<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 March 31, 1999

                                       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 MAY 7, 1999:  2,210,434 SHARES.

                                       1
<PAGE>
 
                         PART I  FINANCIAL INFORMATION

<TABLE>
<CAPTION>
 
 
ITEM  1.        FINANCIAL STATEMENTS
                                                                      PAGE NO.
<S>       <C>                                                         <C>
          REPORT ON REVIEW BY INDEPENDENT CERTIFIED                      3
          PUBLIC ACCOUNTANTS
 
          STATEMENTS OF ASSETS AND LIABILITIES AS OF                     4
          MARCH 31, 1999 (UNAUDITED) AND DECEMBER 31, 1998
 
          STATEMENTS OF OPERATIONS, FOR THE PERIODS                      5
          JANUARY 1, 1999 THROUGH MARCH  31, 1999 (UNAUDITED)
          AND JANUARY 1, 1998 THROUGH MARCH 31, 1998 (UNAUDITED)
 
          STATEMENTS OF CHANGES IN NET ASSETS, FOR THE                   6
          PERIODS JANUARY 1, 1999 THROUGH MARCH 31, 1999 (UNAUDITED)
          AND JANUARY 1, 1998 THROUGH MARCH 31, 1998 (UNAUDITED)
 
          STATEMENTS OF CASH FLOWS, FOR THE PERIODS JANUARY 1, 1999      7
          THROUGH MARCH 31, 1999 (UNAUDITED) AND JANUARY 1, 1998
          THROUGH MARCH 31, 1998 (UNAUDITED)
 
          NOTES TO FINANCIAL STATEMENTS                                  8
 
ITEM 2.         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL       15
                CONDITION AND RESULTS OF OPERATIONS
 
STATEMENT BY MANAGEMENT CONCERNING REVIEW OF INTERIM                    16
INFORMATION BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
 
STATEMENT BY MANAGEMENT CONCERNING THE FAIR                             17
PRESENTATION OF INTERIM FINANCIAL INFORMATION
</TABLE>

                                       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 March 31, 1999 and 1998, and the
related statements of operations, changes in net assets, and cash flows for the
three month periods ended March 31, 1999 and 1998. 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, 1998 and
the related statements of operations, changes in net assets (deficit), and cash
flows for the year then ended (not presented herein), and in our report dated
March 24, 1999, we expressed an unqualified opinion on those financial
statements.



Goff, Ellenbogen, Backa & Alfera, LLC
Pittsburgh, May 7, 1999



                                       3


<PAGE>
 
                  Western Pennsylvania Adventure Capital Fund
                      Statements of Assets and Liabilities
                                     As of
<TABLE>
<CAPTION>
 
                                                March 31, 1999   December 31, 1998
                                                ---------------  ------------------
                               Assets            (unaudited)
                               ------
<S>                                             <C>              <C>
 
Cash and Cash Equivalents                           $  282,331          $  289,824
 
Short Term Investments, Net                            766,937             894,960
 
Receivables - Interest and Fees                         12,111               6,453
 
Investment in Portfolio Companies                      988,677             862,677
 
Prepaid Taxes                                            2,690               2,440
 
Organization Costs                                      11,400              12,160
                                                    ----------          ----------
 
  Total Assets                                      $2,064,146          $2,068,514
                                                    ==========          ==========
                                 Liabilities
                                 -----------
 
Accounts Payable                                    $   24,919          $   14,396
 
Accrued Liabilities                                      4,200              14,700
                                                    ----------          ----------
 
  Total Liabilities                                 $   29,119          $   29,096
                                                    ==========          ==========
                                 Net Assets
                                 ----------
 
Common Stock, Par Value $.01 Per Share,
Authorized 10,000,000 Shares, Issued and
Outstanding 2,210,434 Shares                        $   23,543          $   23,543
 
Additional Paid in Capital                           2,083,290           2,083,290
 
Syndication Costs                                      (85,507)            (85,507)
 
Retained Earnings                                       15,140              19,531
 
Treasury Stock - 143,899 Shares, at Cost                (1,439)             (1,439)
                                                    ----------          ----------
 
 Net Assets Applicable to Shares Outstanding        $2,035,027          $2,039,418
                                                    ==========          ==========
 
 Net Assets Value Per Share                         $     0.92          $     0.92
                                                    ==========          ==========
 
</TABLE>
See Accountant's Report and accompanying notes to financial statements.

                                       4
<PAGE>
 
                  Western Pennsylvania Adventure Capital Fund
                            Statements of Operations
                                For the Periods

<TABLE>
<CAPTION>
 
                                                      January 1, 1999             January 1, 1998
                                                          through                     through
                                                       March 31, 1999              March 31, 1998
                                                      ---------------             ---------------
                                                        (unaudited)                 (unaudited)
<S>                                                   <C>                         <C>
Revenues:
   Interest                                                $13,578                     $24,979
   Management Fees                                           6,250                           0
                                                           -------                     -------
         Total Revenues                                     19,828                      24,979
                                                           -------                     -------
                                                  
Expenses:                                         
   General and Administration                                4,200                           0
   Interest                                                      0                           0
   Other Operating Expenses                                 19,269                      19,420
                                                           -------                     -------
        Total Expenses                                      23,469                      19,420
                                                           -------                     -------
                                                  
Profit (Loss) Before Income Tax                             (3,641)                      5,559
                                                  
Income Tax Expense                                             750                       1,390
                                                           -------                     -------
                                                  
Net Income (Loss)                                          $(4,391)                    $ 4,169
                                                           =======                     =======
                                                  
Earnings Per Share                                         $   .00                     $   .00
                                                           =======                     =======
</TABLE>




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

                                       5
<PAGE>
 
                  Western Pennsylvania Adventure Capital Fund
                      Statements of Changes in Net Assets
                                For the Periods

<TABLE>
<CAPTION>
 
                                                    January 1, 1999             January 1, 1998
                                                        through                     through
                                                     March 31, 1999              March 31, 1998
                                                    ---------------             ---------------
                                                      (unaudited)                 (unaudited)
<S>                                                 <C>                         <C>
From Operations
   Net Income (Loss)                                  $   (4,391)                 $    4,169
                                               
Net Assets:                                    
   Beginning of Period                                 2,039,418                   2,036,369
                                                      ----------                  ----------
                                               
   End of Period                                      $2,035,027                  $2,040,538
                                                      ==========                  ==========
</TABLE>




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

                                       6
<PAGE>
 
                  Western Pennsylvania Adventure Capital Fund
                            Statements of Cash Flows
                                For the Periods

<TABLE>
<CAPTION>
 
                                                           January 1, 1999           January 1, 1998
                                                               through                   through
                                                            March 31, 1999            March 31, 1998
                                                           ---------------           ---------------
                                                             (unaudited)               (unaudited)
<S>                                                        <C>                       <C>
Cash Flow from Operating Activities:
 
  Income (Loss)                                               $  (4,391)                $   4,169
                                                       
   Change in Assets and Liabilities:                   
      Organization Costs - Amortization                             760                       760
      Receivables - (Increase)                                   (5,658)                        0
      Prepaid Taxes - (Increase)                                   (250)                        0
      Accounts Payable - Increase                                10,523                    16,582
      Accrued Liabilities - (Decrease)                          (10,500)                   (5,534)
                                                              ---------                 ---------
                                                       
  Net Cash Provided by (Used in)                       
     Operating Activities                                        (9,516)                   15,977
                                                              ---------                 ---------
                                                       
Cash Flow from Investing Activities:                   
                                                       
 Redemption of Short Term Investments,                 
       Net of Purchases                                         128,023                   118,081
  Investment in Portfolio Companies                            (126,000)                 (200,000)
                                                              ---------                 ---------
  Net Cash Provided by (Used in)                       
                                                                        
    Investing Activities                                          2,023                   (81,919) 
                                                              ---------                 ---------
                                                       
Net (Decrease) in Cash and Cash Equivalents                      (7,493)                  (65,942)
                                                       
Cash and Cash Equivalents at Beginning of Period                289,824                   368,618
                                                              ---------                 ---------
                                                       
Cash and Cash Equivalents at  End of Period                   $ 282,331                 $ 302,676
                                                              =========                 =========
</TABLE>




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

                                       7
<PAGE>
 
                  Western Pennsylvania Adventure Capital Fund
                         Notes to Financial Statements
                                 March 31, 1999

                                        
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, 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 has 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 has been a private, non-profit consulting firm founded in
1983 for the purpose of assisting entrepreneurs in developing new businesses in
western Pennsylvania.

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.

As of December 31, 1998, Enterprise ceased operations.  The fund is
investigating alternatives to replace the services previously provided by
Enterprise.  Temporarily, the Fund is handling advisory services on an internal
basis and has contracted externally for administrative and support services.

                                       8
<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 complete 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, 1998 to December 31,
1998, contained in the Fund's 1998 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 "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 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 Offering being 4.8%.

During 1997, the Fund sold 2,104,333 shares of its common stock and closed the
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 percent of the then total shares issued and
outstanding (2,210,434 shares).  The repurchased shares are presented as
Treasury Stock, at cost.

There were no transactions involving the Fund's Shares during the three month
period ending March 31, 1999.

Syndication Costs

Legal, accounting and other costs of $85,507 ($85,507 in 1997) incurred in
connection with the Offering have been capitalized and reported as a permanent
reduction of net assets in accordance with generally accepted accounting
principles.  No syndication costs were incurred in the three month period ending
March 31, 1999.

                                       9
<PAGE>
 
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 from face value and are redeemed at maturity at face value.  The
difference represents interest income 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 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 recognized on each individual investment will
increase over time as the carrying value of that investment increases.  The Fund
records these investments net of remaining unearned interest income.

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 March 
31, 1999 and December 31, 1998.

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

A total of $15,200 has been incurred in connection with the start-up and
organization of the Fund.  These costs have been deferred and are being
amortized ratably over a period of 60 months beginning January 1, 1998.

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.  There are no outstanding stock
options, warrants, or other contingently issuable shares.

                                       10
<PAGE>
 
Income Taxes

The Fund has adopted the SFAS 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.  As of March 31, 1999 and December 31, 1998, the Fund had no significant
temporary or permanent differences and, therefore, it did not have any deferred
taxes.


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 ("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.  No shares were sold
during the three month period ending March 31, 1999.

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.  As of March 31, 1999 and December 31, 1998,
$988,677 and $862,677, 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 January 20, 1999, the Fund purchased $100,000 of Interactive Information,
Inc. ("Interactive") 4.57% Convertible Notes ("Convertible Notes").  The
Convertible Notes are convertible into the same equity, and on the same terms as
Interactive will issue in its next securities offering.  If certain specified
conditions in connection with the next securities offering are not met, the
noteholders may elect to convert their Convertible Notes into either common
stock equal to 30.3125% ownership (based on total Convertible Notes - $485,000)
on a fully diluted basis, or a demand note with a significantly higher interest
rate.  In addition, the Convertible Notes carry warrants, one warrant for each
three and one-third shares, for the purchase, at $.01 per share, of the same
equity as Interactive will issue in its next securities offering.  The warrants
expire after ten years.  At approximately the same time, other private investors
in the Fund purchased $330,000 of Interactive Convertible Notes.

Interactive sells an interactive software program for use in hospitals and
physicians' offices that educates patients on their disease and their
responsibility in the treatment regimen.  The software modules have the
potential to lower health care costs through fewer hospital/physician visits.

                                       11
<PAGE>
 
On March 26, 1999, the Fund purchased $26,000 of Medtrex Incorporated
("Medtrex") subordinated notes.  These subordinated notes were part of a
$302,000 debt offering, all of which was purchased by existing shareholders of
Medtrex.  The subordinated notes are due and payable, with interest, upon the
earlier of February 9, 2000 or upon the sale of or change in control of Medtrex.
Interest accrues equal to 50 percent of the face amount of the subordinated
notes.

Medtrex designs, manufactures, and distributes electrosurgical instruments and
accessories for the hospital, surgery center, and physicians' office market.

On March 30, 1999, Allegheny Child Care Academy, Inc. ("ACCA") sold 559,375
shares of its Series B Preferred Stock ("Series B Preferred") to Kitty Hawk
Capital, a venture capital firm, at $1.7877 per share for a total of $1,000,000.
These shares were issued at the same price and with the same terms as those
acquired by the Fund in its investment in ACCA in November, 1998.  As of March
31, 1999, the Fund's investment and the total investment by the Fund and its
shareholders represented 0.9 percent ownership and 2.9 percent ownership,
respectively, on a fully diluted basis.

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.

Note 4 - Rescission Offer
-------------------------

The Fund's Offering Circular authorized the Fund to sell shares through July 31,
1997.  In August, September, and October 1997, a total of 194,233 shares of the
Fund's common stock in the aggregate were offered and sold to residents of the
Commonwealth of Pennsylvania for $1.00 per share ($194,233 in the aggregate).
Consequently, the provisions of Section 201 of the Pennsylvania Securities Act
of 1972 relating to the registration of securities may not have been complied
with in connection with the offer or sale of these securities.

Accordingly, the Fund made an offer of rescission to all of the affected
shareholders.  The offer of rescission expired January 30, 1998.  None of the
affected shareholders elected to exercise the right of rescission.

Note 5 - 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.

                                       12
<PAGE>
 
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.


Note 6 - 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 from face
value and are redeemed at maturity at face value.  The discount from face value
represents unearned interest income 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
March 31, 1999 and December 31, 1998:

                        As of March 31, 1999
                        --------------------

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

U.S. Government Securities    $    775,814  $      766,937  $      766,757
                              ============  ==============  ==============


                        As of December 31, 1998
                        -----------------------

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

U.S. Government Securities    $   908,299   $      894,960  $    895,192
                              ===========   ==============  ============



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

Accounts payable as of March 31, 1999, includes $10,000 payable to Enterprise
for investment advisory services and $3,000 for accounting services payable to a
consulting firm in which one of the Fund's officers is a significant
shareholder.  Accrued liabilities at March 31, 1999 includes $4,200 for Board of
Directors fees.

Accounts payable as of December 31, 1998, includes $10,000 payable to Enterprise
for investment advisory and administrative services.  Accrued liabilities at
December 31, 1998 includes $14,700 for Board of Directors fees.

                                       13
<PAGE>
 
Note 8 - Year 2000 Conversion
-----------------------------

In 1998, the Fund initiated a program to prepare its computer systems and
applications for the year 2000.  The Year 2000 issue is the result of computer
programs being written using two digits rather than four to define the
applicable year.  Any of the Fund's programs that have time-sensitive software
may recognize a date using "00" as the year 1900 rather than the year 2000.
This could result in a system failure or miscalculations.  The Fund presently
believes that, with appropriate modifications to existing software and
conversions to new software, the Year 2000 issue will not pose significant
problems for the Fund's computer systems as so modified and converted.


Note 9 - Subsequent Events
--------------------------

On April 6, 1999, the Fund purchased 68,221 shares of SegWay Internet
Technologies, Inc. ("SegWay") Preferred Stock Series B ("Preferred B") at
$1.4658191 per share for a total investment of $100,000, which represented
approximately 0.8 percent ownership on a fully diluted basis.  The Preferred B
is convertible into common stock, has voting rights, and has certain dividend
and liquidation preferences.  At approximately the same time, other private
investors in the Fund purchased 266,963 shares of Preferred B for a total
investment of $391,319.  The total investment by the Fund and the Fund's
shareholders represented 3.8 percent ownership on a fully diluted basis.

SegWay provides software and installation services for E-Commerce systems to
enable large, complex companies to sell to their distributors and buy from
vendors through web-based communications.

On April 22, 1999, the Fund exercised its pre-emptive rights and participated in
a $750,000 bridge financing by ISLIP Media Network, Inc. ("ISLIP").  Under the
terms of this bridge financing, the Fund purchased $2,546 of each of three debt
securities as described herein.  First, a subordinated convertible note due June
30, 1999 with interest at 6 percent per annum.  This note is convertible,
principal and interest, into the same security as to be issued in the next
subsequent financing at 96.5% of this next round price.  Second, a subordinated
non-convertible note due June 30, 2000 with interest at 6 percent per annum.
Both notes carry warrants to purchase the next round security at its issue price
equal to 10 percent of the face amount of the notes.  The warrants expire after
seven years.  Third, a subordinated convertible note due May 31, 1999 with
interest at 10 percent per annum.  This note is convertible, principal and
interest, into the same security as to be issued in the next subsequent
financing at the next subsequent financing round price.

On April 28, 1999, ISLIP closed on the sale of 1,450,767.64 shares of its Series
B preferred stock at $1.30 per share for total consideration of $1,885,997.90.
These shares are being offered through Saturn Capital, Inc. which earns a 9
percent underwriting fee, plus warrants to purchase 19,230 shares at $1.30 per
share for each $100,000 of gross proceeds received by ISLIP.  The offering is
continuing at this time.  The Series B preferred stock is convertible into
common stock on a one-for-one basis, has voting rights with common stock on an
as-converted basis, has board representation rights, and liquidation
preferences.  The Fund and the Fund and its shareholders investment in ISLIP
currently represents approximately 0.6 percent and 1.9 percent, respectively, on
a fully diluted basis.

                                       14
<PAGE>
 
Item 2.  Management's Discussion and Analysis of Financial Condition and Results
--------------------------------------------------------------------------------
of Operations
-------------


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

Revenues for the three month period ending March 31, 1999, consisted of interest
income and management fees of $13,578 and $6,250, respectively.  General and
administrative expenses for the three month period amounted to $4,200, and
consisted primarily of directors fees.  Other operating expenses for the three
month period ending March 31, 1999 amounted to $19,269 and included $12,144 of
legal and accounting fees.

Revenues for the three month period ending March 31, 1998 consisted of interest
income of $24,979, which represented interest earned on escrowed funds, short
term investments, and money market funds.

Other operating expenses of $19,420 included $10,000 for investment advisory and
administrative services due to the Fund's investment advisor and $8,655 of legal
and accounting fees.


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

The Registrant, through its sale of Common Stock under the Offering, raised
$2,104,333 in 1997.  As of March 31, 1999, the Registrant had invested $988,677
in Portfolio Companies, and held cash, cash equivalents, and short-term
investments in high quality commercial paper and U.S. Government securities of
$1,049,268.  Most of this amount, except for normal operating expenses, is
available for investment in Portfolio Securities.

                                       15
<PAGE>
 
   Statement by Management Concerning Review of Interim Financial Information
                  by Independent Certified Public Accountants


The March 31, 1999 financial statements included in this filing on Form 10-Q
have been reviewed by Goff, Ellenbogen, Backa & Alfera, LLC, independent
certified public accountants, in accordance with established professional
standards and procedures for such review.  The report of Goff, Ellenbogen, Backa
& Alfera, LLC commenting on their review accompanies the financial statements
included in Item 1 of Part I.

                                       16
<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,
Ellenbogen, Backa & Alfera, LLC commenting upon their review accompanies the
financial statements included in Item 1 of Part I.

                                       17
<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 month 
                    periods ended March 31, 1999 and March 31, 1998

               27   Financial Data Schedule


      (b)      Reports on Form 8-K

               A report on Form 8-K was filed on February 19, 1999 to report
               under Item 5, Other Events, the cessation of operations by the
               Fund's investment advisor, The Enterprise Corporation of
               Pittsburgh.

 

                                       18
<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:  May 7, 1999       /s/ G. Richard Patton
                              ---------------------
                              G. Richard Patton
                              President and Chief Executive Officer
                              and Director


     Date:  May 7, 1999       /s/Alvin J. Catz
                              ----------------
                              Alvin J. Catz
                              Chief Financial Officer, Treasurer and Director



 

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