<PAGE>

                                    FORM 10-Q
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

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

         For the quarterly period ended June 30, 2001

                                       OR

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

Commission file number 000-21593
                       ---------

                   Western Pennsylvania Adventure Capital Fund
             (Exact Name of Registrant as Specified in its Charter)

         Pennsylvania                                  25-1792727
         ------------                                  ----------
(State of Other Jurisdiction of           (I.R.S. Employer Identification No.)
 Incorporation or Organization)

                         Scott Towne Center, Suite A-113
                               2101 Greentree Road
                            Pittsburgh, PA 15220-1400
              (Address of Principal Executive Offices and Zip Code)

                                 (412) 279-1760
              (Registrant's Telephone Number, Including Area Code)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

  X   Yes        No
-----      -----

Number of shares outstanding of the issuer's Common Stock, par value $.01 per
share, as of August 6, 2001: 4,224,870 Shares.
<PAGE>

                         PART 1 - Financial Information

                                                                        Page No.


Item 1                        Financial Statements

         Report on Review by Independent Certified Public Accountants      3

         Statements of Assets and Liabilities as of June 30, 2001
         (unaudited) and December 31, 2000                                 4

         Statements of Operations, for the Periods April 1, 2001
         through June 30, 2001 (unaudited) and January 1, 2001
         through June 30, 2001 (unaudited)                                 5

         Statements of Operations, for the Periods April 1, 2000
         through June 30, 2000 (unaudited) and January 1, 2000
         through June 30, 2000 (unaudited)                                 6

         Statements of Changes in Net Assets for the Periods April 1,
         2001 through June 30, 2001 (unaudited) and January 1, 2001
         through June 30, 2001 (unaudited)                                 7

         Statements of Changes in Net Assets, for the Periods April 1,
         2000 through June 30, 2000 (unaudited) and January 1, 2000
         through June 30, 2000 (unaudited)                                 8

         Statements of Cash Flows, for the Periods April 1, 2001
         through June 30, 2001 (unaudited) and January 1, 2001
         through June 30, 2001 (unaudited)                                 9

         Statements of Cash Flows, for the Periods April 1, 2000
         through June 30, 2000 (unaudited) and January 1, 2000
         through June 30, 2000 (unaudited)                                10

         Notes to Financial Statements                                    11

Item 2   Management's Discussion and Analysis of Financial Condition
         and Results of Operations                                        21

Statement by Management Concerning Review of Interim Information by
Independent Certified Public Accountants                                  22

Statement by Management Concerning the Fair Presentation of Interim
Financial Information                                                     23

                                       2
<PAGE>

          REPORT ON REVIEW BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS


To the Board of Directors
Western Pennsylvania Adventure Capital Fund

We have reviewed the accompanying statement of assets and liabilities of Western
Pennsylvania Adventure Capital Fund as of June 30, 2001, and the related
statements of operations, changes in net assets, and cash flows for the three
and six month periods ended June 30, 2001 and 2000. These financial statements
are the responsibility of the company's management.

We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should
be made to the accompanying financial statements for them to be in conformity
with generally accepted accounting principles.

We have previously audited, in accordance with generally accepted auditing
standards, the statement of assets and liabilities as of December 31, 2000 and
the related statements of operations, changes in net assets, and cash flows for
the year then ended (not presented herein), and in our report dated March 16,
2001, we expressed an unqualified opinion on those financial statements.



Goff Backa Alfera & Company, LLC
Pittsburgh, August 6, 2001

                                       3
<PAGE>

                   Western Pennsylvania Adventure Capital Fund
                      Statements of Assets and Liabilities
                                      As of

<TABLE>
<CAPTION>
                                                   June 30, 2001   December 31, 2000
                                                   -------------   -----------------
                                    Assets          (unaudited)
                                    ------
<S>                                                 <C>              <C>
Cash and Cash Equivalents                           $   233,995      $   884,821

Short Term Investments, Net                             957,439          728,551

Receivables                                              35,732           18,250

Investment in Portfolio Companies                     2,833,545        3,999,650

Prepaid / Deferred Taxes                                 57,000            2,606

Organization Costs                                        4,560            6,080
                                                    -----------      -----------

   Total Assets                                     $ 4,122,271      $ 5,639,958
                                                    ===========      ===========

                                    Liabilities
                                    -----------

Accounts Payable                                    $       405      $     6,976

Accrued Liabilities                                       6,500            6,500

Accrued Income Taxes                                     48,832                0
                                                    -----------      -----------

   Total Current Liabilities                             55,737           13,476
                                                    -----------      -----------

Deferred Income Taxes                                         0          292,447
                                                    -----------      -----------

   Total Liabilities                                $    55,737      $   305,923
                                                    ===========      ===========

                                    Net Assets
                                    ----------
Common Stock, Par Value $.01 Per Share,
Authorized 10,000,000 Shares, Issued and
Outstanding   4,224,870 Shares (4,202,120
Shares at December 31, 2000)                        $    44,749      $    44,521

Additional Paid in Capital                            5,146,276        5,110,104

Syndication Costs                                      (149,220)        (149,220)

Retained Earnings (Deficit)                            (848,706)         455,195

Treasury Stock -  250,000 Shares, at cost              (126,565)        (126,565)
                                                    -----------      -----------

  Net Assets Applicable to Shares Outstanding       $ 4,066,534      $ 5,334,035
                                                    ===========      ===========

  Net Assets Value Per Share                        $      0.96      $      1.27
                                                    ===========      ===========
</TABLE>

See Accountant's Report and accompanying notes to financial statements.

                                       4
<PAGE>

                   Western Pennsylvania Adventure Capital Fund
                            Statements of Operations
                                 For the Periods


                                                 April 1, 2001   January 1, 2001
                                                    through          through
                                                 June 30, 2001    June 30, 2001
                                                 -------------    -------------
                                                  (unaudited)      (unaudited)

Revenues:
   Interest                                       $     9,955      $    36,020
   Management Fees                                      6,250           12,500
   Realized Gains                                           0          189,195
                                                  -----------      -----------
         Total Revenues                                16,205          237,715
                                                  -----------      -----------

Expenses:
   General and Administration                           4,500            9,000
   Other Operating Expenses                            24,088           47,534
                                                  -----------      -----------
        Total Expenses                                 28,588           56,534
                                                  -----------      -----------

Unrealized depreciation - Portfolio companies      (1,785,697)      (1,785,697)

Profit (Loss) Before Income Tax                    (1,798,080)      (1,604,516)

Income Tax Expense (Benefit)                         (372,701)        (300,615)
                                                  -----------      -----------

Net Income (Loss)                                 $(1,425,379)     $(1,303,901)
                                                  ===========      ===========

Earnings (Loss) Per Share                         $     (0.34)     $     (0.31)
                                                  ===========      ===========



See Accountant's Report and accompanying notes to financial statements.

                                       5
<PAGE>

                   Western Pennsylvania Adventure Capital Fund
                            Statements of Operations
                                 For the Periods



                                            April 1, 2000      January 1, 2000
                                               through             through
                                            June 30, 2000       June 30, 2000
                                            -------------       -------------
                                             (unaudited)         (unaudited)

Revenues:

   Interest                                   $ 76,321             $117,901

   Management Fees                               6,250               12,500
                                              --------             --------

        Total Revenues                          82,571              130,401
                                              --------             --------

Expenses:

   General and Administration                    4,500                9,000

   Other Operating Expenses                     41,105               75,391
                                              --------             --------

        Total Expenses                          45,605               84,391
                                              --------             --------

Profit Before Income Tax                        36,966               46,010

Income Tax Expense                              15,480               18,000
                                              --------             --------

Net Income                                    $ 21,486             $ 28,010
                                              ========             ========

Earnings Per Share                            $   0.01             $   0.01
                                              ========             ========


See Accountant's Report and accompanying notes to financial statements.

                                       6
<PAGE>

                   Western Pennsylvania Adventure Capital Fund
                       Statements of Changes in Net Assets
                                 For the Periods


                                         April 1, 2001       January 1, 2001
                                            through              Through
                                         June 30, 2001        June 30, 2001
                                         -------------        -------------
                                          (unaudited)          (unaudited)

From Operations
   Net Income (Loss)                      $(1,425,379)         $(1,303,901)

From Share Transactions:
   Proceeds from Sale of Common Stock               0               36,400
   Syndication Costs                                0                    0
                                          -----------          -----------

Net Increase in Net Assets Derived
   From Share Transactions                          0               36,400
                                          -----------          -----------

Net Increase (Decrease) in Net Assets      (1,425,379)          (1,267,501)

Net Assets:
   Beginning of Period                      5,491,913            5,334,035
                                          -----------          -----------

   End of Period
                                          $ 4,066,534)         $ 4,066,534
                                          ===========          ===========



See Accountant's Report and accompanying notes to financial statements.

                                       7
<PAGE>

                   Western Pennsylvania Adventure Capital Fund
                       Statements of Changes in Net Assets
                                 For the Periods


                                               April 1, 2000   January 1, 2000
                                                  through          through
                                               June 30, 2000    June 30, 2000
                                               -------------    -------------
                                                (unaudited)      (unaudited)

From Operations
   Net Income                                   $    21,486      $    28,010

From Share Transactions:
    Proceeds from Sale of Common Stock                  -0-        2,068,044
    Syndication Costs                                (5,950)          (9,680)
    Purchase of Treasury Stock                     (125,126)        (125,126)
                                                -----------      -----------

Net Increase (Decrease) in Net Assets
   Derived from Share Transactions                 (131,076)       1,933,238
                                                -----------      -----------

Net Assets:
   Beginning of Period                            5,076,285        3,005,447
                                                -----------      -----------

   End of Period                                $ 4,966,695      $ 4,966,695
                                                ===========      ===========



See Accountant's Report and accompanying notes to financial statements.

                                       8
<PAGE>

                   Western Pennsylvania Adventure Capital Fund
                            Statements of Cash Flows
                                 For the Periods

<TABLE>
<CAPTION>
                                                          April 1, 2001   January 1, 2001
                                                             through          through
                                                          June 30, 2001    June 30, 2001
                                                          -------------    -------------
                                                           (unaudited)      (unaudited)
<S>                                                       <C>              <C>
Cash Flow from Operating Activities:

  Income (Loss)                                           $(1,425,379)     $(1,303,901)

   Change in Assets and Liabilities:
      Organization Costs -  Amortization                          760            1,520
      Receivables - (Increase) Decrease                         2,460          (17,482)
      Prepaid Taxes - (Increase) Decrease                     (57,000)         (54,394)
      Accounts Payable - Increase (Decrease)                   (7,482)          (6,571)
      Accrued Liabilities - Increase (Decrease)               (17,648)         (48,832)
      Deferred Taxes - (Decrease)                            (292,447)        (292,447)
                                                          -----------      -----------

  Net Cash Provided By (Used in) Operating Activities      (1,796,736)      (1,624,443)

Cash Flow from Financing Activities:
     Proceeds from Sale of Common Stock                             0           36,400
     Payment of Syndication Costs                                   0                0
                                                          -----------      -----------
Net Cash Provided by Financing Activities                           0           36,400
                                                          -----------      -----------


Cash Flow from Investing Activities:
  Short Term Investments, Net of Redemptions                  (54,035)        (228,888)
  Investment in Portfolio Companies                         1,366,105        1,166,105
                                                          -----------      -----------
  Net Cash Provided by (Used in) Investing Activities       1,312,070          937,217
                                                          -----------      -----------

Net (Decrease) in Cash and Cash Equivalents                  (484,666)        (650,826)

Cash and Cash Equivalents at Beginning of Period              718,661          884,821
                                                          -----------      -----------

Cash and Cash Equivalents at  End of Period               $   233,995      $   233,995
                                                          ===========      ===========

Income Taxes Paid (Refunded)                              ($    5,437)     ($    2,437)

</TABLE>


See Accountant's Report and accompanying notes to financial statements.

                                       9
<PAGE>

                   Western Pennsylvania Adventure Capital Fund
                            Statements of Cash Flows
                                 For the Periods

<TABLE>
<CAPTION>

                                                       April 1, 2000   January 1, 2000
                                                          through          through
                                                       June 30, 2000    June 30, 2000
                                                       -------------    -------------
                                                        (unaudited)      (unaudited)
<S>                                                     <C>              <C>

Cash Flow from Operating Activities:

Income                                                  $    21,486      $    28,010

Changes in Assets and Liabilities:
   Organization Costs - Amortization                            760            1,520
   Receivables - (Increase) Decrease                          2,689            2,177
   Accounts Payable - (Decrease)                            (16,692)         (21,449)
   Accrued Liabilities - Increase (Decrease)                 20,980           10,000
                                                        -----------      -----------

Net Cash Provided by Operating Activities                    29,223           20,258
                                                        -----------      -----------

Cash Flow from Financing Activities:
    Proceeds from Sale of Common Stock                            0        2,068,044
    Payment of Syndication Costs                             (5,950)          (9,680)
    Purchase of Treasury Stock                             (125,126)        (125,126)
                                                        -----------      -----------

Net Cash Provided by (Used in) Financing Activities        (131,076)       1,933,238
                                                        -----------      -----------

Cash Flow from Investing Activities:
   Short Term Investments, Net of Redemptions              (175,715)      (1,937,253)
   Investment in Portfolio Companies                       (348,965)        (708,034)
                                                        -----------      -----------
   Net Cash (Used in) Investing Activities                 (524,680)      (2,645,287)
                                                        -----------      -----------

Net (Decrease) in Cash and Cash Equivalents                (626,533)        (691,791)

Cash and Cash Equivalents at Beginning of Period            939,170        1,004,428
                                                        -----------      -----------

Cash and Cash Equivalents at End of Period              $   312,637      $   312,637
                                                        ===========      ===========
</TABLE>

See Accountant's Report and accompanying notes to financial statements.

                                       10
<PAGE>

                   Western Pennsylvania Adventure Capital Fund
                          Notes to Financial Statements
                                  June 30, 2001


Note 1 - Summary of Significant Accounting Policies:
----------------------------------------------------

This summary of significant accounting policies of Western Pennsylvania
Adventure Capital Fund (the "Fund") is presented to assist in understanding the
Fund's financial statements. These accounting policies conform with generally
accepted accounting principles and have been consistently applied in the
preparation of the financial statements.

Nature of Operations

The Fund was incorporated on May 23, 1996, and began its primary business
activities in November, 1997. The Fund has been formed to become a Business
Development Company ("BDC") and to be subject to the applicable provisions of
the Investment Company Act of 1940, as amended (the "1940 Act"). The Fund
invests primarily in the equity and/or debt securities of development stage
companies located in western Pennsylvania. The Fund seeks to make its
investments in conjunction with a consortium of investment partners such as
individual investors, other venture capital firms, private non-profit or
for-profit companies or foundations, and federal, state or local public,
quasi-public or publicly-supported economic development organizations, agencies
or authorities which provide investment capital or low interest or other
financing for economic development.

The Fund's Board of Directors, which is elected by the shareholders annually,
has responsibility for management of the Fund, including authority to select
portfolio securities for investment by the Fund. The Board is advised by the
officers of the Fund and, through December 31, 1998, had been advised by The
Enterprise Corporation of Pittsburgh ("Enterprise"), which served as the Fund's
investment advisor. Enterprise screened potential Portfolio Companies and
presented them to the Fund's Board for investment consideration, conducted due
diligence reviews of investment candidates and managed the day-to-day operations
of the Fund including, portfolio management, preparing reports to shareholders
and performing administrative services. The recommendations of Enterprise as to
investments were advisory only and were not binding on the Fund or its Board of
Directors. Enterprise was a private, non-profit consulting firm founded in 1983
for the purpose of assisting entrepreneurs in developing new businesses in
western Pennsylvania. As of December 31, 1998, Enterprise ceased operations and
is no longer serving as the Fund's investment advisor. The Fund's Board of
Directors now performs these activities.

Enterprise received a fee equal to 5% of the aggregate amount of assets invested
by the Fund in portfolio securities for providing investment advisory and
administrative services to the Fund. Enterprise may also have received
compensation from investment partners or members of any investment consortium
that invested with the Fund in portfolio securities, all on such basis as such
other parties and Enterprise may have agreed.

                                       11
<PAGE>

Basis of Presentation - Interim Financial Statements

The financial information included herein has been prepared from the books and
records without audit. The accompanying financial statements have been prepared
in accordance with the instructions to form 10-Q and do not include all of the
information and the footnotes required by generally accepted accounting
principles for statements. In the opinion of management, all adjustments,
consisting only of normal recurring adjustments, necessary for a fair
presentation of the financial condition, results of operations, changes in net
assets, and cash flows, have been included.

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 revenue and expenses during the reporting period. Actual
results could differ from those estimates.

These financial statements should be read in conjunction with the financial
statements and notes thereto for the period January 1, 2000 to December 31,
2000, contained in the Fund's 2000 Annual Report on Form 10-K.

Basis of Presentation - Net Assets

During 1996, the Fund began offering a total of 5,000,000 shares of its common
stock, par value $.01, at a price of $1.00 per share under Regulation E of the
Securities Act of 1933 (the "First Offering"). In connection with its services
in organizing the formation and development of the Fund, Enterprise purchased
250,000 shares of common stock for $.01 per share, which represented 4.8% of the
total potential outstanding shares of the Fund. The shares purchased by
Enterprise represented founder's shares. If less than 5,000,000 shares were sold
in the First Offering, the Fund had the right to repurchase from Enterprise for
$.01 per share such number of shares as would result in Enterprise's ownership
percentage in the Fund immediately following the First Offering being 4.8%.

During 1997, the Fund sold 2,104,333 shares of its common stock and closed the
First Offering. As of December 31, 1997, the Fund repurchased 143,899 shares of
its common stock from Enterprise, thereby reducing Enterprise's ownership to
106,101 shares, which represented 4.8% of the then total shares issued and
outstanding (2,210,434 shares). The repurchased shares are presented as Treasury
Stock, at cost. On June 7, 2000, the Fund repurchased from Innovation Works,
Inc., successor to Enterprise, the 106,101 shares. These repurchased shares also
are presented as Treasury shares, at cost.

On September 10, 1999, the Fund began offering a total of 2,750,000 shares of
its common stock, par value $.01, at a price of $1.45 per share under Regulation
E of the Securities Act of 1933 (the "Second Offering"). The Second Offering was
extended through January 31, 2000. The Fund sold 2,057,787 shares of its common
stock and closed the Second Offering.

On July 14, 2000, the Fund began offering a total of 875,000 shares of its
common stock, par value $0.01, at a price of $1.60 per share under Regulation E
of the Securities Act of 1933 (the "Third Offering"). The Third Offering was
extended through March 31, 2001. The Fund sold 62,750 shares of its common stock
and closed the Third Offering.

                                       12
<PAGE>

Syndication Costs

Legal, accounting and other costs of $149,220 ($85,507 in 1998) incurred in
connection with the Fund's First Offering, Second Offering and Third Offering
have been capitalized and reported as a permanent reduction of net assets in
accordance with generally accepted accounting principles.

There were no syndication costs incurred in the three and six month periods
ended June 30, 2001. Syndication costs incurred in the three and six month
periods ended June 30, 2000, were $5,950 and $9,680, respectively.

Cash and Cash Equivalents

Cash and Cash Equivalents consist of cash in checking accounts and high quality
money market instruments having or deemed to have remaining maturities of
thirteen months or less.

Short Term Investments

The Fund's short term investments consist of high quality commercial paper and
U.S. Government securities. These investments generally are purchased at a
discount or premium from face value and are redeemed at maturity at face value.
The difference represents interest income (expense) which will accrue over the
period from date of acquisition to date of maturity. The Fund uses the effective
yield to maturity method to recognize the accretion of interest income (expense)
over the life of each individual short term investment. This method produces a
rate of return which is constant over the period from acquisition to maturity.
Using this method, the interest income (expense) recognized on each individual
investment will increase over time as the carrying value of that investment
increases (decreases). The Fund records these investments net of remaining
unearned interest income (expense).

In accordance with Statement of Financial Accounting Standards ("SFAS") No. 115,
"Accounting for Certain Investments in Debt and Equity Securities," the Fund has
classified all short term investments as held-to-maturity ("HTM") as of June 30,
2001 and December 31, 2000.

Investments in Portfolio Companies

Investments are stated at value. Investments for which market quotations are
readily available are valued at the last trade price on or within one local
business day of the date of determination as obtained from a pricing source. If
no such trade price is available, such investments are valued at the quoted bid
price or the mean between the quoted bid and asked price on the date of
determination as obtained from a pricing source. Securities for which market
quotations are not readily available are valued at fair value in good faith
using methods determined by or under the direction of the Fund's Board of
Directors.

Start-Up and Organization Costs

Costs incurred in connection with the start-up and organization of the Fund have
been deferred and are being amortized ratably over a period of 60 months
beginning January 1, 1998. The balance of $4,560 ($6,080 at December 31, 2000)
represents the remaining portion of these costs subject to amortization.

                                       13
<PAGE>

Earnings Per Share

During 1997, the Fund adopted SFAS No. 128, "Earnings Per Share". Its
application is not expected to affect the calculations of basic and diluted
earnings per share.

Earnings per share is computed using the weighted average number of shares
outstanding during the respective periods, adjusted for outstanding stock
options. There are no other outstanding warrants, or other contingently issuable
shares.

The Fund's shareholders, at the annual meeting of shareholders held on November
17, 1999, approved a stock option plan which authorizes the granting of options
to purchase the Fund's common stock to directors, officers, employees, and
members of the advisory board of the Fund. Options to purchase 250,000 shares of
the Fund's common stock have been granted to directors of the Fund under the
terms of this stock option plan.

Income Taxes

The Fund has adopted the SFAS Standard No. 109, "Accounting for Income Taxes",
from its inception. SFAS 109 requires an asset and liability approach that
recognizes deferred tax assets and liabilities for the expected future tax
consequences of events that have been recognized in the Fund's financial
statements or tax returns. In estimating future tax consequences, SFAS 109
generally considers all expected future events other than enactments of changes
in the tax law or rates. During the quarter ended December 31, 1999, the Fund
recognized unrealized appreciation on its portfolio companies, and accordingly,
began recognizing deferred taxes due to temporary timing differences in
accordance with SFAS 109. There were no deferred taxes recognized during the
three and six month periods ended June 30, 2000.

During the three month period ended June 30, 2001, the Fund revalued a number of
its investments in portfolio companies based on current economic conditions and
certain unfavorable developments at specific portfolio companies. Accordingly,
previously recognized deferred taxes of $292,447 on previously recorded
unrealized appreciation were reversed in the three month period ended June 30,
2001. There were no deferred taxes recognized in the three month period ended
March 31, 2001.

Note 2 - Sale of Securities
---------------------------

During 1997, the Fund sold 2,104,333 shares of its common stock at $1.00 per
share, under an Offering Circular dated November 7, 1996 ("First Offering
Circular"). The proceeds were required to be deposited in an escrow account with
the Fund's escrow agent, PNC Bank, until such time as the escrow account reached
$1 million. At that time, the Fund was permitted to withdraw the funds from the
escrow account and begin to invest in portfolio securities.

As of July 11, 1997, the proceeds in the escrow account totaled $1,860,100. On
that date, the Fund withdrew substantially all of the funds from the escrow
account.

The funds released from escrow have been temporarily invested, pending
investment in Portfolio Securities, in cash equivalents, government securities,
and high quality debt securities. A portion of the funds released from escrow
were disbursed to pay accumulated obligations whose payment was deferred until
funds were released from escrow.

                                       14
<PAGE>

The Fund began offering for sale up to 2,750,000 shares of its Common Stock at
$1.45 per share, or a maximum of $3,987,500, under an Offering Circular dated
September 10, 1999 ("Second Offering Circular"). The Fund intends to use the
proceeds from this sale of securities primarily to invest in the equity and/or
debt securities of additional development stage companies located in western
Pennsylvania, and to make follow on investments, as appropriate, in existing
portfolio companies. The proceeds from this sale of securities have been
temporarily invested, pending investments in portfolio companies, in cash
equivalents, government securities, and high quality debt securities. A portion
of these proceeds may be used for normal operating expenses. The Fund sold
2,057,787 shares ($2,983,792) of its Common Stock under this Second Offering
Circular.

The Fund began offering for sale up to 875,000 shares of its Common Stock at
$1.60 per share, or a maximum of $1,400,000, under an Offering Circular dated
July 14, 2000 ("Third Offering Circular"). The Fund intends to use the proceeds
from this sale of securities primarily to invest in the equity and/or debt
securities of additional development stage companies located in western
Pennsylvania, and to make follow on investments, as appropriate, in existing
portfolio companies. The proceeds from this sale of securities will be
temporarily invested, pending investments in portfolio companies, in cash
equivalents, government securities, and high quality debt securities. A portion
of these proceeds may be used for normal operating expenses. As of December 31,
2000, the Fund had received subscriptions to purchase 40,000 shares ($64,000).
The Fund sold 62,750 shares of its Common Stock at $1.60 per share under the
Third Offering Circular, and closed the Third Offering as of March 31, 2001. As
of March 31, 2001, and December 31, 2000, $4,199,650 and $3,999,650,
respectively, were invested in Portfolio Securities, and the balance of the
funds remained invested in cash equivalents, government securities, and high
quality debt securities.

Note 3 - Investments in Portfolio Companies
-------------------------------------------

On April 9, 2001, the Fund exercised a portion of its pre-emptive rights and
purchased 22,000 shares of Allegheny Child Care Academy, Inc. ("ACCA") Series D
Preferred Stock ("Series D") at $2.9999 per share for a total investment of
$65,998. At approximately the same time, other shareholders of the Fund
exercised a portion of their pre-emptive rights and purchased 26,420 shares of
Series D for a total investment of $79,257. ACCA sold a total of 2,950,522
shares of Series D for $7,770,395, including 90,120 shares via exercise of
pre-emptive rights.

ACCA owns and operates children's day care centers primarily in central/inner
city locations with most of its clients welfare subsidized through state and
federal programs.

On April 25, 2001, the Fund purchased $25,000 of MediaSite, Inc. ("MediaSite")
Bridge Loan Notes ("Bridge Notes"). The Bridge Notes bear interest at 8 percent
per annum and mature upon the earlier of the sale of the company, an event of
default, or March 31, 2002. Upon sale of the company, the Bridge Notes have a
liquidation preference equal to five times their principal amount. MediaSite
issued approximately $3,700,000 of Bridge Notes.

MediaSite produces software to deliver network-based searchable digital and
audio libraries.

On April 27, 2001, the Fund purchased $50,000 of TimeSys Corporation ("TimeSys")
Convertible Bridge Notes ("Convertible Notes"). The Convertible Notes mature on
August 30, 2001, bear interest at 15 percent per annum, and are convertible,
principal and interest, into the new Series A Preferred Stock financing expected
to close approximately July 24, 2001. At approximately the same time, other
shareholders in the Fund purchased $435,000 of these Convertible Notes. TimeSys
issued a total of $835,000 of Convertible Notes. See Subsequent Events - Note
12.

                                       15
<PAGE>

TimeSys develops and markets software tools for embedded real time systems.

On May 21, 2001, the Fund purchased 50,000 shares of Webmedx, Inc. ("Webmedx")
Series D Convertible Preferred Stock ("Webmedx D") at $1.00 per share for a
total investment of $50,000. At approximately the same time, other shareholders
in the Fund purchased 492,487 shares of Webmedx D for a total investment of
$492,487. As of June 30, 2001, Webmedx had sold approximately 8,200,000 shares
of Webmedx D and the offering is continuing at this time.

Webmedx provides software and services to diagnostic imaging segments of the
healthcare industries.

On May 31, 2001, the Fund purchased 192,308 shares of e-Cruise, Inc.
("e-Cruise") Series B Preferred Stock ("Series B") at $0.26 per share for a
total investment of $50,000. At approximately the same time, other shareholders
of the Fund purchased 163,462 shares of Series B for a total investment of
$42,500.

e-Cruise will provide online infomediary content for cruise lines to potential
passengers.

On June 5, 2001, the Fund placed in escrow, under control of its legal counsel,
$100,000 for the purchase of MindMatrix, Inc. ("MindMatrix") Convertible
Promissory Notes ("Notes"). The escrow is to be released to MindMatrix upon its
raising of total of $750,000, including the Fund's $100,000, through the
issuance of these Notes. The Notes mature upon the earlier of the next round
financing or December 31, 2001, bear interest at 10 percent per annum, and are
convertible into the same security as to be issued in the next round financing
subject to a discount from 15 - 50 percent dependent upon the timing of the next
round financing. See Subsequent Events - Note 12.

MindMatrix offers a solution platform to vendors in the information technology
industry to better communicate the value of their products to customers.

On June 18, 2001, the Fund purchased 17,125 shares of Quantapoint, Inc.
("Quantapoint") Series C Preferred Stock ("Series C") at $1.46 per share for
total investment of $25,000. At approximately the same time, other shareholders
of the Fund purchased 61,995 shares of Series C for a total investment of
$90,513. Quantapoint raised $4,000,000 from the sale of 2,739,726 shares of
Series C. The total investment by the Fund, and by the Fund and its
shareholders, including previously acquired shares, represented an ownership
interest of 1.96 percent and 15.79 percent, respectively, on a fully diluted
basis.

Quantapoint uses a 3D laser camera to measure "existing conditions" dimensions
of the interior or exterior of structures, and then converts the 3D data to 2D
drawings for building owners and architects.

On June 15, 2001, the Fund purchased $53,594 of Laminar Software, Inc.
("Laminar") Convertible Promissory Notes ("Laminar Notes"). The Laminar Notes
mature upon the earlier of December 31, 2001 or the closing of the next round
financing, bear interest at 6 percent per annum, and are convertible into the
next financing round security on the same terms and conditions, subject to a 20
percent price discount. At approximately the same time, other shareholders in
the Fund purchased $146,984 of the Laminar Notes. Laminar raised $750,000
through the issuance of these Laminar Notes.

                                       16
<PAGE>

Laminar develops, markets, and sells tools for monitoring the performance and
availability of e-commerce sites.

Note 4 - Co-Investor Agreement
------------------------------

On June 30, 1998, the Fund and the Urban Redevelopment Authority of Pittsburgh
("URA") entered into a co-investment agreement ("Agreement"). Under the terms of
this Agreement, the URA will create an escrow account of $1,000,000 to be used
for direct investment in certain select Fund's Portfolio Companies, located
within the City of Pittsburgh and meeting other criteria established by the URA.
The escrow account also will be used for payment of the Fund's investment and
management fees related to such investments. The URA will match, on a
dollar-for-dollar basis, the Fund's investment in Portfolio Companies, subject
to the limitations of the Portfolio Companies' location within the City of
Pittsburgh and such companies meeting the URA's criteria for funding.

The annual management fee payable to the Fund is $25,000. Further, the URA will
pay the Fund's investment advisor a transaction fee of five percent (5%) of the
URA's portion of its investment. All fees will be paid from the escrow account.

In addition, the URA, as part of the Agreement, has agreed to subordinate its
rights to any return on its investment until the private equity participants,
investing in each of the contemplated transactions, including the Fund, have
recovered their original investments in the portfolio companies. Thereafter, the
URA and all equity participants, including the Fund, will participate in all
future distributions in accordance with their investment.

As of June 30, 2001, the URA notified the Fund of its decision to terminate the
Agreement, effective as of July 31, 2001. Through June 30, 2001, the URA had
invested a total of $100,000, on its dollar-for-dollar matching basis in one
portfolio company.

Note 5 - Short Term Investments
-------------------------------

The Fund, pending investments in Portfolio Securities, temporarily invests its
excess funds in short term high quality commercial paper and U.S. Government
securities. These investments generally are purchased at a discount or premium
from face value and are redeemed at maturity at face value. The discount/premium
from face value represents unearned interest income/expense and is recognized
over the remaining term of the security using the effective yield to maturity
method. All of the short term investments are classified as HTM in accordance
with SFAS No. 115. The face value, carrying value, and market value for HTM
investments were as follows at June 30, 2001 and December 31, 2000:

                               As of June 30, 2001
                               -------------------

Investment                   Face Value     Carrying Value      Market Value
----------                   ----------     --------------      ------------

U.S. Government Securities    $966,000         $957,439           $956,329
                              ========         ========           ========


                             As of December 31, 2000
                             -----------------------

Investment                   Face Value     Carrying Value      Market Value
----------                   ----------     --------------      ------------

U.S. Government Securities    $733,000         $728,551           $728,441
                              ========         ========           ========

                                       17
<PAGE>

Note 6 - Unrealized Appreciation (Depreciation)
-----------------------------------------------

The Fund recognizes unrealized appreciation (depreciation) on its portfolio
companies when significant and material events have occurred that clearly
indicates that an adjustment to the carrying value of those investments is
appropriate. Unrealized (depreciation) was $(1,083,572) as of June 30, 2001 and
unrealized appreciation was $702,125 as of December 31, 2000.

During the three month period ended June 30, 2001, the Fund reduced the carrying
value of a number of its investments in portfolio companies based upon: (1)
current general economic conditions within those industry markets in which its
portfolio companies operate, and (2) specific unfavorable developments at
certain of those companies. The unrealized depreciation recognized in the three
month period ended June 30, 2001 was $1,785,697. No unrealized appreciation or
depreciation was recognized either in the three month period ended March 31,
2001 or in the three and six month periods ended June 30, 2000.

Note 7 - Related Party Transactions
-----------------------------------

Accrued liabilities at June 30, 2001 and December 31, 2000 include $4,500 for
Board of Directors fees and $2,000 for accounting services payable to a
consulting firm in which one of the Fund's officers is a significant
shareholder.

Note 8 - Stock Option Plan
--------------------------

The shareholders, at the annual meeting of shareholders held on November 17,
1999, approved a stock option plan authorizing the granting of options to
purchase the Fund's common stock to directors, officers, employees and members
of the advisory board of the Fund. Under the terms of the plan, the stock option
committee has authority to award options to eligible persons on the basis of the
nature of their duties, their present and potential contributions to the success
of the Fund and like factors.

The maximum number of options that may be granted under the plan is 500,000. The
exercise price is determined by the stock option committee at the time the
option is granted, but cannot be less than the fair market value of the Fund's
common stock on the date of grant. Each option will have a term, not in excess
of 10 years, as determined by the stock option committee. In general, each
option will become exercisable in 25 percent increments beginning on the first,
second, third and fourth anniversaries of the date of grant. Options may be
granted as either incentive stock options or nonqualified stock options.

The stock option committee granted options to purchase 50,000 shares of its
common stock at an exercise price of $1.45 per share to each of the Fund's five
directors (250,000 shares in the aggregate), effective as of October 11, 1999.
These options vest 50% upon issuance, and 25% in equal increments on the first
and second anniversary dates of issuance.

                                       18
<PAGE>

Note 9 - Income Taxes
---------------------

The following table summarizes the provision for Federal and state taxes on
income.

                                            2001           2000
                                          --------       -------
          Current:
             Federal                      $ 43,832       $ 7,000
             State                           3,000        11,000
                                            48,832        18,000

          Deferred:
            Federal                       (281,901)            0
            State                          (67,546)            0
                                         ---------       -------
                                          (349,447)            0
                                         ---------       -------

          Total                          $(300,615)      $18,000
                                         =========       =======

The components of the deferred tax asset, as reflected on the balance sheet,
consist of the following:

                                                       2001         2000
                                                     --------     ---------
          Deferred tax liability:
            Unrealized appreciation                  $      0     $ 320,000
                                                     --------     ---------

          Deferred tax asset:
            Net operating loss                              0        27,553
            Unrealized depreciation on securities     741,500             0
            Valuation allowance                      (684,500)            0
                                                    ---------     ---------

          Net deferred tax asset                    $  57,000     $(292,447)
                                                    =========     =========


The Fund has provided a valuation allowance for the deferred tax asset since the
recognition of the unrealized depreciation is not sufficiently assured due to
the uncertainty of future capital gain income. The valuation allowance increased
since December 31,2000 by $684,500.

Note 10 - Realized Gains
------------------------

In January, 2000, the Fund sold its investment in Medtrex Incorporated
("Medtrex"), one of the Fund's portfolio companies. The proceeds of sale were
placed in escrow pending claims against the escrow by the purchaser. On July 26,
2000, the Fund received its first distribution from its sale of its investment
in Medtrex. The excess of the proceeds received ($234,604) on July 26, 2000,
over the Fund's investment ($152,477) was recognized as realized gains during
the year ended December 31, 2000. On February 7, 2001, the Fund received its
second and final distribution from its sale of Medtrex on January 19, 2000. This
second distribution, which amounted to $189,195, has been recognized as

                                       19
<PAGE>

realized gains during the three month period ended March 31, 2001, and results
in a total return to the Fund of $423,799 on an investment of $152,477.

Note 11 - Treasury Stock
------------------------

On June 7, 2000, the Fund purchased 106,101 shares of its common stock
previously owned by Innovation Works, Inc. for $125,126. These shares are shown
as treasury stock as of June 30, 2001 and December 31, 2000.

As of December 31, 1997, the Fund repurchased 143,899 shares of its common stock
from Enterprise at $0.01 per share. These shares also are shown as treasury
stock as of June 30, 2001 and December 31, 2000.

Note 12 - Subsequent Events
---------------------------

On July 24, 2001, TimeSys closed on the sale of 30,842,327 shares of its new
Series A Preferred Stock ("Series A") at $0.2673 per share for a total
investment of $8,244,154. The Series A is convertible into common stock and has
liquidation and other preferences. Concurrent with this closing, both classes of
previously outstanding preferred stock were converted into a new Series B
Preferred Stock which also is convertible into common and has certain limited
preferences. Also at the same time, the existing Convertible Bridge Notes were
converted principal ($835,000) and interest ($20,846) were converted into Series
A.

As of August 6, 2001, MindMatrix had not raised the minimum of $750,000 through
the issuance of its Convertible Promissory Notes, and the Fund had not
authorized the release of its $100,000 being held escrow by its legal counsel
pending the achievement of the $750,000 minimum amount. The $100,000 is included
in Investments in Portfolio Companies of June 30, 2001.

                                       20
<PAGE>

Item 2.  Management's Discussion and Analysis of Financial Condition
         -----------------------------------------------------------
         and Results of Operations
         -------------------------

Results of Operations
---------------------

Revenues for the three month and six month periods ending June 30, 2001 amounted
to $16,205 and $237,715, respectively. The $237,715 includes $189,195 realized
gain from the sale of Medtrex Incorporated, one of the Fund's portfolio
companies, which was recognized in the three month period ended March 31, 2001.
Revenues for the three and six month periods ended June 30, 2000 amounted to
$82,571 and $130,401, respectively, and interest income represented $76,321 and
$117,901, respectively. Interest income for the three and six month periods
ending June 30, 2001 was $9,955 and $36,020, respectively. The decline in
interest income reflects both lower interest rates and a reduction in short term
investments due to additional investments in portfolio companies.

General and administrative expenses for the three and six month periods ending
June 30, 2001 amounted to $4,500 and $9,000, respectively, and consisted of
directors fees. These amounts are the same as the comparable periods of 2000.
Other operating expenses for the three and six month periods ended June 30, 2001
amounted to $24,088 and $47,534, respectively. Other operating expenses for the
three and six month periods ended June 30, 2000 amounted to $41,105 and $75,391,
respectively. The decrease in other operating expenses in the three and six
month periods of 2001 compared with the same periods of 2000 was due to
elimination of advisory board fees of $17,000 and $29,000, respectively.

Income tax expense (benefit) for the three and six month periods ending June 30,
2001 was ($372,701) and ($300,615), respectively, compared with $15,480 and
$18,000 for the same periods of 2000. The (benefit) recognized in the three and
six month periods ending June 30, 2001 reflects the recognition of a portion of
unrealized depreciation on investments in portfolio companies during the three
month period ending June 30, 2001. A tax benefit has been recognized only to the
extent of available net operating loss carrybacks and previously recorded
unrealized appreciation on investments in portfolio companies since realization
of additional tax benefits is not sufficiently assured as to warrant recognition
in the financial statements.


Financial Condition, Liquidity and Capital Resources
----------------------------------------------------

The Registrant, through its sale of Common Stock under the First Offering
Circular, raised $2,104,333 in 1997. The Registrant, through the sale of its
Common Stock under the Second Offering Circular, raised $2,983,792 in 1999 -
2000. The Registrant, through the sale of its Common Stock under the Third
Offering Circular, raised $100,400 in 2000-2001. As of June 30, 2001, the
Registrant held cash, cash equivalents, and short-term investments in high
quality commercial paper and U.S. Government securities of $1,199,995. Most of
this amount, except for normal operating expenses, is available for investment
in Portfolio Securities.

                                       21
<PAGE>

   Statement by Management Concerning Review of Interim Financial Information
                   by Independent Certified Public Accountants


The June 30, 2001 financial statements included in this filing on Form 10-Q have
been reviewed by Goff Backa Alfera & Company, LLC, independent certified public
accountants, in accordance with established professional standards and
procedures for such review. The report of Goff Backa Alfera & Company, LLC
commenting on their review accompanies the financial statements included in Item
1 of Part I.

                                       22
<PAGE>

            Statement by Management Concerning the Fair Presentation
                        Of Interim Financial Information


The financial information included herein is unaudited; however, such
information reflects all adjustments (consisting solely of normal recurring
adjustments), which are, in the opinion of management, necessary to a fair
statement of the results for the interim periods. The report of Goff Backa
Alfera & Company, LLC commenting upon their review accompanies the financial
statements included in Item 1 of Part I.

                                       23
<PAGE>

                           Part II - Other Information


Item 6.            Exhibits and Reports on Form 8-K

          (a)      List of Exhibits

                   11      Computation of earnings per share for the three and
                           six month periods ended June 30, 2001 and June 30,
                           2000


          (b)     Reports on Form 8-K

                  No reports were filed on Form 8-K by the Registrant
                  during the quarter covered by this report.

                                       24
<PAGE>

                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Western
Pennsylvania Adventure Capital Fund has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized:

         Western Pennsylvania Adventure Capital Fund
         (Registrant)


         Date:  August 6, 2001          /s/ G. Richard Patton
                                        --------------------------------------
                                        G. Richard Patton
                                        President and Chief Executive Officer
                                        and Director


         Date:  August 6, 2001          /s/ Alvin J. Catz
                                        --------------------------------------
                                        Alvin J. Catz
                                        Chief Financial Officer, Treasurer
                                        and Director

                                       25