imageLocation does not set image of a picture box immediately

I think setting the ImageLocation property just assigns the path, so the image is not loaded into the Picturebox1.Image property yet. Try the following:

Picturebox1.Load( Application.StartupPath  + "\\targetImage.jpg");
            sm = new SecurityManagement(Picturebox1.Image );

This will set the ImageLocation and cause the image to display, which will load it into the PictureBox1.Image property.

Modification:

Based on the new specifications regarding the problem, the following code should accomplish what you are looking for:

Bitmap bitmap;

private void button1_Click(object sender, EventArgs e)
{
    using ( FileStream tempbmp = new FileStream ( @"targetImage.jpg", FileMode.Open ) )
    {
        bitmap = ( Bitmap )Bitmap.FromStream ( tempbmp );
    }

    System.IO.File.Delete ( @"targetImage.jpg" );
}