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, 2005
                                    ------------------

                                       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
11, 2005 was 11,051,546

Transitional Small Business Disclosure Format: Yes ; No X_

                                                                    Page 1 of 19
                                                                    ------------

<PAGE>

                          PART I: FINANCIAL INFORMATION
                          -----------------------------

ITEM 1.  FINANCIAL STATEMENTS
-----------------------------

                           SIERRA MONITOR CORPORATION
                           --------------------------

                             Condensed Balance Sheet
                             -----------------------

                               September 30, 2005

                                   (Unaudited)
<TABLE>
<CAPTION>
                   Assets
                   ------
<S>                                                                   <C>
Current assets:
      Cash                                                            $   431,062
      Trade receivables, less allowance for doubtful accounts           1,530,617
          of approximately $27,000
      Inventories, net                                                  1,424,980
      Prepaid expenses                                                    111,389
      Income taxes receivable                                               1,326
      Deferred income taxes                                               384,139
                                                                      -----------
                    Total current assets                                3,883,513

Property and equipment, net                                               168,534
Deferred income taxes                                                     144,784
Other assets                                                               64,626
                                                                      -----------
                    Total assets                                      $ 4,261,457
                                                                      ===========

                    Liabilities and Shareholders' Equity
                    ------------------------------------

Current liabilities:
      Accounts payable                                                $   469,990
      Accrued compensation expenses                                       332,112
      Other current liabilities                                            83,978
      Line of Credit                                                      200,000
                                                                      -----------
                    Total current liabilities                           1,086,080

Commitments and contingencies

Shareholders' equity:
      Common stock, $0.001 par value; 20,000,000 shares authorized;
      11,036,546 shares issued and outstanding                             11,037
      Additional paid-in capital                                        3,227,024
      Accumulated deficit                                                 (62,684)
                                                                      -----------
                    Total shareholders' equity                          3,175,377
                                                                      -----------
                    Total liabilities and shareholders' equity        $ 4,261,457
                                                                      ===========
</TABLE>

See accompanying notes to the condensed financial statements.

                                                                    Page 2 of 19
                                                                    ------------
<PAGE>


                           SIERRA MONITOR CORPORATION
                           --------------------------

                       Condensed Statements of Operations
                       ----------------------------------

                                   (Unaudited)
<TABLE>
<CAPTION>

                                                           Three months ended                 Nine months ended
                                                             September 30,                      September 30,
                                                   ------------------------------     ------------------------------
                                                       2005              2004             2005               2004
                                                   ------------      ------------     ------------      ------------
<S>                                                <C>               <C>              <C>               <C>
Net sales                                          $  2,204,755      $  2,336,103     $  6,421,833      $  6,543,978
Cost of goods sold                                      903,242           926,298        2,623,773         2,479,352
                                                   ------------      ------------     ------------      ------------
       Gross profit                                   1,301,513         1,409,805        3,798,060         4,064,626
                                                   ------------      ------------     ------------      ------------
Operating expenses
    Research and development                            433,109           410,420        1,288,441         1,326,982
    Selling and marketing                               553,801           675,526        2,011,833         1,996,744
    General and administrative                          302,474           308,866          960,064           921,588
                                                   ------------      ------------     ------------      ------------
                                                      1,289,384      $  1,394,812        4,260,338      $  4,245,314
                                                   ------------      ------------     ------------      ------------
        Income (loss) from operations                    12,129            14,992         (462,278)         (180,688)
Interest income (expense)                                (1,319)                0           (1,319)                0
                                                   ------------      ------------     ------------      ------------
        Income (loss) before income taxes                10,810            14,992         (463,597)         (180,688)
Income tax (benefit) provision                            4,325             5,965         (185,439)          (72,276)
                                                   ------------      ------------     ------------      ------------
        Net income (loss)                          $      6,485             9,027     $   (278,158)         (108,412)
                                                   ============      ============     ============      ============
Basic and diluted net income (loss) available
      to common shareholders per common share      $       0.00      $       0.00     $      (0.03)     $      (0.01)
                                                   ============      ============     ============      ============

Weighted average number of shares used in per
      share computations
                                        Basic:       11,019,879        10,981,546       10,993,768        10,974,879
                                                   ============      ============     ============      ============
                                      Diluted:       11,473,069        11,312,340       10,993,768        10,974,879
                                                   ============      ============     ============      ============
</TABLE>

See accompanying notes to the condensed financial statements.

                                                                    Page 3 of 19
                                                                    ------------
<PAGE>

                           SIERRA MONITOR CORPORATION
                           --------------------------

                       Condensed Statements of Cash Flows
                       ----------------------------------
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                      Nine months ended
                                                                        September 30,
                                                                   2005              2004
                                                                -----------      -----------
<S>                                                             <C>              <C>
Cash flows from operating activities:
        Net loss                                                $  (278,154)     $  (108,412)
         Adjustments to reconcile net loss to net cash used
           in operating activities:
           Depreciation and amortization                            114,063          127,435
           Provision for bad debt expense                             8,573           (6,373)
           Provision for inventory losses                            10,602             --
           Deferred income taxes                                   (185,825)         (74,264)
           Warrants compensation expense                             30,800             --
           Changes in operating assets and liabilities:
             Trade receivables                                      (14,607)        (305,558)
             Inventories                                            (84,844)        (106,497)
             Prepaid expenses and other current assets               52,353          115,710
             Other assets                                               324             --
             Accounts payable                                      (116,648)          22,067
             Accrued compensation expenses                           (9,786)         192,025
             Other current liabilities                              (25,173)          (1,402)
                                                                -----------      -----------
               Net cash used in operating activities               (498,322)        (145,269)
                                                                -----------      -----------
Cash flows from investing activities:
        Capital expenditures                                        (71,404)        (118,803)
        Other assets                                                   --             (3,200)
                                                                -----------      -----------
               Net cash used in investing activities                (71,404)        (122,003)
                                                                -----------      -----------
Cash flows from financing activities:
        Proceeds from bank borrowings                               200,000             --
        Proceeds from exercise of stock options                      12,100            2,200
                                                                -----------      -----------
               Net cash provided by financing activities            212,100            2,200
                                                                -----------      -----------
Net decrease in cash                                               (357,626)        (265,072)
Cash at beginning of period                                         788,688        1,055,081
                                                                -----------      -----------
Cash at end of period                                           $   431,062      $   790,009
                                                                ===========      ===========
Supplemental cash flow information
       Cash paid for income taxes                               $     3,292      $     1,458
                                                                ===========      ===========
</TABLE>

See accompanying notes to the condensed financial statements.

                                                                    Page 4 of 19
                                                                    ------------
<PAGE>

                           SIERRA MONITOR CORPORATION
                           --------------------------

          Notes to the Unaudited Interim Condensed Financial Statements

                               September 30, 2005

Basis of Presentation
---------------------

     The accompanying unaudited interim condensed financial statements have been
prepared by Sierra Monitor  Corporation (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,  accounting  policies and notes  thereto  included in the  Company's
Annual  Report on Form 10-KSB for the year ended  December 31,  2004,  which was
filed March 30, 2005. In the opinion of the Company, all adjustments,  including
normal recurring adjustments necessary to present fairly the financial position,
results of  operations,  and cash flows of Sierra  Monitor  Corporation  for the
interim  periods 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  was  founded  in 1978 to design  and  develop
hazardous gas  monitoring  devices for protection of personnel and facilities in
industrial  workplaces.  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,  companies in the semiconductor industry and are used in other
applications  which  involve the  handling or  generation  of  hazardous  gases.
Environment controllers, which provide management of environmental conditions in
small  structures  such as local DSL  distribution  nodes and  buildings at cell
tower sites ("cell sites"), 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 is quoted on the OTC Bulletin  Board under the
symbol "SRMC.OB".

Accounting Policies
-------------------

     a) Revenue Recognition

     The  Company  recognizes  revenues  in  accordance  with  Staff  Accounting
Bulleting  ("SAB") No. 104,  "Revenue  Recognition,"  when all of the  following
conditions exist: a) persuasive evidence of an arrangement exists in the form of
an accepted  purchase order; b) delivery has occurred,  based on shipping terms,
or services have been rendered;  c) the Company's price to the buyer is fixed or
determinable,   as  documented   on  the  accepted   purchase   order;   and  d)
collectibility is reasonably  assured. By product and service type, revenues are
recognized when the following specific conditions are met:

                                                                    Page 5 of 19
                                                                    ------------
<PAGE>

     Gas Detection and Environment Control Products
     ----------------------------------------------

     Gas Detection and Environment  Control  products are sold as  off-the-shelf
products with prices fixed at the time of order. Orders delivered to the Company
by phone,  fax,  mail or email are  considered  valid  purchase  orders and once
accepted by the Company are deemed to be the final understanding  between us and
our  customer  as to the  specific  nature  and  terms of the  agreed-upon  sale
transaction.  Products are shipped and are considered delivered when (a) for FOB
factory  orders they leave our shipping dock or (b) for FOB customer dock orders
upon confirmation of delivery.  The  creditworthiness  of customers is generally
assessed prior to the Company accepting a customer's first order.  Additionally,
international  customers and  customers who have  developed a history of payment
problems are generally required to prepay or pay through a letter-of-credit.

     Gas Detection and Environment Control Services
     ----------------------------------------------

     Gas Detection and  Environment  Control  Services  consist of field service
orders  (technical  support)  and  training,  which are provided  separate  from
product  orders.  Orders are  accepted  in the same forms as  discussed  for Gas
Detection and Environment Control Products above with hourly prices fixed at the
time of order.  Revenue  recognition  occurs only when the  service  activity is
completed.  Such services are provided to current and prior  customers,  and, as
noted above,  creditworthiness  has generally  already been  assessed.  In cases
where the  probability  of  receiving  payment is low, a credit  card  number is
collected for immediate processing.

     FieldServer Products
     --------------------

     FieldServer  products  are sold in the same  manner  as Gas  Detection  and
Environment  Control  products  (as  discussed  above)  except that the products
contain embedded software, which is integral to the operation of the device. The
software  embedded in FieldServer  products  includes two items:  (a) A compiled
program  containing (i) the basic operating  system for  FieldServers,  which is
common to every unit, and (ii) the correct set of protocol  drivers based on the
customer order (see FieldServer Services below for more information);  and (b) a
configuration  file that  identifies  and links each data point as identified by
the  customer.  The Company does not deem the hardware,  operating  systems with
protocol drivers and configuration files to be separate units of accounting,  as
defined  in EITF  00-21,  "Revenue  Arrangements  with  Multiple  Deliverables,"
because  the  Company  does not  believe  that they have value on a  stand-alone
basis.  The hardware is useless  without the software,  and the software is only
intended to be used in FieldServer hardware. Additionally, the software included
in each sale is deemed to not require  significant  production,  modification or
customization,  as described in  Statement  of Position  (SOP) 97-02,  "Software
Revenue Recognition",  as amended, and therefore the Company recognizes revenues
upon the  shipment or delivery of products  (depending  on shipping  terms),  as
described in Gas Detection and Environment Control Products above.

     FieldServer Services
     --------------------

     FieldServer  services consist of orders for custom  development of protocol
drivers.  Generally customers place orders for FieldServer products concurrently
with their order for  protocol  drivers.  However if custom  development  of the
protocol  driver  is  required,   the  product  order  is  not  processed  until
development of the protocol driver is complete.  Orders are received in the same
manner as described in FieldServer  Products above, but due to the non-recurring
engineering  aspect of the  customized  driver  development  the Company is more
likely to have a written  evidence  trail of a quotation  and a hard copy order.

                                                                    Page 6 of 19
                                                                    ------------
<PAGE>

The  driver  development  involves  further  research  after  receipt  of order,
preparation  of a  scope  document  to be  approved  by the  customer  and  then
engineering time to write, test and release the driver program. When development
of the driver is  complete  the  customer is  notified  and can  proceed  with a
FieldServer  product  (see  FieldServer  Products  above).  Revenues  for driver
development  are billed and recognized  upon shipment or delivery of the related
product that includes the developed  protocol  drivers (as noted in  FieldServer
Products  above).   Collectibility   is  reasonably   assured  as  described  in
FieldServer Products above.

     Discounts and Allowances
     ------------------------

     Discounts are applied at time of order entry and sales are processed at net
pricing. No allowances are offered to customers.

     b) Recent Accounting Standards

     Recent accounting pronouncements discussed in the notes to the December 31,
2004 audited  financial  statements,  filed  previously  with the Securities and
Exchange  Commission in Form 10-KSB, that were required to be adopted during the
year  ending  December  31,  2005,  did not have or are not  expected  to have a
significant impact on the Company's 2005 financial statements.

     c) Employee Stock-Based Compensation

     The  Company's  1986 Stock  Option Plan  expired  during the quarter  ended
September  30,  2005.  As a result  the  Company  has one  stock-based  employee
compensation  plan,  the 1996 Stock Plan,  at September  30,  2005.  The Company
accounts  for that plan 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  options  were
granted during the three and nine month periods ended September 30, 2005, and no
employee stock-based  compensation expense was recorded during such periods. The
following table  illustrates the effect on net income (loss) and earnings (loss)
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," to stock-based employee compensation.
<TABLE>
<CAPTION>

                                                      For The Three Months          For The Nine months
                                                      Ended September 30,           Ended September 30,
                                                      2005           2004           2005          2004
                                                   ---------      ---------      ---------      ---------
<S>                                                <C>            <C>            <C>            <C>
Net income (loss):
   As reported                                     $   6,485      $   9,027      $(278,158)     $(108,412)
   Deduct: Total stock-based employee
      compensation expense determined under
      fair value based method for all awards       $ (38,000)     $ (41,000)     $(115,000)     $ (82,000)
                                                   ---------      ---------      ---------      ---------
         Pro forma                                 $ (31,515)     $ (31,973)     $(393,158)     $(190,412)
                                                   =========      =========      =========      =========
Basic and diluted net income (loss) per share:
         As reported                               $    0.00      $    0.00      $   (0.03)     $   (0.01)
         Pro forma                                 $   (0.00)     $   (0.00)     $   (0.04)     $   (0.02)
</TABLE>

                                                                    Page 7 of 19
                                                                    ------------
<PAGE>

Inventories
-----------

A summary of inventories as of September 30, 2005 follows:


      Raw Materials                            $    664,281
      Work-in-process                               667,969
      Finished goods                                256,657
      Obsolescence reserve                         (163,927)
                                               ------------
                                               $  1,424,980
                                               ============

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 the nine month periods ended September
30, 2005 and 2004. As a result,  815,000 and 835,000  shares,  respectively,  of
common stock issuable upon exercise of stock options have been excluded from the
calculation of diluted loss per share for the nine month period ended  September
30, 2004 because their inclusion would be anti-dilutive.  At September 30, 2005,
and 2004,  outstanding  options to acquire  336,500  shares and 672,000  shares,
respectively,  of common stock were not considered  potentially  dilutive common
shares due to the  exercise  price being higher than the stock price used in the
EPS calculation.

     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,
2005 and 2004, respectively:
<TABLE>
<CAPTION>
                                                 Three months    Nine months   Three months    Nine months
                                                     ended          ended          ended          ended
                                                   9/30/2005      9/30/2005      9/30/2004      9/30/2004
                                                  ----------     ----------     ----------     ----------
<S>                                               <C>            <C>            <C>            <C>
Basic EPS - weighted-average number of common     11,019,879     10,993,768     10,981,546     10,974,879
    shares outstanding
Effect of dilutive potential common shares -
    stock options outstanding                        453,190           --          330,794           --
                                                  ----------     ----------     ----------     ----------
Diluted EPS - weighted-average number of
    common shares and potential common shares
    outstanding                                   11,473,069     10,993,768     11,312,340     10,974,879
                                                  ==========     ==========     ==========     ==========
</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.

                                                                    Page 8 of 19
                                                                    ------------

<PAGE>

     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,
                                          ------------------------------------     ------------------------------------
                                               2005                2004                  2005                2004
                                          ----------------    ----------------     ----------------    ----------------
<S>                                       <C>                 <C>                  <C>                 <C>
Gas detection devices                     $     1,421,706     $     1,352,207      $     3,744,060     $     3,832,996
Environment controllers                           256,930             315,862              952,341             819,846
FieldServers                                      526,119             668,034            1,725,432           1,891,136
                                          ----------------    ----------------     ----------------    ----------------
                                          $     2,204,755     $     2,336,103      $     6,421,833     $     6,543,978
                                          ================    ================     ================    ================
</TABLE>

Line-of-Credit
--------------

     In August 2005,  the Company  borrowed  $200,000  from its $500,000 line of
credit with its commercial  bank. The Company is in compliance with the terms of
the loan.

Stock Options
-------------

     No stock options were granted during the three and nine month periods ended
September 30, 2005 while 100,000  options were granted during the three and nine
month periods ended September 30, 2004. A total of 50,000 options were exercised
by employees  for cash  proceeds of $11,000  during the three month period ended
September  30,  2005 and a total of  325,000  options  expired  during  the same
period.  A total of 5,000 options were  exercised by employees for cash proceeds
of $1,100  during the three month  period ended  September  30, 2004 with 35,500
options expiring during the same period.

Subsequent Events
-----------------

     In October,  2005 two former employees of the Company  exercised options to
acquire 15,000 shares of the Company's common stock.

                                                                    Page 9 of 19
                                                                    ------------
<PAGE>

     This Form 10-QSB contains forward-looking  statements within the meaning of
Section 27A of the  Securities  Act of 1933,  and Section 21E of the  Securities
Exchange Act of 1934.  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, 2005,  Sierra Monitor  Corporation
reported net sales of  $2,204,755  compared to  $2,336,103  for the three months
ended  September 30, 2004. For the nine-month  period ended  September 30, 2005,
net sales were $6,421,833  compared with $6,543,978 in the prior year nine-month
period.  The sales results for the third  quarter of fiscal 2005  represent a 6%
decrease from the same period in the prior year. The sales results for the first
nine months of fiscal 2005  represent a 2% decrease for the first nine months in
the prior year.

     In the third quarter of 2005 sales of our gas detection products, including
service revenues,  were approximately  $1,422,000  compared to $1,352,000 in the
third  quarter of 2004.  For the nine month period ended  September 30, 2005 our
gas detection  product sales were $3,744,000  compared to $3,833,000 in the same
period in 2004.  Sales of gas detection  products,  which were  approximately 5%
higher in third  quarter  2005  compared to third  quarter  2004,  increased  by
approximately  48% compared to second  quarter 2005. The improved sales were due
in part to shipment of Sentry systems to construction projects that were delayed
earlier in the year as a result of weather.

     Sales  of  Environment  Controllers  to  the  telecommunications  industry,
including  service  revenues,  in the third  quarter of 2005 were  approximately
$257,000  compared to $316,000 in the third  quarter of 2004.  In the nine month
period  ended  September  30,  2005  sales  of  Environment   Controllers   were
approximately  $952,000  or a 16%  increase to the  $820,000  sales for the same
period in 2004. Although sales of controllers for underground telecommunications
equipment  vaults were lower by 19% in the third quarter of 2005, as a result of
periodic fluctuations, compared to the third quarter of 2004, the higher year to
date sales in 2005 compared to 2004 reflect a continued  gradual increase in the
number of new underground vault installations and the number of retrofits,  each
of which require our integrated Environment Controller.

     In the third quarter of 2005,  sales of  FieldServers,  our  communications
bridge,  including service  revenues,  were  approximately  $526,000 compared to
approximately  $668,000  in the same  period in 2004.  In the nine month  period
ended September 30, 2005 sales of  FieldServers  were  approximately  $1,725,000
compared to $1,891,000  reported in the same period in 2004,  representing  a 9%
decrease in sales.  The  decreases in lower third quarter and year to date sales
in 2005  compared to the same periods in 2004 are primarily due to the fact that
FieldServer  sales in the second and third quarter of 2004 included  delivery of
two large orders for  integration of multiple  buildings on a university  campus
and because there was no similar project in the current year.

                                                                   Page 10 of 19
                                                                   -------------
<PAGE>

     Gross profit of $1,301,513 for the  three-month  period ended September 30,
2005 was 59% of sales  compared  to  $1,409,805,  or 60% of  sales,  in the same
period in the previous year.  The gross profit for the  nine-month  period ended
September 30, 2005 was $3,798,060,  or 59% of sales, compared to $4,064,626,  or
62% of sales, in the same period in the previous year. The lower gross margin in
both periods is primarily due to increased  labor  expenses  including  overhead
allocations.

     Expenses  for  research  and   development,   which   include  new  product
development and engineering to sustain existing products,  were $433,109, or 20%
of sales,  for the  three-month  period  ending  September  30, 2005 compared to
$410,420,  or 18% of sales, in the comparable  period in 2004. In the nine-month
periods  ending  September  30,  2005  and  September  30,  2004,  research  and
development expenses were $1,288,441, or 20% of sales, and $1,326,982, or 20% of
sales, respectively. We have continued product development focus on a new family
of  gas  detectors.  The  new  gas  detectors,  marketed  as  "IT"  (Information
Technology)  products provide enhanced features and backward  compatibility with
our older gas  detectors.  Our research and  development  expenses  also include
continued development of FieldServer  derivative product named ProtoCessor.  The
derivative  product  provides a very low cost  hardware  platform onto which the
FieldServer software functionality can be loaded for sales to Original Equipment
Manufacturers.

     Selling and  marketing  expenses,  which  consist  primarily  of  salaries,
commissions  and  promotional  expenses were  $553,801,  or 25% of sales for the
three-month  period ended  September  30,  2005,  compared to $675,526 or 29% of
sales,  in the comparable  period in the prior year. For the nine-month  periods
ending September 30, 2005 and September 30, 2004, selling and marketing expenses
were $2,011,833, or 31% of sales, and $1,996,744, or 31% of sales, respectively.
The lower selling expenses are due, primarily, to changes in salary and benefits
expenses due to a reduction in the number of sales employees.

     General and  administrative  expenses,  which  consist  primarily of salary
expenses,  building rent and insurance expenses, were $302,474, or 14% of sales,
for the three-month period ended September 30, 2005 compared to $308,866, or 13%
of sales, in the three-month period ended September 30, 2004. For the nine-month
periods  ending  September  30,  2005  and  September  30,  2004,   general  and
administrative  expenses were $960,064, or 15% of sales, and $921,588, or 14% of
sales,   respectively.   There  were  no  significant  changes  in  general  and
administrative  expenses  in the three month  period  ended  September  30, 2005
compared  to the same  period  in the prior  year.  General  and  administrative
expenses  in  the  nine  month  period  ended   September  30,  2005  include  a
non-recurring expense of $30,800 related to warrants issued in 2004 for services
received in 2005 and an increase in salary expenses.

     Our net income for the  three-month  period  ended  September  30, 2005 was
$6,485,  comparable to our net income of $9,027 in the same period of 2004.  For
the  nine-month  period  ended  September  30,  2005 our net  loss was  $278,158
compared to net loss of $108,412 in the same period of 2004.  The higher loss in
the  current  year nine  month  period,  compared  to the prior  year nine month
period,  is due to lower net sales  combined  with a small  increase  in cost of
goods sold and fixed expenses.

Liquidity and Capital Resources
-------------------------------

     Working  capital,  which  is  comprised,   primarily,   of  cash,  accounts
receivable  and  inventories  offset by current  liabilities,  was $2,797,434 at
September 30, 2005. Working capital decreased by $192,273 from December 31, 2004
to September 30, 2005. The decrease in working  capital was primarily the result

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of the net loss of $278,158 and capital  investments  of  approximately  $71,000
reduced by  approximately  $114,000 of  depreciation  and  amortization of fixed
assets. Cash on hand, a component of working capital,  was $431,062 at September
30, 2005, a decrease of $357,626 compared to December 31, 2004.

     During the third quarter we borrowed $200,000 against our line of credit to
meet cash flow demands.  Cash on hand at September 30, 2005 includes the current
$200,000 balance due against the line of credit.  As a result of higher sales in
the  third  quarter,  compared  to the  second  quarter  of 2005,  our  accounts
receivable  have increased by  approximately  $249,000.  Our current  resources,
which include cash, accounts receivable,  and the line of credit are anticipated
to be sufficient to fund our  anticipated  level of operations  through at least
the next twelve months.  The line of credit carries certain covenants related to
profitability  and it is important  that we maintain  profitable  operations  to
retain the current credit facility.

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 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

     The  Company  recognizes  revenues  in  accordance  with  Staff  Accounting
Bulleting  ("SAB") No. 104,  "Revenue  Recognition,"  when all of the  following
conditions exist: a) persuasive evidence of an arrangement exists in the form of
an accepted  purchase order; b) delivery has occurred,  based on shipping terms,

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or services have been rendered;  c) the Company's price to the buyer is fixed or
determinable,   as  documented   on  the  accepted   purchase   order;   and  d)
collectibility is reasonably  assured. By product and service type, revenues are
recognized when the following specific conditions are met:

     Gas Detection and Environment Control Products
     ----------------------------------------------

     Gas Detection and Environment  Control  products are sold as  off-the-shelf
products with prices fixed at the time of order. Orders delivered to the Company
by phone,  fax,  mail or email are  considered  valid  purchase  orders and once
accepted by the Company are deemed to be the final understanding  between us and
our  customer  as to the  specific  nature  and  terms of the  agreed-upon  sale
transaction.  Products are shipped and are considered delivered when (a) for FOB
factory  orders they leave our shipping dock or (b) for FOB customer dock orders
upon confirmation of delivery.  The  creditworthiness  of customers is generally
assessed prior to the Company accepting a customer's first order.  Additionally,
international  customers and  customers who have  developed a history of payment
problems are generally required to prepay or pay through a letter-of-credit.

     Gas Detection and Environment Control Services
     ----------------------------------------------

     Gas Detection and  Environment  Control  Services  consist of field service
orders  (technical  support)  and  training,  which are provided  separate  from
product  orders.  Orders are  accepted  in the same forms as  discussed  for Gas
Detection and Environment Control Products above with hourly prices fixed at the
time of order.  Revenue  recognition  occurs only when the  service  activity is
completed.  Such services are provided to current and prior  customers,  and, as
noted above,  creditworthiness  has generally  already been  assessed.  In cases
where the  probability  of  receiving  payment is low, a credit  card  number is
collected for immediate processing.

     FieldServer Products
     --------------------

     FieldServer  products  are sold in the same  manner  as Gas  Detection  and
Environment  Control  products  (as  discussed  above)  except that the products
contain embedded software, which is integral to the operation of the device. The
software  embedded in FieldServer  products  includes two items:  (a) A compiled
program  containing (i) the basic operating  system for  FieldServers,  which is
common to every unit, and (ii) the correct set of protocol  drivers based on the
customer order (see FieldServer Services below for more information);  and (b) a
configuration  file that  identifies  and links each data point as identified by
the  customer.  The Company does not deem the hardware,  operating  systems with
protocol drivers and configuration files to be separate units of accounting,  as
defined  in EITF  00-21,  "Revenue  Arrangements  with  Multiple  Deliverables,"
because  the  Company  does not  believe  that they have value on a  stand-alone
basis.  The hardware is useless  without the software,  and the software is only
intended to be used in FieldServer hardware. Additionally, the software included
in each sale is deemed to not require  significant  production,  modification or
customization,  as described in  Statement  of Position  (SOP) 97-02,  "Software
Revenue Recognition",  as amended, and therefore the Company recognizes revenues
upon the  shipment or delivery of products  (depending  on shipping  terms),  as
described in Gas Detection and Environment Control Products above.

     FieldServer Services
     --------------------

     FieldServer  services consist of orders for custom  development of protocol
drivers.  Generally customers place orders for FieldServer products concurrently
with their order for  protocol  drivers.  However if custom  development  of the
protocol  driver  is  required,   the  product  order  is  not  processed  until
development of the protocol driver is complete.  Orders are received in the same

                                                                   Page 13 of 19
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manner as described in FieldServer  Products above, but due to the non-recurring
engineering  aspect of the  customized  driver  development  the Company is more
likely to have a written  evidence  trail of a quotation  and a hard copy order.
The  driver  development  involves  further  research  after  receipt  of order,
preparation  of a  scope  document  to be  approved  by the  customer  and  then
engineering time to write, test and release the driver program. When development
of the driver is  complete  the  customer is  notified  and can  proceed  with a
FieldServer  product  (see  FieldServer  Products  above).  Revenues  for driver
development  are billed and recognized  upon shipment or delivery of the related
product that includes the developed  protocol  drivers (as noted in  FieldServer
Products  above).   Collectibility   is  reasonably   assured  as  described  in
FieldServer Products above.

     Discounts and Allowances
     ------------------------

     Discounts are applied at time of order entry and sales are processed at net
pricing. No allowances are offered to customers.

     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 provided by the clients' need for our services is
critical  to the  effective  application  of credit  terms and  minimization  of
accounts receivable losses.

     We maintain  an  allowance  for  doubtful  accounts  which is analyzed on a
periodic  basis  to  insure  that  it is  adequate.  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 estimated market,  with 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.

     d) Off Balance Sheet Arrangements

     As of September 30, 2005, the Company had no off balance sheet arrangements
as defined in Item 303(c) of the Securities and Exchange Commission's Regulation
S-B.

                                                                   Page 14 of 19
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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.

     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 15 of 19
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                           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.

         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 1350,
                          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.

                                   SIGNATURES

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 11, 2005                      By:   /s/ Gordon R. Arnold
                                                   --------------------------
                                                    Gordon R. Arnold
                                                    President
                                                    Chief Executive Officer
                                                    Chief Financial Officer


                                                                   Page 16 of 19
                                                                   -------------
<PAGE>


                                Index to Exhibits
                                -----------------


         Exhibit
         Number           Description
         ------           -----------

         3.1(1)           Articles of Incorporation of the Registrant.

         3.2(2)           Bylaws 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 1350,
                          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.


                                                                   Page 17 of 19
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