All of its directors are having their salaries cut by one-third and must surrender half their share option entitlements. The news came as Snakeboard, which was listed on AIM at 3.5p last November and is now worth 1.5p a share, announced pre-tax losses of pounds 742,000 for the five months to March and said it would not make the pre-tax profit flotation forecast of pounds 2.6m for the 14 months to December. "These projections must now be regarded as no longer achievable," Mr Lloyd said.
Mr Lloyd has agreed to bail out the company by subscribing for pounds 200,000 of convertible loan stock, said that a manufacturing glitch - which resulted in the board's wheels not turning properly - had put the company back by 18 months.
However, he said that the manufacturing issue was resolved, the latest products were ready for shipment and that Snakeboard had secured over $1.1m of new orders in June. "I am putting my money where my mouth is. I wouldn't invest in a company I didn't feel had good prospects. We had a slight manufacturing problem that has set us back. But the market for boards is young and massive and snakeboarding is proving fantastically popular in Europe."
Raymond Moore, managing director, said the cost cutting measures - which include cutting salaries, option entitlements and consultancy fees, could save around $500,000 per year and meant that the group would have sufficient working capital to last for two years: "It is a horrible story. We are a one-product company who had no products to sell. But I went to everyone and said we must protect our working capital. I think it shows a serious and responsible attitude. It's nice that David also agreed to help us out." Part of the shake-out includes the resignation of Nick Macleod Smith, marketing director and brother of the board's designer. The group also plans to outsource its research and development.
Mr Lloyd was planning to expand into clothes and safety equipment. He admitted the market was competitive and said the group planned to introduce a cheaper board - which will retail for around pounds 58 in the UK compared the top-of-the-range board which retails at pounds 120.