UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  FORM 10 - QSB

(Mark One)

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

         For the quarterly period ended September 30, 2003
                                        ------------------

                                       or

(_)      Transition report under 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
                                                            No.)

                                1991 Tarob Court
                           Milpitas, California 95035
              (Address and zip code of principal executive offices)

                                 (408) 262-6611
                (Issuer's telephone number, including area code)

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 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 November 8,
2003 was 10,971,546.

Transitional Small Business Disclosure Format: Yes ___; No _X_

                                                                    Page 1 of 17
<PAGE>

                          PART I: FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                           SIERRA MONITOR CORPORATION

                             Condensed Balance Sheet

                               September 30, 2003

                                   (Unaudited)
                   Assets

Current assets:
      Cash                                                            $  933,421
      Trade receivables, less allowance for doubtful accounts          1,312,713
          of approximately $36,000
      Inventories, net                                                 1,332,620
      Prepaid expenses                                                    58,606
      Income taxes receivable                                            154,971
      Deferred income taxes                                              274,263
                                                                      ----------

                    Total current assets                               4,066,594

Property and equipment, net                                              182,079
Deferred income taxes                                                     58,853
Other assets                                                              93,231
                                                                      ----------

                    Total assets                                      $4,400,757
                                                                      ==========

                    Liabilities and Shareholders' Equity

Current liabilities:
      Accounts payable                                                $  295,245
      Accrued compensation expenses                                      331,382
      Other current liabilities                                          144,756
                                                                      ----------

                    Total current liabilities                            771,383

Commitments and contingencies

Shareholders' equity:
      Common stock, $0.001 par value; 20,000,000 shares authorized;
      10,971,546 shares issued and outstanding                            10,972
      Additional paid-in capital                                       3,151,189
      Retained earnings                                                  467,213
                                                                      ----------

                    Total shareholders' equity                         3,629,374
                                                                      ----------

                    Total liabilities and shareholders' equity        $4,400,757
                                                                      ==========

See accompanying notes to the condensed financial statements.

                                                                    Page 2 of 17
<PAGE>

                           SIERRA MONITOR CORPORATION

                       Condensed Statements of Operations

                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                     Three months ended                    Nine months ended
                                                                        September 30,                        September 30,
                                                              -------------------------------       -------------------------------
                                                                  2003               2002               2003               2002
                                                              ------------       ------------       ------------       ------------
<S>                                                           <C>                <C>                <C>                <C>
Net sales                                                     $  2,038,312       $  2,264,681       $  6,035,851       $  6,579,516
Cost of goods sold                                                 750,899            893,524          2,429,860          2,712,749
                                                              ------------       ------------       ------------       ------------
        Gross profit                                             1,287,413          1,371,157          3,605,991          3,866,767
                                                              ------------       ------------       ------------       ------------
Operating expenses
    Research and development                                       410,146            352,506          1,122,463          1,153,990
    Selling and marketing                                          572,300            655,696          1,821,430          2,113,149
    General and administrative                                     267,768            283,893            875,116            880,970
                                                              ------------       ------------       ------------       ------------
                                                                 1,250,214          1,292,095          3,819,009          4,148,109
                                                              ------------       ------------       ------------       ------------
        Income (loss) from operations                               37,199             79,062           (213,018)          (281,342)
Interest income (expense)                                                3               (337)             1,952               (968)
                                                              ------------       ------------       ------------       ------------
        Income (loss) before income taxes                           37,202             78,725           (211,066)          (282,310)
Income tax (benefit) provision                                      (4,278)            31,331           (103,586)          (112,720)
                                                              ------------       ------------       ------------       ------------
        Net income (loss)                                     $     41,480       $     47,394       $   (107,480)      $   (169,590)
                                                              ============       ============       ============       ============
Basic and diluted net income (loss) available
      to common shareholders per common share                 $       0.00       $       0.00       $      (0.01)      $      (0.02)
                                                              ============       ============       ============       ============

Weighted average number of shares used in per
      share computations
                                        Basic:                  10,971,546         10,971,546         10,971,546         10,971,546
                                                              ============       ============       ============       ============
                                      Diluted:                  11,326,479         11,028,159         10,971,546         10,971,546
                                                              ============       ============       ============       ============
</TABLE>

See accompanying notes to the condensed financial statements.

                                                                    Page 3 of 17
<PAGE>

                           SIERRA MONITOR CORPORATION

                       Condensed Statements of Cash Flows

                                   (Unaudited)

                                                           Nine months ended
                                                              September 30
                                                            2003         2002
                                                         ---------    ---------
Cash flows from operating activities:
        Net loss                                         $(107,480)   $(169,590)
         Adjustments to reconcile net loss to
           net cash provided by (used in)
           operating activities:
           Depreciation and amortization                   227,352      229,950
           Allowance for doubtful accounts                 (16,160)       4,065
           Deferred income taxes                           (83,616)    (113,991)
           Changes in operating assets and
             liabilities:
             Trade receivables                              39,880     (110,660)
             Inventories                                    84,022       77,419
             Prepaid expenses                               86,098      121,297
             Income taxes receivable                        (1,003)     148,187
             Accounts payable                              (70,007)    (170,090)
             Accrued compensation expenses                 116,959       68,205
             Other current liabilities                      (1,893)     (24,692)
                                                         ---------    ---------
               Net cash provided by (used in)
                 operating activities                      274,152       60,100
                                                         ---------    ---------
Cash flows from investing activities:
        Capital expenditures                               (80,209)     (90,865)
        Other assets                                        (1,169)        (100)
                                                         ---------    ---------
               Net cash used in investing activities       (81,378)     (90,965)
                                                         ---------    ---------
Cash flows from financing activities:
        Proceeds from bank borrowings, net                    --        100,000
        Repayment of notes receivable                        1,329        6,287
        Proceeds from exercise of stock options               --          6,177
                                                         ---------    ---------
               Net cash provided by financing
                 activities                                  1,329      112,464
                                                         ---------    ---------
Net increase in cash and cash equivalents                  194,103       81,599
Cash and cash equivalents at beginning of period           739,318      772,394
                                                         ---------    ---------
Cash and cash equivalents at end of period               $ 933,421    $ 853,993
                                                         =========    =========
Supplemental cash flow information
       Cash paid for income taxes                        $     628    $   5,188
                                                         =========    =========
       Cash paid for interest expense                    $       0    $   2,946
                                                         =========    =========

See accompanying notes to the condensed financial statements.

                                                                    Page 4 of 17
<PAGE>

                           SIERRA MONITOR CORPORATION

                   Notes to the Condensed Financial Statements

                               September 30, 2003

Basis of Presentation

         The unaudited condensed financial  statements have been prepared by the
Company,  pursuant to the rules and  regulations  of the Securities and Exchange
Commission (the "SEC").  Certain information and footnote  disclosures  normally
included  in  financial   statements  prepared  in  accordance  with  accounting
principles  generally accepted in the United States of America 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, 2002
which was filed March 27, 2003. 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, 2003 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.

Summary of Business

         Sierra  Monitor  Corporation  (the  "Company")  was  founded in 1978 to
design and develop hazardous gas monitoring  devices for protection of personnel
and facilities in industrial work-places. In addition to gas monitoring systems,
the Company also manufactures  microprocessor-based  systems used to monitor and
control  environmental  conditions in small, remote structures used for cellular
and hard wire  telephone  equipment.  The Company  also  manufactures  a line of
products known as  Communications  Bridges.  These products  provide a means for
many industrial  instruments to communicate  with each other even when they have
different  communication  protocols.  Communications  Bridges are sold under the
name FieldServer by the FieldServer Technologies Division of the Company.

         Gas monitoring products  manufactured by the Company are sold primarily
to oil and gas drilling and refining  companies,  chemical  plants,  waste-water
treatment plants,  semiconductor  industry and other  applications which involve
the handling or generation of hazardous gases.  Environment Controllers are sold
to telecommunications companies and their suppliers.  FieldServers are typically
sold to  integration  companies  that  service  building  and  plant  automation
projects.

         The Company's  common stock trades on the OTC Bulletin  Board under the
symbol "SRMC.OB".

Accounting Policies

         a) Revenue Recognition

         Revenue  related to gas detection and monitoring  devices is recognized
when all of the following criteria have been met: (1) persuasive  evidence of an
arrangement  exists;  (2) the fee for the arrangement is fixed or  determinable;
(3) delivery has occurred or services have been rendered; and (4) collectibility
is reasonably assured. Revenue from government contracts is recognized utilizing
the  percentage-of-completion  method.  Contract  revenues  are  recorded as the
related  costs  (including  certain  general and  administrative  costs),  which
contribute to contract performance, are incurred.

         The  Company  recognizes  revenue  from  the  sale of  FieldServers  in
accordance   with  Statement  of  Position   ("SOP")  97-2,   Software   Revenue
Recognition,  as  amended.  Revenue  is  recognized  when  all of the  following
criteria have been met: persuasive  evidence of an arrangement exists;  delivery
has

                                                                    Page 5 of 17
<PAGE>

occurred;  the fee is fixed or  determinable;  and  collectibility  is probable.
Additionally   the   software   should  not  require   significant   production,
modification or customization;  otherwise revenues should be deferred.  Deferred
revenues at September 30, 2003 were not significant.

         b) Reclassifications

         Certain  amounts  presented in the  financial  statements  for the 2002
comparative  period have been  reclassified  to conform to the current  period's
presentation.

         c) Recent Accounting Standards

         Recent accounting pronouncements discussed in the notes to the December
31,  2002 and 2001  audited  financial  statements,  filed  previously  with the
Securities  and Exchange  Commission  on Form 10-KSB,  that were  required to be
adopted  during the year ending  December  31,  2003 did not have a  significant
impact on the Company's financial statements.

         d) Employee Stock-Based Compensation

         At  September  30,  2003,  the  Company  has two  stock-based  employee
compensation  plans.  The Company accounts for those plans under the recognition
and  measurement  principles  of  Accounting  Principles  Board  Opinion No. 25,
"Accounting   for  Stock   Issued  to   Employees"   ("APB  25"),   and  related
Interpretations.

         No stock-based employee  compensation cost is reflected in net loss, as
all options  granted under those plans had an exercise price equal to the market
value of the underlying  common stock on the date of grant.  The following table
illustrates  the effect on net income and  earnings per share if the Company had
applied  the  fair  value  recognition  provisions  of  Statement  of  Financial
Accounting  Standards No. 123,  "Accounting  for Stock-Based  Compensation,"  as
amended to stock-based employee compensation.

<TABLE>
<CAPTION>
                                                                          For The Three Months              For The Nine Months
                                                                           Ended September 30,              Ended September 30,
                                                                          2003            2002              2003            2002
                                                                       ---------        ---------        ---------        ---------
<S>                                                                    <C>              <C>              <C>              <C>
Net income (loss):
   As reported                                                         $  41,480        $  47,394        $(107,480)       $(169,590)
   Deduct: Total stock-based employee
      compensation expense determined under
      fair value based method for all awards                           $ (46,000)       $ (35,000)       $(138,000)       $(105,000)
                                                                       ---------        ---------        ---------        ---------
         Pro forma                                                     $  (4,520)       $  12,394        $(245,480)       $(274,590)
                                                                       =========        =========        =========        =========
Basic and diluted net income (loss) per share:
         As reported                                                   $   (0.00)       $    0.00        $   (0.01)       $   (0.02)
         Pro forma                                                     $   (0.00)       $    0.00        $   (0.02)       $   (0.03)
</TABLE>


Inventories

A summary of inventories as of September 30, 2003 follows:

Raw materials                                                       $   718,880
Work-in-process                                                         431,312
Finished goods                                                          255,859
Reserve for obsolescence                                                (73,431)
                                                                    -----------
                                                                    $ 1,332,620
                                                                    ===========

                                                                    Page 6 of 17
<PAGE>

Net income (loss) Per Share

         Basic earnings per share ("EPS") is computed using the weighted average
number of common shares outstanding  during the period.  Diluted EPS is computed
using the weighted average number of common and dilutive potential common shares
outstanding  during the period.  Dilutive  potential  common  shares  consist of
common stock  issuable upon  exercise of stock options using the treasury  stock
method.  No  adjustments  to  earnings  were  made  for  purposes  of per  share
calculations.

         The Company  reported a net loss for both the nine-month  periods ended
September 30, 2003 and 2002. As a result, 605,000 and 1,314,500 shares of common
stock  issuable  upon  exercise of stock  options  have been  excluded  from the
calculation  of diluted  loss per share for the  respective  nine-month  periods
because the inclusion of such stock options would be antidilutive.

         In the three-month periods ended September 30, 2003 and 2002 options to
purchase  847,500  and  1,119,500  shares of common  stock,  respectively,  were
outstanding  but not  included  in the  computation  of diluted  EPS because the
exercise price was greater than the average market price of common shares.

         The following is a reconciliation of the shares used in the computation
of basic and diluted EPS for the three and  nine-month  periods ended  September
30, 2003 and 2002, respectively:

<TABLE>
<CAPTION>
                                                                     Three months      Nine months      Three months     Nine months
                                                                         ended            ended            ended            ended
                                                                       9/30/2003        9/30/2003        9/30/2002        9/30/2002
                                                                       ----------       ----------       ----------       ----------
<S>                                                                    <C>              <C>              <C>              <C>
Basic EPS - weighted-average number of common
    shares outstanding                                                 10,971,546       10,971,546       10,971,546       10,971,546
Effect of dilutive potential common shares - stock
    options outstanding                                                   354,933             --             56,613             --
                                                                       ----------       ----------       ----------       ----------
Diluted EPS - weighted-average number of common
    shares and potential common shares outstanding                     11,326,479       10,971,546       11,028,159       10,971,546
                                                                       ==========       ==========       ==========       ==========
</TABLE>

Comprehensive Income

         The Company has no significant components of other comprehensive income
and, accordingly, comprehensive income is the same as net income for all periods
presented.

Segment Information

         The Company operates in one segment,  industrial  instrumentation.  The
Company's chief operating decision maker, the Chief Executive Officer, evaluates
the performance of the Company and makes operating  decisions based on financial
data consistent with the presentation in the accompanying financial statements.

         In addition,  the CEO reviews the following  information on revenues by
product category:

<TABLE>
<CAPTION>
                                                                  Three months ended                       Nine months ended
                                                                     September 30                             September 30
                                                           -------------------------------           -------------------------------
                                                              2003                 2002                 2003                 2002
                                                           ----------           ----------           ----------           ----------
<S>                                                        <C>                  <C>                  <C>                  <C>
Gas detection devices                                      $1,204,008           $1,540,809           $3,929,636           $4,754,374
Environmental controllers                                     334,117              295,546              777,679              667,174
FieldServers                                                  500,187              428,326            1,328,536            1,157,968
                                                           ----------           ----------           ----------           ----------
                                                           $2,038,312           $2,264,681           $6,035,851           $6,579,516
                                                           ==========           ==========           ==========           ==========
</TABLE>

                                                                    Page 7 of 17
<PAGE>

Line-of-Credit

         In June 2003 the Company  renewed its $500,000  line of credit with its
commercial  bank.  There are currently no borrowings  and there has been no loan
activity during 2003.

Stock Options

         On May 13, 2003, the Company granted to an employee  options to acquire
10,000  shares of the  Company's  common stock at $0.10 per share.  Such options
were granted under the terms of the 1996 Stock Option Plan, have a 10-year life,
and vest as follows:  25% on June 1, 2004 with the balance  vesting ratably over
the following 36 months. No stock option compensation expense was recorded under
APB 25 as the fair value of the Company's  common stock was determined to be not
more than the strike price on the date of grant.

         During the quarter ended  September 30, 2003, no employee stock options
were granted, exercised,  forfeited or cancelled. No options have been exercised
during 2003.

Lease Commitments

         In April  2003,  the  Company  renegotiated  the lease for its  primary
facilities in Milpitas,  California. The new lease commenced on May 1, 2003, has
a term of six years, and requires monthly payments of $26,149.

         Additionally,  the Company moved its operations in Fort Myers,  Florida
to Milpitas,  California when the related lease expired during the  three-months
ended June 30, 2003.  The Company  entered  into a new lease which  commenced on
June 1, 2003 with a term of 24 months and requiring monthly payments of $1,183.

         Future minimum lease  payments for all of the Company's  non-cancelable
operating leases are as follows:

         Year ending
         December 31,
         ------------
             2003                              $      391,000
             2004                                     328,000
             2005                                     320,000
             2006                                     314,000
             2007                                     314,000
             Thereafter                               418,000
                                               --------------
                                               $    2,085,000
                                               ==============

                                                                    Page 8 of 17
<PAGE>

         This Form 10-QSB and the accompanying  letter to shareholders  contains
forward-looking  statements  within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended.  Statements that are not statements of historical fact may be deemed
to be  forward-looking  statements.  The words  "believe,"  "expect,"  "intend,"
"plan,"  "project,"  "will" and similar  words and phrases as they relate to the
Company also identify  forward-looking  statements.  Such statements reflect the
current views and  assumptions  of the Company and are not  guarantees of future
performance.  These  statements are subject to various risks and  uncertainties.
The Company's actual results could differ  materially from those  anticipated in
these  forward-looking  statements as a result of the risk factors  described in
this Form 10-QSB,  including those under the heading  "Certain  Factors That May
Affect Future Results" and those issues  described  under the heading  "Critical
Accounting  Policies." The Company expressly disclaims any obligation to release
publicly any updates or revisions  to any  forward-looking  statement to reflect
any changes in  expectations,  or any change in events or circumstances on which
those statements are based, unless otherwise required by law.

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

Results of Operations

         For  the  three  months  ended   September  30,  2003  Sierra   Monitor
Corporation  reported net sales of  $2,038,312  compared to  $2,264,681  for the
three months ended September 30, 2002. For the nine-month period ended September
30, 2003 net sales were  $6,035,851  compared with  $6,579,516 in the prior year
nine-month  period.  The sales  results  for the third  quarter  of fiscal  2003
represent a 10% decrease from the same period in the prior year. The results for
the first nine months of fiscal  2003  represent  an 8%  decrease  from the same
period in the prior year.

         In the third  quarter of 2003 sales of our gas  detection  systems were
22%  lower  than  the  corresponding  quarter  in 2002.  The  lower  sales  are,
primarily,  the result of lower orders for large  projects  which use our Sentry
gas  monitoring  systems.  The  continuation  of two key  projects  for which we
shipped  product  in the first  half of this year have been  delayed,  at least,
until next calendar year. There can be no assurance that these key projects will
be  continued  or that we will ship any  additional  products  related  to these
projects.  Further,  there were no other  large  system  shipments  in the third
quarter.  Gas detection sales for the year to date period in 2003 were 17% lower
than the year to date period in 2002.

         Sales of our environment controllers to the telecommunications industry
in the  third  quarter  of 2003 were  approximately  13%  higher  than the third
quarter of 2002.  Although  there have been no major  changes in  infrastructure
spending by our customers, the major telephone,  cable and cell phone companies,
there has been a gradual increase in local upgrades and expansions this year. As
a result of the increase in local activities,  environment  controller sales for
the year to date  period in 2003 were  approximately  16%  higher  than the same
period in 2002.

         Sales of FieldServers,  our communications  bridge,  were approximately
17% higher in the third  quarter of 2003  compared to the third quarter of 2002.
FieldServer  sales in the first  nine  months of 2003 were 17%  higher  than the
first nine months of 2002. FieldServer sales include non-reccurring  engineering
charges and sales of hardware modules with  preinstalled  proprietary  software.
Our  engineering  charges were lower in the third quarter  compared to the first
half of the year and our sales of  hardware  modules  were higher than the prior
periods.  This change in mix of sales  reflects  broader

                                                                    Page 9 of 17
<PAGE>

acceptance  of  released  software  capabilities  and  less  dependence  by  our
customers upon new engineering development by FieldServer Technologies.

         Our  gross  profit  of  $1,287,413  for the  three-month  period  ended
September 30, 2003 was 63% of sales compared to $1,371,157,  or 61% of sales, in
the same period in the previous year. Our gross profit for the nine-month period
ended September 30, 2003 was $3,605,991 or 60% of sales, compared to $3,866,767,
or 59% of sales, in the same period in the previous year. The lower gross profit
in both reported  periods is due to lower sales levels in those  periods.  Gross
margins  were higher in both periods as a result of the shift in product mix and
changes in selling prices.  Generally large gas detection projects such as those
shipped in the first two quarters of the year are sold at discounted  prices and
include special  components which have high materials costs.  There were no such
sales  in the  quarter  ended  September  30,  2003.  There  have  been no other
significant changes in materials costs, labor costs or manufacturing overheads.

         Expenses  for  research  and  development,  which  include  new product
development and engineering to sustain existing products,  were $410,146, or 20%
of sales,  for the  three-month  period  ending  September  30, 2003 compared to
$352,506,  or 16% of sales, in the comparable  period in 2002. In the nine-month
periods  ending  September  30,  2003  and  September  30,  2002,  research  and
development expenses were $1,122,463, or 19% of sales, and $1,153,990, or 18% of
sales,  respectively.  In the third  quarter of 2003 we increased  the number of
product  development  projects in both gas  detection  products and  FieldServer
products. We also accelerated certain projects in an effort to make new products
available for sales early in 2004.

         Selling and marketing  expenses,  which consist  primarily of salaries,
commissions  and  promotional  expenses  were  $572,300  or 28% of sales for the
three-month  period ended  September  30,  2003,  compared to $655,696 or 29% of
sales,  in the comparable  period in the prior year. For the nine-month  periods
ending September 30, 2003 and September 30, 2002, selling and marketing expenses
were $1,821,430 or 30% of sales, and $2,113,149, or 32% of sales,  respectively.
Our  selling   expenses   include   commissions   paid  to   independent   sales
representatives  for gas detection  sales.  The lower gas detection sales in the
third  quarter of 2003,  compared to the third  quarter of 2002,  combined  with
changes in our sales  representative  network,  resulted in significantly  lower
commission  payments in the  current  quarter  compared  to the prior  year.  In
addition,  our marketing  spending for advertising and sales brochures was lower
in the third quarter of 2003 compared to 2002.  In the  nine-month  year to date
period in 2003, compared to the same period in the prior year, our selling costs
were lower,  primarily,  due to lower commission  expenses and lower advertising
expenses.

         General and administrative  expenses, which consist primarily of salary
expenses,  building rent and insurance expenses, were $267,768, or 13% of sales,
for the three-month  period ended September 30, 2003 compared to $283,893,  also
13% of sales,  in the  three-month  period ended  September  30,  2002.  For the
nine-month periods ending September 30, 2003 and September 30, 2002, general and
administrative  expenses were $875,116, or 14% of sales, and $880,970, or 13% of
sales,  respectively.  General and administrative  expenses have been reduced in
both the three-month and nine-month periods as a result of the relocation of our
Fort Myers,  Florida plant, reduced real estate lease expenses for the Milpitas,
California offices and general expense controls.

         Our net income for the three-month  period ended September 30, 2003 was
$41,480  compared to net income of $47,394 in the same  period of 2002.  For the
nine-month period ended September 30, 2003 our net loss was $107,480 compared to
net loss of $169,590 in the same period of 2002. As a result of lower sales than
the prior year period,  income from  operations in the third quarter of 2003 was
$37,199

                                                                   Page 10 of 17
<PAGE>

compared to $79,062 in the third quarter of 2002.  An income tax benefit  booked
increased our net income in 2003. On a comparative  basis,  our operating income
for third quarter of 2002 was reduced by tax expense. The lower net loss for the
nine-month period ended September 30, 2003, compared to the same period in 2002,
accomplished with lower sales, was due to improved gross margins and lower fixed
expenses resulting from ongoing cost control actions.

Liquidity and Capital Resources

         Working  capital,  which is  comprised,  primarily,  of cash,  accounts
receivable  and  inventories  offset by current  liabilities,  was $3,295,210 at
September  30, 2003.  During the period ended  September  30, 2003,  our working
capital increased by $39,822 compared to December 31, 2002. The increase was due
to  depreciation  of  capital  assets  which was  partially  offset by new asset
purchases plus our net loss.

         Cash on hand, a component of working capital, was $933,421 at September
30,  2003,  an increase  of  $194,103  compared  to  December  31,  2002.  Other
significant  working capital  component  changes  include net trade  receivables
which  decreased by $23,721,  accounts  payable  which  decreased by $70,007 and
deferred income taxes which increased by $83,616 in the same period.

         In the current  fiscal year,  we have not utilized our $500,000 line of
credit  with  our  commercial  bank.  We  believe  that our  present  resources,
including cash and accounts  receivable,  are sufficient to fund our anticipated
level of operations through at least the next twelve months.

         Certain Factors That May Affect 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  our  industry,  lack  of  growth  in our
end-markets,  and our  ability to  develop,  manufacture,  and sell both new and
existing products at a profitable yet competitive price.

         The  industry in which we compete is highly  competitive  and we expect
such  competition to continue in the future.  Most of our competitors are larger
than our company and have substantially greater financial,  technical, marketing
and manufacturing  resources.  While we have invested in new products, there can
be no assurance that we can continue to introduce new products on a timely basis
or that certain of our products will not be rendered non-competitive or obsolete
by our competitors.

         Our  operations  are  concentrated  in a single  building in  Milpitas,
California. Our operations could be interrupted by fire, earthquake, power loss,
telecommunications failure and other events beyond our control. We do not have a
detailed  disaster  recovery  plan.  In  addition,  we do not  carry  sufficient
business  interruption  insurance to compensate us for losses that may occur and
any losses or damages incurred by us could have a material adverse effect on our
business.

         Our  short-term  liquidity  is  dependent  upon our  ability  to reduce
collection cycles, reduce inventories and manage expenses and cash distribution.
We must also  maintain our  compliance  with the  conditions of our bank line of
credit.

Critical Accounting Policies.

         The  preparation  of financial  statements  and related  disclosures in
conformity with accounting principles generally accepted in the United States of
America  requires  management to make judgments,  assumptions and estimates that
affect the amounts reported in the Company's  consolidated  financial statements
and the accompanying  notes.  The amounts of assets and liabilities  reported on
our balance sheets and the amounts of revenues and expenses reported for each of
our fiscal  periods are affected by

                                                                   Page 11 of 17
<PAGE>

estimates  and  assumptions,  which  are  used  for,  but not  limited  to,  the
accounting for revenue recognition,  accounts receivable,  doubtful accounts and
inventories.  Actual  results could differ from these  estimates.  The following
critical   accounting   policies  are   significantly   affected  by  judgments,
assumptions and estimates used in the preparation of the consolidated  financial
statements:

         a) Revenue Recognition

         Our net sales  consist of revenue  from sales of products  net of trade
discounts  and  allowances.   We  generally  obtain  oral  or  written  purchase
authorizations  from our  customers  for a  specified  amount  of  product  at a
specified price and consider  delivery to have occurred at the time of shipment.
We  recognize  revenue  when  evidence  of an  arrangement  exists,  contractual
obligations have been satisfied, title and risk of loss have been transferred to
the customer and collection of the resulting  receivable is reasonably  assured.
We recognize  revenue from the sale of FieldServers in accordance with SOP 97-2,
Software Revenue Recognition, as amended. Management's ability to determine that
such conditions have been met is based on market  experience and judgment of the
specific economic and contractual conditions that exist at the time of shipment.
The Company  does not enter into  multiple-element  arrangements  related to the
sales of FieldServers.

         b) Accounts Receivable and Related Allowances

         Our domestic  sales are generally  made on an open account basis unless
specific  experience  or  knowledge  of the  customer's  potential  inability or
unwillingness  to  meet  the  payment  terms  dictate  secured   payments.   Our
international  sales are generally made based on secure payments  including cash
wire  advance  payments and letters of credit.  International  sales are made on
open account terms where sufficient  historical  experience justifies the credit
risks  involved.  In many of our larger  sales,  the  customers  are  frequently
construction contractors who are in need of our field services to complete their
work and obtain  payment.  Management's  ability to manage the credit  terms and
take  advantage  of the leverage of the need for our services is critical to the
effective  application of credit terms and  minimization of accounts  receivable
losses.

         We maintain an allowances for doubtful  accounts which is analyzed on a
periodic  basis  to  insure  that it is  adequate  to the  best of  management's
knowledge.  We believe that we have  demonstrated the ability to make reasonable
and reliable  estimates of allowances for doubtful accounts based on significant
historical experience.

         c) Inventories

         Inventories  are  stated at the  lower of cost or  market,  cost  being
determined on the  first-in,  first-out  method.  The Company uses an Enterprise
Requirements  Planning  ("ERP")  software  system which provides data upon which
management can rely to determine  inventory  trends and identify  excesses.  The
carrying  value of  inventory  is reduced to market for slow moving and obsolete
items based on historical experience and current product demand. We evaluate the
carrying value of inventory quarterly. The adequacy of these carrying amounts is
dependent  upon  management's  ability to forecast  demands  accurately,  manage
product changes efficiently, and interpret the data provided by the ERP system.

                                                                   Page 12 of 17
<PAGE>

ITEM 3:  CONTROLS AND PROCEDURES

         Evaluation  of  disclosure  controls  and  procedures.  Our  management
evaluated,  with the participation of Gordon R. Arnold, our principal  executive
and  financial  officer,  the  effectiveness  of  our  disclosure  controls  and
procedures as of the end of the period covered by this Quarterly  Report on Form
10-QSB.  Based on this evaluation,  Mr. Arnold has concluded that our disclosure
controls and procedures are effective to ensure that information we are required
to disclose in reports that we file or submit under the Securities  Exchange Act
of 1934 is recorded, processed,  summarized and reported within the time periods
specified in Securities and Exchange Commission rules and forms.

         Changes in internal  control  over  financial  reporting.  There was no
change in our internal control over financial reporting that occurred during the
period  covered by this  Quarterly  Report on Form  10-QSB  that has  materially
affected,  or is reasonably  likely to materially  affect,  our internal control
over financial reporting.

                                                                   Page 13 of 17
<PAGE>

                           PART II: OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K

         (a) Exhibits.

             Exhibit
             Number            Description
             ------            -----------
             3.1(1)            Articles of Incorporation of the Registrant.
             3.2(2)            Bylaws of the Registrant.
             4.1(3)            Specimen   Common   Stock   certificate   of  the
                               Registrant.
             31                Certification  of  Chief  Executive  Officer  and
                               Chief Financial  Officer  pursuant to Section 302
                               of the Sarbanes-Oxley Act of 2002.
             32                Certification  of  Chief  Executive  Officer  and
                               Chief  Financial  Officer  pursuant  to 18 U.S.C.
                               Section  350, as adopted  pursuant to Section 906
                               of the Sarbanes-Oxley Act of 2002.

                  (1)          Incorporated by reference to the Company's Annual
                               Report on Form  10-K for the  fiscal  year  ended
                               December 31, 1989.

                  (2)          Incorporated   by  reference  to  the   Company's
                               Quarterly   Report  on  Form  10-QSB   (File  No.
                               000-07441) filed with the SEC on August 14, 1998.

                  (3)          Incorporated by reference to the Company's Annual
                               Report on Form 10-KSB (File No.  000-07441) filed
                               with the SEC on March 27, 2003.

         (b) Reports on Form 8-K: None.


                                    SIGNATURE

In accordance with the  requirements of the Exchange Act, the registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.


                                              SIERRA MONITOR CORPORATION
                                              Registrant

Date: November 8, 2003                        By: /s/ Gordon R. Arnold
                                                  -------------------------
                                                  Gordon R. Arnold
                                                  President
                                                  Chief Financial Officer

                                                                   Page 14 of 17
<PAGE>

                                Index to Exhibits


            Exhibit
            Number             Description
            ------             -----------
             3.1(1)            Articles of Incorporation of the Registrant.
             3.2(2)            Bylaws of the Registrant.  4.1(3) Specimen Common
                               Stock certificate of the Registrant.
             31                Certification  of  Chief  Executive  Officer  and
                               Chief Financial  Officer  pursuant to Section 302
                               of the Sarbanes-Oxley Act of 2002.
             32                Certification  of  Chief  Executive  Officer  and
                               Chief  Financial  Officer  pursuant  to 18 U.S.C.
                               Section  350, as adopted  pursuant to Section 906
                               of the Sarbanes-Oxley Act of 2002.

                  (1)          Incorporated by reference to the Company's Annual
                               Report on Form  10-K for the  fiscal  year  ended
                               December 31, 1989.

                  (2)          Incorporated   by  reference  to  the   Company's
                               Quarterly   Report  on  Form  10-QSB   (File  No.
                               000-07441) filed with the SEC on August 14, 1998.

                  (3)          Incorporated by reference to the Company's Annual
                               Report on Form 10-KSB (File No.  000-07441) filed
                               with the SEC on March 27, 2003.

                                                                   Page 15 of 17