997          1998
                                                            ----------    ----------    -----------
                                                             (IN THOUSANDS, EXCEPT PER SHARE DATA)
Net loss:
     As reported..........................................   $(2,638)      $(6,828)      $(10,536)
     Pro forma............................................    (2,641)       (6,834)       (10,574)
Basic and diluted net loss per share:
     As reported..........................................     (0.18)        (0.41)         (0.59)
     Pro forma............................................     (0.18)        (0.41)         (0.60)
Because the determination of the fair value of all options granted after
Student Advantage completed its IPO 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 years ended December 31, 1996, 1997 and 1998: no
dividend yield; risk free interest rates of 5.5%, 5.5% and 4.54%, respectively;
no volatility; and an expected option term of 7.1, 7.9 and 4 years,
respectively.

                                      F-15
78
                            STUDENT ADVANTAGE, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

     Stock option activity under the Company's option plans since January 1,
1996 is as follows:
OUTSTANDING OPTIONS
                                     ---------------------------------------------------------------------
                                             1996                    1997                    1998
                                     ---------------------   ---------------------   ---------------------
                                                 WEIGHTED-               WEIGHTED-               WEIGHTED-
                                                  AVERAGE                 AVERAGE                 AVERAGE
                                      NUMBER     EXERCISE     NUMBER     EXERCISE     NUMBER     EXERCISE
                                     OF SHARES     PRICE     OF SHARES     PRICE     OF SHARES     PRICE
                                     ---------   ---------   ---------   ---------   ---------   ---------
Outstanding -- beginning of year...   17,703       $1.05      30,320       $1.05        39,842     $2.50
  Granted, at fair value...........   13,764        1.05      13,373        5.70        37,206      4.27
  Granted, at below fair value.....       --          --          --          --     2,313,000      0.33
  Exercised........................     (645)       1.05          --          --        (1,124)     5.70
  Canceled.........................     (502)       1.05      (3,851)       2.24       (13,851)     3.94
                                      ------                  ------                 ---------
Outstanding December 31,...........   30,320       $1.05      39,842       $2.50     2,375,073     $0.41
                                      ======       =====      ======       =====     =========     =====
Exercisable at December 31,........   11,180       $1.05      24,222       $1.91       485,951     $0.49
                                      ======       =====      ======       =====     =========     =====
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:
OPTIONS OUTSTANDING                         OPTIONS EXERCISABLE
----------------------------------------------   ------------------------------------
   NUMBER                                            NUMBER OF
OUTSTANDING      WEIGHTED                             SHARES
   AS OF         AVERAGE                         EXERCISABLE AS OF   WEIGHTED AVERAGE
DECEMBER 31,    REMAINING     WEIGHTED AVERAGE     DECEMBER 31,          EXERCISE
    1998       LIFE (YEARS)    EXERCISE PRICE          1998               PRICE
------------   ------------   ----------------   -----------------   ----------------
11,470         6.2             $0.89               10,904             $0.89
    12,616         6.4             $1.45               11,500             $1.45
    31,443         8.6             $4.27                9,111             $4.27
     6,544         7.6             $5.70                3,901             $5.70
 2,313,000         9.3             $0.33              450,535             $0.33
 ---------                                            -------
 2,375,073         9.3             $0.41              485,951             $0.49
 =========                                            =======
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.

  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

                                      F-16
79
                            STUDENT ADVANTAGE, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

grant, while compensation related to options which vest over time was recorded
as a component of stockholders' equity (deficit) and is being amortized over the
vesting periods of the related options.

9.  INCOME TAXES

     Deferred tax assets are comprised of the following (in thousands):
DECEMBER 31,
                                                                      ------------------
                                                                       1997       1998
                                                                      -------    -------
Deferred tax assets:
               Deferred revenue.....................................  $    --    $ 2,400
               Start up costs.......................................      257        154
               Net operating loss carryforwards.....................    3,028      5,782
               Non current assets...................................       --        200
               Accruals.............................................       --        300
               Deferred compensation................................       --        300
               Other................................................       45        165
                                                                      -------    -------
                    Total deferred tax assets.......................    3,330      9,301
          Deferred tax asset valuation allowance....................   (3,330)    (9,301)
                                                                      -------    -------
                                                                      $    --    $    --
                                                                      =======    =======
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, 1997 and 1998, the Company has a net operating loss
carryforward for federal and state purposes of approximately $13.2 million and
$10.6 million which expire 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.

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.

                                      F-17
80
                            STUDENT ADVANTAGE, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

11.  COMPUTATION OF NET LOSS PER SHARE AND PRO FORMA NET LOSS PER SHARE

     The following table reconciles the numerator and denominator of the basic
and diluted net loss per share and the pro forma basic and diluted net loss per
share (unaudited) computations shown on the consolidated statements of
operations.
(IN THOUSANDS, EXCEPT PER SHARE DATA)
                                                                                  FOR THE NINE MONTHS
                                                      FOR THE YEARS ENDED                ENDED
                                                          DECEMBER 31,               SEPTEMBER 30,
                                                  ----------------------------    -------------------
                                                   1996      1997       1998       1998        1999
                                                  -------   -------   --------    -------    --------
                                                                                      (UNAUDITED)
Basic and diluted net loss per share:
Net loss........................................  $(2,638)  $(6,828)  $(10,536)   $(5,058)   $(14,181)
Basic and diluted weighted average common shares
  outstanding...................................   14,384    16,588     17,710     17,492      24,776
Basic and diluted net loss per share............  $ (0.18)  $ (0.41)  $  (0.59)   $ (0.29)   $  (0.57)
                                                  =======   =======   ========    =======    ========
Pro forma basic and diluted net loss per share
  (unaudited):
Net loss........................................                      $(10,536)   $(5,058)   $(14,181)
Shares attributable to common stock, excluding
  effects of preferred stock conversion.........                        17,710     17,492      21,636
Shares attributable to the assumed conversion of
  preferred stock upon closing of the initial
  public offering...............................                         5,062      4,293       8,241
                                                                      --------    -------    --------
Pro forma basic and diluted weighted average
  shares outstanding............................                        22,772     21,785      29,877
                                                                      ========    =======    ========
Pro forma basic and diluted net loss per
  share.........................................                      $  (0.46)   $ (0.23)   $  (0.47)
                                                                      ========    =======    ========
All outstanding options and warrants to purchase common stock were excluded
from the calculation of diluted earnings per share for all periods presented
because their inclusion would have been anti-dilutive.

12.  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, totaled
approximately $71,000, $342,000 and $914,000, respectively.

                                      F-18
81
                            STUDENT ADVANTAGE, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

     Future minimum lease payments under noncancelable operating leases at
December 31, 1998 are as follows (in thousands):
OPERATING
                                                                         LEASES
                                                                        ---------
1999........................................................   $  941
          2000........................................................      829
          2001........................................................      496
          2002........................................................      437
          2003........................................................      437
          Thereafter..................................................      238
                                                                         ------
          Total minimum lease payments................................   $3,378
                                                                         ======
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.

  CollegeClub.com Action (Unaudited)

     On August 3, 1999, Student Advantage, Inc. filed an action in the United
States District Court for the Southern District of New York against
CollegeClub.com, alleging among other things, that CollegeClub.com has committed
false advertising, unfair competition, and tortious interference with contract
in connection with, CollegeClub.com's promotion and marketing of its services,
including but not limited to the Discount Directory in its Web site. Student
Advantage seeks monetary damages and equitable relief, including a preliminary
and permanent injunction. As part of its response, CollegeClub.com has filed
counterclaims against Student Advantage alleging similar conduct on the part of
Student Advantage. CollegeClub.com seeks monetary damages and equitable relief,
including injunctive relief. Student Advantage plans to vigorously oppose the
counterclaims alleged by CollegeClub.com and believes it has meritorious
defenses to each such counterclaim.

13.  SUBSEQUENT EVENTS

     On June 18, 1999, Student Advantage acquired all of the outstanding stock
of UNI in exchange for 2,438,875 shares of Student Advantage common stock and
the conversion of all UNI outstanding common stock options for options to
purchase 66,634 shares of Student Advantage common stock. UNI is a leading
operator of official athletic Web sites for colleges, universities and college
sports associations. Through its FANSonly Network, UNI provides sports fans with
comprehensive online information and analysis on college sports. This
acquisition was accounted for using the pooling of interests method;
accordingly, the historic consolidated financial statements of Student Advantage
prior to the acquisition have been restated to reflect the financial position,
results of operations and cash flows of UNI.

     Effective June 18, 1999, UNI's fiscal year end changed from March 31 to
December 31 to conform to Student Advantage's year end. UNI's results of
operations for the years ended March 31, 1997, 1998 and 1999 have been included
in Student Advantage's December 31, 1996, 1997 and 1998 results, respectively.
UNI's results for the nine months ended December 31, 1998 have been included in
Student Advantage's nine months ended September 30, 1998 results. Accordingly,
UNI's operations for the three months ended March 31, 1999 will be included in
Student Advantage's results for both the years ended December 31, 1998 and 1999
(when presented). Revenue and net loss for UNI for the three months ended March
31, 1999 were $682,000 and $1.6 million, respectively. This net loss has been
reported as an adjustment to the consolidated accumulated deficit.

                                      F-19
82
                            STUDENT ADVANTAGE, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

     The following is a reconciliation of revenues and net loss previously
reported by Student Advantage for the years ended December 31, 1996, 1997 and
1998 and for the nine months ended September 30, 1998 and 1999, with the
combined amounts currently presented in the consolidated financial statements
for those periods (in thousands):
FOR THE YEAR ENDED DECEMBER 31,
                       -----------------------------------------------------------------------------------------
                                  1996                           1997                           1998
                       ---------------------------   ----------------------------   ----------------------------
                         SA       UNI     COMBINED     SA        UNI     COMBINED     SA        UNI     COMBINED
                       ------   -------   --------   -------   -------   --------   -------   -------   --------
Revenues.............  $1,730   $   108   $ 1,838    $ 3,792   $ 1,023   $ 4,815    $17,443   $ 1,917   $ 19,360
     Net loss........  $ (657)  $(1,981)  $(2,638)   $(3,152)  $(3,676)  $(6,828)   $(5,115)  $(5,421)  $(10,536)
FOR THE NINE MONTHS ENDED SEPTEMBER 30,
                                              -----------------------------------------------------------
                                                          1998                           1999
                                              ----------------------------   ----------------------------
                                                SA        UNI     COMBINED     SA        UNI     COMBINED
                                              -------   -------   --------   -------   -------   --------
                                                                      (UNAUDITED)
Revenues....................................  $12,476   $ 1,234   $13,710    $16,729   $ 1,592   $ 18,321
     Net loss...............................  $(1,284)  $(3,774)  $(5,058)   $(8,948)  $(5,233)  $(14,181)
On June 23, 1999, the Company completed an IPO of 6,000,000 shares of
common stock resulting in net proceeds of approximately $44.6 million. Upon
closing of the IPO, each outstanding share of redeemable convertible preferred
stock converted into shares of common stock at a three to one ratio. On July 21,
1999, an additional 900,000 shares of common stock were issued by the Company as
a result of the full exercise of the underwriters' over-allotment option. The
Company received additional net proceeds of $6.7 million as a result of the
exercise.

     On July 21, 1999, Student Advantage entered into a marketing agreement with
Lycos, Inc. In connection with the transaction, Lycos was granted a warrant (the
"Lycos warrant") to purchase 550,000 shares of Student Advantage common stock at
a price of $10.875 per share. The Lycos warrant terminates on July 21, 2002 and
is exercisable on or after July 21, 2000. The Company has valued the Lycos
warrant at $2.2 million, which is included in other assets, and which will be
recognized as a sales and marketing expense on a straight-line basis over the
thirty-month term of the marketing agreement.

     On October 7, 1999, Student Advantage acquired Voice FX Corporation, a
leading provider of internet and interactive voice response services to college
and university registrars. In connection with the acquisition, Student Advantage
paid approximately $1.1 million in cash, issued 430,082 shares of Student
Advantage common stock and agreed to assumed all outstanding options to purchase
Voice FX common stock through issuing 59,687 options to purchase common stock.
The acquisition will be accounted for under the purchase method of accounting;
accordingly, Voice FX's results of operations will be included in Student
Advantage's results of operations beginning on the acquisition date. Goodwill
and other intangible assets in the aggregate amount of $6.3 million will be
recorded in connection with the acquisition and will be amortized on a straight-
line basis over expected useful lives of between three and five years.

     On November 12, 1999, Student Advantage made an equity investment in
edu.com, Inc., a privately held e-commerce company. Student Advantage paid
approximately $4.3 million in exchange for approximately 922,000 shares of
Series B preferred stock. Student Advantage will record its investment in
edu.com on the cost basis of accounting. Additionally, Student Advantage entered
into a two-year marketing and distribution agreement with edu.com. The terms of
this agreement provide, among other things, that edu.com will become Student
Advantage's exclusive technology e-commerce partner and rewards program
provider, the parties will pursue certain promotional initiatives on each
other's behalf, and edu.com will make certain payments to Student Advantage
including $2.0 million payable over the term of the agreement.

                                      F-20
83

                       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-21
84

                              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-22
85

                              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-23
86

                              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-24
87

                              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-25
88

                              THE MAIN QUAD, INC.

                         NOTES TO FINANCIAL STATEMENTS

1.  NATURE OF THE BUSINESS

     The Main Quad, Inc. ("TMQ") 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

     TMQ 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 TMQ to concentration of
credit risk include accounts receivable. TMQ 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
                                                                                     ========
Depreciation and amortization expense totaled $28,582 for the period from
January 1, 1997 through December 6, 1997.

                                      F-26
89
                              THE MAIN QUAD, INC.

                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)

4.  BORROWINGS

     TMQ'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 TMQ.

  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 TMQ, 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,
TMQ issued warrants to purchase 40,000 shares of Series A Preferred Stock and
69,093 shares of Series B Preferred Stock at their respective par values. These
warrants are immediately exercisable, and will terminate five years from the
date of issuance, unless TMQ's initial sale of its Common Stock in a public
offering or the acquisition of TMQ occurs prior to that date.

                                      F-27
90
                              THE MAIN QUAD, INC.

                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)

6.  COMMON STOCK

     Each share of Common Stock entitles the holder to one vote on all matters
submitted to a vote of TMQ'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

     TMQ 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
                                                                        -------
                                                                         12,907
          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, TMQ 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 TMQ, 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-28
91

                       REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders
  of Voice FX Corporation:

     In our opinion, the accompanying consolidated balance sheets and the
related consolidated statements of operations, of stockholders' equity and of
cash flows present fairly, in all material respects, the financial position of
Voice FX Corporation and its subsidiary at December 31, 1997 and 1998, and the
results of their operations and their cash flows for the years 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 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.

                                         /S/ PRICEWATERHOUSECOOPERS LLP

                                         PricewaterhouseCoopers LLP

Boston, Massachusetts
September 15, 1999, except as to Note 11
  which is as of October 7, 1999

                                      F-29
92

                              VOICE FX CORPORATION

                          CONSOLIDATED BALANCE SHEETS
DECEMBER 31,
                                                             ------------------------    SEPTEMBER 30,
                                                                1997          1998           1999
                                                             ----------    ----------    -------------
                                                                                          (UNAUDITED)
ASSETS
Current assets:
  Cash and cash equivalents................................  $3,996,381    $  193,189     $  233,532
  Restricted cash..........................................     500,000            --             --
  Accounts receivable (net of allowance of $39,074, $30,106
     and $30,106 at December 31, 1997 and 1998 and
     September 30, 1999 (unaudited), respectively).........     281,899       499,977        723,548
  Prepaid expenses and other current assets................     479,970        64,023         24,583
                                                             ----------    ----------     ----------
     Total current assets..................................   5,258,250       757,189        981,663
Property and equipment, net................................   1,029,455       711,102        563,593
Other assets...............................................      21,821        27,472         27,413
                                                             ----------    ----------     ----------
          Total assets.....................................  $6,309,526    $1,495,763     $1,572,669
                                                             ==========    ==========     ==========

                                 LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable.........................................  $  671,737    $  234,706     $  346,314
  Accrued expenses.........................................     101,355        96,228        203,898
  Current portion of capital lease obligation..............      31,673        36,763         18,616
  Income taxes payable.....................................     220,000            --             --
  Deferred revenue.........................................     695,468       575,221        418,099
                                                             ----------    ----------     ----------
     Total current liabilities.............................   1,720,233       942,918        986,927
                                                             ----------    ----------     ----------
Capital lease obligation, net of current portion...........      46,844        10,080          1,175
                                                             ----------    ----------     ----------
Commitments (Note 9)
Stockholders' equity:
  Common stock, $0.01 par value; 4,000,000 shares
     authorized; 2,344,924, 3,010,095 and 3,022,595 shares
     issued and 2,344,924, 796,711 and 796,711 shares
     outstanding at December 31, 1997 and 1998 and
     September 30, 1999 (unaudited), respectively..........      23,449        30,101         30,226
  Additional paid-in capital...............................   5,382,831     5,796,816      6,855,699
  Accumulated deficit......................................    (825,550)   (2,120,891)    (3,224,756)
  Treasury stock, at cost, 2,213,384 shares at December 31,
     1998 and September 30, 1999 (unaudited)...............          --    (3,076,602)    (3,076,602)
                                                             ----------    ----------     ----------
                                                              4,580,730       629,424        584,567
Less: notes receivable from stockholders...................     (38,281)      (86,659)            --
                                                             ----------    ----------     ----------
     Total stockholders' equity............................   4,542,449       542,765        584,567
                                                             ----------    ----------     ----------
          Total liabilities and stockholders' equity.......  $6,309,526    $1,495,763     $1,572,669
                                                             ==========    ==========     ==========
The accompanying notes are an integral part of these consolidated financial
                                   statements

                                      F-30
93

                              VOICE FX CORPORATION
                     CONSOLIDATED STATEMENTS OF OPERATIONS
NINE MONTHS ENDED
                                                 YEAR ENDED DECEMBER 31,           SEPTEMBER 30,
                                                --------------------------   -------------------------
                                                   1997           1998          1998          1999
                                                -----------    -----------   -----------   -----------
                                                                             (UNAUDITED)   (UNAUDITED)
Revenue:
  Hardware....................................  $   637,832    $   637,166   $   637,166   $    39,885
  Services....................................      595,279      1,397,923       718,935     3,887,111
                                                -----------    -----------   -----------   -----------
     Total revenue............................    1,233,111      2,035,089     1,356,101     3,926,996
                                                -----------    -----------   -----------   -----------
Cost of revenues:
  Cost of hardware............................      443,492        444,076       444,076        33,425
  Cost of services............................      819,985      1,179,786       740,191     2,033,345
                                                -----------    -----------   -----------   -----------
     Total cost of revenues...................    1,263,477      1,623,862     1,184,267     2,066,770
                                                -----------    -----------   -----------   -----------
          Gross margin........................      (30,366)       411,227       171,834     1,860,226
                                                -----------    -----------   -----------   -----------
Operating expenses:
  Product development.........................      454,674        507,967       310,624       411,024
  Sales and marketing.........................      601,146        463,657       358,592       775,790
  General and administrative..................    1,078,071        466,583       403,368       635,623
  Stock-based compensation....................           --        326,672       326,672     1,142,837
                                                -----------    -----------   -----------   -----------
          Total operating expenses............    2,133,891      1,764,879     1,399,256     2,965,274
                                                -----------    -----------   -----------   -----------
Operating loss................................   (2,164,257)    (1,353,652)   (1,227,422)   (1,105,048)
Other income (expense):
Interest income...............................      141,243         68,217        64,044         5,128
Interest expense..............................     (214,998)        (9,906)       (7,692)       (3,945)
                                                -----------    -----------   -----------   -----------
Loss from continuing operations before
  extraordinary loss..........................   (2,238,012)    (1,295,341)   (1,171,070)   (1,103,865)
                                                -----------    -----------   -----------   -----------
Discontinued operations:
  Loss from discontinued operations...........     (613,846)            --            --            --
  Gain on disposal of discontinued operations,
     net of income taxes of $220,000..........    6,739,187             --            --            --
                                                -----------    -----------   -----------   -----------
          Total income from discontinued
            operations........................    6,125,341             --            --            --
                                                -----------    -----------   -----------   -----------
Extraordinary loss on early extinguishment of
  debt (Note 4)...............................     (838,193)            --            --            --
                                                -----------    -----------   -----------   -----------
Net income (loss).............................  $ 3,049,136    $(1,295,341)  $(1,171,070)  $(1,103,865)
                                                ===========    ===========   ===========   ===========
The accompanying notes are an integral part of these consolidated financial
                                   statements

                                      F-31
94

                              VOICE FX CORPORATION
                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
NOTES
                                      COMMON STOCK       ADDITIONAL                      TREASURY STOCK         RECEIVABLE
                                   -------------------    PAID-IN     ACCUMULATED   ------------------------       FROM
                                    SHARES     AMOUNT     CAPITAL       DEFICIT       SHARES       AMOUNT      STOCKHOLDERS
                                   ---------   -------   ----------   -----------   ----------   -----------   ------------
Balance, December 31, 1996.......  2,316,524   $23,165   $5,353,146   $(3,874,686)          --   $        --     $(38,281)
Exercise of common stock
  options........................     28,400       284       29,685
Net income.......................                                       3,049,136
                                   ---------   -------   ----------   -----------   ----------   -----------     --------
Balance, December 31, 1997.......  2,344,924    23,449    5,382,831      (825,550)          --            --      (38,281)
Exercise of common stock
  warrant........................    378,807     3,788
Exercise of common stock
  options........................    286,364     2,864       87,313                                               (85,177)
Purchase of common stock for
  treasury.......................                                                   (2,213,384)  $(3,076,602)
Compensation expense related to
  common stock options...........                           326,672
Repayment of loans from
  stockholders...................                                                                                  38,281
Interest on notes receivable from
  stockholders...................                                                                                  (1,482)
Net loss.........................                                      (1,295,341)
                                   ---------   -------   ----------   -----------   ----------   -----------     --------
Balance, December 31, 1998.......  3,010,095    30,101    5,796,816    (2,120,891)  (2,213,384)   (3,076,602)     (86,659)
Interest on notes receivable from
  stockholders (unaudited).......                                                                                  (1,545)
Exercise of common stock options
  (unaudited)....................     12,500       125        4,250
Forgiveness of notes receivable
  from stockholders
  (unaudited)....................                         1,054,633                                                88,204
Net loss (unaudited).............                                      (1,103,865)
                                   ---------   -------   ----------   -----------   ----------   -----------     --------
Balance, September 30, 1999
  (unaudited)....................  3,022,595   $30,226   $6,855,699   $(3,224,756)  (2,213,384)  $(3,076,602)    $     --
                                   =========   =======   ==========   ===========   ==========   ===========     ========
TOTAL
                                   STOCKHOLDERS'
                                      EQUITY
                                   -------------
Balance, December 31, 1996.......   $1,463,344
Exercise of common stock
  options........................       29,969
Net income.......................    3,049,136
                                    ----------
Balance, December 31, 1997.......    4,542,449
Exercise of common stock
  warrant........................        3,788
Exercise of common stock
  options........................        5,000
Purchase of common stock for
  treasury.......................   (3,076,602)
Compensation expense related to
  common stock options...........      326,672
Repayment of loans from
  stockholders...................       38,281
Interest on notes receivable from
  stockholders...................       (1,482)
Net loss.........................   (1,295,341)
                                    ----------
Balance, December 31, 1998.......      542,765
Interest on notes receivable from
  stockholders (unaudited).......       (1,545)
Exercise of common stock options
  (unaudited)....................        4,375
Forgiveness of notes receivable
  from stockholders
  (unaudited)....................    1,142,837
Net loss (unaudited).............   (1,103,865)
                                    ----------
Balance, September 30, 1999
  (unaudited)....................   $  584,567
                                    ==========
The accompanying notes are an integral part of these consolidated financial
                                   statements

                                      F-32
95

                              VOICE FX CORPORATION

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED
                                                              YEAR ENDED DECEMBER 31,          SEPTEMBER 30,
                                                             -------------------------   -------------------------
                                                                1997          1998          1998          1999
                                                             -----------   -----------   -----------   -----------
                                                                                         (UNAUDITED)   (UNAUDITED)
Cash flows from operating activities:
  Net loss from continuing operations......................  $(2,238,012)  $(1,295,341)  $(1,171,070)  $(1,103,865)
  Adjustments to reconcile net loss from continuing
    operations to net cash provided by (used in) operating
    activities:
    Depreciation and amortization..........................      431,624       417,383       288,477       315,195
    Write off of previously capitalized deferred public
      offering costs.......................................      442,577            --            --            --
    Compensation expense related to common stock options...           --       326,672       326,672            --
    Accrued interest on notes receivable from
      stockholders.........................................           --        (1,482)           --        (1,545)
    Forgiveness of notes receivable from stockholders......           --            --            --     1,174,846
    Changes in operating assets and liabilities:
      Accounts receivable..................................      645,905      (218,078)      222,385      (223,571)
      Prepaid expenses and other current assets............     (370,947)      415,947       428,895         7,431
      Other assets.........................................      175,419        (5,651)       (6,001)           59
      Accounts payable and accrued expenses................     (129,104)     (442,158)     (674,101)      219,278
      Income taxes payable.................................           --      (220,000)     (220,000)           --
      Deferred revenue.....................................      858,925      (120,247)     (281,428)     (157,122)
                                                             -----------   -----------   -----------   -----------
      Cash provided by (used in) operating activities......     (183,613)   (1,142,955)   (1,086,171)      230,706
                                                             -----------   -----------   -----------   -----------
Cash flows from investing activities:
  Purchase of property and equipment.......................     (225,421)      (99,030)      (69,347)     (167,686)
  Restricted cash..........................................     (500,000)      500,000       500,000            --
                                                             -----------   -----------   -----------   -----------
      Cash provided by (used in) investing activities......     (725,421)      400,970       430,653      (167,686)
                                                             -----------   -----------   -----------   -----------
Cash flows from financing activities:
  Common stock issued upon option and warrant exercises....       29,969         8,788         8,788         4,375
  Payments on capital lease obligation.....................      (27,287)      (31,674)      (23,306)      (27,052)
  Purchase of common stock for treasury....................           --    (3,076,602)   (3,076,602)           --
  Payments received on notes receivable from
    stockholders...........................................           --        38,281        37,781            --
  Payments on long-term debt...............................   (3,300,000)           --            --            --
                                                             -----------   -----------   -----------   -----------
      Cash used in financing activities....................   (3,297,318)   (3,061,207)   (3,053,339)      (22,677)
                                                             -----------   -----------   -----------   -----------
Net cash and cash equivalents provided by discontinued
  operations...............................................    7,914,345            --            --            --
                                                             -----------   -----------   -----------   -----------
Net increase (decrease) in cash and cash equivalents.......    3,707,993    (3,803,192)   (3,708,857)       40,343
Cash and cash equivalents, beginning of period.............      288,388     3,996,381     3,996,381       193,189
                                                             -----------   -----------   -----------   -----------
Cash and cash equivalents, end of period...................  $ 3,996,381   $   193,189   $   287,524   $   233,532
                                                             ===========   ===========   ===========   ===========
Supplemental disclosure of cash flow information:
  Cash paid for interest...................................  $    92,026   $     9,906   $     7,692   $     3,945
  Cash paid for income taxes...............................  $        --   $   212,284   $   200,000   $        --
Supplemental disclosure of non-cash investing and financing
  activities:
  Issuance of common stock for notes receivable from
    stockholders...........................................  $        --   $    85,177   $    85,177   $        --
The accompanying notes are an integral part of these consolidated financial
                                   statements

                                      F-33
96

                              VOICE FX CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.  ORGANIZATION

     Voice FX Corporation ("FX") provides Internet and interactive voice
response telephone services, primarily to colleges and universities. These
services include telephone and Internet grade reporting, financial aid status
reporting, fee payment reporting, registration, and telephone and Internet
transcript ordering. To date, all of FX's revenues have been in the U.S. and are
reported through one operating segment. During 1997, FX sold its corporate
teleservices division and its FX Direct, Inc. product sample distribution
subsidiary business.

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

  Principles of Consolidation

     The consolidated financial statements include the accounts of Voice FX
Corporation and its wholly-owned subsidiaries. All intercompany balances and
transactions have been eliminated in consolidation. FX sold its only
wholly-owned subsidiary during 1997.

  Cash, Cash Equivalents and Restricted Cash

     FX considers all highly liquid debt instruments purchased with an initial
maturity of three months or less to be cash equivalents. Restricted cash
represents amounts held in escrow associated with certain representations and
warranties made by FX in connection with its sale of its teleservices division
in 1997. The restricted cash was released to FX in full during 1998.

  Concentration of Credit Risk and Significant Customers

     Financial instruments which potentially expose FX to concentrations of
credit risk consist primarily of cash equivalents and accounts receivable. FX
invests its excess cash primarily in money market funds of major financial
institutions. FX provides credit to customers in the normal course of business.
Collateral is not required for accounts receivable, but credit evaluations of
customers' financial conditions are performed periodically. FX maintains
reserves for potential credit losses and such losses have been within
management's expectations.

     Revenues of approximately $638,000 (52%) were attributable to one customer
during 1997. Revenues of approximately $637,000 (31%) and $309,000 (15%) were
attributable to two customers during 1998. Revenues of approximately $637,000
(47%) were attributable to one customer during the nine months ended September
30, 1998 (unaudited). Revenues of approximately $3.1 million (79%) were
attributable to one customer during the nine months ended September 30, 1999
(unaudited). Accounts receivable from three customers accounted for
approximately $160,000 (50%), from two customers accounted for approximately
$403,000 (76%) and from two customer accounted for approximately $652,000 (87%)
(unaudited) of the total amounts due to FX at December 31, 1997 and 1998 and
September 30, 1999, respectively.

  Prepaid Expenses and Other Current Assets

     At December 31, 1997, prepaid expenses and other current assets included
approximately $437,000 of hardware equipment which was installed and recognized
as revenue during 1998.

  Property and Equipment

     Property and equipment are recorded at cost and depreciated using the
straight line method over their estimated useful lives. Property and equipment
held under capital leases are stated at the lower of the fair market value of
the related asset or the present value of the minimum lease payments at the
inception of the lease and are amortized using the straight-line method over the
life of the related asset or the term of the lease. Upon retirement or sale, the
cost of the assets disposed of and the related accumulated depreciation and

                                      F-34
97
                              VOICE FX CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

amortization are removed from the accounts and any resulting gain or loss is
included in the determination of net income (loss). Maintenance and repair costs
are expensed as incurred.

     FX adopted Statement of Position 98-1, "Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use" ("SOP 98-1"), on
December 31, 1997. In accordance with SOP 98-1, FX capitalizes costs of software
development for internal use which meet certain criteria and amortizes such
costs on a straight-line basis over the life of the software. These assets are
included in property and equipment.

  Software Development Costs

     Costs associated with purchased software, new products and enhancements to
existing products are generally capitalized, after the establishment of
technological feasibility, and amortized as the greater of the ratio of current
revenues to total expected revenues from the product or the straight-line method
over the remaining estimated economic life of the product. To date, costs of
internally developed software which qualify for capitalization have not been
material. All other research and development expenditures are charged to product
development expense in the period incurred.

  Revenue Recognition

     FX derives revenue from annual membership fees from colleges and
universities that allow the college or university's students to utilize FX's
Internet and telephone services. Revenue from these memberships is recognized
ratably over the annual term of the agreement. FX also derives revenue from
corporate sponsors who advertise on FX's Internet website and through FX's
telephone services. Revenue from the corporate sponsors is generally a set price
per "play" of the sponsor's advertisement; accordingly, revenue from corporate
sponsors is recognized as such plays are provided. Revenue from hardware sales
is recognized when the hardware is delivered and all implementation services
have been provided. Amounts invoiced or received in advance of revenue being
earned are recorded as deferred revenue.

  General and Administrative Expense

     General and administrative expense for the year ended December 31, 1997
included costs of approximately $636,000 previously capitalized in anticipation
of an initial public offering of FX's common stock. This anticipated offering
did not occur and FX no longer has plans for such an offering; accordingly,
costs previously capitalized were expensed.

  Income Taxes

     Deferred tax assets and liabilities are determined based on the differences
between the financial statement and tax bases of assets and liabilities using
enacted tax rates in effect in the years in which the differences are expected
to reverse. Valuation allowances are provided if, based upon the weight of
available evidence, it is more likely than not that some or all of the deferred
tax assets will not be realized.

  Accounting for Stock-Based Compensation

     FX accounts for stock-based awards to employees using the intrinsic value
method as prescribed in Accounting Principles Board 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 equal to the fair market value of FX's
common stock at the date of grant. FX has adopted the provisions of Statement of
Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation," ("SFAS 123") through disclosure only. All stock-based awards to
nonemployees are accounted for in accordance with SFAS No. 123.

                                      F-35
98
                              VOICE FX CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

  Comprehensive Income (Loss)

     Effective January 1, 1998, FX adopted Statement of Financial Accounting
Standards No. 130, "Reporting Comprehensive Income" ("SFAS 130"). SFAS 130
requires the reporting of comprehensive income (loss) in addition to net income
(loss). Comprehensive income (loss) is a more inclusive reporting methodology
that includes disclosure of certain financial information that historically has
not been recognized in the calculation of net income (loss). Comprehensive
income (loss) is comprised of two components, net income (loss) and other
comprehensive income (loss). During the years ended December 31, 1997 and 1998
and the nine months ended September 30, 1998 and 1999 (unaudited), FX had no
items qualifying as other comprehensive income (loss); accordingly, the adoption
of SFAS 130 had no impact on FX's financial statements.

  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, 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.

  Unaudited Interim Financial Data

     The interim financial data as of September 30, 1999 and for the nine months
ended September 30, 1998 and 1999 has been derived from unaudited financial
statements of FX. Management believes FX's unaudited financial statements have
been prepared on the same basis as the audited financial statements and include
all adjustments, consisting only of normal recurring adjustments, necessary for
a fair presentation of the financial position and results of operations for such
periods. Results for the nine months ended September 30, 1998 and 1999 have not
be audited and are not necessarily indicative of results to be expected for the
full fiscal year.

  Recent Accounting Pronouncements

     In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133 ("SFAS 133"), "Accounting for Derivative
Instruments and Hedging Activities." SFAS 133 establishes accounting and
reporting standards for derivative financial instruments, including certain
derivative instruments embedded in other contracts (collectively referred to as
derivatives) and for hedging activities. SFAS 133 is effective for all fiscal
quarters of fiscal years beginning after June 15, 2000 and is effective for FX's
fiscal year ending December 31, 2001. FX does not expect the adoption of SFAS
133 to have a material effect on its financial position or results of
operations.

     In April 1998, the Accounting Standards Executive Committee issued
Statement of Position 98-5, "Reporting on the Costs of Start-Up Activities"
("SOP 98-5"). 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 new 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 financial statements for years beginning after
December 15, 1998. FX does not expect the adoption of this standard to have a
material effect on its financial position or results of operations.

                                      F-36
99
                              VOICE FX CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

3.  PROPERTY AND EQUIPMENT:

     Property and equipment consisted of the following at December 31, 1997 and
1998:
ESTIMATED
                                                        USEFUL LIFE
                                                          (YEARS)                1997         1998
                                                        -----------           ----------   ----------
Computer equipment.......................               5                $1,361,641   $1,432,575
     Office furniture and equipment...........               5                    12,114       14,230
     Software.................................               3                   502,830      528,810
     Leasehold improvements...................  Shorter of estimated useful
                                                   life or life of lease          18,309       18,309
                                                                              ----------   ----------
                                                                               1,894,894    1,993,924
     Less: accumulated depreciation and
       amortization...........................                                   865,439    1,282,822
                                                                              ----------   ----------
                                                                              $1,029,455   $  711,102
                                                                              ==========   ==========
At December 31, 1997 and 1998, fixed assets under capital leases included
computer equipment with a cost of approximately $145,000 and accumulated
depreciation of approximately $77,000 and $106,000, respectively.

     Depreciation expense for the years ended December 31, 1997 and 1998 was
approximately $397,000 and $417,000, respectively.

4.  STOCKHOLDERS' EQUITY

  Notes Receivable from Stockholders

     At December 31, 1997, notes receivable from stockholders included two notes
payable to FX for common stock option exercises during 1993. These notes, which
did not have a stated interest rate, were due and paid in full during January
1998.

     In September 1998, two officers and directors exercised stock options to
purchased 243,364 shares of FX's common stock, through the issuance of
non-recourse notes payable to FX in the amount of $85,177. These notes had an
interest rate of 6% and are due in September 2003. Interest earned during the
year ended December 31, 1998 and the nine months ended September 30, 1999 was
$1,482 and $1,545, respectively, and is included in interest income. In April
1999, FX's Board of Directors approved the forgiveness of all amounts due under
these notes, resulting in a compensation charge of $1,142,837, based on the fair
value of the underlying common stock on the date the notes were forgiven. This
expense has been included in stock-based compensation expense for the nine
months ended September 30, 1999.

  Warrants

     During 1996, FX received cash proceeds totaling $3,000,000 from the
issuance of two separate notes payable. The notes had an interest rate of 13.5%.
The noteholders were issued stock purchase warrants with the right to purchase
378,807 shares of FX's common stock at a price of $0.01 per share. These
warrants were immediately exercisable. The warrants were ascribed a value of
$954,593, which was recorded as additional paid-in capital and as a discount to
the value of the note. This discount was recognized over the term of the note.
The accretion of debt discount for these warrants during 1996 was $116,400. The
notes were repaid in full during 1997 and accordingly, the remaining unamortized
discount of $838,193 was recognized as an extraordinary loss on early
extinguishment of debt in 1997. These warrants were exercised in full during
1998.

                                      F-37
100
                              VOICE FX CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

  Treasury Stock

     On January 2, 1998, FX repurchased 2,213,384 shares (approximately 80%) of
its outstanding common stock. These purchases were made in privately negotiated
transactions at a price per share of $1.39. FX paid $1.21 per share of the
repurchase price in January 1998 and made payments of $0.18 per share during
July 1998 upon the release of the restricted cash balance. FX plans to use these
repurchased shares for its employee stock option plans.

5.  STOCK OPTIONS AND WARRANTS

     During 1990, FX adopted the 1990 Stock Option Plan (the "1990 Plan"), which
provides for the grant of incentive and non-qualified stock options for the
purchase of up to 800,000 shares of FX's common stock by officers, employees,
consultants and directors of FX. On March 20, 1998, the Board of Directors
approved the adoption of the 1998 Stock Option Plan (the "1998 Plan"), which
provides for the grant of incentive and non-qualified stock options up to an
aggregate of 400,000 shares of FX's common stock to employees, officers,
directors and consultants of FX. The Board of Directors is responsible for the
administration of the 1990 Plan and the 1998 Plan. The Board determines the term
of each option, the option price, the number of shares for which each option is
granted and the rate at which each option is exercisable. Generally, options
have a term of ten years and vest over a period of three to four years.
Incentive stock options may be granted to any officer or employee at an exercise
price per share of not less than the fair value per common share on the date of
the grant (not less than 110% of fair value in the case of holders of more than
10% of FX's voting stock) and with a term not to exceed ten years from the date
of grant (five years for incentive stock options granted to holders of more than
10% of FX's voting stock). Non-qualified stock options may be granted to any
officer, employee, consultant or director.

     The following table summarizes activity of FX's option plans since January
1, 1997:
WEIGHTED
                                                                                  AVERAGE
                                                                                  EXERCISE
                                                                        SHARES     PRICE
                                                                       --------   --------
Outstanding at December 31, 1996...........................   515,426    $2.73
               Granted...............................................        --       --
               Exercised.............................................   (28,400)    1.06
               Canceled..............................................  (132,600)    2.86
                                                                       --------
          Outstanding at December 31, 1997...........................   354,426     2.82
               Granted, at fair value................................    57,000     1.39
               Granted, at below fair value..........................   314,108     0.35
               Exercised.............................................  (286,364)    0.31
               Canceled..............................................  (334,426)    2.73
                                                                       --------
          Outstanding at December 31, 1998...........................   104,744    $0.69
                                                                       ========
As of December 31, 1997 and 1998, options to purchase 117,849 and 85,244
shares of common stock, respectively, were exercisable with weighted-average
exercise prices of $2.38 and $0.53, respectively. The weighted average fair
value per share of options granted at fair value and below fair value during
1998 was approximately $0.95 and $1.22, respectively. As of December 31, 1998,
28,892 shares were available for future grant under the 1998 Plan.

                                      F-38
101
                              VOICE FX CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

     The following table summarizes the stock options outstanding at December
31, 1998:
WEIGHTED
                                          AVERAGE
                                         REMAINING
          EXERCISE                      CONTRACTUAL           SHARES
           PRICE         SHARES            LIFE             EXERCISABLE
          --------       -------        -----------         -----------
$0.35          70,744         9.7 years             70,744
           $1.39          34,000         9.6 years             14,500
                         -------                               ------
                         104,744                               85,244
                         =======                               ======
During 1998, FX's Board of Directors authorized that all employee options
under the 1990 Plan would be eligible to be exchanged for options with an
exercise price at the then fair market value, as determined by the Board of
Directors, of $1.39 per share. Prior to the repricing, these options had
exercise prices ranging from $2.92 to $3.04 per share. This cancellation and
reissuance of stock options affected options for 286,426 shares.

     During 1998, FX granted stock options to purchase 314,108 shares of common
stock with an exercise price of $0.35 per share. Relating to these options, FX
recorded compensation expense of $326,672, representing the aggregate difference
between the estimated fair value of the common stock on the date of grant and
the exercise price of those options. As the options were immediately
exercisable, the compensation expense was fully recognized in 1998 and was also
recorded as a component of additional paid-in capital within stockholders'
equity.

     Had compensation cost been determined based on the fair value at the grant
date for awards in fiscal years 1996, 1997 and 1998 consistent with the
provisions of SFAS No. 123, FX's net losses from continuing operations before
extraordinary loss for 1997 and 1998 would have been $2,334,379 and $1,669,647,
respectively. For this purpose, the fair value of each option grant was
estimated on the grant date using the Black-Scholes option-pricing model with
the following assumptions: no dividend yield; no volatility; risk-free interest
rate of 5.5%; and an expected option term of four years. Because options vest
over several years and additional option grants are expected to be made in
future years, the above pro forma results are not representative of the pro
forma results for future years.

6.  RELATED PARTY TRANSACTIONS

     In January 1998, FX advanced a total of $32,009 to two officers and
directors. These advances were payable upon demand and did not have a stated
interest rate. In April 1999, FX's Board of Directors approved the forgiveness
of these advances, resulting in a compensation charge of $32,009. This expense
has been included in general and administrative expenses for the nine months
ended September 30, 1999.

7.  DISCONTINUED OPERATIONS

     During 1997, FX sold its sample distribution business and its corporate
teleservices division. The acquirer purchased all related assets and assumed
certain related liabilities of these businesses, including accounts receivable,
accounts payable, accrued and prepaid expenses and deferred revenue. As of
December 31, 1997 and 1998, there were no assets or liabilities related to these
businesses recorded in FX's financial statements.

     Operating results of these businesses from January 1, 1997 through the date
of disposition have been reflected within the statement of operations as
discontinued operations. Revenue of the sold businesses for the year ended
December 31, 1997 was approximately $1,124,000, which has been included within
the loss from discontinued operations.

                                      F-39
102
                              VOICE FX CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

8.  INCOME TAXES

     At December 31, 1997 and 1998, FX's deferred tax assets of approximately
$150,000 and $300,000, respectively, consisted primarily of net operating loss
carryforwards. FX has provided a valuation allowance for the full amount of its
net deferred tax assets as the realization of these future benefits cannot be
reasonably assured at December 31, 1998.

     At December 31, 1998, FX had federal and state net operating loss
carryforwards of approximately $600,000 and $950,000, respectively, available to
reduce future taxable income. The federal and state net operating loss
carryforwards begin to expire in 2011.

     As a result of the 1997 sale of the teleservices and sample distribution
businesses, FX recognized a gain of approximately $6.7 million. FX utilized
approximately $3.5 million of its federal tax loss carryforwards and
approximately $1.0 million of its state tax loss carryforwards to reduce the
taxable gain. As a result, total federal and state corporate income taxes for
1997 were approximately $220,000, which are included within the gain on disposal
of discontinued operations.

9.  COMMITMENTS

     FX leases its office space under noncancelable operating leases. Total rent
expense under these operating leases for the years ended December 31, 1997 and
1998 was approximately $76,000 and $68,000, respectively. FX also leases certain
equipment under a capital lease.

     Future minimum lease payments under all noncancelable operating and capital
leases as of December 31, 1998 are as follows:
OPERATING    CAPITAL
          YEAR ENDING DECEMBER 31,                                    LEASES       LEASE
          ------------------------                                   ---------    -------
1999.....................................................  $ 81,582     $41,332
          2000.....................................................    20,433      10,333
                                                                     --------     -------
                                                                     $102,015      51,665
                                                                     ========
          Less: amount representing interest.......................                 4,822
                                                                                  -------
          Present value of future minimum lease payments...........                46,843
          Less: amounts due within one year........................                36,763
                                                                                  -------
          Long-term portion........................................               $10,080
                                                                                  =======
10.  401(K) SAVINGS PLAN

     FX has established a retirement savings plan under Section 401(k) of the
Internal Revenue Code (the "401(k) Plan"). The 401(k) Plan covers substantially
all employees of FX who meet certain requirements and allows participants to
defer a portion of their annual compensation on a pre-tax basis. The terms of
the plan provide for FX to assume the cost of plan administration. FX may make
contributions to the 401(k) Plan at the discretion of management; to date, no
contributions by FX have been made to the 401(k) Plan.

11.  SUBSEQUENT EVENT

     On October 7, 1999, FX completed a merger with Student Advantage, Inc.
whereby Student Advantage acquired all of the common stock of FX by paying
approximately $1.1 million in cash and issuing 430,082 shares of Student
Advantage common stock. Assets acquired by Student Advantage consist of all
tangible assets of FX, as well as customer relationships, patents, completed
technology and FX's workforce.

                                      F-40
103

                          UNAUDITED PRO FORMA COMBINED
                              FINANCIAL STATEMENTS

     On October 7, 1999, SA Acquisition II, Inc. ("SA"), a wholly owned
subsidiary of Student Advantage, Inc. (the "Company"), merged into Voice FX
Corporation ("FX") pursuant to an Agreement and Plan of Merger by and among the
Company, SA and FX, dated September 27, 1999. At the close of the transaction,
FX became a wholly-owned subsidiary of the Company. Voice FX provides Internet
and interactive voice response telephone services to college and university
students, primarily grade reporting, transcript ordering and financial aid
status reporting.

     All of the outstanding capital stock of FX was converted into 430,082
shares of Common Stock, $.01 par value, of the Company and $1.1 million in cash.
Additionally, the Company assumed outstanding FX stock options, which were
converted into options to purchase an aggregate of 59,687 shares of Company
Common Stock. The exchange rate used to convert the capital stock and options of
FX into Common Stock and options of the Company and cash were determined as a
result of arms length negotiation.

     The accompanying unaudited pro forma combined financial statements are
presented as if the Company and FX had been operating as a combined entity. The
unaudited pro forma combined balance sheet as of September 30, 1999 presents the
financial position of the Company assuming the acquisition had occurred on
September 30, 1999. The unaudited pro forma combined statements of operations
for the nine months ended September 30, 1999 and the year ended December 31,
1998 present the results of operations of the Company assuming the acquisition
had occurred on January 1, 1999 and January 1, 1998, respectively, and included
all material pro forma adjustments necessary for this purpose. All material
adjustments to reflect the acquisition are set forth in the column "Pro Forma
Adjustments."

     The pro forma data is for informational purposes only and may not
necessarily reflect future results of operations and financial position or what
the results of operations or financial position would have been had the Company
and FX been operating as a combined entity for the specified periods. The
unaudited pro forma combined financial statements should be read in conjunction
with the historical financial statements of the Company, including the notes
thereto.

                                      F-41
104

                        PRO FORMA COMBINED BALANCE SHEET
                               SEPTEMBER 30, 1999
                                 (IN THOUSANDS)
                                  (UNAUDITED)
STUDENT                       PRO           PRO
                                                        ADVANTAGE,    VOICE FX        FORMA         FORMA
                                                           INC.      CORPORATION   ADJUSTMENTS     COMBINED
                                                        ----------   -----------   -----------     --------
ASSETS
Current Assets
  Cash and cash equivalents...........................   $  6,884      $   233       $(1,133)(a)   $  5,984
  Marketable securities...............................     35,340           --            --         35,340
  Accounts receivable, net............................      6,347          724            --          7,071
  Prepaid expenses and other current assets...........      2,238           25            --          2,263
                                                         --------      -------       -------       --------
     Total current Assets.............................     50,809          982        (1,133)        50,658
Property and equipment, net...........................      2,333          564            --          2,897
Intangible assets, net................................      3,502           --         6,344(b)       9,846
Other Assets..........................................         --           27            --             27
                                                         --------      -------       -------       --------
     Total Assets.....................................   $ 56,644      $ 1,573       $ 5,211       $ 63,428
                                                         ========      =======       =======       ========

                                   LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
  Accounts payable....................................   $  2,421      $   346       $    --       $  2,767
  Accrued compensation................................      1,001           75            --          1,076
  Other accrued expenses..............................      3,989          129           150(a)       4,268
  Deferred revenue....................................      8,295          418            --          8,713
  Current portion of capital lease obligation.........         --           19            --             19
                                                         --------      -------       -------       --------
     Total current liabilities........................     15,706          987           150         16,843
                                                         --------      -------       -------       --------
Notes payable.........................................        100           --            --            100
Capital lease obligation, net of current portion......         --            1            --              1
                                                         --------      -------       -------       --------
     Total liabilities................................     15,806          988           150         16,944
                                                         --------      -------       -------       --------
Stockholders' equity
  Common stock........................................        348           30           (26)(a)        352
  Additional paid-in capital..........................     81,936        6,857        (1,215)(a)     87,578
  Accumulated deficit.................................    (38,683)      (3,225)        3,225(a)     (38,683)
  Deferred compensation...............................     (2,754)          --            --         (2,754)
  Treasury stock, at cost.............................         (9)      (3,077)        3,077(a)          (9)
                                                         --------      -------       -------       --------
     Total Stockholder's equity.......................     40,838          585         5,061         46,484
                                                         --------      -------       -------       --------
     Total liabilities and stockholders' equity.......   $ 56,644      $ 1,573       $ 5,211       $ 63,428
                                                         ========      =======       =======       ========
The accompanying notes are an integral part of the unaudited pro forma combined
                              financial statements
                                      F-42
105

                   PRO FORMA COMBINED STATEMENT OF OPERATIONS
                      NINE MONTHS ENDED SEPTEMBER 30, 1999
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                  (UNAUDITED)
STUDENT                       PRO            PRO
                                                       ADVANTAGE,    VOICE FX        FORMA          FORMA
                                                          INC.      CORPORATION   ADJUSTMENTS      COMBINED
                                                       ----------   -----------   -----------      --------
Revenue:
  Subscription.......................................   $  6,194      $    --       $    --        $  6,194
  Other..............................................     12,127        3,927            --          16,054
                                                        --------      -------       -------        --------
Total revenue........................................     18,321        3,927            --          22,248
Costs and expenses:
  Cost of subscription revenue.......................      1,989           --            --           1,989
  Cost of other revenue..............................      8,888        2,067          (296)(d)      10,659
  Product development................................      6,169          411            --           6,580
  Sales and marketing................................      8,067          776            --           8,843
  General and administrative.........................      6,186          635           (19)(d)       6,802
  Depreciation and amortization......................      1,126           --         1,437(c)(d)     2,563
  Stock-based compensation...........................        837        1,143            --           1,980
                                                        --------      -------       -------        --------
Total costs and expenses.............................     33,262        5,032         1,122          39,416
                                                        --------      -------       -------        --------
Loss from operations.................................    (14,941)      (1,105)       (1,122)        (17,168)
Interest income (expense), net.......................        760            1            --             761
                                                        --------      -------       -------        --------
Net loss.............................................   $(14,181)     $(1,104)      $(1,122)       $(16,407)
                                                        ========      =======       =======        ========
Basic and diluted net loss per share.................   $  (0.57)                                  $  (0.65)
                                                        ========                                   ========
Shares used in computing basic and diluted net loss
  per share..........................................     24,776                        430(e)       25,206
                                                        ========                    =======        ========
The accompanying notes are an integral part of the unaudited pro forma combined
                              financial statements

                                      F-43
106

                   PRO FORMA COMBINED STATEMENT OF OPERATIONS
                          YEAR ENDED DECEMBER 31, 1998
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                  (UNAUDITED)
STUDENT                         PRO            PRO
                                                   ADVANTAGE,     VOICE FX         FORMA          FORMA
                                                      INC.       CORPORATION    ADJUSTMENTS      COMBINED
                                                   ----------    -----------    -----------      --------
Revenue:
  Subscription...................................   $  7,174       $    --        $    --        $  7,174
  Other..........................................     12,186         2,035             --          14,221
                                                    --------       -------        -------        --------
Total revenue....................................     19,360         2,035             --          21,395
Costs and expenses:
  Cost of subscription revenue...................      2,442            --             --           2,442
  Cost of other revenue..........................      7,867         1,624           (396)(d)       9,095
  Product development............................      4,948           508             --           5,456
  Sales and marketing............................      7,313           464             --           7,777
  General and administrative.....................      5,484           466            (21)(d)       5,929
  Depreciation and amortization..................      1,155            --          1,913(c)(d)     3,068
  Stock-based compensation.......................        808           327             --           1,135
                                                    --------       -------        -------        --------
Total costs and expenses.........................     30,017         3,389          1,496          34,902
                                                    --------       -------        -------        --------
Loss from operations.............................    (10,657)       (1,354)        (1,496)        (13,507)
Interest income (expense), net...................        121            58             --             179
                                                    --------       -------        -------        --------
  Net loss.......................................   $(10,536)      $(1,296)       $(1,496)       $(13,328)
                                                    ========       =======        =======        ========
Basic and diluted net loss per share.............   $  (0.59)                                    $  (0.73)
                                                    ========                                     ========
Shares used in computing basic and diluted net
  loss per share.................................     17,710                          430(e)       18,140
                                                    ========                      =======        ========
The accompanying notes are an integral part of the unaudited pro forma combined
                              financial statements

                                      F-44
107

                            STUDENT ADVANTAGE, INC.
           NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS

     a.) To give effect to the elimination of Voice FX stockholders' equity and
to record the total consideration of $6.9 million paid in the acquisition of
Voice FX.

     In connection with the acquisition, Student Advantage paid $1.1 million in
cash to Voice FX shareholders and issued 430,082 shares to Voice FX
shareholders, valued at $5.0 million, in exchange for all the outstanding
capital stock of Voice FX. In addition, Student Advantage agreed to assume all
outstanding options to purchase Voice FX common stock through issuing 59,687
options to purchase common stock, valued at approximately $700,000. Student
Advantage also incurred fees of approximately $150,000 in connection with the
transaction.

     b.) To give effect to the intangible assets acquired including completed
technology ($1.2 million), assembled work force ($0.5 million), and goodwill
($4.6 million).

     c.) To reflect the amortization (on a straight-line basis) had the
acquisition occurred at the beginning of the periods presented of completed
technology, assembled work force, and goodwill recorded in connection with the
acquisition, over expected useful lives of between three and five years.

     d.) To reclassify certain expenses within cost of other revenue and general
and administrative expenses to conform to Student Advantage's historical
presentation.

     e.) The calculation of pro forma weighted-average number of shares
outstanding includes the weighted-average number of common shares outstanding of
Student Advantage for the respective periods, adjusted to give effect to the
issuance of 430,082 shares of Student Advantage's common stock in connection
with the acquisition. For the nine months ended September 30, 1999 and the year
ended December 31, 1998 the calculation does not include the effect of common
stock equivalents as their inclusion would be anti-dilutive.

                                      F-45
108

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

                            [STUDENT ADVANTAGE LOGO]

================================================================================
109

                                    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,
the Nasdaq National Market listing fee and the NASD filing fee.
SEC registration fee........................................  $  7,153
     Accounting fees and expenses................................    50,000
     Legal fees and expenses.....................................    75,000
     Printing and mailing expenses...............................    45,000
     Miscellaneous...............................................     2,847
                                                                   --------
               Total.............................................   180,000
                                                                   ========
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.

     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.

                                      II-1
110

     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.

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.

 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 January 1997, Mr. Sozzi exercised options to purchase 870 membership
     units of Student Advantage LLC for $87,818.

 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 April 1997, Student Advantage LLC issued 200 membership units to Ms.
     Abegglen in satisfaction of a $24,000 note.

 6.  In December 1997, Student Advantage LLC 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.

 7.  In January 1998, Ms. Abegglen exercised options to purchase 350 membership
     units of Student Advantage LLC for $164,914.

                                      II-2
111

 8.  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 membership units.

 9.  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
     an aggregate of $10.0 million.

10.  On May 27, 1999, in connection with the acquisition of substantially all of
     the assets of Mentor Interactive Corp., the Registrant issued 18,056 shares
     of common stock and a warrant to purchase 24,000 shares of common stock at
     an exercise price of $11.08 per share.

11.  On June 11, 1999, in connection with the acquisition of Transaction Service
     Providers, Inc., the Registrant issued 195,000 shares of common stock to
     the stockholders of Transaction Service Providers, Inc.

12.  On June 18, 1999, in connection with the acquisition of University
     Netcasting, Inc., the Registrant issued 2,438,875 shares of common stock to
     the stockholders of University Netcasting, Inc. and assumed options to
     purchase a total of 66,634 shares of common stock.

13.  On July 21, 1999, in connection with entering into a marketing agreement
     with Lycos, Inc., the Registrant issued a warrant to purchase 550,000
     shares of common stock at an exercise price of $10.875 per share to Lycos,
     Inc.

14.  On October 7, 1999, in connection with the acquisition of Voice FX
     Corporation, the Registrant issued 430,082 shares of common stock to the
     stockholders of Voice FX Corporation and assumed options to purchase a
     total of 59,687 shares of common stock.

     (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 June 18, 1999, options to purchase 869,811 shares of
common stock had been exercised for a consideration of $289,937 under the
Registrant's 1998 Stock Incentive Plan and options to purchase an aggregate of
3,342,039 shares of common stock were outstanding under the Registrant's 1998
Stock Incentive Plan and 1998 California 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
112

ITEM 16.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

  (a) Exhibits
EXHIBIT
  NO.                             DESCRIPTION
-------                           -----------
2.1     Agreement and Plan of Merger, dated as of May 7, 1999, among
          Student Advantage, Inc., SA Acquisition I, Inc. and
          University Netcasting, Inc.*
  3.1     Amended and Restated Certificate of Incorporation of the
          Registrant.*
  3.2     Amended and Restated By-Laws of the Registrant.*
  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 USTrust Bank and the
          Registrant, dated March 31, 1999.*
 10.4     Form of Indemnification Agreement between the Registrant and
          each of its directors and officers.*
 10.5     Investor Rights Agreement, dated as of October 20, 1998,
          among the Registrant and certain stockholders.*
 10.6     Employment Agreement, dated March 25, 1996, between the
          Registrant 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 Registrant.+*
 10.8     Marketing Agreement, effective February 1, 1998, between
          AT&T Corp. and the Registrant.+*
 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
          Registrant and Princeton Review Publishing, L.L.C.*
 10.12    Letter Agreement, dated September 8, 1997, between the
          Registrant and Princeton Review Publishing, L.L.C.*
 10.13    Letter Agreement, dated October 20, 1998, between the
          Registrant and Princeton Review Publishing, L.L.C.*
 10.14    Mailing and Fulfillment Services Agreement, dated August 8,
          1996, between the Registrant and Aero Fulfillment Services.*
 10.15    Promissory Note (Equipment) to USTrust dated March 31,
          1999.*
 10.16    Master Note to USTrust Bank dated March 31, 1999.*
 10.17    Letter Agreement, dated May 3, 1999, between the Registrant
          and Ronald J. Kos.*
 10.18    Letter Agreement, dated May 20, 1999, between AT&T
          Communications, Inc. and the Registrant.+*
 10.19    Common Stock Purchase Warrant, dated July 21, 1999 issued to
          Lycos, Inc.**
 10.20    Sublease, dated as of May 20, 1999, between the Registrant
          and Morrison, Mahoney & Miller, LLP.
 21       Subsidiaries of the Registrant.
 23.1     Consent of PricewaterhouseCoopers LLP (Student Advantage,
          Inc.).
 23.2     Consent of PricewaterhouseCoopers LLP (Voice FX
          Corporation).
 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.
---------------
 * Incorporated herein by reference from the Registrant's Registration Statement
   on Form S-1 (File No. 333-75807).

** Incorporated herein by reference from the Registrant's Quarterly Report on
   Form 10-Q for the quarter ended June 30, 1999.

 + Confidential treatment previously granted by the Securities and Exchange
   Commission as to certain portions, which portions are omitted and filed
   separately with the Securities and Exchange Commission.

                                      II-4
113

  (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

     The undersigned Registrant hereby undertakes:

     (1)  To file, during any period in which offers or sales are being made, a
          post-effective amendment to this registration statement:

          (i)    To include any prospectus required by Section 10(a)(3) of the
                 Securities Act of 1933;

          (ii)   To reflect in the prospectus any facts or events arising after
                 the effective date of the registration statement (or the most
                 recent post-effective amendment thereof) which, individually or
                 in the aggregate, represent a fundamental change in the
                 information set forth in the registration statement.
                 Notwithstanding the foregoing, any increase or decrease in
                 volume of securities offered (if the total dollar value of
                 securities offered would not exceed that which was registered)
                 and any deviation from the low or high end of the estimated
                 maximum offering range may be reflected in the form of
                 prospectus filed with the Commission pursuant to Rule 424(b)
                 if, in the aggregate, the changes in volume and price represent
                 no more than 20 percent change in the maximum aggregate
                 offering price set forth in the "Calculation of Registration
                 Fee" table in the effective registration statement.

          (iii)  To include any material information with respect to the plan of
                 distribution not previously disclosed in the registration
                 statement or any material change to such information in the
                 registration statement;

     (2)  That, for the purpose of determining any liability under the
          Securities Act of 1933, each such post-effective amendment 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.

     (3)  To remove from registration by means of a post-effective amendment any
          of the securities being registered which remain unsold at the
          termination of the offering.

     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.

                                      II-5
114

                                   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 8th
day of December, 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              December 8, 1999
---------------------------------------      and Chief Executive Officer
         Raymond V. Sozzi, Jr.

      /s/ CHRISTOPHER B. ANDREWS           Vice President, Finance and                   December 8, 1999
---------------------------------------      Administration, Treasurer and
        Christopher B. Andrews               Secretary (Principal Financial
                                             and Accounting Officer)

         /s/ JOHN M. CONNOLLY              Director                                      December 8, 1999
---------------------------------------
           John M. Connolly

         /s/ WILLIAM S. KAISER             Director                                      December 8, 1999
---------------------------------------
           William S. Kaiser

          /s/ JOHN S. KATZMAN              Director                                      December 8, 1999
---------------------------------------
            John S. Katzman

        /s/ MARC J. TURTLETAUB             Director                                      December 8, 1999
---------------------------------------
          Marc J. Turtletaub

         /s/ CHARLES E. YOUNG              Director                                      December 8, 1999
---------------------------------------
           Charles E. Young
II-6
115

                                 EXHIBIT INDEX
EXHIBIT
  NO.                             DESCRIPTION
-------                           -----------
2.1     Agreement and Plan of Merger, dated as of May 7, 1999, among
          Student Advantage, Inc., SA Acquisition I, Inc. and
          University Netcasting, Inc.*
  3.1     Amended and Restated Certificate of Incorporation of the
          Registrant.*
  3.2     Amended and Restated By-Laws of the Registrant.*
  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 USTrust Bank and the
          Registrant, dated March 31, 1999.*
 10.4     Form of Indemnification Agreement between the Registrant and
          each of its directors and officers.*
 10.5     Investor Rights Agreement, dated as of October 20, 1998,
          among the Registrant and certain stockholders.*
 10.6     Employment Agreement, dated March 25, 1996, between the
          Registrant 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 Registrant.+*
 10.8     Marketing Agreement, effective February 1, 1998, between
          AT&T Corp. and the Registrant.+*
 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
          Registrant and Princeton Review Publishing, L.L.C.*
 10.12    Letter Agreement, dated September 8, 1997, between the
          Registrant and Princeton Review Publishing, L.L.C.*
 10.13    Letter Agreement, dated October 20, 1998, between the
          Registrant and Princeton Review Publishing, L.L.C.*
 10.14    Mailing and Fulfillment Services Agreement, dated August 8,
          1996, between the Registrant and Aero Fulfillment Services.*
 10.15    Promissory Note (Equipment) to USTrust dated March 31,
          1999.*
 10.16    Master Note to USTrust Bank dated March 31, 1999.*
 10.17    Letter Agreement, dated May 3, 1999, between the Registrant
          and Ronald J. Kos.*
 10.18    Letter Agreement, dated May 20, 1999, between AT&T
          Communications, Inc. and the Registrant.+*
 10.19    Common Stock Purchase Warrant, dated July 21, 1999 issued to
          Lycos, Inc.**
 10.20    Sublease, dated as of May 20, 1999, between the Registrant
          and Morrison, Mahoney & Miller, LLP.
 21       Subsidiaries of the Registrant.
 23.1     Consent of PricewaterhouseCoopers LLP (Student Advantage,
          Inc.).
 23.2     Consent of PricewaterhouseCoopers LLP (Voice FX
          Corporation).
 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.
---------------

 * Incorporated herein by reference from the Registrant's Registration Statement
   on Form S-1 (File No. 333-75807).

** Incorporated herein by reference from the Registrant's Quarterly Report on
   Form 10-Q for the quarter ended June 30, 1999.

 + Confidential treatment previously granted by the Securities and Exchange
   Commission as to certain portions, which portions are omitted and filed
   separately with the Securities and Exchange Commission.