The Ofex-listed business has been burdened by heavy research and development costs and is yet to see a return on the alarm or the Batcane, a white stick for the visually impaired that uses bat navigation techniques.
During the nine months to December 31 the group recorded a loss of £427,266, although this was an improvement on the same period in 2001 when it reported losses of £675,563.
Turnover was slightly lower than 2001's figure at £14,252, but chairman Graham Cooper remained optimistic.
He said the alarm system, which Sound Alert hopes will become the technology of choice in buildings, aircraft and passenger ships, had been received well by regulators.
But production on the Batcane has still not started be-cause of cashflow problems.
He added: "Global economic uncertainty continues to re-main a factor delaying investment decisions... Our own cost base reductions have now taken effect in order to conserve cash for the future.
"Our creditors are firmly supporting the two businesses and we are not under any pressure from this area."