U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  FORM 10 - QSB

(Mark One)

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

                  For the quarterly period ended June 30, 1997.

                                       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 small business issuer 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 of the issuer's  common stock  outstanding,  as of June 30,
1997 was: 10,566,263.

Transitional Small Business Disclosure Format: Yes____; No ___X__

                                                                     Page 1 of 9

<PAGE>



                          PART I: FINANCIAL INFORMATION


                          ITEM 1. FINANCIAL STATEMENTS

                           SIERRA MONITOR CORPORATION

                                 Balance Sheets

                                                     June 30,       December 31,
                                                       1997            1996
                                                    ----------      -----------
                                  Assets            (Unaudited)
Current assets
       Cash and cash equivalents                    $   556,185        478,910
       Short-term investments                           246,267        246,781
       Trade receivables, less allowance for
           doubtful accounts of $47,813 in
           1997 and $45,598 in 1996                     772,915      1,040,989
       Inventories                                      818,925        717,865
       Prepaid expenses                                  66,793         51,556
       Deferred income taxes                            211,000        211,000
                                                    -----------    -----------
           Total current assets                       2,672,085      2,747,101
Property and equipment, net                              98,588         84,653
Other assets                                             74,690         92,378
                                                    -----------    -----------
                                                    $ 2,845,363      2,924,132
                                                    ===========    ===========

                      Liabilities and Shareholders' Equity

Current liabilities
       Accounts payable                             $   264,679        291,371
       Accrued expenses                                 206,829        214,408
       Other current liabilities                         28,842         38,741
       Income taxes payable                              12,278         23,547
                                                    -----------    -----------
           Total current liabilities                    512,628        568,067
                                                    -----------    -----------
Shareholders' equity
       Common stock                                   2,937,035      2,912,493
       Accumulated deficit                             (576,410)      (546,701)
       Notes receivable from shareholders               (27,890)        (9,727)
                                                    -----------    -----------
           Total shareholders' equity                 2,332,735      2,356,065
                                                    -----------    -----------
                                                    $ 2,845,363      2,924,132
                                                    ===========    ===========

See the accompanying notes to the financial statements.

                                                                     Page 2 of 9

<PAGE>
<TABLE>

                           SIERRA MONITOR CORPORATION

                            Statements of Operations

                                   (Unaudited)

<CAPTION>
                                           Three months ended June 30,   Six months ended June 30,
                                               1997           1996          1997           1996
                                            -----------   -----------   -----------    -----------

<S>                                         <C>             <C>           <C>            <C>      
Net sales                                   $ 1,184,819     1,361,930     2,330,976      2,458,556

Cost of goods sold                              422,558       522,759       882,861        950,321
                                            -----------   -----------   -----------    -----------

        Gross profit                            762,261       839,171     1,448,115      1,508,235
                                            -----------   -----------   -----------    -----------

Operating expenses
    Research and development                     83,898       117,925       180,821        227,976
    Selling and marketing                       422,563       418,689       837,785        821,161
    General and administrative                  242,391       219,953       470,845        448,813
                                            -----------   -----------   -----------    -----------
                                                748,852       756,567     1,489,451      1,497,950
                                            -----------   -----------   -----------    -----------
        Income (loss) from operations            13,409        82,604       (41,336)        10,285

Interest income                                   6,425         7,583        11,627         11,640
                                            -----------   -----------   -----------    -----------

        Income (loss) before income taxes        19,834        90,187       (29,709)        21,925

Income taxes                                       --           2,039          --            2,039
                                            -----------   -----------   -----------    -----------

        Net income (loss)                   $    19,834        88,148       (29,709)        19,886
                                            ===========   ===========   ===========    ===========


Net income (loss) per share                 $      0.00          0.01          0.00           0.00
                                            ===========   ===========   ===========    ===========

Weighted average common
  shares outstanding                         10,820,397    10,737,102    10,566,263     10,686,270
                                            ===========   ===========   ===========    ===========
<FN>

See the accompanying notes to the financial statements.
</FN>
</TABLE>
                                                                     Page 3 of 9
<PAGE>

<TABLE>

                           SIERRA MONITOR CORPORATION

                            Statements of Cash Flows

                                   (Unaudited)

<CAPTION>

                                                            Three months ended        Six months ended
                                                                 June 30,                  June 30
                                                             1997         1996        1997         1996
                                                          ---------    ---------    ---------    ---------
<S>                                                       <C>             <C>         <C>           <C>   
Cash flows from operating activities:
  Net income (loss)                                       $  19,834       88,148      (29,709)      19,886
  Adjustments to reconcile net income (loss) to net
    cash provided by (used in) operating activities:
       Depreciation & amortization                           30,580       31,995       57,183       66,961
       Allowance for doubtful accounts                        1,070        2,250        3,320        3,395
       Changes in items affecting operations:
         Trade receivables                                  114,754     (118,344)     264,754      (90,867)
         Inventories                                        (95,469)      (2,881)    (101,060)     (76,981)
         Prepaid expenses                                   (14,304)     (34,602)     (15,237)     (74,727)
         Accounts payable                                    34,246       15,842      (26,692)     (39,832)
         Accrued expenses                                   (26,656)     (21,607)      (7,579)      (4,107)
         Other current liabilities                           (6,827)      (7,294)      (9,898)      25,620
         Income taxes payable                                  --           --        (11,269)     (11,115)
                                                          ---------    ---------    ---------    ---------
             Net cash provided by (used in)
               operating activities                          57,228      (46,493)     123,813     (181,767)
                                                          ---------    ---------    ---------    ---------
Cash flows from investing activities:
  Capital expenditures                                      (10,820)      (5,070)     (53,429)     (31,224)
  Short term investments                                      2,419          150          513      331,357
                                                          ---------    ---------    ---------    ---------
             Net cash provided by (used in)
               investing activities                          (8,401)      (4,920)     (52,916)     300,133
                                                          ---------    ---------    ---------    ---------
Cash flows from financing activities:
  Proceeds from exercise of stock options,
    net of notes receivable                                   4,824        2,370        6,378        8,443
                                                          ---------    ---------    ---------    ---------
             Net cash provided by financing activities        4,824        2,370        6,378        8,443
                                                          ---------    ---------    ---------    ---------
Net increase (decrease) in
  cash and cash equivalents                                  53,651      (49,043)      77,275      126,809

Cash and cash equivalents at beginning of period            502,534      486,406      478,910      310,554
                                                          ---------    ---------    ---------    ---------

Cash and cash equivalents at end of period                $ 556,185      437,363      556,185      437,363
                                                          =========    =========    =========    =========
<FN>

See the accompanying notes to the financial statements 
</FN>
</TABLE>
                                                                     Page 4 of 9
<PAGE>

                           SIERRA MONITOR CORPORATION

                        Notes to the Financial Statements

                                  June 30, 1997

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-KSB for the year ended  December  31, 1996
which was filed March 31, 1997. 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 June 30, 1997 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 June 30, 1997.

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:
                                       June 30,  December 31,
                                         1997       1996
                                       --------   --------

                     Raw materials     $328,991   $275,024
                     Work-in-process    353,623    324,042
                     Finished goods     136,311    118,799
                                       --------   --------
                                       $818,925   $717,865
                                       ========   ========

                                                                     Page 5 of 9
<PAGE>


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

Results of Operations

For the three  months  ended June 30,  1997,  Sierra  Monitor  Corporation  (the
"Company") reported net sales of $1,184,819 compared to $1,361,930 for the three
months  ended June 30, 1996.  For the six month period ended June 30, 1997,  net
sales  were  $2,330,976  compared  with  $2,458,556  in the prior year six month
period. The results for the second quarter of 1997 represent a 13% decrease from
the same  period in the  prior  year.  The  results  for the first  half of 1997
represent a 5% decrease from the same period in the prior year. During the first
two months of the second  quarter,  bookings and sales improved  compared to the
levels in the first  quarter,  but the trend did not continue in the final month
and the results fell short of the  Company's  expectations.  Lower sales of both
multi-point   gas  monitoring   systems  and  products  for  telephone   company
applications  were slightly  offset by higher sales of military  products single
point monitoring devices.

Gross  profit of  $762,261  for the three month  period  ended June 30, 1997 was
64.3% of sales compared to $839,171 or 61.6% of sales, in the same period in the
previous year. The gross profit for the six month period ended June 30, 1997 was
$1,448,115,  or 62.1% of sales, compared to $1,508,235 or 61.3% of sales, in the
same period in the previous  year.  The higher margins in the second quarter are
primarily due to the change in the mix of products  sold. The margins in the six
month year to date period are consistent with historical results.

Expenses for research and development, which include new product development and
engineering to sustain existing  products,  were $83,898,  or 7.1% of sales, for
the three month period  ending June 30, 1997  compared to  $117,925,  or 8.7% of
sales,  in the  comparable  period in 1996. In the six month periods ending June
30, 1997 and June 30, 1996, research and development expenses were $180,821,  or
7.8% of sales, and $227,976,  or 9.3% of sales,  respectively.  In the first and
second  quarters  of 1997 there  were less  consulting  expenses  related to new
product development than in the same periods in the prior year.

Selling and marketing  costs for the three month period ended June 30, 1997 were
$422,563,  or 35.7% of sales,  compared to $418,689,  or 30.7% of sales,  in the
comparable  period in the prior year.  For the six month periods ending June 30,
1997 and June 30, 1996,  selling and marketing costs were $837,785,  or 35.9% of
sales,  and $821,161,  or 33.4% of sales,  respectively.  Although  there are no
significant   changes  in  total  selling  and  marketing  costs,   lower  sales
commissions  paid to  representatives  have  been  offset by  increased  travel,
advertising and sales materials  expenses incurred by Company employees in their
efforts to improve the overall level of sales.

General and administrative  costs increased to $242,391,  or 20.5% of sales, for
the three month period ended June 30, 1997 from  $219,953,  or 16.2%  percent of
sales, in the three month period ended June 30, 1996. General and administrative
costs increased to $470,845,  or 20.2% of sales,  for the six month period ended
June 30, 1997 from  $448,813,  or 18.3% of sales,  in the six month period ended
June 30, 1996. The increase in general and administrative costs is due to higher
salary, labor and benefit costs.

                                                                     Page 6 of 9
<PAGE>

Net income,  after interest and provision for income taxes, for the three months
ended June 30, 1997 was $19,834 or 1.7% of net sales,  compared  with $88,148 or
6.5% of net sales, in the three months ended June 30, 1996. Net loss for the six
month period ended June 30, 1997 was $29,709 compared with net income of $19,886
in the same period in the prior year.  Although the gross margin as a percent of
sales  improved in the second  quarter,  compared to the prior year period,  the
gross  profit  was  lower  due to lower  revenue.  Fixed  expenses  remained  at
approximately the same level resulting in lower income from operations and lower
net income.

Liquidity and Capital Resources

Working  capital at June 30,  1997 was  $2,159,457  compared  to  $2,179,034  at
December  31,  1996.  The  total of cash and cash  equivalents  and  short  term
investments  at June 30, 1997 was $802,452  compared to $725,691 at December 31,
1996.  The  increase  in cash and  short  term  investments  is due to  improved
collections of accounts  receivable,  including  resolution of several  accounts
which were  delinquent in excess of 120 days.  The  resolution of the delinquent
accounts was achieved  without any write offs.  The  improvement in cash on hand
due to collection of accounts  receivable was partially offset by an increase in
materials  inventory.  Purchases  of  materials,  for the second  quarter,  were
planned at a higher level due to  anticipated  sales  increases  which failed to
materialize.

Short term investments consist of certain  certificates of deposit 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 its  current  capital
resources 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 9
<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
<TABLE>

           The Annual Meeting of  Shareholders  was held on May 28, 1997. At the
           meeting the following directors were elected:
<CAPTION>

                                                                        Number of Common Shares Voted
                                                                        -----------------------------

             Directors                                                For                         Withheld
             ---------                                                ---                         --------

<S>                                                                <C>                               <C>
             Gordon R. Arnold                                      6,823,114                         0

             C. Richard Kramlich                                   6,823,114                         0

             Jay T. Last                                           6,823,114                         0
</TABLE>
<TABLE>

           In addition, the shareholders approved the following proposal
<CAPTION>

                                                                        Number of Common Shares Voted
                                                                        -----------------------------

             Proposal                                           For                Against              Abstain
             --------                                           ---                -------              -------

<S>                                                          <C>                      <C>                  <C>
             Ratify the appointment of KPMG Peat             6,823,114                0                    0
             Marwick LLP as the Company's  independent
             public accountants for the fiscal year
             ending December 31, 1997.
</TABLE>

           There were no broker non-votes for any of the proposals

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

                                                                     Page 8 of 9
<PAGE>


                                    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:   August  14, 1997                 By:  /S/ Gordon R. Arnold
                                              ----------------------------------
                                              Gordon R. Arnold

                                              President

                                              Chief Financial Officer


                                                                     Page 9 of 9