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, 2002


                                       or

( )  Transition  report  under  section 13 or 15(d) of the  Exchange Act

          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
                (Issuer's telephone number, including area code)


      The  number of shares of the  issuer's  common  stock  outstanding,  as of
November 13, 2002 was 10,971,546.

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


                                                                    Page 1 of 15
<PAGE>

                          PART I: FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                           SIERRA MONITOR CORPORATION

                            Condensed Balance Sheets
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                        September 30,        December 31,
                                                                            2002                2001
                                                                         -----------         -----------
                                   Assets
<S>                                                                      <C>                 <C>
Current assets:
      Cash and cash equivalents                                          $   853,993         $   772,394
      Trade receivables, less allowance for doubtful accounts              1,607,206           1,500,611
          of $32,091 in 2002 and $28,026 in 2001
      Notes receivable                                                         1,971               8,258
      Inventories                                                          1,503,540           1,580,959
      Prepaid expenses                                                        35,488             156,785
      Income taxes receivable                                                   --               148,187
      Deferred income taxes                                                  293,855             179,864
                                                                         -----------         -----------

                        Total current assets                               4,296,053           4,347,058

Property and equipment, net                                                  220,597             310,622
Deferred income taxes                                                          4,741               4,741
Other assets                                                                 259,989             308,949
                                                                         -----------         -----------

                        Total assets                                     $ 4,781,380         $ 4,971,370
                                                                         ===========         ===========

                Liabilities and Shareholders' Equity
Current liabilities:
      Accounts payable                                                   $   338,927         $   509,017
      Bank borrowings                                                        100,000                --
      Accrued compensation expenses                                          414,634             346,429
      Other current liabilities                                              104,826             129,518
                                                                         -----------         -----------

                        Total current liabilities                            958,387             984,964

Commitments

Shareholders' equity:
      Common stock, $0.001 par value; 20,000,000 shares                       10,972              10,972
      authorized 10,971,546 shares issued and outstanding
      Additional paid-in capital                                           3,151,189           3,151,189
      Retained earnings                                                      666,453             836,043
      Notes receivable from shareholders                                      (5,621)            (11,798)
                                                                         -----------         -----------

                        Total shareholders' equity                         3,822,993           3,986,406
                                                                         -----------         -----------

                        Total liabilities and shareholders' equity       $ 4,781,380         $ 4,971,370
                                                                         ===========         ===========
</TABLE>

See accompanying notes to the condensed financial statements.


                                                                    Page 2 of 15
<PAGE>

                           SIERRA MONITOR CORPORATION

                       Condensed Statements of Operations

                                   (Unaudited)
<TABLE>
<CAPTION>
                                                              Three months ended                      Nine months ended
                                                                September 30,                            September 30,
                                                          2002                 2001                2002                 2001
                                                      ------------         ------------        ------------         ------------
<S>                                                   <C>                  <C>                 <C>                  <C>
Net sales                                             $  2,264,681         $  2,485,661        $  6,579,517         $  7,844,743
Cost of goods sold                                         858,767              989,946           2,617,404            3,007,974
                                                      ------------         ------------        ------------         ------------
        Gross profit                                     1,405,914            1,495,715           3,962,113            4,836,770
                                                      ------------         ------------        ------------         ------------
Operating expenses
    Research and development                               352,506              368,853           1,153,990            1,001,913
    Selling and marketing                                  655,696              693,140           2,113,149            2,024,732
    General and administrative                             318,649              343,698             976,316            1,030,457
                                                      ------------         ------------        ------------         ------------
                                                         1,326,851            1,405,690           4,243,455            4,057,102
                                                      ------------         ------------        ------------         ------------
        Income (loss) from operations                       79,063               90,025            (281,342)             779,668
Interest income (expense)                                     (337)               5,018                (968)              21,380
                                                      ------------         ------------        ------------         ------------
        Income (loss) before income taxes                   78,726               95,042            (282,310)             801,047
Income tax expense (benefit)                                31,331               37,361            (112,720)             319,839
                                                      ------------         ------------        ------------         ------------
        Net income (loss)                             $     47,395         $     57,681        $   (169,590)        $    481,208
                                                      ============         ============        ============         ============
Net income (loss) per share - basic                   $       0.00         $       0.01        $      (0.02)        $       0.04
                                                      ============         ============        ============         ============
Net income (loss) per share - diluted                 $       0.00         $       0.01        $      (0.02)        $       0.04
                                                      ============         ============        ============         ============

Weighted average number of shares used in per
share computations
                                        Basic:          10,971,546           10,971,546          10,971,546           10,969,347
                                                      ============         ============        ============         ============
                                      Diluted:          11,028,159           11,522,332          10,971,546           11,564,412
                                                      ============         ============        ============         ============
</TABLE>

See accompanying notes to the condensed financial statements.


                                                                    Page 3 of 15
<PAGE>

                           SIERRA MONITOR CORPORATION

                       Condensed Statements of Cash Flows
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                       Three months ended                Nine months ended
                                                                          September 30,                     September 30
                                                                      2002             2001             2002             2001
                                                                  -----------      -----------      -----------      -----------
<S>                                                               <C>              <C>              <C>              <C>
Cash flows from operating activities:
        Net income (loss)                                         $    47,395      $    57,681      $  (169,590)     $   481,208
        Adjustments to reconcile net income (loss) to
        net cash used in operating activities
           Depreciation & amortization                                 75,121           72,477          229,950          219,489
           Provision for doubtful accounts                             (2,612)         (57,750)           4,065          (53,250)
           Change in deferred income taxes                             30,879             --           (113,991)            --
                 Changes in operating assets and liabilities:
             Trade receivables                                       (111,477)         192,440         (110,660)          26,930
             Inventories                                               71,386          104,444           77,419          (30,237)
             Prepaid expenses                                          47,404            7,118          121,297          (73,820)
             Income taxes receivable                                     --               --            148,187             --
             Accounts payable                                         (36,478)          (8,160)        (170,090)         (59,928)
             Accrued compensation expenses                              4,205          (60,578)          68,205             (566)
             Other current liabilities                                 25,748           13,712          (24,692)          23,335
             Income taxes payable                                        --            (43,679)            --           (255,082)
                                                                  -----------      -----------      -----------      -----------
               Net cash provided by
                operating activities                                  151,571          277,705           60,100          278,079
                                                                  -----------      -----------      -----------      -----------
Cash flows from investing activities:
        Capital expenditures                                           (6,070)         (87,557)         (90,865)        (316,510)
        Other assets                                                      500            4,115             (100)         (27,243)
                                                                  -----------      -----------      -----------      -----------
           Net cash used in investing activities                       (5,570)         (83,442)         (90,965)        (343,753)
                                                                  -----------      -----------      -----------      -----------
Cash flows from financing activities:
        Proceeds from bank borrowings, net                               --               --            100,000             --
        Repayment of notes receivable                                   2,243            9,399            6,287           20,288
        Proceeds from exercise of stock options                         1,641             --              6,177            2,217
                                                                  -----------      -----------      -----------      -----------
           Net cash provided by financing activities                    3,884            9,399          112,464           22,505
                                                                  -----------      -----------      -----------      -----------
Net increase (decrease) in cash and cash equivalents                  149,885          203,662           81,599          (43,169)
Cash and cash equivalents at beginning of period                      704,108          919,465          772,394        1,166,296
                                                                  -----------      -----------      -----------      -----------
Cash and cash equivalents at end of period                        $   853,993      $ 1,123,126      $   853,993      $ 1,123,127

Supplemental cash flow information
    Cash paid for interest expense                                $     1,283      $      --        $     2,946      $      --
                                                                  ===========      ===========      ===========      ===========
    Cash paid for income taxes                                    $      --        $    81,040      $     5,188      $   572,679
                                                                  ===========      ===========      ===========      ===========
</TABLE>

See accompanying notes to the condensed financial statements.

                                                                    Page 4 of 15
<PAGE>


                           SIERRA MONITOR CORPORATION
                   Notes to the Condensed Financial Statements

                               September 30, 2002

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 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, 2001 which was filed March 28, 2002.  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, 2002 and the results of its operations and cash
flows for the nine-month  period and the quarter then ended, have been included.
The results of operations for the interim periods are not necessarily indicative
of the results for the full year.

Summary of Business

      Sierra Monitor Corporation ("Sierra Monitor" 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.  In  addition  to  gas
monitoring systems, the Company also manufactures  microprocessor-based  systems
known as  Environment  Controllers  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
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  industry and other  applications which involve
the handling or generation of hazardous gases.  Environment Controllers are sold
to telecommunications companies and their suppliers.  FieldServers are typically
sold to  integration  companies  that  service  building  and  plant  automation
projects.

Accounting Policies

      a) Revenue Recognition

      Revenue related to gas detection and monitoring  devices and Environmental
Controllers  is  recognized  when all of the  following  criteria have been met:
persuasive  evidence of an arrangement  exists;  the fee for the  arrangement is
fixed or determinable; delivery has occurred or services have been rendered; and
collectibility is reasonably assured.

      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  upon  shipment of the product when all of the  following
criteria have been met: persuasive  evidence of an arrangement exists;  delivery
has occurred; the fee is fixed or determinable; and collectibility is probable.

      b) Reclassifications


                                                                    Page 5 of 15
<PAGE>

      Certain  amounts  presented  in the  financial  statements  for  the  2001
comparative periods have been reclassified to conform to the
current period's presentation.

      c) Recent Accounting Standards

      In July 2001, the Financial  Accounting  Standards  Board ("FASB")  issued
Statement of Financial Accounting Standards ("SFAS") No. 142, Goodwill and Other
Intangible  Assets.  SFAS No. 142 requires  that  goodwill and other  intangible
assets  with  indefinite  useful  lives no longer be  amortized,  but instead be
tested for  impairment at least  annually in accordance  with the  provisions of
SFAS No. 142. SFAS No. 142 also requires  that  intangible  assets with definite
useful lives be amortized over their  respective  estimated useful lives, and be
reviewed for impairment.

      The Company  adopted the  provisions of SFAS No. 142 effective  January 1,
2002. As of the date of adoption of SFAS No. 142, the Company had no goodwill or
unidentified  intangible  assets  and had  unamortized  identifiable  intangible
assets of $214,480 consisting of technology rights and compliance certification.
The Company has identifiable  intangible assets of $142,598,  net of accumulated
amortization of $571,509, as of September 30, 2002. Amortization expense for the
three and nine-month  periods ended  September 30, 2002 was $27,213 and $81,648,
respectively.  The Company expects that its annual amortization  expense will be
approximately $110,000.

      In  August  2001,  the FASB  issued  SFAS No.  143,  Accounting  for Asset
Retirement  Obligations.   SFAS  No.  143  addresses  financial  accounting  and
reporting for obligations  associated with the retirement of tangible long-lived
assets and the associated asset retirement costs. The purpose of SFAS No. 143 is
to develop  consistent  accounting of asset  retirement  obligations and related
costs in the financial  statements and to provide more information  about future
cash outflows,  leverage, and liquidity regarding retirement obligations and the
gross investment in long-lived assets. The Company is required to adopt SFAS No.
143 effective January 1, 2003. The Company does not anticipate that the adoption
of SFAS No. 143 will have a material effect on its financial statements.

      In  October  2001,  the FASB  issued  SFAS  No.  144,  Accounting  for the
Impairment or Disposal of Long-Lived  Assets.  SFAS No. 144 addresses  financial
accounting  and reporting for the  impairment or disposal of long-lived  assets.
SFAS No. 144 requires that long-lived assets be reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount of an asset
may not be  recoverable.  The  Company  adopted the  provisions  of SFAS No. 144
effective  January 1, 2002. The adoption of SFAS No. 144 did not have a material
effect on the Company's financial statements.

      In June 2002,  FASB issued SFAS No. 146,  Accounting for Costs  Associated
with  Exit or  Disposal  Activities.  SFAS  No.  146  requires  recording  costs
associated  with  exit or  disposal  activities  at  their  fair  values  when a
liability has been incurred.  Under previous  guidance,  certain exit costs were
accrued upon management's  commitment to an exit plan, which is generally before
an actual liability has been incurred.  The new requirements of SFAS No. 146 are
effective prospectively for exit or disposal activities initiated after December
31, 2002; however, early application of SFAS No. 146 is encouraged.  The Company
does not  anticipate  that the  adoption  of SFAS No.  146 will have a  material
impact on its  financial  position or results of  operations,  but the  adoption
could  result in the  Company's  recognizing  the cost of  future  restructuring
activities, if any, over a period of time rather than in one reporting period.

Inventories

A summary of inventories follows:

                                September 30, 2002       December 31, 2001
                              ---------------------    ---------------------
          Raw materials       $          775,284       $          712,891
          Work-in-process                522,412                  575,150
          Finished goods                 205,844                  292,918
                              ---------------------    ---------------------
                              $        1,503,540       $        1,580,959
                              =====================    =====================

                                                                    Page 6 of 15
<PAGE>

Line of Credit

      In June 2002, the Company  entered into an agreement to renew its existing
$500,000  line of credit  facility  with a financial  institution.  This line of
credit  will expire on June 14,  2003 and is to be used to fund  operating  cash
flow requirements.

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  period ended September
30, 2002. As a result,  1,314,500  shares of common stock issuable upon exercise
of stock  options have been excluded  from the  calculation  of diluted loss per
share for the  nine-month  period  because the  inclusion of such stock  options
would be  antidilutive.  In the  three-month  period  ended  September  30, 2002
options to purchase  1,119,500  shares of common stock were  outstanding but not
included  in the  computation  of diluted EPS  because  the  exercise  price was
greater  than  the  average  market  price  of  common  shares.  There  were  no
anti-dilutive potential common shares in any of the other periods presented.

      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,
2002 and 2001, respectively:
<TABLE>
<CAPTION>
                                                        3 months         9 months         3 months       9 months
                                                          ended            ended            ended          ended
                                                        9/30/2002        9/30/2002        9/30/2001      9/30/2001
<S>                                                      <C>              <C>             <C>            <C>
Basic EPS - weighted-average number of common
    shares outstanding                                   10,971,546       10,971,546      10,971,546     10,969,347
Effect of dilutive potential common shares - stock
    options outstanding                                     56,613                -          550,786        595,065
                                                     ---------------- ---------------- --------------- ---------------
Diluted EPS - weighted-average of common shares and
    potential common shares outstanding                 11,028,159       10,971,546       11,522,332     11,564,412
                                                     ---------------- ---------------- --------------- ---------------
</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.

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 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 September 30, 2002, Sierra Monitor  Corporation
reported net sales of  $2,264,681  compared to  $2,485,661  for the three months
ended  September 30, 2001. For the nine-month  period ended  September 30, 2002,
net sales were  $6,579,517  compared to $7,844,743 in the prior year  nine-month
period.  The sales results for the third  quarter of fiscal 2002  represent a 9%
decrease from the same period in the prior year.  The results for the first nine
months of fiscal 2002 represent a 16% decrease from the same period in the prior
year.

      The sales  decline in the  three-month  period ended  September  30, 2002,
compared to the same period in 2001,  is primarily  the result of lower sales of
the Company's  Communications  Bridge products.  In the third quarter of 2001, a
single project  accounted for 54% of Communications  Bridge sales.  There was no
equivalent  project in the third quarter of 2002.  Excluding the single project,
Communications  Bridge sales increased 59% in the third quarter of 2002 compared
to the third quarter of 2001.

      The sales  decline for the  nine-month  period is primarily  the result of
changes in the  market for the  Company's  environment  controllers  used by the
telecommunications  industry. During the approximate two-year period through the
middle of calendar year 2001,  major  telephone  companies  undertook  extensive
infrastructure  expansion  to  deliver  broadband  Internet  capacity  to  their
customers.  The  expansion  slowed  dramatically  in the  second  half  of  2001
resulting in substantial  inventory  build up throughout the  telecommunications
equipment  supply chain.  Sierra  Monitor's  customers,  manufacturers of remote
telecommunications  structures,  experienced significant inventory build up and,
as a result,  cancelled or delayed  deliveries of our  products.  As a result of
these actions,  the Company's  sales to the  telecommunications  industry in the
first and second quarters of 2002 were approximately $900,000 and $700,000 lower
than in the first and second quarters of 2001,  respectively,  and approximately
unchanged in the third quarter.

      Gross profit of $1,405,914 for the three-month  period ended September 30,
2002 was 62% of sales  compared  to  $1,495,715,  or 60% of  sales,  in the same
period in the previous year.  The gross profit for the  nine-month  period ended
September 30, 2002 was $3,962,113 or 60% of sales,  compared to  $4,836,770,  or
62% of sales,  in the same period in the previous  year. The higher gross margin
in the third  quarter was primarily due to lower  expenses  attributable  to the
Company's temporary wage reductions and other cost saving strategies implemented
during the second quarter of the current year.


                                                                    Page 8 of 15
<PAGE>

      Expenses  for  research  and   development,   which  include  new  product
development and engineering to sustain existing products,  were $352,506, or 16%
of sales,  for the  three-month  period  ending  September  30, 2002 compared to
$368,853,  or 15% of sales, in the comparable  period in 2001. In the nine-month
periods  ending  September  30,  2002  and  September  30,  2001,  research  and
development expenses were $1,153,990, or 18% of sales, and $1,001,913, or 13% of
sales,  respectively.  Subsequent to the end of the first  quarter of 2002,  the
Company  implemented  actions to reduce the level of  research  and  development
expenses.  These actions included reduction of employees,  salary reductions and
re-negotiated  rates for outside  contractors.  Lower  research and  development
expenses  in the third  quarter of 2002,  compared  to the third  quarter of the
prior year are, in part, due to these actions. The higher year-to-date  research
and development  expenses are due to higher levels of spending  undertaken prior
to the cost reduction efforts.

      Selling and  marketing  expenses,  which  consist  primarily  of salaries,
commissions  and  promotional  expenses  were  $655,696  or 29% of sales for the
three-month  period ended  September 30, 2002,  compared to $693,140,  or 28% of
sales,  in the comparable  period in the prior year. For the nine-month  periods
ending September 30, 2002 and September 30, 2001, selling and marketing expenses
were $2,113,149, or 32% of sales, and $2,024,732, or 26% of sales, respectively.
In both the three and nine-month  periods of 2002,  selling  expenses  increased
relative to the prior year periods, in part, due to the addition of personnel to
the professional  sales staff and due to higher  commissions paid to independent
sales  representatives.  Commission expenses vary due to the mix of products and
sales channels.  Marketing  expenses  decreased in both the three and nine-month
periods due to cost reduction  efforts  resulting in lower advertising and other
promotional spending.

      General and  administrative  expenses,  which consist  primarily of salary
expenses,  building rent and insurance expenses, were $318,649, or 14% of sales,
for the three-month period ended September 30, 2002 compared to $343,698, or 14%
of sales, in the three-month period ended September 30, 2001. For the nine-month
periods  ending  September  30,  2002  and  September  30,  2001,   general  and
administrative  expenses were $976,316, or 15% of sales, and $1,030,457,  or 13%
of sales,  respectively.  In the current quarter and year-to-date periods, lower
salary expenses  resulting from temporary cost reduction  actions were offset by
increases in costs for rent and liability insurance.

      Net income for the three-month period ended September 30, 2002 was $47,395
compared  to $57,681  in the same  period of 2001.  Net loss for the  nine-month
period ended September 30, 2002 was $169,590  compared to net income of $481,208
in the same  period of 2001.  The net income for the third  quarter is, in part,
due to the effect of  temporary  cost  reductions.  The net loss for the year to
date period is due to the lower net sales level  resulting  primarily from lower
sales of our Environment Controllers to the telecommunications industry.

      The  Company's  salary  reductions  will remain in effect for at least the
next three months as efforts remain focused on growth of net sales.

Liquidity and Capital Resources

      Working  capital  consists  primarily  of  cash,  inventory  and  accounts
receivables.  The Company's  working  capital was $3,337,666 as of September 30,
2002,  approximately  unchanged  from  December 31, 2001. At September 30, 2002,
cash and cash equivalents  totaled $853,993.  Trade receivables and inventories,
components  of  working   capital,   at  September  30,  2002  were  $3,110,746,
approximately the same as their December 31, 2001 levels.

      The Company has borrowed $100,000 against its $500,000 line of credit with
its commercial bank and remains in compliance with the borrowing covenants.


                                                                    Page 9 of 15
<PAGE>

      The company believes that its current  resources are sufficient to support
existing and anticipated levels of business for 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 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 yet competitive price.

      The industry in which the Company  operates is highly  competitive and the
Company  expects  such  competition  to  continue  in the  future.  Most  of the
Company's competitors are larger than the Company and have substantially greater
financial,  technical,  marketing and manufacturing resources. While the Company
has invested in new products,  there can be no assurance that it can continue to
introduce  new products on a timely  basis or that certain of its products  will
not remain competitive.

      Our  operations  are  concentrated  in  a  single  building  in  Milpitas,
California,  and a small assembly plant in Fort Myers,  Florida.  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.  Our  facilities  in  California  are  potentially  subject to  electrical
blackouts as a consequence of a shortage of available  electrical  power similar
to those that  occurred in 2001.  In the event these were to reoccur  they could
disrupt  our  operations.  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.

      The Company's short-term liquidity is dependent upon our ability to manage
collection cycles, control inventory levels, expenses and cash distribution.  We
must also maintain  compliance to the covenants of our bank line of credit or we
may have difficulty funding operations.

      The Company's  profitable  operations in the quarter ending  September 30,
2002 were  accomplished,  in part,  due to the  forbearance of all the Company's
employees who have accepted a percentage  reduction in their  compensation,  and
outside  contractors  who lowered their normal  hourly rates.  The Company views
these cost  reductions  as  temporary,  therefore it will be  necessary  for the
Company to  increase  sales to remain  profitable  as  expenses  return to prior
levels.

Critical Accounting Policies.

      In December  2001, the SEC requested  that all  registrants  discuss their
three to five most "critical accounting policies" in the Management's Discussion
and Analysis of Financial Condition and Results of Operations. The SEC indicated
that a  "critical  accounting  policy"  is one  which is both  important  to the
portrayal  of  the  Company's  financial  condition  and  results  and  requires
management's most difficult,  subjective or complex judgments, often as a result
of the need to make  estimates  about the effect of matters that are  inherently
uncertain.   We  believe  that  our  following   accounting  policies  fit  this
definition:

      a) Revenue Recognition

      Our net sales  consist of  revenue  from  sales of  products  net of trade
discounts.  We generally obtain oral or written purchase authorizations from our
customers  for a specified  amount of product at a specified  price and consider
delivery to have  occurred at the time of shipment.  We  recognize  revenue when
evidence of an arrangement exists,  contractual obligations have been satisfied,
title and risk of loss have been  transferred  to the customer and collection of
the resulting  receivable is reasonably  assured.  We recognize revenue from the
sale of FieldServers in accordance with SOP 97-2, Software Revenue  Recognition,
as amended. Management's ability to determine that such conditions have been met
is  based on  market  experience  and


                                                                   Page 10 of 15
<PAGE>

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.  Many of our large orders are sold to  construction  contractors
who are required to pay their  invoices in full before they are able to purchase
any additional products or services.  Management's  ability to manage the credit
terms  and take  advantage  of the  leverage  of the need  for our  services  is
critical  to the  effective  application  of credit  terms and  minimization  of
accounts receivable losses.

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

      c) Inventories

      Inventories  are  stated  at the  lower  of cost  or  market,  cost  being
determined on the  first-in,  first-out  method.  The Company uses an Enterprise
Resource  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 carrying  amount 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

      Gordon R. Arnold, the Company's principal executive and financial officer,
has  evaluated  the  effectiveness  of the  Company's  disclosure  controls  and
procedures  (as defined in Rule 13a-14(c)  under the Securities  Exchange Act of
1934) as of a date  within 90 days of the filing of this  report.  Based on that
evaluation,  he  has  concluded  that  the  Company's  disclosure  controls  and
procedures are adequate and effective. There have been no significant changes in
the Company's  internal  controls or in other  factors that could  significantly
affect  internal  controls  subsequent  to the date  Mr.  Arnold  completed  his
evaluation.


                                                                   Page 11 of 15
<PAGE>

                           PART II: OTHER INFORMATION


Item 1.           Legal Proceedings - None

Item 2.           Changes in Securities - None

Item 3.           Defaults Upon Senior Securities - None

Item 4.           Submission of Matters to a Vote of Security Holders - None

Item 5.           Other Information - N/A

Item 6.           Exhibits and Reports on Form 8-K

                       (a)   Exhibits.
                                99.1      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.

                       (b)   Reports on Form 8-K - None



                                    SIGNATURE

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


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

Date:        November 13, 2002             By:    /s/ Gordon R. Arnold
                                                  ------------------------------
                                                  Gordon R. Arnold
                                                  President
                                                  Chief Financial Officer


                                                                   Page 12 of 15
<PAGE>

      CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

I, Gordon R. Arnold, certify that:

1.       I have reviewed this quarterly  report on Form 10-QSB of Sierra Monitor
         Corporation;

2.       Based on my  knowledge,  this  quarterly  report  does not  contain any
         untrue  statement of a material  fact or omit to state a material  fact
         necessary to make the  statements  made, in light of the  circumstances
         under which such  statements  were made, not misleading with respect to
         the period covered by this quarterly report;

3.       Based on my knowledge,  the financial  statements,  and other financial
         information  included in this quarterly  report,  fairly present in all
         material  respects the financial  condition,  results of operations and
         cash flows of the  registrant as of, and for, the periods  presented in
         this quarterly report;

4.       The registrant's  other  certifying  officers and I are responsible for
         establishing  and  maintaining  disclosure  controls and procedures (as
         defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
         we have:

              a)   designed such  disclosure  controls and  procedures to ensure
                   that  material   information   relating  to  the  registrant,
                   including its consolidated subsidiaries,  is made known to us
                   by others  within  those  entities,  particularly  during the
                   period in which this quarterly report is being prepared;

              b)   evaluated the  effectiveness of the  registrant's  disclosure
                   controls and  procedures as of a date within 90 days prior to
                   the filing date of this  quarterly  report  (the  "Evaluation
                   Date"); and

              c)   presented in this quarterly report our conclusions  about the
                   effectiveness of the disclosure controls and procedures based
                   on our evaluation as of the Evaluation Date;

5.       The registrant's other certifying officers and I have disclosed,  based
         on our most recent  evaluation,  to the  registrant's  auditors and the
         audit  committee  of  registrant's   board  of  directors  (or  persons
         performing the equivalent functions):

              a)   all  significant  deficiencies  in the design or operation of
                   internal   controls   which   could   adversely   affect  the
                   registrant's ability to record, process, summarize and report
                   financial  data  and  have  identified  for the  registrant's
                   auditors any material weaknesses in internal controls; and

              b)   any fraud, whether or not material,  that involves management
                   or  other  employees  who  have  a  significant  role  in the
                   registrant's internal controls; and

6.       The registrant's other certifying officers and I have indicated in this
         quarterly  report  whether  or not there  were  significant  changes in
         internal controls or in other factors that could  significantly  affect
         internal controls subsequent to the date of our most recent evaluation,
         including   any   corrective   actions   with  regard  to   significant
         deficiencies and material weaknesses.


Date:        November 13, 2002               By:    /s/ Gordon R. Arnold
                                                    ----------------------------
                                                    Gordon R. Arnold
                                                    Chief Executive Officer
                                                    Chief Financial Officer


                                                                   Page 13 of 15
<PAGE>

                                Index to Exhibits

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

99.1       Certification of Chief Executive  Officer and Chief Financial Officer
           pursuant to 18 U.S.C. Section 350, as adopted pursuant to Section 302
           of the Sarbanes-Oxley Act of 2002.


                                                                   Page 14 of 15