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 March 31, 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)


The number of shares of the  issuer's  common stock  outstanding,  as of May 12,
2005 was 10,981,546.

Transitional Small Business Disclosure Format:  Yes        No   X
                                                   -----      -----

                                                                    Page 1 of 15
<PAGE>
                          PART I: FINANCIAL INFORMATION
                          -----------------------------

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

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

                                  Balance Sheet
                                  -------------

                                 March 31, 2005

                                   (Unaudited)
                                     Assets
                                     ------

Current assets:
      Cash                                                            $  627,879
      Trade receivables, less allowance for doubtful accounts
          of approximately $20,000                                     1,410,280
      Inventories, net                                                 1,416,505
      Prepaid expenses                                                   152,493
      Deferred income taxes                                              301,215
                                                                      ----------
                    Total current assets                               3,908,372

Property and equipment, net                                              214,005
Deferred income taxes                                                    144,784
Other assets                                                              64,429
                                                                      ----------
                    Total assets                                      $4,331,590
                                                                      ==========

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

Current liabilities:
      Accounts payable                                                $  540,503
      Accrued compensation expenses                                      365,747
      Other current liabilities                                          117,743
                                                                      ----------
                    Total current liabilities                          1,023,993

Commitments and contingencies

Shareholders' equity:
      Common stock, $0.001 par value; 20,000,000
      shares authorized; 10,981,546 shares issued
      and outstanding                                                     10,982
      Additional paid-in capital                                       3,214,979
      Retained earnings                                                   81,636
                                                                      ----------
                    Total shareholders' equity                         3,307,597
                                                                      ----------
                    Total liabilities and shareholders' equity        $4,331,590
                                                                      ==========

See accompanying notes to the condensed financial statements.

                                                                    Page 2 of 15

<PAGE>
                           SIERRA MONITOR CORPORATION
                           --------------------------

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

                                   (Unaudited)

                                                    For the three months ended
                                                   -----------------------------
                                                    March 31,        March 31,
                                                       2005            2004
                                                   ------------    ------------

Net sales                                          $  2,211,677       1,916,525
Cost of goods sold                                      894,201         744,625
                                                   ------------    ------------
                  Gross profit                        1,317,476       1,171,900
                                                   ------------    ------------

Operating expenses
      Research and development                          415,709         491,847
      Selling and marketing                             800,729         660,774
      General and administrative                        337,741         286,034
                                                   ------------    ------------
                                                      1,554,179       1,438,655
                                                   ------------    ------------

                  Loss from operations                 (236,703)       (266,755)

Income tax benefit                                      102,869         105,509
                                                   ------------    ------------
                Net  loss                          $   (133,834)       (161,246)
                                                   ============    ============

Basic and diluted net loss available to common
    shareholders per common share                  $      (0.01)          (0.01)
                                                   ============    ============

Weighted-average number of shares used
    in per share computations:
         Basic and diluted                           10,981,546      10,971,546
                                                   ============    ============


See accompanying notes to the condensed financial statements.

                                                                    Page 3 of 15


<PAGE>
                           SIERRA MONITOR CORPORATION
                           --------------------------

                            Statements of Cash Flows
                            ------------------------

                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                                                      For the three months ended
                                                                                                ------------------------------------
                                                                                                  March 31,              March 31,
                                                                                                    2005                    2004
                                                                                                -----------             -----------
<S>                                                                                             <C>                     <C>
Cash flows from operating activities:
       Net loss                                                                                 $  (133,834)            $  (161,246)
       Adjustments to reconcile net loss to net cash used in
       operating activities:
              Depreciation and amortization                                                          37,549                  48,972
              Provision for bad debt expense                                                          2,250                  (3,200)
              Provision for inventory losses                                                          9,000                  17,247
              Warrants issued for services                                                           30,800                    --
              Deferred income taxes                                                                (102,901)               (107,498)
              Change in operating assets and liabilities:
                 Trade receivables                                                                  112,053                  (3,131)
                 Inventories                                                                        (74,767)                 (8,775)
                 Prepaid expenses and other current assets                                           12,575                  18,402
                 Accounts payable                                                                   (46,135)                 36,262
                 Accrued compensation expenses                                                       23,849                 112,361
                 Other current liabilities                                                            8,592                  (2,373)
                                                                                                -----------             -----------
                  Net cash used in operating activities                                            (120,969)                (52,979)
                                                                                                -----------             -----------

Cash flows from investing activities -
       Purchases of property and equipment                                                          (39,840)                (19,302)
                                                                                                -----------             -----------
                  Net cash used in investing activities                                             (39,840)                (19,302)
                                                                                                -----------             -----------

Net decrease in cash                                                                               (160,809)                (72,281)
Cash - beginning of period                                                                          788,688               1,055,081
                                                                                                -----------             -----------
Cash - end of period                                                                            $   627,879             $   982,800
                                                                                                ===========             ===========

Supplemental cash flow information:
     Cash paid for income taxes                                                                 $     1,486             $     3,585
                                                                                                ===========             ===========
<FN>

See accompanying notes to the condensed financial statements.
</FN>
</TABLE>
                                                                    Page 4 of 15

<PAGE>

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

                   Notes to the Condensed Financial Statements
                                   (Unaudited)
                                 March 31, 2005

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, 2004,
which was filed with the SEC on March 30,  2005.  In the opinion of the Company,
all adjustments,  including normal  recurring  adjustments  necessary to present
fairly the financial position of Sierra Monitor Corporation as of March 31, 2005
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  called  Environment
Controllers  that are used to monitor and control  environmental  conditions  in
small,  remote structures used for cellular and land-line  telephone  equipment.
The  Company  also  manufactures  a line of  products  known  as  Communications
Bridges.  These  software-based  products  provide a means  for many  industrial
instruments  to  communicate  with each  other  even  when  they have  different
communications  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  manufacturers  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
(1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3)
the  fee  is  fixed  or  determinable;   and  (4)  collectibility  is  probable.

                                                                    Page 5 of 15
<PAGE>

Additionally,  we defer revenue if the software requires significant production,
modification or  customization  and recognize the deferred revenue only when the
production,  modification or customization has been completed. Deferred revenues
at March 31, 2005 were not significant.

      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

      At March 31, 2005, 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,"  and related  Interpretations.  No
stock options were granted during the  three-month  periods ended March 31, 2005
and 2004, and no employee  stock-based  compensation expense was recorded during
such periods.  The following  table  illustrates the effect on net loss and 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
                                                                                                           Ended March 31,
                                                                                                    -------------------------------
                                                                                                      2005                  2004
                                                                                                    ---------           -----------
<S>                                                                                                 <C>                 <C>
Net income (loss):
      As reported                                                                                   $(133,834)          $  (161,246)
         Deduct: Total stock-based employee compensation expense
               determined under fair value based method for all awards
                                                                                                    $ (38,000)          $   (38,000)
                                                                                                    ---------           -----------
         Pro forma                                                                                  $(171,834)          $  (199,246)
                                                                                                    =========           ===========
Basic and diluted net income (loss) per share:
           As reported                                                                              $   (0.01)          $     (0.01)
           Pro forma                                                                                $   (0.02)          $     (0.02)

</TABLE>


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

A summary of inventories as of March 31, 2005 follows:

                Raw Materials                          $   751,958
                Work-in-process                            588,999
                Finished goods                             237,873
                Obsolescence reserve                      (162,325)
                                                       -----------
                                                       $ 1,416,505
                                                       ===========

Net 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 has reported a net loss for both periods  ended March 31, 2005
and 2004.  As a result,  1,090,000 and 860,000  shares of common stock  issuable
upon  exercise of stock  options  have been  excluded  from the  calculation  of
diluted  loss per share for the three  month  periods  ended  March 31, 2005 and
2004, respectively,  because their inclusion would be antidilutive. At March 31,
2005 and 2004,  outstanding  options to acquire  466,500 and  592,500  shares of

                                                                    Page 6 of 15

<PAGE>

common stock,  respectively,  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  periods  ended  March  31,  2005  and  2004,
respectively:

<TABLE>
<CAPTION>
                                                                                                          2005               2004
                                                                                                       ----------         ----------
<S>                                                                                                    <C>                <C>
Basic EPS - weighted-average number of common shares outstanding                                       10,981,546         10,971,546
Effect of dilutive potential common shares - stock options outstanding                                       --                 --
                                                                                                       ----------         ----------
Diluted EPS - weighted-average number of common shares and potential common
    shares outstanding                                                                                 10,981,546         10,971,546
                                                                                                       ==========         ==========
</TABLE>

Comprehensive Income
--------------------

      The Company has no significant  components of other  comprehensive  income
(loss) and,  accordingly,  comprehensive  income is the same as net loss 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 for the three months ended March 31:

                                                      2005               2004
                                                   ----------         ----------
Gas detection devices                              $1,359,932         $1,184,333
Environment controllers                               306,127            276,291
FieldServers                                          545,619            455,901
                                                   ----------         ----------
                                                   $2,211,677         $1,916,525
                                                   ==========         ==========

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

      At March 31,  2005,  the Company was not in  compliance  with one covenant
under its line-of-credit  requiring  quarterly  profitability.  In May 2005, the
Company received a waiver for this covenant.  No borrowings have been made under
this line-of-credit during 2005, and the balance was zero at March 31, 2005.

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

      No stock option transactions were recorded for the quarter ended March 31,
2005.

Reclassifications
-----------------

      Certain amounts in the 2004 financial statements have been reclassified to
conform to the 2005 presentation.


                                                                    Page 7 of 15

<PAGE>

      This Form 10-QSB 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 March 31, 2005,  Sierra  Monitor  Corporation
reported net sales of  $2,211,677  compared to  $1,916,525  for the three months
ended March 31, 2004. The results for the first quarter of fiscal 2005 represent
a 15% increase from the same period in the prior year.

      Sales of our gas detection systems,  which accounted for approximately 60%
of total  revenue,  were 15% higher in the first quarter of 2005 compared to the
first quarter of 2004.  This includes sales of gas monitors to the US Navy which
were at a higher  level in first  quarter of 2005 than the levels in each of the
quarters in 2004. Also included are sales of Sentry gas detection  systems which
were  higher in first  quarter of 2005 than in the first  quarter  of 2004,  but
below the remaining quarters of 2004.

      Sales  of  environment  controllers  to  the  telecommunications  industry
increased  11% in the first  quarter of 2005  compared  to the first  quarter of
2004.  The increase was primarily  due to higher sales of spare parts,  combined
with an increase in sales of controllers for telephone company new installations
and retrofits.  The mix of sales  continues to reflect a relatively low level of
infrastructure spending by the larger land-line telephone companies.

      Sales of FieldServers,  our communications  bridge,  also increased in the
first quarter of 2005  compared to the first  quarter of 2004.  The 20% increase
reflects  continued  expansion of application and utilization of FieldServers in
the  building   automation   industry  where  we  offer  a  building  block  for
interoperability of sensors, actuators and control systems.

      Gross  profit  for  the  three-month  period  ended  March  31,  2005  was
$1,317,476  compared to $1,171,900  in the same period in the previous  year. In
the current period, the gross margin was approximately 60% of net sales compared
to 61% of net sales in the same period in the previous year. The gross margin in
both periods was consistent with our historical  margins.  The increase in gross
profit was due to higher sales in the first quarter of 2005.

      Expenses  for  research  and   development,   which  include  new  product
development and engineering to sustain existing  products,  were $415,709 or 19%
of net sales,  for the  three-month  period ended March 31, 2005,  compared with
$491,847 or 26% of net sales, in the comparable  period in 2004. The decrease in
research and  development  expense was primarily  due to a one-time  expenditure
made in the first  quarter  2004 when we  undertook  a project  to  develop  and
install a complex  control  system for improving  the energy  efficiency of cell

                                                                    Page 8 of 15
<PAGE>

site buildings.  Two complete  systems were installed in operational  cell tower
sites owned by a major wireless  carrier.  At the end of the first quarter 2004,
both test installations  were fully functional and under competitive  evaluation
by the  wireless  carrier.  Although  we have  continuing  engineering  expenses
related to this  evaluation,  first  quarter of 2004 is  approximately  $110,000
higher than first quarter of 2005 due to the cost of development  and deployment
of the cell  site  control  system.  We are also  continuing  other  engineering
programs including FieldServer software and new gas detection products.

      Selling and marketing  expenses for the three month period ended March 31,
2005 were  $800,729  or 36% of net sales,  compared  to  $660,774  or 34% of net
sales,  in the same period in the prior year.  Increases in commission  expenses
due to the higher sales level and increased expenses for trade shows contributed
to the higher sales and marketing expenses in the first quarter of 2005 compared
to the first quarter of 2004.

      General and  administrative  expenses  for the first  quarter of 2005 were
$337,741  or 15% of net sales  compared  to  $286,034 or 15% of net sales in the
same period in the prior year.  Administrative  expenses in the first quarter of
2005 include a  non-recurring  expense of $30,800 related to warrants issued for
services  in 2004.  There were no other  significant  changes in  administration
expenses in the first quarter of 2005 compared to the first quarter of 2004.

      Net loss for the  three-month  period ended March 31, 2005 was $133,834 or
approximately  6%  of  net  sales,   compared  with  net  loss  of  $161,246  or
approximately  8% of net sales for the same period in the prior year.  The lower
net loss in the first  quarter of 2005  compared to the first quarter of 2004 is
the result of the improved gross profit offset by higher fixed expenses.

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

      Working capital, which is comprised primarily of cash, accounts receivable
and inventories offset by current liabilities, was $2,884,379 at March 31, 2005.
During the period  ended  March 31,  2005,  our  working  capital  decreased  by
$105,325  compared to December  31, 2004.  The  decrease in working  capital was
primarily  the  result  of the net  loss  of  $133,834  reduced  by  $37,549  of
depreciation  and  amortization  of fixed  assets.  Cash on hand, a component of
working capital, was $627,879 at March 31, 2005, a decrease of $160,809 compared
to December  31, 2004.  Other  significant  working  capital  component  changes
include   deferred   income  taxes  which  increased  by  $102,901  and  accrued
compensation expenses liabilities which increased by $23,849 in the same period.

      In the current  fiscal year,  we have not  utilized  our $500,000  line of
credit with our commercial  bank.  After the close of the first quarter of 2005,
we obtained a waiver of a line of credit term  restricting the allowable loss in
the  quarter.  The waiver of that  requirement  removed the  restriction  of our
access to those funds.

      Management  believes  that  its  present  resources,  including  cash  and
accounts receivable,  are sufficient to fund its 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.

      We are not currently profitable and there can be no assurance that we will
achieve or maintain  profitability.  If we are not able to achieve profitability
soon or obtain access to sufficient new capital, which may not be available,  we
may not be able to sustain operations.


                                                                    Page 9 of 15
<PAGE>

      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.  Although we
maintain  offsite  storage of back-up  data files and other  records,  we do not
maintain  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 renew or expand our bank line of credit in June 2005 under terms we
expect  to be  similar  to the  current  terms of the line of credit in order to
avoid the necessity of more costly funds.

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

      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  from the sale of gas  detection  devices and  environment
controllers 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

                                                                   Page 10 of 15
<PAGE>

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  allowance  for  doubtful  accounts  which is analyzed on a
periodic  basis  to  insure  that it is  adequate  to the  best of  management's
knowledge.  Historical  losses  have  been  minimal.  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  relies 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.

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,  our  management  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 SEC 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.

                           PART II: OTHER INFORMATION
                           --------------------------

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
------------------------------------------------------------

                  None

ITEM 6.  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  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.

                                                                   Page 11 of 15

<PAGE>

                                    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:        May 12, 2005                 By:      /s/ Gordon R. Arnold
                                                 -------------------------------
                                                 Gordon R. Arnold
                                                 President
                                                 Chief Executive Officer
                                                 Chief Financial Officer

                                                                   Page 12 of 15

<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 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.


                                                                   Page 13 of 15