BALA CYNWYD, Pa., Sept. 3, 2003 (PRIMEZONE) -- The following statement was issued today by the law firm of Schiffrin & Barroway, LLP:
Notice is hereby given that a class action lawsuit was filed in the United States District Court for the Southern District of California on behalf of all purchasers of the publically traded securities of SureBeam Corporation (Nasdaq:SUREE) ("SureBeam" or the "Company") from March 16, 2001 through August 25, 2003, inclusive (the "Class Period").
If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Schiffrin & Barroway, LLP (Marc A. Topaz, Esq. or Stuart L. Berman, Esq.) toll free at 1-888-299-7706 or 1-610-667-7706, or via e-mail at info@sbclasslaw.com.
The Complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between March 16, 2001 and August 25, 2003, thereby artificially inflating the price of SureBeam's publicly traded securities. The Complaint alleges the statements were materially false and misleading because they failed to disclose and/or misrepresented the following adverse facts, among others: (1) that the Company was improperly recognizing revenue in violation of GAAP; (2) that the Company's improper revenue recognition was done through its recognition of revenue from non-affiliated parties when the Company knew that such parties could not pay and for which SureBeam would forgive those receivables; (3) that the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; and (4) that as a result, the values of the Company's earnings, net income and earnings per share were materially overstated at all relevant times.
The Class Period begins on March 16, 2001, after SureBeam successfully launched an Initial Public Offering ("IPO"), wherein it obtained net proceeds of $60 million. Prior to the IPO, on March 15, 2001, the Company issued its prospectus, which contained alleged misrepresentations regarding SureBeam's revenue recognition. The truth began to emerge on June 10, 2003, when SureBeam filed a current report with the SEC on Form 8-K, and disclosed that it was terminating KPMG LLP as its independent auditor and that it was naming Deloitte & Touche LLP as its new auditor. Moreover, the Company issued a press release on July 30, 2003, announcing that it was going to delay the release of its second quarter earnings from the planned date of July 31, 2003 until August 12, 2003. On August 12, 2003, the Company announced that it was going to further delay the release of its second quarter earnings until after the Company's Form 10-Q for the second quarter had been filed.
SureBeam's accounting difficulties continued, and on August 21, 2003, the Company announced that it was dismissing Deloitte & Touche due to issues that had not been resolved to the auditor's satisfaction. Specifically, Deloitte & Touche was not satisfied with certain aspects of the Company's revenue recognition policies and certain contracts entered into in 2000 and affecting subsequent periods.
The Class Period ends on August 25, 2003. On that date, SureBeam shocked the investing public when it announced that the Company would now trade under the ticker symbol "SUREE" because it had missed the deadline to file its Form 10-Q in accordance with NASDAQ Marketplace Rule 4310(c)(14). Investor reaction was swift and negative, with SureBeam stock falling from a close of $1.82 on Friday, August 22, 2003, to a close of $1.59 on Monday, August 25, 2003, or a single-day decline of more than 12% on a very high trade volume.
Plaintiff seeks to recover damages on behalf of class members and is represented by the law firm of Schiffrin & Barroway, which prosecutes class actions in both state and federal courts throughout the country. Schiffrin & Barroway is a driving force behind corporate governance reform, and has recovered in excess of a billion dollars on behalf of institutional and high net worth individual investors. For more information about Schiffrin & Barroway, or to sign up to participate in this action online, please visit http://www.sbclasslaw.com/currentcases.cfm.
If you are a member of the class described above, you may, not later than October 27, 2003, move the Court to serve as lead plaintiff of the class, if you so choose. In order to serve as lead plaintiff, however, you must meet certain legal requirements.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca