SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549

                                   FORM 10 - Q

(Mark One)

( X )    Quarterly report pursuant to section 13 or 15(d) of the Securities 
         Exchange Act of 1934.

           For the quarterly period ended September 30, 1996.
                                          ------------------

                                       or

(   )    Transition report pursuant to section 13 or 15(d) of the Securities 
         Exchange Act of 1934.

           For the Transition period from ______  to  _____


                          Commission file number 0-7441

                           SIERRA MONITOR CORPORATION

             (Exact name of registrant as specified in its charter)


          California                                         95-2481914
(State or other jurisdiction of                              (I.R.S. Employer
 incorporation or organization)                              Identification
                                                             Number)

                                1991 Tarob Court
                           Milpitas, California 95035

              (address and zip code of principal executive offices)

                                 (408) 262-6611
              (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 and 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.

Yes  x    No 
   -----     -----

     The number of shares  outstanding of each of the issuer's classes of common
stock, as of the close of September 30, 1996:

Common Stock: 10,332,513


                                                                     Page 1 of 8
<PAGE>

                                        PART I: FINANCIAL INFORMATION


ITEM 1.  FINANCIAL STATEMENTS
<TABLE>

                                          SIERRA MONITOR CORPORATION

                                                Balance Sheets
<CAPTION>
                                                                         September 30,          December 31,
                                                                             1996                   1995
                                                                         -----------            -----------
                                  Assets                                 (Unaudited)
<S>                                                                      <C>                      <C>
Current assets
       Cash and cash equivalents                                         $   317,342                310,554 
       Short-term investments                                                491,051                577,124
       Trade receivables, less allowance for doubtful accounts                                 
           of $63,365 in 1996 and $61,156 in 1995                            900,935                898,496
       Inventories                                                           739,990                605,480
       Prepaid expenses                                                      155,099                 40,200
       Deferred income taxes                                                 188,000                188,000
                                                                         -----------            -----------
           Total current assets                                            2,792,417              2,619,854
Property and equipment, net                                                   87,565                101,463
Other assets                                                                  77,609                 78,934
                                                                         -----------            -----------
                                                                         $ 2,957,591              2,800,251
                                                                         ===========            ===========
                                                                                               
                   Liabilities and Shareholders' Equity                                        
Current liabilities                                                                            
       Accounts payable                                                  $   305,821                305,693
       Accrued expenses                                                      261,672                265,565
       Other current liabilities                                              84,785                 23,342
       Income taxes payable                                                     --                   11,115
                                                                         -----------            -----------
           Total current liabilities                                         652,278                605,715
                                                                         -----------            -----------
Shareholders' equity                                                                           
       Common stock                                                        2,912,493              2,903,270
       Accumulated deficit                                                  (595,652)              (696,131)
       Notes receivable from shareholders                                    (11,528)               (12,603)
                                                                         -----------            -----------
           Total shareholders' equity                                      2,305,313              2,194,536
                                                                         -----------            -----------
                                                                         $ 2,957,591              2,800,251
                                                                         ===========            ===========
<FN>
                                                                                       
   The accompanying notes are an integral part of these financial statements.

</FN>
</TABLE>
                                                                     Page 2 of 8
<PAGE>

<TABLE>

                                   SIERRA MONITOR CORPORATION

                                    Statements of Operations

                                           (Unaudited)
<CAPTION>

                                            Three months ended           Nine months ended
                                              September 30,                September 30,
                                         1996             1995         1996            1995
                                     ------------    ------------   ------------   ------------
<S>                                  <C>                <C>            <C>            <C>      
Net sales                            $  1,303,581       1,347,256      3,762,137      3,559,052

Cost of goods sold                        499,687         540,042      1,450,008      1,378,844
                                     ------------    ------------   ------------   ------------

        Gross profit                      803,894         807,214      2,312,129      2,180,208
                                     ------------    ------------   ------------   ------------

Operating expenses
    Research and development              105,720         100,657        333,696        304,745
    Selling and marketing                 417,390         413,514      1,238,550      1,224,696
    General and administrative            207,932         204,977        656,746        595,410
                                     ------------    ------------   ------------   ------------
                                          731,042         719,148      2,228,992      2,124,851
                                     ------------    ------------   ------------   ------------
        Income from operations             72,852          88,066         83,137         55,357

Interest income                             5,702           7,074         17,342         23,303
                                     ------------    ------------   ------------   ------------

        Income before income taxes         78,554          95,140        100,479         78,660

Income tax expense (benefit)               (2,039)          9,514           --            9,514
                                     ------------    ------------   ------------   ------------

        Net income                   $     80,592          85,626        100,479         69,146
                                     ============    ============   ============   ============


Net income per share                 $       0.01            0.01           0.01           0.01
                                     ============    ============   ============   ============

Weighted average common
  shares outstanding                   10,710,304      10,436,718     10,689,935     10,464,067
                                     ============    ============   ============   ============
<FN>

   The accompanying notes are an integral part of these financial statements.
</FN>
</TABLE>

                                                                     Page 3 of 8

<PAGE>

<TABLE>

                                            SIERRA MONITOR CORPORATION

                                             Statements of Cash Flows

                                                    (Unaudited)
<CAPTION>
                                                                            Three months ended              Nine months ended
                                                                              September 30,                   September 30
                                                                           1996            1995           1996             1995
                                                                       -------------   -------------  -------------    -------------
                                                  
<S>                                                                    <C>                 <C>             <C>               <C>   
Cash flows from operating activities:
  Net income                                                           $  80,593           85,626          100,479           69,146
  Adjustments to reconcile net income to net
    cash provided by (used in) operating activities:
       Depreciation & amortization                                        29,726           32,727           96,687           99,592
       Allowance for doubtful accounts                                   (11,186)          (7,403)          (7,791)          (5,667)
       Changes in items affecting operations:
         Trade receivables                                                96,219           11,973            5,352         (303,037)
         Inventories                                                     (57,529)          25,779         (134,510)         114,863
         Prepaid expenses                                                (40,172)          16,757         (114,899)         (94,587)
         Accounts payable                                                 39,960          (67,523)             128          (33,613)
         Accrued expenses                                                    215           16,078           (3,892)         (24,380)
         Other current liabilities                                        35,822             --             61,442             --
         Income taxes payable                                               --               --            (11,115)         124,000
                                                                       ---------        ---------        ---------        ---------
             Net cash provided by (used in)
               operating activities                                      173,648          114,014           (8,119)         (53,683)
                                                                       ---------        ---------        ---------        ---------
Cash flows from investing activities:
  Capital expenditures                                                   (27,056)          (9,615)         (58,280)         (62,603)
  Short term investments                                                (245,284)            --             86,073             --
  Other assets                                                           (23,184)            --            (23,184)            --
                                                                       ---------        ---------        ---------        ---------
             Net cash provided by (used in)
               investing activities                                     (295,524)          (9,615)           4,609          (62,603)
                                                                       ---------        ---------        ---------        ---------
Cash flows from financing activities:
  Proceeds from exercise of stock options,
    net of notes receivable                                                1,855            1,798           10,298            3,859
                                                                       ---------        ---------        ---------        ---------
             Net cash provided by financing
             activities                                                    1,855            1,798           10,298            3,859
                                                                       ---------        ---------        ---------        ---------
Net increase (decrease) in
  cash and cash equivalents                                             (120,021)         106,197            6,788         (112,427)

Cash and cash equivalents at beginning of period                         437,363          772,284          310,554          990,908
                                                                       ---------        ---------        ---------        ---------

Cash and cash equivalents at end of period                             $ 317,342          878,481          317,342          878,481
                                                                       =========        =========        =========        =========
<FN>

The accompanying notes are an integral part of these financial statements.
</FN>
</TABLE>


                                                                     Page 4 of 8
<PAGE>


                           SIERRA MONITOR CORPORATION

                        Notes to the Financial Statements

                               September 30, 1996

The unaudited financial statements have been prepared by the Company pursuant to
the rules and  regulations of the Securities  and Exchange  Commission.  Certain
information and footnote  disclosures  normally included in financial statements
prepared in accordance with generally accepted  accounting  principles have been
omitted  pursuant to such SEC rules and regulations;  nevertheless,  the Company
believes that the disclosures are adequate to make the information presented not
misleading.  These  financial  statements and the notes hereto should be read in
conjunction  with the financial  statements  and notes  thereto  included in the
Company's  Annual Report on Form 10-K for the year ended December 31, 1995 which
was filed  March 28,  1996.  In the  opinion of the  Company,  all  adjustments,
including normal recurring adjustments necessary to present fairly the financial
position of Sierra Monitor  Corporation as of September 30, 1996 and the results
of its operations and cash flows for the quarter then ended, have been included.
The results of operations for the interim period are not necessarily  indicative
of the results for the full year.

Accounting Policies

There have been no changes in accounting policies used by the Company during the
quarter ended September 30, 1996.

Summary of Business

Sierra Monitor Corporation ("SMC" or the Company") was founded in 1978 to design
and develop  hazardous gas  monitoring  devices for  protection of personnel and
facilities in industrial work places.

Products  manufactured by the Company are sold primarily to oil and gas drilling
and  refining  companies,   chemical  plants,   waste  water  treatment  plants,
telecommunications   companies,  parking  garages  and  landfill  rehabilitation
projects.

Inventories

A summary of inventories follows:

                                                 September 30,      December 31,
                                            
                                                       1996             1995
                                                       ----             ----
                                         
Raw materials                                       $313,319            $264,754

Work-in-process                                      336,841             244,959

Finished goods                                        89,830              95,767
                                                    --------            --------

                                                    $739,990            $605,480
                                                    ========            ========


                                                                     Page 5 of 8
<PAGE>


ITEM 2.       MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
              AND RESULTS OF OPERATIONS

The following  Management's  Discussion and Analysis of Financial  Condition and
Results  of  Operations  should  be  read  in  conjunction  with  the  Financial
Statements  and related  notes  thereto  included in this report.  The following
discussion contains forward-looking  statements and the Company's actual results
could  differ  materially  from  those  anticipated  in  these   forward-looking
statements  as a result of numerous  factors,  including  those set forth in the
following discussion and elsewhere in this report.

Results of Operations

For the three months ended  September 30, 1996 Sierra Monitor  Corporation  (the
"Company") reported net sales of $1,303,581 compared to $1,347,256 for the three
months ended  September 30, 1995. For the nine month period ended  September 30,
1996 net sales were  $3,762,137  compared with $3,559,052 in the prior year nine
month period.

The results for the third quarter of 1996 represent a 3.2% decline from the same
period  in the  prior  year.  The  results  for the  first  nine  months of 1996
represent a 5.7% increase  from the same period in the prior year.  Although the
mix of product sales is approximately  the same in each of the reported periods,
there  were  less  shipments  of large  projects  in the third  quarter  of 1996
compared with the third  quarter of 1995.  The higher sales for the year to date
period are due to the higher sales, previously reported, in the first six months
of the year.

Gross profit for the three month period  ended  September  30, 1996 was 61.7% of
sales  compared  to 59.9% in the same  period in the  previous  year.  The gross
profit for the nine month period ended  September 30, 1996 was 61.5% compared to
61.3% in the same  period in the  previous  year.  The  general  level of profit
margins is consistent with historical results.

Expenses for research and development, which include new product development and
engineering  to sustain  existing  products,  were  $105,720 for the three month
period ending  September 30, 1996 compared to $100,657 in the comparable  period
in 1995. In the nine month periods  ending  September 30, 1996 and September 30,
1995, research and development expenses were $333,696 and $304,745 respectively.
The  higher  expenses  in both the three  month and nine  month  periods  ending
September 30, 1996 are due to outside consulting expenses related to new product
development.

Selling and marketing  costs for the three month period ended September 30, 1996
increased to $417,390,  or 32.0% of net sales,  from  $413,514,  or 30.7% of net
sales, in the prior year period. For the nine month periods ending September 30,
1996 and September 30, 1995,  selling and marketing  costs were  $1,238,550,  or
32.9% of net sales,  and $1,224,696,  or 34.4% of net sales,  respectively.  The
higher  selling  and  marketing  expenses in both the three month and nine month
periods ending September 30, 1996 are due, primarily, to higher salary costs.

                                                                     Page 6 of 8
<PAGE>

General and  administrative  costs  increased  to  $207,932  for the three month
period ended  September  30, 1996 from  $204,977 in the three month period ended
September 30, 1995. General and  administrative  costs increased to $656,746 for
the nine month period ended  September  30, 1996 from $595,410 in the nine month
period ended  September  30, 1995.  While there were no  significant  changes in
general and administrative  costs for the third quarter,  the costs for the nine
month period ended September 30, 1996 include  approximately $25,000 of one time
expenses for new employee training.  A reclassification  of field service income
contributed  approximately  $28,000 of additional  general and administrative in
expenses in the 1996 period.

Net income,  after interest and taxes,  for the three months ended September 30,
1996 was  $80,592,  or 6.2% of net sales,  compared  with $85,626 or 6.4% of net
sales,  in the three months ended  September  30, 1996.  Net income for the nine
month  period ended  September  30, 1996 was  $100,479  compared  with income of
$69,146 in the same period in the prior year.

The lower  income for the three  month  period is due to the lower  sales  level
combined with higher fixed costs in each expense category. The higher income for
the year to date period is due to higher  overall  sales levels in the first six
months of 1996, somewhat offset by higher fixed expenses in the same period.

Liquidity and Capital Resources

Working  capital at September 30, 1996 was $2,140,139  compared to $2,274,536 at
December 31, 1995.

Inventory levels at September 30, 1996 were approximately 20% higher compared to
December 31, 1995.  The  increases  are due to higher  production  levels in the
third  quarter of 1996  compared  to the fourth  quarter of 1995.  In  addition,
inventories have been increased in anticipation of future sales of the Company's
new product for telephone company applications.

Prepaid expenses  increase to $155,099 at September 30, 1996 compared to $40,200
at December 31, 1995. The increases include prepaid product liability  insurance
which  is  amortized  on a  monthly  basis,  and  prepayment  of  various  costs
associated  with third party  approval  programs.  Third party  approvals are an
investment in future marketability of the Company's products and are capitalized
at the time the approvals are received.

At September 30, 1996,  cash and cash  equivalents  and short term  investments,
totaled $808,393 compared to $887,678 at December 31, 1995. The reduction is due
, in part, to the changes in inventory  levels and prepaid  expenses,  offset by
operating income. The short term investments consist of certain  certificates of
deposits  with  original  maturities  greater than 90 days.  The Company has not
drawn on its line of credit with its commercial  bank. The Company believes that
the current capital resources,  including cash and cash equivalents and its line
of credit  with a  commercial  bank,  are  sufficient  to support  existing  and
anticipated levels of business.

Future Results:

The Company's future  operating  results may be affected by a number of factors,
including  general  economic  conditions  in both foreign and domestic  markets,
cyclical  factors  affecting  the  Company's  industry,  lack of  growth  in the
Company's end-markets,  and the Company's ability to develop,  manufacture,  and
sell both new and existing products at a profitable but competitive price.


                                                                     Page 7 of 8
<PAGE>

                           PART II: OTHER INFORMATION

Item 1.    Legal Proceedings - N/A

Item 2.    Changes in Securities - N/A

Item 3.    Defaults Upon Senior Securities - N/A

Item 4.    Submission of Matters to a Vote of Security Holders - N/A

Item 5.    Other Information - N/A

Item 6.    Exhibits and Reports on Form 8-K

           a.     Exhibits.

                  11.1     Computation of earnings per share

                  27.0     Financial Data Schedule

           b.     Reports on Form 8-K - None


                                    SIGNATURE


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


                                             SIERRA MONITOR CORPORATION

                                             Registrant

Date: November 14, 1996                  By: /S/ GORDON R. ARNOLD
                                            ------------------------------------
                                            Gordon R. Arnold
                                            President
                                            Chief Financial Officer


                                                                     Page 8 of 8