<PAGE>

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

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

     For the quarterly period ended June 30, 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 July 30, 1999:  2,210,434 Shares.
<PAGE>

                        Part 1 - Financial Information

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

          Report on Review by Independent Certified Public Accountants                 3

          Statements of Assets and Liabilities as of June 30, 1999 (unaudited)         4
          and December 31, 1998

          Statements of Operations, for the Periods April 1, 1999 through              5
          June 30, 1999 (unaudited) and January 1, 1999 through June 30, 1999
          (unaudited)

          Statements of Operations, for the Periods April 1, 1998 through              6
          June 30, 1998 (unaudited) and January 1, 1998 through June 30, 1998
          (unaudited)

          Statements of Changes in Net Assets for the Periods April 1, 1999            7
          through June 30, 1999 (unaudited) and January 1, 1999 through
          June 30, 1999 (unaudited)

          Statements of Changes in Net Assets, for the Periods April 1, 1998           8
          through June 30, 1998 (unaudited) and January 1, 1998 through
          June 30, 1998 (unaudited)

          Statements of Cash Flows, for the Periods April 1, 1999 through              9
          June 30, 1999 (unaudited) and January 1, 1999 through June 30, 1999
          (unaudited)

          Statements of Cash Flows, for the Periods April 1, 1998 through             10
          June 30, 1998 (unaudited) and January 1, 1998 through June 30, 1998
          (unaudited)

          Notes to Financial Statements                                               11

Item 2    Management's Discussion and Analysis of Financial Condition and             19
          Results of Operations

Statement by Management Concerning Review of Interim Information by                   20
Independent Certified Public Accountants

Statement by Management Concerning the Fair Presentation of Interim                   21
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 June 30, 1999, and the related
statements of operations, changes in net assets, and cash flows for the three
and six month periods ended June 30, 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, August 6, 1999

                                      -3-
<PAGE>

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

<TABLE>
<CAPTION>
                                                  June 30, 1999   December 31, 1998
                                                  -------------   -----------------
Assets                                             (unaudited)
------
<S>                                               <C>             <C>
Cash and Cash Equivalents                           $  227,110        $  289,824
Short Term Investments, Net                            532,036           894,960
Receivables - Interest                                   9,247             6,453
Investment in Portfolio Companies                    1,275,714           862,677
Prepaid Taxes                                            1,001             2,440
Organization Costs                                      10,640            12,160
                                                    ----------        ----------
   Total Assets                                     $2,055,748        $2,068,514
                                                    ==========        ==========
Liabilities
-----------
Accounts Payable                                    $   11,681        $   14,396
Accrued Liabilities                                      8,400            14,700
                                                    ----------        ----------
   Total Liabilities                                $   20,081        $   29,096
                                                    ==========        ==========
Net Assets
----------
Common Stock, Par Value $.01 Per Share,             $   23,543        $   23,543
Authorized 10,000,000 Shares, Issued and
Outstanding 2,210,434 Shares
Additional Paid In Capital                           2,083,290         2,083,290
Syndication Costs                                      (85,507)          (85,507)
Retained Earnings                                       15,780            19,531
Treasury Stock - 143,899 Shares, at cost                (1,439)           (1,439)
                                                    ----------        ----------
   Net Assets Applicable to Shares Outstanding      $2,035,667        $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>
                                   April 1, 1999   January 1, 1999
                                      through          through
                                   June 30, 1999    June 30, 1999
                                   -------------    -------------
                                    (unaudited)      (unaudited)
<S>                                <C>             <C>
Revenues:
 Interest                                $13,492          $27,070
 Management Fees                           6,250           12,500
                                         -------          -------
    Total Revenues                        19,742           39,570
                                         -------          -------

Expenses:
 General and Administration                4,200            8,400
 Interest                                     48               48
 Other Operating Expenses                 13,599           32,868
                                         -------          -------
    Total Expenses                        17,847           41,316
                                         -------          -------

Profit (Loss) Before Income Tax            1,895           (1,746)

Income Tax Expense                         1,255            2,005
                                         -------          -------

Net Income (Loss)                        $   640          $(3,751)
                                         =======          =======

Earnings Per Share                       $   .00          $   .00
                                         =======          =======
</TABLE>

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

                                      -5-
<PAGE>

                  Western Pennsylvania Adventure Capital Fund
                           Statements of Operations
                                For the Periods


<TABLE>
<CAPTION>
                                     April 1, 1998   January 1, 1998
                                        through          through
                                     June 30, 1998    June 30, 1998
                                     -------------    -------------
                                      (unaudited)      (unaudited)
<S>                                  <C>              <C>
Revenues-Interest Income                   $21,626           $46,605

Expenses:
 General and Administration                  7,500             7,500
 Interest                                       50                50
 Other Operating Expenses                   20,794            40,214
                                           -------           -------

    Total Expenses                          28,344            47,764
                                           -------           -------

Profit (Loss) Before Income taxes           (6,718)           (1,159)

Income Tax Expense                           2,891             4,281
                                           -------           -------

Net Income (Loss)                          $(9,609)          $(5,440)
                                           =======           =======

Earnings (Loss) Per Share                  $  (.00)          $  (.00)
                                           =======           =======
</TABLE>

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

                                      -6-
<PAGE>

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

<TABLE>
<CAPTION>
                                             April 1, 1999   January 1, 1999
                                                through          through
                                             June 30, 1999    June 30, 1999
                                             -------------   ---------------
                                              (unaudited)      (unaudited)
<S>                                          <C>             <C>
From Operations
 Net Income (Loss)                              $      640        $   (3,751)

Net Assets:
 Beginning of Period                             2,035,027         2,039,418
                                                ----------        ----------

 End of Period                                  $2,035,667        $2,035,667
                                                ==========        ==========
</TABLE>

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

                                      -7-
<PAGE>

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

<TABLE>
<CAPTION>
                                               April 1, 1998   January 1, 1998
                                                  through          through
                                               June 30, 1998    June 30, 1998
                                               -------------   ---------------
                                                (unaudited)      (unaudited)
<S>                                            <C>             <C>
From Operations
  Net Loss                                        $   (9,609)      $   (5,440)

From Share Transactions:
  Syndication Costs                                        0                0
                                                  ----------       ----------
  Net Increase (Decrease) in
     Net Assets Derived from
     Share Transactions                                    0                0
                                                  ----------       ----------

       Net (Decrease) in Net Assets                   (9,609)          (5,440)

Net Assets:
  Beginning of Period                              2,040,538        2,036,369
                                                  ----------       ----------

  End of Period                                   $2,030,929       $2,030,929
                                                  ==========       ==========
</TABLE>

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

                                      -8-
<PAGE>

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

<TABLE>
<CAPTION>
                                              April 1, 1999   January 1, 1999
                                                 through          through
                                              June 30, 1999    June 30, 1999
                                              -------------   ---------------
                                               (unaudited)      (unaudited)
<S>                                           <C>             <C>
Cash Flow from Operating Activities:

Income (Loss)                                    $     640         $  (3,751)

Changes in Assets and Liabilities:
 Organization Costs-Amortization                       760             1,520
 Receivables-(Increase) Decrease                     2,864            (2,794)
 Prepaid Taxes-Decrease                              1,689             1,439
 Accounts Payable-(Decrease)                       (13,238)           (2,715)
 Accrued Liabilities-Increase (Decrease)             4,200            (6,300)
                                                 ---------         ---------

Net Cash (Used in) Operating
Activities                                          (3,085)          (12,601)
                                                 ---------         ---------

Cash Flow from Investing Activities:

Redemption of Short Term Investments, Net
 of Purchases                                      229,262           357,285
Investment in Portfolio Companies                 (281,398)         (407,398)
                                                 ---------         ---------
Net Cash (Used in) Investing Activities            (52,136)          (50,113)
                                                 ---------         ---------

Net (Decrease) in Cash and Cash
 Equivalents                                       (55,221)          (62,714)

Cash and Cash Equivalents at Beginning of
 Period                                            282,331           289,824
                                                 ---------         ---------

Cash and Cash Equivalents at End of Period       $ 227,110         $ 227,110
                                                 =========         =========
</TABLE>

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

                                      -9-
<PAGE>

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

<TABLE>
<CAPTION>
                                              April 1, 1998   January 1, 1998
                                                 through          through
                                              June 30, 1998    June 30, 1998
                                              --------------  ----------------
                                               (unaudited)      (unaudited)
<S>                                           <C>             <C>
Cash Flow from Operating Activities:

Income (Loss)                                     $  (9,609)        $  (5,440)

Changes in Assets and Liabilities:
 Organization Costs-Amortization                        760             1,520
 Prepaid Taxes-(Increase)                            (1,003)           (1,003)
 Accounts Payable-Increase (Decrease)                (6,713)            9,869
 Accrued Liabilities-Increase (Decrease               4,514            (1,020)
                                                  ---------         ---------

Net Cash Provided by (Used in) Operating
Activities                                          (12,051)            3,926
                                                  ---------         ---------

Cash Flow from Investing Activities:

Redemption of Short Term Investments, Net
 of Purchases                                       200,494           318,575
Investment in Portfolio Companies                  (151,550)         (351,550)
                                                  ---------         ---------
Net Cash Provided by (Used in)
 Investing Activities                                48,944           (32,975)
                                                  ---------         ---------

Net Increase (Decrease) in Cash and Cash
 Equivalents                                         36,893           (29,049)

Cash and Cash Equivalents at Beginning of
 Period                                             302,676           368,618
                                                  ---------         ---------

Cash and Cash Equivalents at End of Period        $ 339,569         $ 339,569
                                                  =========         =========
</TABLE>

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

                                      -10-
<PAGE>

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

                                      -11-
<PAGE>

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 a internal
basis and has contracted externally for administrative and support services.

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.

                                      -12-
<PAGE>

There were no transactions involving the Fund's Shares during the six month
period ending June 30, 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 six month period ending
June 30, 1999.

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 June 30,
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.

                                      -13-
<PAGE>

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.

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 June 30, 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 six month period ending June 30, 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 June 30, 1999 and December 31, 1998,
$1,275,714 and $862,677, respectively, were invested in Portfolio Securities,
and the

                                      -14-
<PAGE>

balance of the funds remained invested in cash equivalents, government
securities, and high quality debt securities.

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

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.

During the three month period ending June 30, 1999, ISLIP closed on the sale of
4,869,999 shares of its Series B preferred stock ("Series B") at $1.30 per share
for total consideration of $6,330,999.  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, and an additional
$375,000 has been received and is being held in escrow pending a second closing.
The Series B 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.

As a consequence of this closing, ISLIP repaid a portion of the aforementioned
bridge financing with the balance of the bridge financing converted into Series
B.  The Fund received repayment of $5,117.59 representing principal ($5,092.48)
and interest ($25.11) on two notes, and converted its third note (principal and
interest) into 2,031 shares of Series B.  In addition to the 2,031 shares

                                      -15-
<PAGE>

of Series B, the Fund received warrants to purchase 391 shares of Series B at
$1.30 per share at any time through April 21, 2006. The Fund and the Fund and
its shareholders' investment in ISLIP currently represents approximately 0.5
percent and 2.8 percent, respectively, on a fully diluted basis. ISLIP produces
software to deliver network-based searchable digital and audio libraries.

Effective June 14, 1999, the Fund committed to exercise its pre-emptive rights
to purchase its pro rata share of Neo Linear, Inc. ("Neo Linear") bridge
financing.  Under this bridge financing, Neo Linear obtained commitments from
its current investors to purchase $1,194,682 of Convertible Promissory Notes
("Notes") due December 31, 1999, with interest at 14 percent per annum.  Neo
Linear has issued $597,341, or 50% of this amount and has the right to call the
balance of the commitments at any time prior to December 31, 1999.  The Notes,
plus accrued interest, are convertible into, at the same price and on the same
terms, as the next round security, plus premium shares equal to 30% of the Note
principal at no additional cost.  The Fund's pro rata share is $50,131.  Of this
amount, $25,065.50 was paid on June 10, 1999, and the balance of $25,065.50 is
subject to call by Neo Linear.  Neo Linear produces computer aided design
software for the semiconductor industry.

On June 28, 1999, the Fund purchased $60,000 of Series II Subordinated
Convertible Notes ("Series II Notes") of Precision Therapeutics, Inc. ("PTI").
These Series II Notes bear interest at prime plus three percent, mature on March
31, 2000, and carry warrants to purchase common stock at $1.00 per share for 10
years equal to 35 percent of principal.  In addition, the Series II Notes
convert into the same security, and at the same price and terms, as will be sold
in the next round financing.  At approximately the same time, other private
investors in the Fund purchased $375,000 of Series II Notes.  During this
period, PTI sold $2,242,500 of these Series II Notes. Accordingly, the Fund and
the Fund and its shareholders ownership of these Series II Notes constituted
approximately 2.7 percent and 19.4 percent, respectively.

At approximately the same time, PTI made an offer to the holders of its existing
Subordinated Convertible Notes ("Series I Notes") to extend the maturity date
from June 30, 1999 to March 31, 2000 in exchange for an increase in warrant
coverage from 25 percent to 40 percent and an increase in interest rate from
approximately 5.5 percent to prime plus three percent.  The Fund, which owns
$110,000 of Series I Notes accepted this offer and other private investors in
the Fund owning $647,500 of Series I Notes accepted their offers.  Accordingly,
the Fund and the Fund and its shareholders' ownership of these Series I Notes
constituted approximately 3.2 percent and 22.1 percent, respectively.

On June 28, 1999, the Fund purchased 116,000 shares of K/2/T inc. Series A
Preferred Stock ("Series A Preferred") at $.8571 per share for a total
investment of $99,424, which represented approximately 2.7 percent ownership on
a fully diluted basis.  The Series A Preferred is convertible into common stock
at any time on an initial one-for-one basis, has voting rights, and has certain
dividend and liquidation preferences.  At approximately the same time, other
private investors in the Fund purchased 195,850 shares of Series A Preferred for
a total investment of

                                      -16-
<PAGE>

$167,863. The total investment by the Fund and the Funds shareholders'
represented approximately 7.3 percent ownership on a fully diluted basis.

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

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.

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 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 June 30, 1999 and December 31, 1998:

                                      -17-
<PAGE>

                              As of June 30, 1999
                              -------------------


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

U.S. Government Securities          $537,675       $532,036     $532,054
                                    ========       ========     ========


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


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

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


Note 6-Related Party Transactions
---------------------------------

Accounts payable as of June 30, 1999, includes $10,000 payable to Enterprise for
investment advisory and administrative services.  Accrued liabilities at June
30, 1999 includes $8,400 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.

Note 7-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
court 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 8-Subsequent Events
------------------------

On July 21, 1999, the Fund's Board of Directors established an Advisory Board to
be comprised of such members as the directors may appoint from time to time, and
appointed Thomas N. Canfield to the Advisory Board.  Members of the Advisory
Board will investigate and report to the Board of Directors on such companies as
the directors shall direct, but shall not make

                                      -18-
<PAGE>

investment decisions for the Fund. It is anticipated that Mr. Canfield's
activities will take approximately 50% of his time, for which he will be
compensated at the rate of $4,000 per month and will be reimbursed for out-of-
pocket expenses.

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

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

Revenues for the three and six month periods ending June 30, 1999, consisted of
interest income and management fees of $13,492 and $6,250, and $27,070 and
$12,500, respectively.  General and administrative expenses for the three and
six month periods amounted to $4,200 and $8,400, respectively, and consisted of
directors fees.  Other operating expenses for the three and six month periods
ending June 30, 1999 amounted to $13,599 and $32,868, respectively, and included
$8,226 and $20,370, respectively, of legal and accounting fees.

Revenues for the three and six month periods ending June 30, 1998 consisted of
interest income of $21,626 and $46,605, respectively, and represented interest
earned on escrowed funds, short term investments, and money market funds.
General and administrative expenses for the three and six month periods ending
June 30, 1998 amounted to $7,500 and $7,500, respectively, and consisted of
directors fees.  Other operating expenses for the three and six month periods
ending June 30, 1998 amounted to $20,794 and $40,214, respectively, and included
investment advisory and administrative services due to the Fund's investment
advisor of $7,500 and $17,500, respectively, and legal and accounting fees of
$12,024 and $20,679, respectively.

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 June 30, 1999, the Registrant had invested $1,275,714
in Portfolio Companies, and held cash, cash equivalents, and short-term
investments in high quality commercial paper and U.S. Government securities of
$759,146.  Most of this amount, except for normal operating expenses, is
available for investment in Portfolio Securities.

                                      -19-
<PAGE>

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

The June 30, 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 reviews.  The report of Goff, Ellenbogen, Backa & Alfera,
LLC commenting on their reviews accompanies the financial statements included in
Item 1 of Part I.

                                      -20-
<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 reviews accompanies the
financial statements included in Item 1 of Part I.

                                      -21-
<PAGE>

Part II-Other Information

Item 6.        Exhibits and Reports on Form 8-K

          (a)  Lists of Exhibits

               11  Computation of earnings per share for the three and six month
                    periods ended June 30, 1999 and June 30, 1998

               27  Financial Data Schedule

          (b)  Reports on Form 8-K

               There were no reports on Form 8-K filed for the quarter ended
               June 30, 1999

                                      -22-
<PAGE>

                                  SIGNATURES

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

     Western Pennsylvania Adventure Capital Fund
     (Registrant)

     Date:  August 6, 1999    /s/ G. Richard Patton
                              ---------------------
                              G. Richard Patton
                              President and Chief Executive Officer
                              and Director


     Date:  August 6, 1999    /s/ Alvin J. Catz
                              ---------------------
                              Alvin J. Catz
                              Chief Financial Officer, Treasurer and Director