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 March 31, 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                                                95-24819414
 (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 May 9, 1997
was 10,332,513.

Traditional Small Business Disclosure Format: Yes    ; No X
                                                 ----    ----
                                                                     Page 1 of 8
<PAGE>


                          PART I: FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                           SIERRA MONITOR CORPORATION

                                 Balance Sheets


                                                       March 31,    December 31,
                                                         1997           1996
                                                    --------------  ------------
                                   Assets             (unaudited)
Current assets:
     Cash and cash equivalents                       $   502,534        478,910
     Short-term investments                              248,688        246,781
     Trade receivables, less allowance for doubtful
          accounts of $46,743 in 1997 and $45,598
          in 1996, respectively                          888,739      1,040,989
     Inventories                                         723,456        717,865
     Prepaid expenses                                     52,489         51,556
     Deferred income taxes                               211,000        211,000
                                                     -----------    -----------

                        Total current assets           2,626,906      2,747,101

Property and equipment, net                              107,559         84,653
Other assets                                              85,478         92,378
                                                     -----------    -----------

                                                     $ 2,819,943      2,924,132
                                                     ===========    ===========

                      Liabilities and Shareholders' Equity

Current liabilities:
     Accounts payable                                $   230,433        291,371
     Accrued compensation expenses                       233,485        214,408
     Other current liabilities                            35,669         38,741
     Income taxes payable                                 12,278         23,547
                                                     -----------    -----------

                        Total current liabilities        511,865        568,067

Shareholders' equity:
     Common stock                                      2,912,493      2,912,493
     Accumulated deficit                                (596,244)      (546,701)
     Note receivable from shareholders                    (8,171)        (9,727)
                                                     -----------    -----------

                        Total shareholders' equity     2,308,078      2,356,065
                                                     -----------    -----------

                                                     $ 2,819,943      2,924,132
                                                     ===========    ===========

See the accompanying notes to the financial statements.

                                                                     Page 2 of 8
<PAGE>

                           SIERRA MONITOR CORPORATION

                            Statements of Operations

                                   (unaudited)


                                                     For the three months ended
                                                    ----------------------------
                                                     March 31,        March 31,
                                                       1997             1996
                                                    ------------     -----------

Net sales                                            $ 1,146,157       1,096,626

Cost of goods sold                                       460,303         427,562
                                                     -----------     -----------

                  Gross profit                           685,854         669,064
                                                     -----------     -----------

Operating expenses
      Research and development                            96,923         110,051
      Selling and marketing                              415,222         402,472
      General and administrative                         228,454         228,860
                                                     -----------     -----------

                                                         740,599         741,383
                                                     -----------     -----------

                  Loss from operations                    54,745          72,319

Interest income                                            5,202           4,057
                                                     -----------     -----------

                Net loss                             $    49,543          68,262
                                                     ===========     ===========

Net loss per share                                   $      0.00            0.01
                                                     ===========     ===========

Weighted average common shares outstanding            10,332,513      10,276,888
                                                     ===========     ===========

See the accompanying notes to the financial statements.

                                                                     Page 3 of 8
<PAGE>
<TABLE>

                           SIERRA MONITOR CORPORATION

                            Statements of Cash Flows

                                   (Unaudited)
<CAPTION>
                                                             For the three months ended
                                                             --------------------------
                                                               March 31,    March 31,
                                                                 1997          1996
                                                              -----------   ----------
<S>                                                            <C>            <C>     
Cash flows from operating activities:
      Net income (loss)                                        $ (49,543)     (68,262)
      Adjustments to reconcile net loss to net cash provided
         by (used in) operating activities:
              Depreciation and amortization                       26,603       34,967
              Allowance for doubtful accounts                      2,250        1,145
              Change in items affecting operations
                 Trade receivables                               150,000       27,477
                 Inventories                                      (5,591)     (74,100)
                 Prepaid expenses                                   (933)     (40,127)
                 Accounts payable                                (60,938)     (55,674)
                 Accrued compensation expenses                    19,077       17,501
                 Other current liabilities                        (3,072)      32,914
                 Income taxes payable                            (11,269)     (11,115)
                                                               ---------    ---------

                  Net cash  provided by (used in) operating
                     activities                                   66,584     (135,274)
                                                               ---------    ---------

Cash flows from investment activities:
      Capital expenditures                                       (42,609)     (26,154)
      Short term investments                                      (1,907)     331,207
                                                               ---------    ---------

                  Net cash provided by (used in) investing       (44,516)     305,053
                     activities                                ---------    ---------

Cash flows from financing activities:
      Proceeds from exercise of stock options
         net of notes receivable                                   1,556        6,073
                                                               ---------    ---------

                   Net cash provided by financing activities       1,556        6,073
                                                               ---------    ---------

Net increase decrease in cash and cash equivalents                23,624      175,852

Cash and cash equivalents at beginning of period                 478,910      310,554
                                                               ---------    ---------

Cash and cash equivalents at end of period                     $ 502,534      486,406
                                                               =========    =========
<FN>

See the accompanying notes to the financial statements.
</FN>
</TABLE>
                                                                     Page 4 of 8
<PAGE>
                           SIERRA MONITOR CORPORATION

                        Notes to the Financial Statements

                                 March 31, 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 March 31, 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 March 31, 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:
                                                 March 31,       December 31,
                                                   1997             1996
                                                   ----             ----

                  Raw Materials                 $ 299,366           275,024

                  Work-in-process                 295,388           324,042

                  Finished goods                  128,702           118,799
                                                  -------         ---------

                                                $ 723,456           717,865
                                                  =======           =======

New Accounting Standard

The  Financial  Accounting  Standards  Board issued its  Statement of Accounting
Standards No. 128,  "Earnings Per Share." SFAS No. 128 requires the presentation
of basic  earnings per share  ("EPS") and, for  companies  with complex  capital
structures,  diluted  EPS.  SFAS No. 128 is  effective  for  annual and  interim
periods ending after  December 15, 1997.  The Company  expects that EPS will not
differ  materially  from  earnings per share as  presented  in the  accompanying
financial statements.

                                                                     Page 5 of 8
<PAGE>

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

Results of Operations

For the three  months  ended  March 31,  1997 Sierra  Monitor  Corporation  (the
"Company") reported net sales of $1,146,157 compared to $1,096,626 for the three
months ended March 31, 1996. The results for the first quarter of 1997 represent
a 4.5%  increase  from the same  period in the prior  year.  The revenue for the
first  quarter  of 1997  includes  $68,600  of net  sales of the  Company's  new
environment  controller for telephone company applications.  There were no sales
of the environment controller in the prior year period.

Gross  profit for the three month  period  ended March 31, 1997 was  $685,854 or
59.8% of net sales,  compared  to  $669,064  or 61.0% of net sales,  in the same
period in the previous year. The lower margin in the current  quarter is due, in
part, to higher  material costs related to the start up of the  manufacture  and
production of the environment controller.

Expenses for research and development, which include new product development and
engineering  to sustain  existing  products,  were  $96,923  for the three month
period ended March 31, 1997,  compared with $110,051 in the comparable period in
1996. In the first quarter of 1997 there were less outside  consulting  expenses
related to new product development than in the same period in the prior year.

Selling and marketing costs for the three month period ended March 31, 1997 were
$415,222, or 36.2% of net sales, compared to $402,472, or 36.7% of net sales, in
the  same  period  in  the  prior  year.   Commissions  to   independent   sales
representatives  decreased  by 2.0% of net  sales in the first  quarter  of 1997
compared to the same period in 1996.  Commission costs vary based on the product
mix,  regional mix, and discount level of sales. The lower commission costs were
offset  by the  cost of  development  and  printing  of new  product  brochures,
resulting in no significant change in total selling and marketing costs.

General and administrative  costs for the first quarter of 1997 were $228,454 or
19.9% of net sales compared to $228,860 or 20.9% in the same period in the prior
year. There were no significant changes in general and administrative expenses.

Net loss for the three month  period ended March 31, 1997 was $49,543 or 4.3% of
net sales, compared with a net loss of $68,262 or 6.2% of net sales for the same
period in the prior  year.  Although  sales  increased  and  total  fixed  costs
remained  constant as compared with the first  quarter of 1996,  the lower gross
margin, due to higher costs of goods sold, contributed to the net loss.

During the first  quarter of 1997  collection of accounts  receivable,  combined
with lower  sales than the fourth  quarter of 1996,  resulted  in a decrease  in
trade  receivables  of  $150,000.  The  current  level of trade  receivables  is
consistent  with the  Company's  collection  experience.  Cash  generated by the
collections in the first quarter  contributed to a $60,938 reduction in accounts
payable.

Liquidity and Capital Resources:

During the period ended March 31, 1997, the Company's  working capital decreased
by $63,993  compared to  December  31,  1996.  Capital  expenditures  related to
upgrading  of the  telephone  system to  provide  voice mail  capabilities,  and
purchase of laptop  computers  for regional  sales  offices  contributed  to the
decrease.

At March 31, 1997, cash and cash equivalents and short term investments, totaled
$751,222.  The short term investments consist of certain certificates of deposit
with original  maturities greater than 90 days. 

                                                                     Page 6 of 8
<PAGE>

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 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:        May 13, 1997               By:      /s/ Gordon R. Arnold
                                               ---------------------------------
                                               Gordon R. Arnold
                                               President
                                               Chief Financial Officer

                                                                     Page 8 of 8