Surveillance firm Digital Barriers saw a big jump in revenues in the first half but fell into the red after costs outweighed earnings.
The firm posted revenue growth of 68% to £8.1m over the six months to the end of September.
However, adjusted loss before tax widened to £5m, compared to £2.9m in the first half of 2011.
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This meant an adjusted loss per share of 11.06p, compared to 6.79p previously.
The company put the loss down to investment in core technologies and setting its cost base for the traditionally stronger second half.
The firm's cash balance at the end of the period was £7.3m, down from £25m in the previous year.
Executive Chairman Dr Tom Black said the firm was particularly encouraged that orders growth was tracking significantly ahead of revenue, with like-for-like orders almost double the previous year.
"With our seasonally stronger second half of the year to come, and our cost base under tight control, we remain confident about our future prospects," he said.
Investors shook off the wider losses, pushing shares up 2.5% by midday on Thursday.
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