A class action has been filed against SureBeam Corporation (Nasdaq: SUREE, formerly SURE), which provides electronic irradiation systems and services for the food industry, and certain of its officers and directors by stockholders who purchased the company's common stock between March 16, 2001, and August 20, 2003. The action claims that the defendants violated federal securities laws by issuing a series of material misrepresentations to the market over this time period, thereby artificially inflating the price of the company's securities. The stockholders seek to recover compensatory damages for the loss of value of their stock.

On July 30, 2003, SureBeam issued a press release entitled "SureBeam to Delay Earnings Announcement." The press release stated in part "SureBeam Corporation announced today that it is delaying the release of its second quarter earnings from its planned date of July 31, 2003. As previously reported by the Company in its Current Report on Form 8-K/A filed on June 11, 2003, on June 9, 2003, Deloitte & Touche LLP was named as the Company's independent auditor for the year ending December 31, 2003, replacing KPMG LLP. The Company's management has not completed preparation of the financial statements for the second quarter and Deloitte & Touche has not yet completed its review of those statements."

On August 12, 2003, SureBeam issued another press release entitled "SureBeam to Delay Earnings Announcement." The press release stated in part: "SureBeam Corporation announced today that it is further delaying the release of its second quarter earnings from its planned release date of August 12, 2003 ... Deloitte & Touche LLP has not completed its reviews of the Company's financial statements."

On August 21, 2003, the company issued a press release entitled "SureBeam Dismisses Auditor; Seeks to Resolve Issues." The press release stated in part: "SureBeam Corporation announced today that it is dismissing its independent public auditor Deloitte & Touche LLP ... The Company believes that its financial statements which were audited by national accounting firms and filed with the Securities and Exchange Commission, were appropriate based on the facts and circumstances that existed at the time. However, the Board of Directors has determined that the issues raised by Deloitte & Touche are sufficiently important and that it wants these issues to be definitively resolved." The price of the company's common stock dropped to $1.55 per share on this news.