Source: Sharecast
The AIM-listed firm said revenues fell sharply in the six months to 31 March, to £350,000 from £1.06m a year previously, while the order intake tumbled to £315,000 from £1.14m.
Pre-tax losses widened to £422,000 from £120,000.
Image Scan, which supplies the security and industrial inspection sectors, said geopolitical events had heightened uncertainty in its key markets, weighing on budgets and curtailing orders.
Delays in a substantial defence contract secured in the previous year further affected first-half trading.
Vince Deery, chief executive, called the performance "disappointing" and warned that Image Scan was now unlikely to meet market expectations for the full year.
He said: "Management is confident that [our] robust [quote] pipeline will deliver increased sales in the second half.
"However, although the board is confident of an improved second half, the outcome for the year is currently very uncertain as it is dependent on the timing of order receipts and their subsequent delivery.
"While the board can still see a path to achieving market expectations for the year, it is now looking increasingly unlikely. It can also see the possibility that the improvement in the second half will not be enough to deliver positive full-year earnings."
As at 1400 BST, the stock had lost 17% at 1.37p, having earlier fallen as low as 1.22p.