<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, 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 May 9, 2001:  4,224,870 Shares.

                                       1
<PAGE>

                        PART I - Financial Information

<TABLE>
<CAPTION>
Item  1.       Financial Statements
                                                                                               Page No.
<S>                                                                                            <C>

           Report on Review by Independent Certified                                              3
           Public Accountants

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

           Statements of Operations, for the Periods                                              5
           January 1, 2001 through March  31, 2001 (unaudited)
           and January 1, 2000 through March 31, 2000 (unaudited)

           Statements of Changes in Net Assets, for the                                           6
           Periods January 1, 2001 through March 31, 2001 (unaudited)
           and January 1, 2000 through March 31, 2000 (unaudited)

           Statements of Cash Flows, for the Periods January 1, 2001                              7
           through March 31, 2001 (unaudited) and January 1, 2000 through
           March 31, 2000 (unaudited)

           Notes to Financial Statements                                                          8

Item 2.        Management's Discussion and Analysis of Financial                                 17
               Condition and Results of Operations

           Statement by Management Concerning Review of Interim                                  18
           Information by Independent Certified Public Accountants

           Statement by Management Concerning the Fair                                           19
           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, 2001 and 2000, and the
related statements of operations, changes in net assets, and cash flows for the
three month periods ended March 31, 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 (deficit), 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, May 9, 2001

                                       3
<PAGE>

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

<TABLE>
<CAPTION>
                                                   March 31, 2001    December 31, 2000
                                                   ---------------   ------------------
                                      Assets         (unaudited)
                                      ------
<S>                                                <C>               <C>
Cash and Cash Equivalents                            $  718,661          $  884,821

Short Term Investments, Net                             903,404             728,551

Receivables                                              38,192              18,250

Investment in Portfolio Companies                     4,199,650           3,999,650

Prepaid Taxes                                                 0               2,606

Organization Costs                                        5,320               6,080
                                                     ----------          ----------

  Total Assets                                       $5,865,227          $5,639,958
                                                     ==========          ==========
                                 Liabilities
                                 -----------
Accounts Payable                                     $    7,887          $    6,976

Accrued Liabilities                                       6,500               6,500

Accrued Income Taxes                                     66,480                   0
                                                     ----------          ----------

  Total Current Liabilities                              80,867              13,476
                                                     ----------          ----------

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

  Total Liabilities                                  $  373,314          $  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                                       576,673             455,195

Treasury Stock - 143,899 Shares, at cost               (126,565)           (126,565)
                                                     ----------          ----------

 Net Assets Applicable to Shares Outstanding         $5,491,913          $5,334,035
                                                     ==========          ==========

 Net Assets Value Per Share                          $     1.30          $     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

<TABLE>
<CAPTION>

                                                 January 1, 2001       January 1, 2000
                                                     through               through
                                                  March 31, 2001        March 31, 2000
                                               --------------------  --------------------
                                                   (unaudited)           (unaudited)
<S>                                            <C>                   <C>
Revenues:
   Interest                                               $ 26,065               $41,580
   Management Fees                                           6,250                 6,250
   Realized Gains                                          189,195                     0
                                                          --------               -------
         Total Revenues                                    221,510                47,830
                                                          --------               -------

Expenses:
   General and Administration                                4,500                 4,500
   Other Operating Expenses                                 23,446                34,286
                                                          --------               -------
        Total Expenses                                      27,946                38,786
                                                          --------               -------

Profit Before Income Tax                                   193,564                 9,044

Income Tax Expense                                          72,086                 2,520
                                                          --------               -------

Net Income                                                $121,478               $ 6,524
                                                          ========               =======

Earnings Per Share                                        $    .03               $   .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, 2001         January 1, 2000
                                                      through                 through
                                                   March 31, 2001          March 31, 2000
                                               ----------------------  ----------------------
                                                    (unaudited)             (unaudited)
<S>                                            <C>                     <C>
From Operations
   Net Income                                             $  121,478              $    6,524

From Share Transactions:
   Proceeds from Sale of Common Stock                         36,400               2,068,044
   Syndication Costs                                               0                  (3,730)
                                                          ----------              ----------

Net Increase in Net Assets Derived
   From Share Transactions                                    36,400               2,064,314
                                                          ----------              ----------

Net Increase in Net Assets                                   157,878               2,070,838

Net Assets:
   Beginning of Period                                     5,334,035               3,005,447
                                                          ----------              ----------

   End of Period                                          $5,491,913              $5,076,285
                                                          ==========              ==========
</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, 2001       January 1, 2000
                                                             through               through
                                                          March 31, 2001        March 31, 2000
                                                       --------------------  --------------------
                                                           (unaudited)           (unaudited)
<S>                                                    <C>                   <C>
Cash Flow from Operating Activities:
  Income                                                         $ 121,478           $     6,524

   Change in Assets and Liabilities:
      Organization Costs -  Amortization                               760                   760
      Receivables - (Increase)                                     (19,942)                 (512)
      Prepaid Taxes - (Increase) Decrease                            2,606                     0
      Accounts Payable - Increase (Decrease)                           911                (4,757)
      Accrued Liabilities - Increase (Decrease)                     66,480               (10,980)
                                                                 ---------           -----------

  Net Cash Provided By (Used in) Operating Activities              172,293                (8,965)
                                                                 ---------           -----------

Cash Flow from Financing Activities:
     Proceeds from Sale of Common Stock                             36,400             2,068,044
     Payment of Syndication Costs                                        0                (3,730)
                                                                 ---------           -----------
Net Cash Provided by Financing Activities                           36,400             2,064,314
                                                                 ---------           -----------

Cash Flow from Investing Activities:
  Short Term Investments, Net of Redemptions                      (174,853)           (1,761,538)
  Investment in Portfolio Companies                               (200,000)           (  359,069)
                                                                                     -----------
  Net Cash (Used in) Investing Activities                         (374,853)           (2,120,607)
                                                                 ---------           -----------

Net (Decrease) in Cash and Cash Equivalents                       (166,160)              (65,258)

Cash and Cash Equivalents at Beginning of Period                   884,821             1,004,428
                                                                 ---------           -----------

Cash and Cash Equivalents at  End of Period                      $ 718,661           $   939,170
                                                                 =========           ===========
</TABLE>


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

                                       7
<PAGE>

                  Western Pennsylvania Adventure Capital Fund
                         Notes to Financial Statements
                                March 31, 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.

                                       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 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 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.

                                       9
<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.

Syndication costs incurred in the three month periods ended March 31, 2001 and
March 31, 2000 were $0 and $3,730, 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 March
31, 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 $5,320 ($6,080 at December 31, 2000)
represents the remaining portion of these costs subject to amortization.

                                       10
<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 month periods ended March 31, 2001 and March 31, 2000.

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.

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

                                       11
<PAGE>

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 January 2, 2001, the Fund purchased 208,334 shares of Precision Therapeutics,
Inc. ("PTI") new Series B Convertible Preferred Stock ("Precision new B") at
$0.24 per share for a total investment of $50,000.  The Precision new B has
voting and anti-dilution rights, liquidation and dividend preferences, certain
other rights and preferences, and is convertible into common stock upon certain
events.  At approximately the same time, other shareholders in the Fund
purchased 3,979,214 shares for a total investment of $955,011.  On January 11,
2001, PTI closed ("First Closing") on the sale of $9,533,496 of Precision new B.
Shareholders purchasing Precision new B in the First Closing received 5 year
warrants to purchase additional Precision new B equal to 50 percent of their
current purchase in the First Closing at $0.024 per share.  The warrants will
become void if PTI secures a firm written commitment of at least $4,000,000 from
a biotech industry venture capital firm within 90 days after the First Closing
and closes on that commitment within 135 days after the First Closing.  See Note
12 - Subsequent Events.

As a condition of this financing, PTI reincorporated in Delaware through the
merger of PTI with and into PTI Delaware and a wholly owned subsidiary of PTI
with PTI Delaware being the survivor.  The capital stock of PTI has been
converted to capital stock of PTI Delaware as follows:  Common - 1:1; Series A
Preferred - 1 old converted into 2.5509 new; Series B Preferred - 1 old
converted into 1.4745 new.

In connection with the First Closing, PTI's outstanding convertible notes and
accrued interest have been converted into Precision new B at $0.24, and all
warrants that have been issued in connection with the outstanding convertible
notes have been amended to make them exercisable at $0.024 per share.

After conclusion of all of the aforementioned events, the total investment by
the Fund, and by the Fund and its shareholders, represented an ownership
interest of 0.80 percent and 11.32 percent, respectively, on a fully diluted
basis.

PTI has developed a proprietary chemosensitivity assay designed to help select
the appropriate therapy for cancer patients.

                                       12
<PAGE>

On January 5, 2001, the Fund purchased an additional 95,565 shares of e-Cruise,
Inc. ("e-Cruise") Common Stock at $0.5232 for a total investment of $50,000.

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

On February 2, 2001, the Fund purchased $100,000 of Automated Cell, Inc.
("Automated") Mandatory Convertible Notes ("Mandatory Notes").  The Mandatory
Notes bear interest at 10 percent per annum, have a maturity date of December
31, 2001, and automatically convert into either:  (a) the next financing round
security if the next financing round equals at least $4,000,000 and occurs by
December 31, 2001 or (b) a new Series A Preferred with standard terms at a
$4,000,000 valuation if the aforementioned next financing round does not occur
by December 31, 2001.  The Mandatory Notes carry warrants to purchase the next
financing round security at its issue price or, in the absence of the next
financing round, the Series A Preferred.  The number of warrants subject to
purchase range from 20 percent to 40 percent of the amount of principal and
accrued interest dependent upon the date of the next financing round.  The
warrants expire upon the earlier of 5 years, a change in control of the company,
or an initial public offering. At approximately the same time, other
shareholders in the Fund purchased $951,000 of Mandatory Notes.  The total
investment by the Fund, and by the Fund and its shareholders, represented an
ownership interest of 4.61 percent and 48.41 percent, respectively, in the
Mandatory Notes.

Automated identifies, under contracts with pharmaceutical firms, the proteins
that lead to cure of disease and shortens drug development efforts.

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.

                                       13
<PAGE>

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 March 31, 2001 and December 31, 2000:

                         As of March 31, 2001
                         --------------------

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

U.S. Government Securities    $  902,000      $      903,404    $    903,189
                              ==========      ==============    ============


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

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

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


Note 6 - Unrealized Appreciation
--------------------------------

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 appreciation (depreciation) was $702,125 as of March
31, 2001 and December 31, 2000.  No unrealized appreciation (depreciation) was
recognized in the three month periods ended March 31, 2001 and March 31, 2000.

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

Accrued liabilities at March 31, 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.

                                       14
<PAGE>

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.

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

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

               Current:                                2001           2000
                                                    -------         ------
                  Federal                           $51,729         $2,120
                  State                              20,357            400
                                                    -------         ------

                                                     72,086          2,520
                                                    =======         ======

               Deferred:
                  Federal                                 0              0
                  State                                   0              0
                                                    -------         ------
                                                          0              0
                                                    -------         ------

               Total                                $72,086         $2,520
                                                    =======         ======


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
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 March 31, 2001 and December 31, 2000.

                                       15
<PAGE>

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 March 31, 2001 and December 31, 2000.

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

In early April, 2001, PTI received a firm written commitment of $4,000,000 from
a biotech industry venture capital firm.  See 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 at $2.9999 per share for a total investment of $65,998.   The
pre-emptive rights offering is continuing at this time.

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.

                                       16
<PAGE>

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


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

Revenues for the three month period ended March 31, 2001 consisted of interest
income, management fees, and realized gains of $26,065, $6,250, and $189,195,
respectively.  The decrease in interest income resulted from the reduction in
short term investments due to the additional investments in portfolio companies.
The realized gains resulted from the receipt of a portion of the proceeds from
the sale of Medtrex Incorporated, one of the Fund's portfolio companies.  The
proceeds from the sale of Medtrex were held in escrow pending settlement of any
claims against the escrow, and were subsequently released in July, 2000 and
February, 2001.  General and administrative expenses for the three month period
ended March 31, 2001 amounted to $4,500, and consisted of directors fees.  Other
operating expenses for the three month period ended March 31, 2001 amounted to
$23,446 and included $13,644 of legal and accounting fees.  The income tax
expense for the three month period ended March 31, 2001 amounted to $72,086,
primarily due to taxable income of $189,195 resulting from the realized gain on
the sale of Medtrex.

Revenues for the three month period ending March 31, 2000 consisted of interest
income and management fees of $41,580 and $6,250, respectively.  The increase in
interest income resulted primarily from the temporary investment of the funds
from the recently completed sale of securities under the Second Offering
Circular in U.S. Government securities and other short-term high-quality debt
instruments.  General and administrative expenses for the three month period
ending March 31, 2000 amounted to $4,500, and consisted primarily of directors
fees.  Other operating expenses for the three month period ending March 31, 2000
amounted to $34,286 and included $12,110 of legal and accounting fees, and
$12,000 of advisory board fees.


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 March 31, 2001, the
Registrant had invested $4,199,650 in Portfolio Companies, and held cash, cash
equivalents, and short-term investments in high quality commercial paper and
U.S. Government securities of $1,622,065.  Most of this amount, except for
normal operating expenses, is available for investment in Portfolio Securities.

                                       17
<PAGE>

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


The March 31, 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.

                                       18
<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.

                                       19
<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, 2001 and March 31, 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.

                                       20
<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 9, 2001            /s/ G. Richard Patton
                                   ---------------------
                                   G. Richard Patton
                                   President and Chief Executive Officer
                                   and Director


     Date:  May 9, 2001            /s/ Alvin J. Catz
                                   -----------------
                                   Alvin J. Catz
                                   Chief Financial Officer, Treasurer
                                   and Director

                                      22