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

                                 FORM 10 - QSB

(Mark One)

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

               For the quarterly period ended September 30, 1997.

                                       or

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

                 For the Transition period from ______ to _____


                          Commission file number 0-7441

                           SIERRA MONITOR CORPORATION

       (Exact name of small business issuer as specified in its charter)

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

                                1991 Tarob Court
                           Milpitas, California 95035

              (address and zip code of principal executive offices)


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

     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the  Securities and Exchange Act
of 1934  during the  preceding  12 months (or for such  shorter  period that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

Yes__x__ No _____

The number of shares of the issuer's common stock  outstanding,  as of September
   30, 1997 was: 10,566,263.

Transitional Small Business Disclosure Format: Yes____ No __ x ___



<PAGE>



                                           PART I: FINANCIAL INFORMATION


ITEM 1.  FINANCIAL STATEMENTS
<TABLE>

                                            SIERRA MONITOR CORPORATION

                                                  Balance Sheets

<CAPTION>
                                                                            September 30,            December 31,
                                                                                 1997                    1996
                                                                           -----------------       ------------------
                                  Assets                                     (Unaudited)
<S>                                                                        <C>                             <C>    
Current assets
       Cash and cash equivalents                                           $        259,602                  478,910
       Short-term investments                                                       540,230                  246,781
       Trade receivables, less allowance for doubtful accounts
           of $46,337 in 1997 and $45,598 in 1996                                 1,027,310                1,040,989
       Inventories                                                                  823,854                  717,865
       Prepaid expenses                                                             110,375                   51,556
       Deferred income taxes                                                        211,000                  211,000
                                                                           -----------------       ------------------
           Total current assets                                                   2,972,371                2,747,101
Property and equipment, net                                                         108,457                   84,653
Other assets                                                                         62,274                   92,378
                                                                           -----------------       ------------------
                                                                           $      3,143,102                2,924,132
                                                                           =================       ==================

                   Liabilities and Shareholders' Equity
Current liabilities
       Accounts payable                                                    $        289,176                  291,371
       Accrued expenses                                                             250,621                  214,408
       Other current liabilities                                                     52,075                   38,741
       Income taxes payable                                                          28,438                   23,547
                                                                           -----------------       ------------------
           Total current liabilities                                                620,310                  568,067
                                                                           -----------------       ------------------
Shareholders' equity
       Common stock                                                               2,937,035                2,912,493
       Accumulated deficit                                                         (388,321)                (546,701)
       Notes receivable from shareholders                                           (25,922)                  (9,727)
                                                                           -----------------       ------------------
           Total shareholders' equity                                             2,522,792                2,356,065
                                                                           -----------------       ------------------
                                                                           $      3,143,102                2,924,132
                                                                           =================       ==================

<FN>

See the accompanying notes to the financial statements.
</FN>
</TABLE>


<PAGE>

<TABLE>

                                            SIERRA MONITOR CORPORATION

                                             Statements of Operations
                                                    (Unaudited)
<CAPTION>

                                                        
                                                        Three months ended                    Nine months ended
                                                          September 30,                         September 30,

                                                     1997               1996               1997               1996
                                                ---------------    ----------------   ----------------   ----------------
<S>                                             <C>                     <C>                 <C>                <C> 
Net sales                                       $    1,474,040           1,303,581          3,805,016          3,762,137

Cost of goods sold                                     521,627             499,687          1,404,488          1,450,008
                                                ---------------    ----------------   ----------------   ----------------

        Gross profit                                   952,413             803,894          2,400,528          2,312,129
                                                ---------------    ----------------   ----------------   ----------------

Operating expenses
    Research and development                           115,625             105,720            296,446            333,696
    Selling and marketing                              424,587             417,390          1,262,372          1,238,550
    General and administrative                         217,204             207,932            688,049            656,746
                                                ---------------    ----------------   ----------------   ----------------
                                                       757,416             731,042          2,246,867          2,228,992
                                                ---------------    ----------------   ----------------   ----------------
        Income from operations                         194,997              72,852            153,661             83,137

Interest income                                          9,331               5,702             20,958             17,342
                                                ---------------    ----------------   ----------------   ----------------

        Income before income taxes                     204,328              78,554            174,619            100,479

Income tax expense (benefit)                            16,239              (2,039)            16,239                  -
                                                ---------------    ----------------   ----------------   ----------------

        Net income                              $      188,089              80,593            158,380            100,479
                                                ===============    ================   ================   ================


Net income per share                            $         0.02                0.01               0.01               0.01
                                                ===============    ================   ================   ================

Weighted average common
  shares outstanding                                10,745,878          10,710,304         10,721,562         10,689,935
                                                ===============    ================   ================   ================
<FN>

See the accompanying notes to the financial statements.
</FN>
</TABLE>


<PAGE>

<TABLE>

                                            SIERRA MONITOR CORPORATION
<CAPTION>

                                             Statements of Cash Flows

                                                    (Unaudited)
                                                                  Three months ended              Nine months ended
                                                                    September 30,                   September 30
                                                                  1997            1996           1997             1996
                                                             -------------   -------------  -------------    -------------
<S>                                                         <C>                  <C>            <C>               <C> 
Cash flows from operating activities:
  Net income                                                $     188,089          80,593        158,380          100,479
  Adjustments to reconcile net income to net
    cash provided by operating activities:
       Depreciation & amortization                                 29,754          29,726         86,937           96,687
       Allowance for doubtful accounts                             (1,476)        (11,186)         1,844          (7,791)
       Changes in items affecting operations:
         Trade receivables                                       (252,919)         96,219         11,835            5,352
         Inventories                                               (4,928)        (57,529)      (105,988)        (134,510)
         Prepaid expenses                                         (43,582)        (40,172)       (58,819)        (114,899)
         Accounts payable                                          24,497          39,960         (2,195)             128
         Accrued expenses                                          43,792             215         36,213           (3,892)
         Other current liabilities                                 23,232          35,822         13,334           61,442
         Income taxes payable                                      16,160               -          4,891          (11,115)
                                                             -------------   -------------  -------------    -------------
             Net cash provided by (used in)
               operating activities                                22,619         173,648        146,432           (8,119)
                                                             -------------   -------------  -------------    -------------
Cash flows from investing activities:
  Capital expenditures                                            (27,208)        (27,056)       (80,637)         (58,280)
  Short term investments                                         (293,962)       (245,284)      (293,449)          86,073
  Other assets                                                          -         (23,184)             -          (23,184)
                                                             -------------   -------------  -------------    -------------
             Net cash provided by (used in)
               investing activities                              (321,170)       (295,524)      (374,086)           4,609
                                                             -------------   -------------  -------------    -------------
Cash flows from financing activities:
  Proceeds from exercise of stock options,
    net of notes receivable                                         1,968           1,855          8,346           10,298
                                                             -------------   -------------  -------------    -------------
             Net cash provided by financing
             activities                                             1,968           1,855          8,346           10,298
                                                             -------------   -------------  -------------    -------------
Net increase (decrease) in
  cash and cash equivalents                                      (296,583)       (120,021)      (219,308)           6,788

Cash and cash equivalents at beginning of period                  556,185         437,363        478,910          310,554
                                                             -------------   -------------  -------------    -------------

Cash and cash equivalents at end of period                   $    259,602         317,342        259,602          317,342
                                                             =============   =============  =============    =============
<FN>

See the accompanying notes to the financial statements.
</FN>
</TABLE>

<PAGE>


                           SIERRA MONITOR CORPORATION

                        Notes to the Financial Statements

                               September 30, 1997

The unaudited financial statements have been prepared by the Company pursuant to
the rules and  regulations of the Securities  and Exchange  Commission.  Certain
information and footnote  disclosures  normally included in financial statements
prepared in accordance with generally accepted  accounting  principles have been
omitted  pursuant to such SEC rules and regulations;  nevertheless,  the Company
believes that the disclosures are adequate to make the information presented not
misleading.  These  financial  statements and the notes hereto should be read in
conjunction  with the financial  statements  and notes  thereto  included in the
Company's  Annual  Report on Form  10-KSB for the year ended  December  31, 1996
which was filed March 31, 1997. In the opinion of the Company,  all adjustments,
including normal recurring adjustments necessary to present fairly the financial
position of Sierra Monitor  Corporation as of September 30, 1997 and the results
of its operations and cash flows for the quarter then ended, have been included.
The results of operations for the interim period are not necessarily  indicative
of the results for the full year.

Accounting Policies

There have been no changes in accounting policies used by the Company during the
quarter ended September 30, 1997.

Summary of Business

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

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

Inventories

A summary of inventories follows:

                                           September 30,   December 31,
                                               1997            1996
                                             --------        --------
                                                          
         Raw materials                       $348,187        $275,024
         Work-in-process                      339,797         324,042
         Finished goods                       135,870         118,799
                                             --------        --------
                                             $823,854        $717,865
                                             ========        ========

<PAGE>


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

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

Results of Operations

For the three months ended  September 30, 1997 Sierra Monitor  Corporation  (the
"Company") reported net sales of $1,474,040 compared to $1,303,581 for the three
months ended  September 30, 1996. For the nine month period ended  September 30,
1997 net sales were  $3,805,016  compared with $3,762,137 in the prior year nine
month period.  The results for the third  quarter  represent a 13% increase from
the same  period  in the prior  year.  The  results  for the nine  month  period
represent  a 1%  increase  from the same  period  in the  prior  year.  Sales of
products  for  telephone  company  applications  and sales to the Navy  improved
during the third quarter of 1997 compared to the results for the same quarter in
1996.  Sales of the same two product groups are higher for the nine month period
in 1997 compared to the prior year. Sales of multi-point gas monitoring systems,
which  were  lower in the  second  quarter  of 1997  improved  during  the third
quarter, but remain below the sales levels achieved in 1996.

Gross profit of $952,413 for the three month period ended September 30, 1997 was
65% of sales  compared  to  $803,894  or 62% of sales in the same  period in the
previous  year.  The gross profit for the nine month period ended  September 30,
1997 was  $2,400,528  or 63% of sales  compared to $2,312,129 or 61% in the same
period in the previous  year.  The higher  gross profit in the third  quarter of
1997 is due to the changes in product mix of goods sold and the  efficiencies of
higher volume. The Company  anticipates that price discounting on large projects
will  cause the gross  profit  margin to return to  historical  levels in future
reporting periods.

Expenses for research and development, which include new product development and
engineering  to sustain  existing  products,  were  $115,625 for the three month
period ending  September 30, 1997 compared to $105,720 in the comparable  period
in 1996. In the nine month periods  ending  September 30, 1997 and September 30,
1996, research and development expenses were $296,446 and $333,696 respectively.
Research and  development  expenses were low during the first six months of 1997
due to a  temporary  reduction  in new  product  development  and  corresponding
reductions  in  consultant  and labor  costs.  During the third  quarter  ending
September 30, 1997 product  development  activity,  and corresponding  expenses,
returned to normal levels.

Selling and  marketing  expenses for the three month period ended  September 30,
1997 were $424,587,  or 29% of sales compared to $417,390,  or 32% of sales,  in
the prior year period.  The lower  selling  expenses as a percentage of sales is
due to the  efficiency of increased  volume.  For the nine month periods  ending
September 30, 1997 and September 30, 1996,  selling and marketing  expenses were
$1,262,372,  and $1,238,550,  respectively.  Selling expenses in both nine month
periods were 33% of sales.



<PAGE>

General and administrative  costs were $217,204 for the three month period ended
September  30,  1997  compared  to  $207,932  in the three  month  period  ended
September 30, 1996. Higher salary and professional  service costs were partially
offset by lower product liability  insurance and capital equipment  depreciation
expenses for the three month period ended  September  30, 1997,  compared to the
same period in 1996. General and administrative  costs increased to $688,049 for
the nine month period ended  September  30, 1997 from $656,746 in the nine month
period  ended  September  30,  1996.  The year to date  increase  in general and
administrative costs is due to higher salary, labor and benefit costs.

Net income for the three months ended  September 30, 1997 was $188,089 or 13% of
net sales,  compared with $80,593 or 6% of net sales,  in the three months ended
September  30, 1996.  Net income for the nine month period ended  September  30,
1997 was $158,380 compared with net income of $100,479 in the same period in the
prior year.  The higher  income is the result of  improved  results in the third
quarter including higher sales and lower cost of goods sold without  significant
increases in fixed expenses.

Liquidity and Capital Resources

Working  capital at  September  30, 1997  increased  to  $2,352,061  compared to
$2,179,034  at December  31, 1996.  The  increase is due, in part,  to increased
operating income, offset by changes in inventory levels and prepaid expenses. At
September  30,  1997,  cash and cash  equivalents  plus short  term  investments
totaled  $799,832  compared  to  $725,691  at  December  31,  1996.  Short  term
investments  consist of certain  certificates of deposits with original  Federal
Agency Securities with maturities greater than 90 days.

Inventory levels at September 30, 1997 were approximately 15% higher compared to
December 31, 1996.  Inventory levels increased during the second quarter of 1997
when anticipated  sales failed to materialize.  During the third quarter,  ended
September 30, 1997, inventory levels remained approximately flat.

Prepaid expenses increased to $110,375 at September 30, 1997 compared to $51,556
at  December  31,  1996.  Prepaid  expenses  vary  throughout  the  year  due to
prepayments  of  insurance,  which are amortized on a monthly  basis,  and third
party approval service deposits.

The  Company has not drawn on its line of credit  with its  commercial  bank and
believes that the current capital  resources,  including cash, cash equivalents,
short  term  investments,  and its line of  credit,  are  sufficient  to support
existing and anticipated levels of business.

Future Results

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



<PAGE>

                           PART II: OTHER INFORMATION

Item 1.    Legal Proceedings - N/A

Item 2.    Changes in Securities - N/A

Item 3.    Defaults Upon Senior Securities - N/A

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

Item 5.    Other Information - N/A

Item 6.    Exhibits and Reports on Form 8-K

           a.     Exhibits.

                  11.1     Computation of earnings per share

                  27.0     Financial Data Schedule

           b.     Reports on Form 8-K - None



                                    SIGNATURE

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


                                              SIERRA MONITOR CORPORATION
                                              Registrant

Date: November 10, 1997                       By: /S/ GORDON R. ARNOLD
                                                  ------------------------------
                                                  Gordon R. Arnold
                                                  President
                                                  Chief Financial Officer