UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 
 FORM 10-K 
 ANNUAL REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31, 2010 Commission File No. 0-3026 
 PARADISE, INC. INCORPORATED IN FLORIDA IRS IDENTIFICATION NO. 59-1007583 1200 DR. MARTIN LUTHER KING, JR., BLVD. PLANT CITY, FLORIDA 33563 TELEPHONE NO. (813) 752-1155 
 Securities Registered Under Section 12 (b) of the Exchange Act: None Securities Registered Under Section 12 (g) of the Exchange Act: Title of Each Class Common Stock, $.30 Par Value 
 Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x Indicate by check mark if the registrant is not required to file pursuant to Section 13 or Section 15(d) of the Act. Yes o No x Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes x No o Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrants knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Yes x No o Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company, as defined in rule 12b-2 of the Exchange Act.  Large accelerated filer o

          

          Accelerated filer o

          

          Non-accelerated filer o

          

          Smaller reporting company x
 Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No x State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrants most recently completed second fiscal quarter. $4,434,299 (as of June 30, 2010, bid price $14.70)  Class

          

          Outstanding at December 31, 2010Common Stock, $.30 Par Value

          

          519,600 Shares
 Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
     TABLE OF CONTENTS PARADISE, INC.   2010 FORM 10-K ANNUAL REPORTTABLE OF CONTENTS  PART IItem 1.Description of Business





I-1  I-3Item 2.Description of Property





I-3Item 3.Legal Proceedings





I-4Item 4.Submission of Matters to a Vote of Security Holders





I-4PART IIItem 5.Market for Common Equity and Related Stockholder Matters and Registrant Purchases of Equity Security





II-1Item 6.Selected Financial Data





II-1Item 7.Managements Discussion and Analysis or Plan of Operation





II-2  II-6Item 8.Consolidated Financial Statements





II-7  II-21Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure





II-22Item 9A.Controls and Procedures





II-22  II-23Item 9B.Other Information





II-23PART IIIItem 10.Directors, Executive Officers and Corporate Governance





III-1Item 11.Executive Compensation





III-2Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters





III-2Item 13.Certain Relationships, Related Transactions and Director Independence





III-3Item 14.Principal Accountant Fees and Services





III-3Item 15.Exhibits and Financial Statement Schedules





III-3SIGNATURES





III-4
 i    TABLE OF CONTENTS PART I Item 1. Description of Business Forward-Looking Statements This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact should be considered forward-looking statements for purposes of these provisions, including statements that include projections of, or expectations about, earnings, revenues or other financial items, statements about our plans and objectives for future operations, statements concerning proposed new products or services, statements regarding future economic conditions or performance, statements concerning our expectations
regarding the attraction and retention of customers, statements about market risk and statements underlying any of the foregoing. In some cases, forward-looking statements can be identified by the use of such terminology as may, will, expects, plans, anticipates, intends, believes, estimates, potential, or continue, or the negative thereof or other similar words. Although we believe that the expectations reflected in our forward-looking statements are reasonable, we can give no assurance that such expectations or any of our forward-looking statements will prove to be correct. Actual results and developments are likely to be different from, and may be materially different from, those expressed or implied by our forward-looking statements. Forward-looking statements are subject to inherent risks and uncertainties. (a)

          Business Development Paradise, Inc. was incorporated under the laws of the State of Florida in September, 1961 as Canaveral Utilities and Development Corporation. After the acquisition and merger of several other assets, the Corporation was renamed Paradise Fruit Company, Inc. in February, 1964, and the corporate name was changed again to Paradise, Inc. during July, 1993. There have been no bankruptcies, receiverships, or similar proceedings during the corporations history. There have been no material reclassifications, mergers, consolidations, purchases or sales of a significant amount of assets not in the ordinary course of business during the past three years. (b)

          The Companys operations are conducted through two business segments. These segments, and the primary operations of each, are as follows:  Business Segment

          

          OperationCandied Fruit

          

          Production of candied fruit, a basic fruitcake ingredient, sold to manufacturing bakers, institutional users, and retailers for use in home baking. Also, based on market conditions, the processing of frozen strawberry products for sale to commercial and institutional such as preservers, dairies, drink manufacturers, etc.Molded Plastics

          

          Production of plastic containers for the Companys products and other molded plastics for sale to unaffiliated customers.
 For further segment information, refer to Note 10 in Part II, Item 8 of this Annual Report. The Company knows of no other manufacturer in the Western Hemisphere whose sales of glace (candied) fruit is equal to those of Paradise, Inc. While there are no industry statistics published, from the generally reliable sources available, management believes that Company brands account for a large majority of all candied fruit sold in supermarkets and other grocery outlets in the USA.  In terms of candied fruit dollar sales, during 2010, approximately 20% were shipped to manufacturing bakers and other institutional users, with the balance being sold through supermarkets and other retail outlets for ultimate use in the home. Sales to retail outlets are usually generated through registered food brokers operating in exclusively franchised territories. This method of distribution is widely accepted in the food industry because of its efficiency and economy.
 I-1    TABLE OF CONTENTS The principal raw materials used by the Company are fruits, fruit peels, corn syrups and plastic resins. Most of these materials are readily accessible from a number of competitive suppliers. The supply and prices may fluctuate with growing and crop conditions, factors common to all agricultural products. Feed stocks for some plastic resins are petroleum related and may be subject to supply and demand fluctuations in this market. The trademarks Paradise, Dixie, Mor-Fruit and Sun-Ripe are registered with the appropriate Federal and State authorities for use on the Companys candied fruit. These registrations are kept current, as required, and have a value in terms of customer recognition. The Company is also licensed to use the trademarks White Swan, Queen Anne, Palm Beach, Golden Crown, and Pennant in the sale of candied fruit. The demand for fruit cake materials is highly seasonal, with over 85% of sales in these items occurring during the months of September, October and November. However, in order to meet delivery requirements during this relatively short period, the Company must process candied fruit and peels for approximately ten months during the year. Also, the Company must acquire the fruits used as raw materials during their seasonal growing periods. These factors result in large inventories, which require financing to meet relatively large short-term working capital needs.  During 1993, and through another wholly owned subsidiary, the Company launched an enterprise for the growing and selling of strawberries, both fresh and frozen. Plant City, Florida, the location of the Companys manufacturing facilities and main office, styles itself as the The Winter Strawberry Capital because of the relatively large volume of fruit that is grown and harvested locally, mostly from December through April of each season. However, once competing fresh berries from the West Coast of the USA begin finding their way to market, the price of Florida fruit begins to diminish, and local growers had no other market for their
product. While there are significant freight cost advantages in the sale and marketing of local strawberries to customers in the eastern U.S., growers and producers on the West Coast, from southern California to Washington state, still dominate pricing and marketing conditions. The Company estimates more than 90% of total U.S. strawberry production is located in that area. Therefore, Paradise, Inc. limits its activities in this market to years in which basic supply and demand statistics, such as West Coast harvest predictions and frozen strawberry prior year inventory carryovers, lead to a reasonable anticipation of profitability. In the plastics molding segment of business, sales to unaffiliated customers continue to strengthen. This trend began several years ago when management shifted its focus from the sale of high volume, low profit generics to higher technology value added custom applications. Some molded plastics container demand is seasonal, by virtue of the fact that a substantial portion of sales are made to packers of food items and horticultural interests, with well defined growing and/or harvest seasons. In the opinion of management, the seasonal nature of some plastics sales does not have a significant impact upon the working capital requirements of the Company. During the first several months of the year, the Company contracts with certain commercial bakers for future delivery of quantities representing a substantial portion of the sales of fruit cake materials to institutional users. Deliveries against these contracts are completed prior to the close of the fiscal year ending December 31.  It is a trade practice to allow some supermarket chains to return unopened cases of candied fruit products that remain unsold at year-end, an option for which they normally pay a premium. A provision for the estimated losses on retail returns is included in the Companys financial statements, for the year during which the sales are made. With the continuing acquisitions, mergers and other consolidations in the supermarket industry, there is increasing concentration of candied fruit buying activity. During 2010, the Company derived approximately 18% of its consolidated net sales from Wal-Mart Stores, Inc. This customer is not affiliated with Paradise, Inc. in any way, and has exclusive use of a Paradise-owned controlled brand. The loss of this customer would have a material adverse effect on operating earnings.
 I-2    TABLE OF CONTENTS While there is no industry-wide data available, management estimates that the Company sold approximately 80% of all candied fruits and peels consumed in the U.S. during 2010. The Company knows of two major competitors; however, it estimates that neither of these has as large a share of the market as the Companys. The molded plastics industry is very large and diverse, and management has no reasonable estimate of its total size. Many products produced by the Company are materials for its own use in the packaging of candied fruits for sale at the retail level. Outside sales represent approximately 85% of the Companys total plastics production at cost, and, in terms of the overall market, are insignificant. In the above business segments, it is the opinion of management that price, which is to include the cost of delivery, is the largest single competitive factor, followed by product quality and customer service. Given the above competitive criteria, it is the opinion of management that the Company is in a favorable position. Over the years, the Company has made capital investments of over $1 million in order to comply with the growing body of environmental regulations. These have included the building of screening and pretreatment facilities for water effluent, the redesign and rebuilding of one processing department in order to improve the control of the quality of air emissions, and removing underground fuel storage tanks to approved above ground locations. All of these facilities are permitted by governmental authorities at various levels, and are subjected to periodic testing as a condition of permit maintenance and renewal. All required permitting is currently in
effect, and the Company is in full compliance with all terms and conditions stated therein.  By local ordinance, it is required that all water effluent is metered, tested and discharged into a municipal industrial waste treatment plant. During 2010, costs for this discharge approximated $225,000, and management estimates that all expenses directly related to compliance with environmental regulations total well over $300,000 annually, which includes costs for permits, third party inspections and depreciation of installations. The Company employs between 140 and 275 people, depending upon the season. The Company conducts operations principally within the United States. Foreign activities are not material. Item 2. Description of Property Built in 1961, the plant is located in a modern industrial subdivision at Plant City, Florida, approximately 20 miles east of the City of Tampa. It is served by three railroad sidings, and has paved road access to three major state and national highways. It has production and warehouse facilities of nearly 350,000 sq. ft. During 1985, the Company acquired approximately 5.2 acres immediately adjacent to, and to the west of, its main plant building. Several buildings and a truck weight scale existed on the property. Some of these facilities have been significantly updated, remodeled, and/or rebuilt and are used for the strawberry processing and some plastics molding operations. In 2006, Paradise, Inc. built a new 10,000 square foot building on this land. The building is primarily used for the production of custom vacuum forming products for its Plastics customers. The Company owns its plant facilities and other properties free and clear of any mortgage obligations. Because of the unique processing methods employed for candied fruit, much of the equipment used by the Company is designed, built and assembled by the Companys employees. The Company considers its plant one of the most modern, automated plants in the industry. The equipment consists of vats, dehydrators, tanks, giant evaporators, carbon filter presses, syrup pumps and other scientifically designed processing equipment. Finished retail packages are stored in air-conditioned warehouses, if required. Regarding molded plastic manufacturing, most equipment is normally available from a number of competitive sources. The molds used for specialized plastic products must be individually designed and manufactured, requiring substantial investment, and are considered proprietary.
 I-3    TABLE OF CONTENTS Item 3. Legal Proceedings None Item 4. Submission of Matters to a Vote of Security Holders None
 I-4    TABLE OF CONTENTS PART II Item 5. Market for Common Equity and Related Stockholder Matters and Registrant Purchases of Equity Securities On August 22, 1997, the Securities and Exchange Commission issued new listing requirements for companies listed on the NASDAQ Small Cap Market. The requirements became effective on February 23, 1998. As of December 2010, the Company had not met the listing criteria. (a)

          The following table shows the range of closing bid prices for the Companys Common Stock in the over-the-counter market for the calendar quarters indicated. The quotations represent prices in the over-the-counter market between dealers in securities, do not include retail mark-up, mark-down, or commissions and do not necessarily represent actual transactions.  BID PRICESHigh

          

          Low2010First Quarter

          

          

          18.00

          

          

          

          15.30Second Quarter

          

          

          17.00

          

          

          

          14.70Third Quarter

          

          

          18.35

          

          

          

          14.70Fourth Quarter

          

          

          14.80

          

          

          

          14.012009First Quarter

          

          

          20.00

          

          

          

          9.50Second Quarter

          

          

          20.00

          

          

          

          12.00Third Quarter

          

          

          18.97

          

          

          

          13.00Fourth Quarter

          

          

          18.00

          

          

          

          14.00
 (b)

          Approximate Number of Equity Security Holders As of December 31, 2010, the approximate number of holders of record of each class of equity securities of the Registrant were:  TITLE OF CLASS

          

          NUMBER OFHOLDERS OF RECORDCommon Stock, $.30 Par Value

          

          133
 (c)

          Dividend History and Policy Dividends have been declared and paid annually when warranted by profitability. On March 10, 2011, the Board of Directors declared dividends of $.10 per share to stockholders of record on April 15, 2011. Dividends paid to stockholders for 2009 were $.05 and for 2008 were $.05. The Company does not have a standard policy in regards to the declaration and payment of dividends. Each year dividend payments, if any, are determined upon consideration of the current profitability, cash flow requirements, investment outlook and other pertinent factors. Item 6. Selected Financial Data  not applicable
 II-1    TABLE OF CONTENTS Item 7. Managements Discussion and Analysis or Plan of Operation Summary The following tables set forth for the periods indicated (i) percentages which certain items in the financial data bear to net sales of the Company and (ii) percentage increase (decrease) of such item as compared to the indicated prior period.  Relationship toTotal RevenueYear Ended December 31,

          

          Period to PeriodIncrease (Decrease)Years Ended2010

          

          2009

          

          2010  2009

          

          2009  2008NET SALES:Candied Fruit

          

          

          68.1

          %

          

          

          70.3

          %

          

          

          0.2

          %

          

          

          (6.9

          )%Molded Plastics

          

          

          31.9

          

          

          

          29.7

          

          

          

          11.3

          

          

          

          (15.4

          )100.0

          

          

          

          100.0

          

          

          

          3.5

          

          

          

          (9.6

          )Cost of Sales

          

          

          74.0

          

          

          

          75.1

          

          

          

          2.1

          

          

          

          7.7Selling, General and Administrative Expenses

          

          

          18.2

          

          

          

          18.0

          

          

          

          4.8

          

          

          

          (9.7

          )Depreciation and Amortization

          

          

          2.9

          

          

          

          3.4

          

          

          

          (8.0

          )

          

          

          (2.8

          )Interest Expense

          

          

          

          

          

          

          0.6

          

          

          

          (73.4

          )

          

          

          (43.1

          )1.8

          

          

          

          (8.2

          )Income from Operations

          

          

          4.7

          

          

          

          3.2

          

          

          

          55.9

          

          

          

          (38.6

          )Other Expense, Net

          

          

          

          

          

          

          

          

          

          

          (100.0

          )

          

          

          (61.8

          )Income Before Provision for Income Taxes

          

          

          4.7

          

          

          

          3.2

          

          

          

          55.9

          

          

          

          (26.3

          )Provision for Income Taxes

          

          

          1.8

          

          

          

          1.4

          

          

          

          37.1

          

          

          

          (38.6

          )Net Income

          

          

          2.9

          %

          

          

          1.8

          %

          

          

          48.9

          %

          

          

          (45.5

          )%
 Liquidity Management is not aware of any demands, commitments, events or uncertainties that will result in, or are reasonably likely to result in, a material increase or decrease in the Companys liquidity. As discussed in footnote 5 of the Companys consolidated financial statements, a line of credit is available to the Company to finance short-term working capital needs. Capital Resources The Company does not have any material outstanding commitments for capital expenditures. Management is not aware of any material trends either favorable or unfavorable in the Companys capital resources.  Critical Accounting Policies and Estimates The following discussion and analysis is based upon our consolidated financial statements which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of our consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of revenues and expenses, and assets and liabilities during the periods reported. Estimates are used when accounting for certain items such as revenues, allowances for returns, early payment discounts, customer discounts, doubtful accounts, employee compensation programs, depreciation and amortization
periods, taxes, inventory values, insurance programs, and valuations of investments, goodwill, other intangible assets and long-lived assets. We base our estimates on historical experience, where applicable and other assumptions that we believe are reasonable under the circumstances. Actual results may differ from our estimates under different assumptions or conditions. We believe that the following critical accounting policies affect our more significant judgments and estimates used in preparation of our consolidated financial statements. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, after elimination of all material intercompany accounts, transactions and profits.
 II-2    TABLE OF CONTENTS Fair Value of Financial Instruments The aggregated net fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash and cash equivalents, receivables, payables, accrued expenses and short-term borrowings. Fair values were assumed to approximate carrying values for these financial instruments since they are short-term in nature and their carrying amounts approximate fair values or they are receivable or payable on demand. The fair value of marketable securities are
based on active market prices. The fair value of the Companys debt, which approximates carrying value, is estimated based upon the quoted market prices for the same or similar issues or on the current rates offered to the Company for debt of the same remaining maturities. Accounts Receivable and Revenue Recognition Management considers subsequent collection results and writes off all year-end balances that are not deemed collectible by the time the consolidated financial statements are issued. Additionally, management has provided for estimated product returns by applying an allowance against Accounts Receivable for the invoiced price of the returns. A provision to recognize a related estimate of finished goods returns has been added to inventories (Note 2). Management considers the remaining accounts receivable to be fully collectible; accordingly, no allowance for doubtful accounts has been established as of December 31, 2010. If accounts become uncollectible,
they will be charged to operations when that determination is made. The Company does not have a policy to charge interest on past due amounts. Accounts Receivable are considered past due based on invoice terms. The Company recognizes revenue upon the shipment of goods to its customers. Marketable Equity Securities and Deferred Compensation The Company held marketable equity securities as a trustee under the terms of a trust agreement to provide compensation benefits to two key executives upon retirement. The investments in the trusts are subject to the claims of the Companys general creditors; therefore, the Company is treated as the owner of the trusts. These marketable equity securities were sold during the years ended December 31, 2010 and 2009, and, in accordance with the trust agreement, the proceeds were remitted to the executives. Deferred compensation related to these trusts was $111,354 at December 31, 2009 and is included in accrued expenses in the accompanying
consolidated balance sheets. There was no deferred compensation at December 31, 2010. The Company records unrealized holding gains and losses on marketable equity securities available for sale in the stockholders equity section of its balance sheet as a component of Accumulated Other Comprehensive Loss. When securities are sold, the cost of securities sold is based on weighted average cost in order to determine gross realized gains and losses. Realized gains and losses, and declines in value judged to be other-than-temporary on available for sale securities, if any, are included in the consolidated statements of income. Goodwill Goodwill totaling $413,280 represents the excess purchase price over the fair value of the net assets acquired in the acquisition of Mastercraft Products Corporation. These costs are reviewed for impairment at least annually or more frequently upon the occurrence of an event or when circumstances indicate that goodwill may be impaired. During the years ended, December 31, 2010 and 2009, the Company determined that its goodwill was not impaired. Identifiable Intangible Assets Customer Base and Non-Compete Agreement The customer base and non-compete agreement represents $1,258,000 of the fair value of these assets pursuant to the Companys purchase during 2006 of an unrelated entitys inventories, their customer list and a non-compete agreement for a period of ten years. The customer base and non-compete agreement are being amortized over ten years.
 II-3    TABLE OF CONTENTS Other Identifiable Intangible Assets Identifiable intangible assets included in Other Assets consist of debt issue costs. Debt issue costs, net of accumulated amortization, amounted to $17,377 and $34,555 as of December 31, 2010 and 2009, respectively, and are amortized over the three year term of the agreement. The Companys identifiable intangible assets are reviewed for potential impairment whenever events or circumstances indicate that the carrying amounts may not be recoverable. During the years ended, December 31, 2010 and 2009, the Company determined that its identifiable intangible assets were not impaired. Results of Operations 2010 Compared to 2009 Paradise, Inc. is the leading producer of glace fruit, a primary ingredient of fruit cakes sold to manufacturing bakers, institutional users and supermarkets for sale during the holiday seasons of Thanksgiving and Christmas. Paradise, Inc. consists of two business segments, fruit and plastics. Fruit segment net sales represents 68.1% of consolidated net sales during the current twelve month reporting period ending December 31, 2010. Fruit segment net sales during 2010 were consistent with 2009 results as food brokers who represent national supermarkets and regional distributors remained conservative with regard to increasing their inventory
levels. Paradise, Inc. will continue to promote its glace fruit line through its Companys web-site along with aggressive marketing programs in order to maximize distribution for the upcoming fiscal year. Paradise Plastics, Inc., a wholly owned subsidiary of Paradise, Inc. represented 31.9% of consolidated net sales during 2010. Plastics segment net sales totaled $7,645,677 for the twelve months ending December 31, 2010 compared to $6,869,827 for the similar reporting period for 2009. Paradise Plastics, Inc.s net sales to unaffiliated customers during 2010 continued to rebound steadily from 2009 as long-term Plastics customers impacted by the downturn in housing starts during 2009 began to receive an upturn in orders for their products. Consolidated cost of goods sold, expressed as a percentage of net sales decreased 1.1% for the twelve months ending December 31, 2010 compared to the similar reporting period for 2009. This percentage decrease in cost of sales is directly attributable to cost cutting actions implemented during the second quarter of 2009. As previously reported during 2009, Paradise, Inc.s Board of Directors eliminated 15 full time positions, reduced executive and salary wages by 15% and 10%, respectively, and rescinded a 4% merit increase awarded all hourly workers. These actions, implemented May 1, 2009, remained in place throughout 2010 and continued to help
offset increases in cost related to plastics resins and various raw fruit commodities needed to produce the Companys glace fruit inventory. Accounts Receivable as of December 31, 2010 increased by $1,829,829 compared to the previous reporting year as scheduled shipments for glace fruit orders to several major fruit segment customers were shipped in October, 2010 compared to September, 2009. Selling, general and administrative expenses for the period ending December 31, 2010 increased 4.8% compared to the similar reporting period of 2009 as increases in cost for advertising, travel and freight expenses associated with the delivery of Paradise, Inc.s glace fruit products to the marketplace outpaced saving achieved in such areas as professional, legal and audit expenses. Depreciation and amortization expenses for 2010 decreased 8.0% as fixed assets that became fully depreciated during the past twelve months exceeded the amount of new assets placed into service. Interest expense for the twelve months ending December 31, 2010 decreased 73.4% compared to the similar reporting period of 2009 as Paradise, Inc. eliminated virtually all of its long-term debt in June of 2009 and did not incur any additional debt obligations during 2010. Interest expense during 2010 is primarily related to interest paid on the Companys revolving line of credit. As of December 31, 2010, the Companys revolving line of credit balance was $0 and all loan covenants required by its primary lender were in full compliance. The existing two year revolving loan agreement remains in effect through June, 2011.
 II-4    TABLE OF CONTENTS The Consolidated Statement of Cash Flow for the year ended December 31, 2010 resulted in positive cash flow of $1,872,049. This increase in liquidity has been based on Paradise, Inc.s effort to reduce its year end inventory value by over $2 million along with the Companys elimination of $500,000 in long-term debt that was repaid in full during 2009. In summary, Paradise, Inc.s consolidated net sales increased 3.5% to $23,964,543 for 2010 compared to $23,153,794 for 2009. Net income after provision for income taxes was $698,138 or $1.34 earnings per share for 2010 compared to $409,804 or $.79 earnings per share for 2009. 2009 Compared to 2008 Paradise, Inc. is the leading producer of glace fruit, a primary ingredient of fruit cakes sold to manufacturing bakers, institutional users and supermarkets for sale during the holiday seasons of Thanksgiving and Christmas. Paradise, Inc. consists of two business segments, fruit and plastics. Fruit segment net sales represents 70.3% of consolidated net sales during the current twelve month reporting period ending December 31, 2009 or $16,283,967 compared to $17,498,939 for the similar reporting period of 2008. This resulted in a decrease of $1,214,972 or 6.9% in net sales. With the downturn in economic activity beginning in the fourth quarter
of 2008 and continuing through the entire year of 2009, Paradise, Inc.s glace fruit customers remained conservative in placing glace fruit orders during the summer and fall for the upcoming 2009 holiday selling season. Paradise Plastics, Inc., a wholly owned subsidiary of Paradise, Inc. represents 29.7% of consolidated net sales during 2009. Total plastics segment net sales were $6,869,827 for the twelve months ended December 31, 2009 compared to $8,116,506 for the similar reporting period of 2008. The decrease in net sales to unaffiliated customers totaled $1,246,679 or 15.4%. This decrease is primarily caused by the downturn in the housing industry as existing customers directly related to the home building and home improvement market have scaled back their level of custom plastics molding orders over the past year. Furthermore, Paradise Plastics, Inc.s
customers in other industries have also reduced their level of orders as demand for all types of plastics products has slowed during the past twelve months of 2009 compared to the similar reporting period of 2008. As a result of the decrease in net sales activity for the fruit and plastics segments mentioned above, Paradise, Inc.s Board of Directors implemented the following cost cutting actions, effective May of 2009. Executive salaries were reduced 15%. Salary employees weekly paychecks were reduced 10% and the 4% merit increase awarded to all hourly paid employees as of January 1, 2009 was rescinded. In addition, management terminated and or eliminated 15 full-time positions across the Companys two business segments during the month of May, 2009. As a result of these actions along with limiting levels of overtime by all existing employees the
Company reduced total payroll and related taxes in excess of $550,000 for the remainder of 2009. Consolidated cost of goods sold, expressed as a percentage of net sales, increased 1.6% for the twelve months ending December 31, 2009 compared to the similar reporting period for 2008. This increase occurred despite the Companys reduction of manufacturing payroll along with keeping in check various costs for commodities such as natural gas and plastics resins. However, these savings were slightly offset by the allocation of the Companys fixed factory overhead over a lesser number of plastics and glace fruit products. Accounts Receivable as of December 31, 2009 increased by $960,133 compared to the previous reporting year as scheduled shipments for glace fruit orders to Wal-Mart Stores, Inc.s commenced in mid-September of 2009 versus August of 2008. Inventory levels at December 31, 2009 decreased $1,837,817 to $8,206,244 from December 31, 2008s inventory level of $10,044,061 as Paradise, Inc.s management anticipating the uncertainty in the economy towards the end of 2008 reduced in purchasing requirements for 2009. Selling, general and administrative expenses for 2009 decreased $448,334 or 9.7% primarily as selling expenses for brokerage fees, freight out, advertising, travel and entertainment and sales payroll expenses all were directly affected by the related 9.6% decline in Paradise, Inc.s consolidated net sales during 2009.
 II-5    TABLE OF CONTENTS Depreciation and amortization expenses for 2009 decreased 2.8% as fixed assets that became fully depreciated during the past twelve months exceeded the amount of new assets placed into service. Interest expense for the twelve months ending December 31, 2009 decreased $93,585 or 43.1% based on the following two reasons. First, Paradise, Inc.s short-term borrowing needs in regard to financing the Companys inventory level declined during 2009. Secondly, interest payments pertaining to a secured note for a mortgage obligation was retired 11 months ahead of schedule in June of 2009. As of December 31, 2009, Paradise, Inc.s revolving line of credit balance was $0 and all loan covenants required by the Companys primary lender were in compliance. The existing revolving loan agreement remains in effect through June, 2011. The Consolidated Statement of Cash Flow for the year ended December 31, 2009 resulted in positive cash flow of $969,267 as management anticipating a continued slowdown in consumer demand through out 2009 reduced its purchasing of raw materials accordingly. In summary, based upon the information above, Paradise, Inc.s consolidated net sales decreased 9.6% to $23,153,794 for 2009 compared to $25,615,445 for 2008. Net income after provision for income taxes was $409,804 or $.79 earnings per share for 2009 compared to $752,141 or $1.45 earnings per share for 2008.
 II-6    TABLE OF CONTENTS Item 8. Consolidated Financial Statements REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Shareholders of Paradise, Inc. Plant City, FL 33563 We have audited the accompanying consolidated balance sheets of Paradise, Inc., and subsidiaries (the Company) as of December 31, 2010 and 2009 and the related consolidated statements of income and comprehensive income, changes in stockholders equity and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Companys internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Paradise, Inc. and subsidiaries as of December 31, 2010 and 2009 and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. Respectfully submitted, /s/ Pender Newkirk & Company LLP PENDER NEWKIRK & COMPANY LLP Certified Public Accountants Tampa, Florida March 30, 2011
 II-7    TABLE OF CONTENTS PARADISE, INC.AND SUBSIDIARIES  Consolidated Balance Sheets   ASSETS  DECEMBER 31,2010

          

          2009CURRENT ASSETS:Cash and Cash Equivalents

          

          $

          4,772,056

          

          

          $

          3,015,063Accounts Receivable, Net of Allowance for Doubtful Accounts of $ -0- and Allowance for Returns of $1,052,862 (2010) and $1,284,611 (2009)

          

          

          3,619,735

          

          

          

          1,789,906Inventories

          

          

          6,046,584

          

          

          

          8,206,244Prepaid Expenses and Other Current Assets

          

          

          348,407

          

          

          

          363,194Deferred Income Tax Asset

          

          

          225,942

          

          

          

          279,545Total Current Assets

          

          

          15,012,724

          

          

          

          13,653,952PROPERTY, PLANT AND EQUIPMENT:Net of Accumulated Depreciation of $17,998,537 (2010) and $17,433,040 (2009)

          

          

          4,338,717

          

          

          

          4,749,033GOODWILL

          

          

          413,280

          

          

          

          413,280CUSTOMER BASE AND NON-COMPETE AGREEMENT

          

          

          691,517

          

          

          

          817,402OTHER ASSETS

          

          

          183,609

          

          

          

          312,378TOTAL ASSETS

          

          $

          20,639,847

          

          

          $

          19,946,045
 LIABILITIES AND STOCKHOLDERS EQUITY  DECEMBER 31,2010

          

          2009CURRENT LIABILITIES:Short-Term Debt

          

          $

          247,836

          

          

          $

          186,919Accounts Payable

          

          

          304,657

          

          

          

          786,253Accrued Expenses

          

          

          1,235,523

          

          

          

          872,272Income Taxes Payable

          

          

          152,009

          

          

          

          37,030Current Portion of Long-Term Debt

          

          

          

          

          

          

          8,831Total Current Liabilities

          

          

          1,940,025

          

          

          

          1,891,305LONG-TERM DEBT, NET OF CURRENT PORTION

          

          

          

          

          

          

          2,885DEFERRED INCOME TAX LIABILITY

          

          

          147,354

          

          

          

          209,478Total Liabilities

          

          

          2,087,379

          

          

          

          2,103,668STOCKHOLDERS EQUITY:Common Stock, $.30 Par Value, 2,000,000 Shares Authorized, 583,094 Shares Issued, 519,600 (2010) and 519,350 (2009) Shares Outstanding

          

          

          174,928

          

          

          

          174,928Capital in Excess of Par Value

          

          

          1,288,793

          

          

          

          1,288,793Retained Earnings

          

          

          17,643,211

          

          

          

          16,971,041Accumulated Other Comprehensive Loss

          

          

          (281,245

          )

          

          

          (315,466

          )18,825,687

          

          

          

          18,119,296Less: Common Stock in Treasury, at Cost, 63,494 Shares (2010) and 63,744 (2009)

          

          

          273,219

          

          

          

          276,919Total Stockholders Equity

          

          

          18,552,468

          

          

          

          17,842,377TOTAL LIABILITIES AND STOCKHOLDERS EQUITY

          

          $

          20,639,847

          

          

          $

          19,946,045
 The Accompanying Notes are an Integral Part of These Consolidated Financial Statements
 II-8    TABLE OF CONTENTS PARADISE, INC.AND SUBSIDIARIES  Consolidated Statements of Income and Comprehensive Income  FOR THE YEARS ENDED DECEMBER 31,2010

          

          2009NET SALES

          

          $

          23,964,543

          

          

          $

          23,153,794COSTS AND EXPENSES:Cost of Goods Sold (Excluding Depreciation)

          

          

          17,730,523

          

          

          

          17,370,522Selling, General and Administrative Expenses

          

          

          4,363,251

          

          

          

          4,164,392Depreciation and Amortization

          

          

          708,762

          

          

          

          770,188Interest Expense

          

          

          32,954

          

          

          

          123,727Total Costs and Expenses

          

          

          22,835,490

          

          

          

          22,428,829INCOME FROM OPERATIONS

          

          

          1,129,053

          

          

          

          724,965OTHER EXPENSE  NET

          

          

          

          

          

          

          (913

          )INCOME BEFORE PROVISION FOR INCOME TAXES

          

          

          1,129,053

          

          

          

          724,052PROVISION FOR INCOME TAXES

          

          

          430,915

          

          

          

          314,248NET INCOME

          

          

          698,138

          

          

          

          409,804OTHER COMPREHENSIVE INCOME:Unrealized Gain on Marketable Equity Securities

          

          

          

          

          

          

          34,724Reclassification adjustment for losses realized on Sale of Marketable Equity Securities

          

          

          34,221

          

          

          

          24,334COMPREHENSIVE INCOME

          

          $

          732,359

          

          

          $

          468,862EARNINGS PER SHARE:Basic

          

          $

          1.34

          

          

          $

          0.79Diluted

          

          $

          1.34

          

          

          $

          0.79
 The Accompanying Notes are an Integral Part of These Consolidated Financial Statements
 II-9    TABLE OF CONTENTS PARADISE, INC.AND SUBSIDIARIES   Consolidated Statements of Changes in Stockholders EquityFor the Years Ended December 31, 2010 and 2009  COMMON STOCK

          

          CAPITAL IN EXCESS OF PAR VALUE

          

          RETAINED EARNINGS

          

          ACCUMULATED OTHER COMPREHENSIVE LOSS

          

          TREASURY STOCK

          

          TOTALBalance, December 31, 2008

          

          $

          174,928

          

          

          $

          1,288,793

          

          

          $

          16,587,204

          

          

          $

          (374,524

          )

          

          $

          (276,919

          )

          

          $

          17,399,482Cash Dividends Declared, $.05 per Share

          

          

          

          

          

          

          

          

          

          

          (25,967

          )

          

          

          

          

          

          

          

          

          

          

          (25,967

          )Unrealized Gain on Marketable Equity Securities

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          34,724

          

          

          

          

          

          

          

          34,724Reclassification adjustment for losses realized on Sale of Marketable Equity Securities

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          24,334

          

          

          

          

          

          

          

          24,334Net Income

          

          

          

          

          

          

          

          

          

          

          409,804

          

          

          

          

          

          

          

          

          

          

          

          409,804Balance, December 31, 2009

          

          

          174,928

          

          

          

          1,288,793

          

          

          

          16,971,041

          

          

          

          (315,466

          )

          

          

          (276,919

          )

          

          

          17,842,377Cash Dividends Declared, $.05 per Share

          

          

          

          

          

          

          

          

          

          

          (25,968

          )

          

          

          

          

          

          

          

          

          

          

          (25,968

          )Sale of Treasury Stock

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          3,700

          

          

          

          3,700Reclassification adjustment for losses realized on Sale of Marketable Equity Securities

          

          

          

          

          

          

          

          

          

          

          

          

          

          

          34,221

          

          

          

          

          

          

          

          34,221Net Income

          

          

          

          

          

          

          

          

          

          

          698,138

          

          

          

          

          

          

          

          

          

          

          

          698,138Balance, December 31, 2010

          

          $

          174,928

          

          

          $

          1,288,793

          

          

          $

          17,643,211

          

          

          $

          (281,245

          )

          

          $

          (273,219

          )

          

          $

          18,552,468
 The Accompanying Notes are an Integral Part of These Consolidated Financial Statements
 II-10    TABLE OF CONTENTS PARADISE, INC.AND SUBSIDIARIES  Consolidated Statements of Cash Flows  FOR THE YEARS ENDEDDECEMBER 31,2010

          

          2009CASH FLOWS FROM OPERATING ACTIVITIES:Net Income

          

          $

          698,138

          

          

          $

          409,804Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:Stock Compensation

          

          

          3,700

          

          

          

          Provision for Sales Returns

          

          

          (231,749

          )

          

          

          190,239Provision for Estimated Inventory Returns

          

          

          408,591

          

          

          

          (165,203

          )Provision for Deferred Income Taxes

          

          

          (8,521

          )

          

          

          (28,736

          )Depreciation and Amortization

          

          

          708,762

          

          

          

          770,188Loss on Sale of Marketable Securities

          

          

          34,221

          

          

          

          24,334Changes in Assets and Liabilities:Accounts Receivable

          

          

          (1,598,080

          )

          

          

          (1,150,371

          )Inventories

          

          

          1,751,069

          

          

          

          2,003,020Prepaid Expenses and Other Current Assets

          

          

          14,787

          

          

          

          77,442Other Assets

          

          

          (8,501

          )

          

          

          (33,373

          )Accounts Payable

          

          

          (481,596

          )

          

          

          96,580Accrued Expenses

          

          

          363,251

          

          

          

          (281,123

          )Income Taxes Payable

          

          

          114,979

          

          

          

          (87,291

          )Net Cash Provided by Operating Activities

          

          

          1,769,051

          

          

          

          1,825,510CASH FLOWS FROM INVESTING ACTIVITIES:Purchase of Property, Plant and Equipment

          

          

          (155,184

          )

          

          

          (169,617

          )Proceeds from Sale of Marketable Equity Securities

          

          

          106,700

          

          

          

          83,778Decrease (Increase) in Cash Surrender Value of Life Insurance

          

          

          13,193

          

          

          

          (40,344

          )Net Cash Used in Investing Activities

          

          

          (35,291

          )

          

          

          (126,183

          )CASH FLOWS FROM FINANCING ACTIVITIES:Net Proceeds from (Borrowings Under) Short-Term Debt

          

          

          60,917

          

          

          

          (186,619

          )Principal Payments on Long-Term Debt

          

          

          (11,716

          )

          

          

          (517,473

          )Dividends Paid

          

          

          (25,968

          )

          

          

          (25,968

          )Net Cash Provided by (Used in) Financing Activities

          

          

          23,233

          

          

          

          (730,060

          )
 The Accompanying Notes are an Integral Part of These Consolidated Financial Statements
 II-11    TABLE OF CONTENTS PARADISE, INC.AND SUBSIDIARIES  Consolidated Statements of Cash Flows (Continued)  FOR THE YEARS ENDEDDECEMBER 31,2010

          

          2009NET INCREASE IN CASH AND CASH EQUIVALENTS

          

          

          1,756,993

          

          

          

          969,267CASH AND CASH EQUIVALENTS, at Beginning of Year

          

          

          3,015,063

          

          

          

          2,045,796CASH AND CASH EQUIVALENTS, at End of Year

          

          $

          4,772,056

          

          

          $

          3,015,063SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:Cash Paid During the Year for:Interest

          

          $

          32,954

          

          

          $

          123,727Income Taxes

          

          $

          349,392

          

          

          $

          430,581SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:Net Unrealized Holding Gain on Securities

          

          $

          

          

          

          $

          34,724
 DISCLOSURE OF ACCOUNTING POLICY: For purposes of the Statements of Cash Flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. The Accompanying Notes are an Integral Part of These Consolidated Financial Statements
 II-12    TABLE OF CONTENTS PARADISE, INC.AND SUBSIDIARIES   NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2010 AND 2009 NOTE 1: SIGNIFICANT ACCOUNTING POLICIES Paradise, Inc. operations are conducted through two business segments, candied fruit and molded plastics. The primary operations of the fruit segment is production of candied fruit, a basic fruitcake ingredient, sold to manufacturing bakers, institutional users, and retailers for use in home baking. Also, based on market conditions, the processing of frozen strawberry products, for sale to commercial and institutional users such as preserves, dairies, drink manufacturers, etc. The molding plastics segment provides production of plastic containers for the Companys products and other molded plastics for sale to unaffiliated customers.
Substantially all of the Companys customers are located in the United States of America. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, after elimination of all material intercompany accounts, transactions and profits. Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Fair Value of Financial Instruments The aggregated net fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash and cash equivalents, receivables, payables, accrued expenses and short-term borrowings. Fair values were assumed to approximate carrying values for these financial instruments since they are short-term in nature and their carrying amounts approximate fair values or they are receivable or payable on demand. The fair value of marketable equity securities
are based on active market prices. The fair value of the Companys debt, which approximates carrying value, is estimated based upon the quoted market prices for the same or similar issues or on the current rates offered to the Company for debt of the same remaining maturities. Accounts Receivable and Revenue Recognition Management considers subsequent collection results and writes off all year-end balances that are not deemed collectible by the time the consolidated financial statements are issued. Additionally, management has provided for estimated product returns by applying an allowance against Accounts Receivable for the invoiced price of the returns. A provision to recognize a related estimate of finished goods returns has been added to inventories (Note 2). Management considers the remaining accounts receivable to be fully collectible; accordingly, no allowance for doubtful accounts has been established as of December 31, 2010. If accounts become uncollectible,
they will be charged to operations when that determination is made. The Company does not have a policy to charge interest on past due amounts. Accounts Receivable are considered past due based on invoice terms. The Company recognizes revenue upon the shipment of goods to its customers. Inventories Inventories are valued at the lower of cost (first-in, first-out) or market. Cost includes material, labor, factory overhead and depreciation.
 II-13    TABLE OF CONTENTS PARADISE, INC.AND SUBSIDIARIES   NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2010 AND 2009 NOTE 1: SIGNIFICANT ACCOUNTING POLICIES   (continued) Property, Plant and Equipment Property, plant and equipment are stated at cost. Generally, the straight-line method is used in computing depreciation. Estimated useful lives of plant and equipment are:  YearsBuildings and Improvements

          

          

          10  40Machinery and Equipment

          

          

          3  20
 Expenditures which significantly increase values or extend useful lives are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred. Upon sale or retirement of property, plant and equipment, the cost and related accumulated depreciation are eliminated from the respective accounts and the resulting gain or loss is included in the current earnings. Amortization is also computed using the straight-line method over the estimated life of the asset. Marketable Equity Securities and Deferred Compensation The Company held marketable equity securities as a trustee under the terms of a trust agreement to provide compensation benefits to two key executives upon retirement. The investments in the trusts are subject to the claims of the Companys general creditors; therefore, the Company is treated as the owner of the trusts. These marketable equity securities were sold during the years ended December 31, 2010 and 2009, and, in accordance with the trust agreement, the proceeds were remitted to the executives. Deferred compensation related to these trusts was $111,354 at December 31, 2009 and is included in accrued expenses in the accompanying
consolidated balance sheets. There was no deferred compensation at December 31, 2010. The Company records unrealized holding gains and losses on marketable equity securities, which are considered available for sale, in the stockholders equity section of its balance sheet as a component of Accumulated Other Comprehensive Loss. When securities are sold, the cost of securities sold is based on weighted average cost in order to determine gross realized gains and losses. Realized gains and losses, and declines in value judged to be other-than-temporary on available for sale securities, if any, are included in the consolidated statement of income. Goodwill Goodwill totaling $413,280 represents the excess purchase price over the fair value of the net assets acquired in the acquisition of Mastercraft Products Corporation. These costs are reviewed for impairment at least annually or more frequently upon the occurrence of an event or when circumstances indicate that goodwill may be impaired. During the years ended, December 31, 2010 and 2009, the Company determined that its goodwill was not impaired. Identifiable Intangible Assets Customer Base and Non-Compete Agreement The customer base and non-compete agreement represents $1,258,000 of the fair value of these assets pursuant to the Companys purchase during 2006 of an unrelated entitys inventories, their customer list and a non-compete agreement for a period of ten years. The customer base and non-compete agreement are being amortized over ten years. Other Identifiable Intangible Assets Identifiable intangible assets included in Other Assets consist of debt issue costs. Debt issue costs, net of accumulated amortization, amounted to $17,377 and $34,555 as of December 31, 2010 and 2009, respectively, and are amortized over the three year term of the agreement.
 II-14    TABLE OF CONTENTS PARADISE, INC.AND SUBSIDIARIES   NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2010 AND 2009 NOTE 1: SIGNIFICANT ACCOUNTING POLICIES   (continued) The Companys identifiable intangible assets are reviewed for potential impairment whenever events or circumstances indicate that the carrying amounts may not be recoverable. During the years ended, December 31, 2010 and 2009, the Company determined that its identifiable intangible assets were not impaired. Amortization expense of intangible assets subject to amortization for the years ended December 31, 2010 and 2009 was $143,262 and $157,831, respectively. Accumulated amortization for the same periods totaled $592,499 (2010) and $449,237 (2009), respectively. Future amortization expense is anticipated to be as follows:  2011

          

          $

          125,8852012

          

          $

          125,8852013

          

          $

          125,8852014

          

          $

          125,8852015

          

          $

          125,885Thereafter

          

          $

          62,092
 Selling Expenses The Company considers freight delivery costs to be selling expenses and has included $491,476 (2010) and $410,007 (2009) in selling, general and administrative expenses in the accompanying statements of income. Advertising Expenses The Company expenses advertising costs in the year they are incurred. Advertising expenses totaled $144,603 (2010) and $119,188 (2009) and are included in selling, general and administrative expenses in the accompanying statements of income. Employee Benefit Plan The Company has a 401(k) retirement plan for all eligible employees. Eligibility requirements for employees are based on completing 1,000 hours of service by the end of the first twelve months of consecutive employment and being at least 21 years old. Employee contributions are voluntary and subject to Internal Revenue Service limitations. The Company provides a matching contribution subject to annual review of the Companys financial performance. For the years ended December 31, 2010 and 2009, the Company incurred approximately $21,000 and $25,000, respectively, in 401(k) expense. Earnings Per Share Basic and diluted earnings per common share are based on the weighted average number of shares outstanding and assumed to be outstanding of 519,496 and 519,350 shares at December 31, 2010 and 2009, respectively. There are no dilutive securities outstanding at December 31, 2010 and 2009. Reclassifications Certain prior period amounts have been reclassified to conform with the current period presentation. Impact of Recently Issued Accounting Pronouncements The Companys management does not believe that any recent codified pronouncements by the Financial Accounting Standards Board (FASB) will have a material impact on the Companys current or future consolidated financial statements.
 II-15    TABLE OF CONTENTS PARADISE, INC.AND SUBSIDIARIES   NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2010 AND 2009 NOTE 2: INVENTORIES  2010

          

          2009Supplies

          

          $

          158,157

          

          

          $

          178,129Raw Materials

          

          

          1,803,470

          

          

          

          1,750,467Work in Progress

          

          

          864,689

          

          

          

          1,255,909Finished Goods

          

          

          3,220,268

          

          

          

          5,021,739Total

          

          $

          6,046,584

          

          

          $

          8,206,244
 Included in Finished Goods inventory are estimated returns related to the Provision for Sales Returns totaling $701,024 (2010) and $1,109,615 (2009). Substantially all inventories are pledged as collateral for certain short-term obligations. NOTE 3: PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment consisted of the following:  2010

          

          2009Land and Improvements

          

          $

          656,040

          

          

          $

          656,040Buildings and Improvements

          

          

          7,053,066

          

          

          

          7,040,572Machinery and Equipment

          

          

          14,628,148

          

          

          

          14,485,461Total

          

          

          22,337,254

          

          

          

          22,182,073Less: Accumulated Depreciation

          

          

          17,998,537

          

          

          

          17,433,040NET

          

          $

          4,338,717

          

          

          $

          4,749,033
 Tax depreciations are calculated using rates and lives prescribed by the Internal Revenue Code. Differences in amounts of depreciation for tax and financial statement purposes are recognized through the computation of net income for financial statement purposes and that for income tax purposes in determining current and deferred income tax expense. All of the real property, machinery and equipment are pledged as collateral for the Companys short-term obligations. Depreciation expense for the years ended December 31, 2010 and 2009 was $565,500 and $612,357, respectively. NOTE 4: INVESTMENT IN MARKETABLE EQUITY SECURITIES The Companys investments in marketable equity securities are considered available for sale securities, which are included in other assets in the balance sheets, and consist of the following:  2010

          

          2009Equity Mutual Funds, at cost

          

          $

          

          

          

          $

          140,921Gross Unrealized Holding Losses, Before Tax

          

          

          

          

          

          

          (29,567

          )Total Marketable Equity Securities, at Fair Value

          

          $

          

          

          

          $

          111,354
 Available for sale securities are carried in the consolidated financial statements at fair value. In accordance with Accounting Standards Codification Topic 820, Fair Value Measurements and Disclosures (ASC Topic 820), fair value is based on quoted market prices in active markets (Level 1). Net unrealized holding gains on available for sale securities amounted to $0 and $34,724 for the years ended December 31, 2010 and 2009, respectively, and have been included in accumulated other comprehensive loss in the accompanying consolidated financial statements.
 II-16    TABLE OF CONTENTS PARADISE, INC.AND SUBSIDIARIES   NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2010 AND 2009 NOTE 4: INVESTMENT IN MARKETABLE EQUITY SECURITIES   (continued) During the years ended December 31, 2010 and 2009, the Company sold available for sale securities for total proceeds of approximately $106,700 and $84,000, respectively, resulting in gross realized losses of approximately $34,000 and $24,000, respectively. NOTE 5: SHORT-TERM DEBT  2010

          

          2009Letters of credit and other short-term debt under a revolving line of credit with a bank.

          

          $

          247,836

          

          

          $

          186,919TOTAL

          

          $

          247,836

          

          

          $

          186,919
 During June 2009, the Company entered into a revolving loan agreement with a financial institution that has a maximum limit of $12,000,000 and a borrowing limit of 80% of the Companys eligible receivables plus 50% of the Companys eligible inventory. This agreement is secured by all of the assets of the Company and matures on June 23, 2011. Interest is payable monthly at the banks LIBOR rate plus 1.9% or a floor rate of 3%, whichever is greater (3% at December 31, 2010 and 2009). Prior to June 2009, the Company had a revolving loan agreement with a different financial institution that had a maximum limit of $12,000,000 and a borrowing limit of 80% of the Companys eligible receivables plus up to 60% of the Companys eligible inventory. This agreement was secured by all of the assets of the Company and was repaid in full during 2009. Interest was payable monthly at the banks LIBOR rate plus an applicable margin as defined in the agreement. These agreements require that certain conditions are met for the Company to continue borrowing, including debt service coverage and debt to equity ratios and other financial covenants including an agreement not to encumber a mortgage on the property and improvement without bank approval. The Company was in compliance with these covenants at December 31, 2010 and 2009. NOTE 6: OPERATING LEASES The Company leases certain automobiles and office equipment under operating leases ranging in length from thirty-six to sixty months. Lease payments charged to operations amounted to $94,235 (2010) and $72,004 (2009), respectively. At December 31, 2010, future minimum payments required under leases with terms greater than one year are as follows:  Years Ending December 31,

          

          OperatingLeases2011

          

          $

          57,4682012

          

          

          40,3552013

          

          

          28,9512014

          

          

          7,502Total Minimum Lease Payments

          

          $

          134,276
 II-17    TABLE OF CONTENTS PARADISE, INC.AND SUBSIDIARIES   NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2010 AND 2009 NOTE 7: ACCRUED EXPENSES  2010

          

          2009Accrued Payroll and Bonuses

          

          $

          568,719

          

          

          $

          146,978Accrued Brokerage Payable

          

          

          255,415

          

          

          

          330,297Other Accrued Expenses

          

          

          44,878

          

          

          

          12,283Coupon Reimbursement

          

          

          60,000

          

          

          

          58,379Accrued Credit Due to Customers

          

          

          259,853

          

          

          

          168,748Accrued Insurance Payable

          

          

          46,658

          

          

          

          44,233Accrued Deferred Compensation

          

          

          

          

          

          

          111,354Total

          

          $

          1,235,523

          

          

          $

          872,272
 NOTE 8: PROVISION FOR FEDERAL AND STATE INCOME TAXES The provisions for income taxes are comprised of the following amounts:  2010

          

          2009Current:Federal

          

          $

          375,200

          

          

          $

          260,700State

          

          

          64,235

          

          

          

          82,284439,435

          

          

          

          342,984Deferred:Federal

          

          

          (7,698

          )

          

          

          (25,965

          )State

          

          

          (822

          )

          

          

          (2,772

          )(8,520

          )

          

          

          (28,737

          )Total Provision for Income Taxes

          

          $

          430,915

          

          

          $

          314,248
 A reconciliation of the differences between the tax provisions attributable to income from continuing operations and the tax provision at statutory Federal income tax rate follows:  2010

          

          2009Income Taxes Computed at Statutory Rate

          

          $

          383,878

          

          

          $

          246,178State Income Tax,Net of Federal Income Tax Benefit

          

          

          40,985

          

          

          

          26,283Other, Net

          

          

          6,052

          

          

          

          41,787Provision for Income Taxes

          

          $

          430,915

          

          

          $

          314,248
 The Company recognizes deferred tax assets and liabilities for future tax consequences of events that have been previously recognized in the Companys consolidated financial statements or tax returns. The measurement of deferred tax assets and liabilities is based on provisions of the enacted tax law; the effects of future changes in tax laws or rates are not anticipated.
 II-18    TABLE OF CONTENTS PARADISE, INC.AND SUBSIDIARIES   NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2010 AND 2009 NOTE 8: PROVISION FOR FEDERAL AND STATE INCOME TAXES   (continued) Significant components of the Companys deferred tax assets and liabilities at December 31, 2010 and 2009 were:  2010

          

          2009Deferred Tax Assets resulting from:Inventory Valuation

          

          $

          129,996

          

          

          $

          171,580Allowance for Sales Returns and Related Provision for:Return of Finished Goods

          

          

          95,946

          

          

          

          66,064Deferred Compensation Trust Expense

          

          

          

          

          

          

          41,901Total Deferred Tax Assets

          

          

          225,942

          

          

          

          279,545Deferred Tax Liabilities resulting from:Tax over Book Depreciation

          

          

          (147,354

          )

          

          

          (209,478

          )Net Deferred Tax Asset

          

          $

          78,588

          

          

          $

          70,067
  2010

          

          2009The Net Deferred Tax Asset is reflected in the Balance Sheet under these captions:Current Deferred Income Tax Asset

          

          $

          225,942

          

          

          $

          279,545Long-Term Deferred Income Tax Liability

          

          

          (147,354

          )

          

          

          (209,478

          )$

          78,588

          

          

          $

          70,067
 The Company follows Accounting Standards Codification Topic 740, Income Taxes (ASC Topic 740). This standard provides interpretative guidance for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. Significant judgment is required in evaluating our tax positions and determining our provision for income taxes. During the ordinary course of business, there are many transactions and calculations for which the determination of the ultimate tax effects is uncertain. We record our tax provision based on current and future income taxes that will be due. In the determination of our provision, we have taken certain tax positions in the consideration of the effects of income and expenses that have been recognized and included in the accompanying consolidated financial statements that may or may not be recognized in the determination of current or future
income taxes. We record a liability for these unrecognized tax benefits when we believe that certain positions might be challenged despite our belief that our tax return positions are fully supportable. We review our liability for unrecognized tax benefits quarterly and adjust it in light of changing facts and circumstances, such as the outcome of tax audit. We are subject to income tax audits by the Internal Revenue Service and the State of Florida for the years 2007  2009. As of December 31, 2010 and 2009, we do not expect that any of the tax positions taken by the Company for the tax periods open to audit, if challenged, would result in a significant tax liability. NOTE 9: STOCK COMPENSATION During the year ended December 31, 2010, the Company issued 250 shares of common stock in treasury to one of the Companys officers in exchange for services rendered totaling $3,700.
 II-19    TABLE OF CONTENTS PARADISE, INC.AND SUBSIDIARIES   NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2010 AND 2009 NOTE 10: BUSINESS SEGMENT DATA The Companys operations are conducted through two business segments. These segments, and the primary operations of each, are as follows:  BUSINESS SEGMENT

          

          OPERATIONCandied Fruit

          

          Production of candied fruit, a basic fruitcake ingredient, sold to manufacturing bakers, institutional users, and retailers for use in home baking. Also, based on market conditions, the processing of frozen strawberry products, for sale to commercial and institutional users such as preservers, dairies, drink manufacturers, etc.Molded Plastics

          

          Production of plastics containers and other molded plastics for sale to various food processors and others.
  YEAR ENDED 2010

          

          YEAR ENDED 2009NET SALES IN EACH SEGMENTCandied Fruit:Sales to Unaffiliated Customers

          

          $

          16,318,866

          

          

          $

          16,283,967Molded Plastics:Sales to Unaffiliated Customers

          

          

          7,645,677

          

          

          

          6,869,827Net Sales

          

          $

          23,964,543

          

          

          $

          23,153,794
  YEAR ENDED2010

          

          YEAR ENDED 2009THE OPERATING PROFIT OF EACH SEGMENT IS LISTED BELOWCandied Fruit

          

          $

          3,860,314

          

          

          $

          3,737,863Molded Plastics

          

          

          1,714,076

          

          

          

          1,337,581Operating Profit of Segments

          

          

          5,574,390

          

          

          

          5,075,445General Corporate Expenses, Net

          

          

          (4,363,251

          )

          

          

          (4,164,392

          )General Corporate Depreciation and Amortization Expense

          

          

          (49,132

          )

          

          

          (62,361

          )Interest Expense

          

          

          (32,954

          )

          

          

          (123,727

          )Other Expense

          

          

          

          

          

          

          (913

          )Income Before Provision for Income Taxes

          

          $

          1,129,053

          

          

          $

          724,052
 Operating profit is composed of net sales, less direct costs and overhead costs associated with each segment. The candied fruit segment purchases items from the molded plastics segment at cost. These transactions are then eliminated during consolidation. Due to the high degree of integration between the segments of the Company, it is not practical to allocate general corporate expenses, interest, and other income between the various segments.  YEAR ENDED2010

          

          YEAR ENDED2009Identifiable Assets of Each Segment are Listed Below:Candied Fruit

          

          $

          10,101,944

          

          

          $

          10,299,983Molded Plastics

          

          

          4,155,835

          

          

          

          4,957,557Identifiable Assets

          

          

          14,257,779

          

          

          

          15,257,540General Corporate Assets

          

          

          6,382,018

          

          

          

          4,688,505Total Assets

          

          $

          20,639,847

          

          

          $

          19,946,045
 II-20    TABLE OF CONTENTS PARADISE, INC.AND SUBSIDIARIES   NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSDECEMBER 31, 2010 AND 2009 NOTE 10: BUSINESS SEGMENT DATA   (continued) Included in Identifiable Assets of the Molded Plastics Segment is goodwill totaling $413,280 at both December 31, 2010 and 2009. Identifiable assets by segment are those assets that are principally used in the operations of each segment. General corporate assets are principally cash, land and buildings.  YEAR ENDED2010

          

          YEAR ENDED2009Depreciation and Amortization Expense of Each Segment are Listed Below:Candied Fruit

          

          $

          429,922

          

          

          $

          459,655Molded Plastics

          

          

          230,621

          

          

          

          248,172Segment Depreciation and Amortization Expense

          

          

          660,543

          

          

          

          707,827General Corporate Depreciation and Amortization Expense

          

          

          48,219

          

          

          

          62,361Total Depreciation and Amortization Expense

          

          $

          708,762

          

          

          $

          770,188
  YEAR ENDED2010

          

          YEAR ENDED2009Capital Expenditures of Each Segment are Listed Below:Candied Fruit

          

          $

          57,583

          

          

          $

          88,970Molded Plastics

          

          

          38,804

          

          

          

          40,250Segment Capital Expenditures

          

          

          96,387

          

          

          

          129,220General Corporate Capital Expenditures

          

          

          58,797

          

          

          

          40,397Total Capital Expenditures

          

          $

          155,184

          

          

          $

          169,617
 The Company conducts operations only within the United States. Foreign sales are insignificant; primarily all sales are to domestic companies. NOTE 11: MAJOR CUSTOMERS During 2010, the Company derived approximately 18% and 10% of its consolidated revenues from Wal-Mart Stores, Inc. and Aqua Cal, Inc., respectively. During 2009, the Company derived 17% of its consolidated revenue from Wal-Mart Stores, Inc. As of December 31, 2010 and 2009, Wal-Mart Stores, Inc.s accounts receivable balance represents 83% and 77% of total accounts receivable, respectively, and Aqua Cal, Inc.s accounts receivable balance represented 14% of total accounts receivable at December 31, 2010. NOTE 12: CONCENTRATION OF CREDIT RISK Financial instruments which potentially subject the Company to concentration of credit risk consist principally of cash, cash equivalents and unsecured trade receivables. The Companys cash and cash equivalents are maintained at one financial institution located in Florida. Accounts at this institution are secured by the Federal Deposit Insurance Corporation up to $250,000. Uninsured balances aggregate to $4,522,056 at December 31, 2010. The Company grants credit to customers, substantially all of whom are located in the United States. The Companys ability to collect these receivables is dependent upon economic conditions in the United
States and the financial condition of its customers. NOTE 13: SUBSEQUENT EVENT SUBSEQUENT EVENT On March 10, 2011, Paradise, Inc. declared a regular dividend of $.10 per share to stockholders of record at April 15, 2011.
 II-21    TABLE OF CONTENTS Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None Item 9A. Controls and Procedures Evaluation of Disclosure Controls and Procedures Our management carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of our disclosure controls and procedures as of the end of our year ended December 31, 2010 pursuant to Exchange Act Rule 13a-15(b). Based upon that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that, as of the end of our year ended December 31, 2010, our disclosure controls and procedures were effective. The term disclosure controls and procedures, as defined under the Exchange Act, means controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commissions rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange
Act is accumulated and communicated to the issuers management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Changes in Internal Control over Financial Reporting There have been no changes in our internal control over financial reporting that occurred during the year ended December 31, 2010 that have materially affected, or are reasonable likely to materially affect, our internal control over financial reporting. During the year, a weakness in internal control over the timing of issuing credit memos for products returned into inventory was observed. This weakness did not have a material effect on the Companys December 31, 2010 and 2009 audited consolidated financial statements. Procedures during the first quarter of 2011 have been established to ensure the timeliness of issuing credit memos when products
are returned. Managements Annual Report on Internal Control over Financial Reporting Our management, under the supervision and with the participation of our President and Chief Executive Officer and our Chief Financial Officer, is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Exchange Act Rule 13a-15(f). Our management has assessed the effectiveness of our internal control over financial reporting as of December 31, 2010. Managements evaluation was based on criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control  Integrated Framework. Internal control over financial
reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. Our internal control over financial reporting includes those policies and procedures that: (1)

          pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect our transactions and dispositions of our assets; (2)

          provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, and that our receipts and expenditures are being made only in accordance with authorizations of our management and board of directors; and (3)

          provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on our consolidated financial statements. Because of its inherent limitations, internal control over financial reporting determined to be effective can provide only reasonable assurance with respect to financial statement preparation and may not prevent or
 II-22    TABLE OF CONTENTS detect all misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Managements Annual Report on Internal Control Over Financial Reporting does not include an attestation report from the Companys registered public accounting firm Pender Newkirk & Company LLP. Based on the COSO criteria and our managements evaluation, our management believes our internal control over financial reporting as of December 31, 2010 were ineffective due to the Companys controls over credit memos. During 2010, the Company observed a material weakness in internal control over the timing of issuing credit memos for products returned into inventory. This weakness did not have a material effect on the Companys December 31, 2010 and 2009 audited consolidated financial statements. Procedures were established during the first quarter of 2011 to ensure that credit memos for products returned will be issued in a timely
manner. Important Considerations The effectiveness of our disclosure and procedures and our internal control over financial reporting is subject to various inherent limitations, include cost limitations, judgments used in decision making, assumptions about the likelihood of future events, the soundness of our systems, the possibility of human error, and the risk of fraud. Moreover, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions and the risk that the degree of compliance with policies or procedures may become inadequate because of changes in conditions and
the risk that the degree of compliance with policies or procedures may deteriorate over time. Because of these limitations, there can be no assurance that any system of disclosure controls and procedures or internal control over financial reporting will be successful in preventing all errors or fraud or in making all material information known in a timely manner to the appropriate levels of management. Item 9B. Other Information None
 II-23    TABLE OF CONTENTS PART III Item 10. Directors, Executive Officers and Corporate Governance Directors of the Registrant  Melvin S. Gordon 

          

          CEO, Chairman and Director of the Registrant, 77 years old. Term of office will expire at next stockholders meeting. Officer with Registrant past 46 years.Eugene L. Weiner 

          

          Vice-President of the Registrant, 79 years old. Term of office will expire at next stockholders meeting. Officer with Registrant past 45 years. (See note on page III-1)Randy S. Gordon 

          

          President of the Registrant, 55 years old. Term of office will expire at next stockholders meeting. Employee or officer of Registrant past 32 years.Tracy W. Schulis 

          

          Senior Vice-President and Secretary of the Registrant, 53 years old. Term of office will expire at next stockholders meeting. Employee or officer of Registrant past 31 years.Mark H. Gordon 

          

          Executive Vice-President of the Registrant, 48 years old. Term of office will expire at next stockholders meeting. Employee or Officer of Registrant past 25 years.
 Executive Officers of the Registrant  Melvin S. Gordon 

          

          CEO, Chairman and Director, 77 years old. Term of office will expire at next annual directors meeting. Officer with Registrant past 46 years.Eugene L. Weiner 

          

          Vice-President, 79 years old. Term of office will expire at next annual directors meeting. Officer with Registrant past 45 years.Randy S. Gordon 

          

          President, 55 years old. Term of office will expire at next annual directors meeting. Employee or officer of Registrant past 32 years.Tracy W. Schulis 

          

          Senior Vice-President and Secretary, 53 years old. Term of office will expire at next annual directors meeting. Employee or officer of Registrant past 31 years.Mark H. Gordon 

          

          Executive Vice-President, 48 years old. Term of office will expire at next annual directors meeting. Employee or Officer of Registrant past 25 years.Jack M. Laskowitz 

          

          CFO and Treasurer, 54 years old. Term of office will expire at next annual directors meeting. Employee or officer with Registrant past 10 years.
 Mr. Weiner relinquished his duties as COO, CFO, Treasurer and Secretary of the Company as of June 30, 2002. Mr. Weiner remains a Director and Vice President, concentrating on corporate development. Family Relationships Melvin S. Gordon is a first cousin by marriage to Eugene L. Weiner. Melvin S. Gordon is the father of Randy S. Gordon and Mark H. Gordon and the father-in-law of Tracy W. Schulis. Audit Committee Financial Expert Rules recently adopted by the Securities and Exchange Commission (the SEC) to implement sections of the Sarbanes-Oxley Act of 2002 (the Act) require disclosure of whether the Company has an audit committee
 III-1    TABLE OF CONTENTS financial expert on its audit committee. The Company has not formally designated an audit committee; however, the Act stipulates that if no such committee exists, then the audit committee is the entire board of directors. The Companys Board of Directors has determined that Eugene L. Weiner, is an audit committee financial expert. Eugene L. Weiner is a Director and also a Vice-President of the Company and therefore is not independent of management. Code of Business Conduct and Ethics The Company has adopted a Code of Business Conduct and Ethics that applies to all executive officers, directors and employees of the Company. The Code of Business Conduct and Ethics is attached as an exhibit to this Annual Report on Form 10-K. Item 11. Executive Compensation (a) and (b) The following summary compensation table sets forth all remuneration paid or accrued by the Company and its subsidiaries for the years ended December 31, 2010 and 2009 to its Chief Executive Officer and the four other highest paid executive officers whose total remuneration exceeded $100,000.  COMPENSATION

          

          ALL OTHERCOMPENSATION(2)NAME AND PRINCIPAL POSITION

          

          YEAR

          

          SALARY(1)

          

          BONUSMelvin S. Gordon,Chief Exec. Officer

          

          

          2010

          

          

          $

          318,968

          

          

          $

          77,685

          

          

          $

          3,6352009

          

          

          

          336,510

          

          

          

          21,094

          

          

          

          2,725Randy S. Gordon,President

          

          

          2010

          

          

          

          202,070

          

          

          

          66,310

          

          

          

          14,4062009

          

          

          

          214,508

          

          

          

          21,495

          

          

          

          14,305Tracy W. Schulis,Senior Vice-President and Secretary

          

          

          2010

          

          

          

          202,070

          

          

          

          67,758

          

          

          

          18,5192009

          

          

          

          214,808

          

          

          

          22,956

          

          

          

          18,589Mark H. Gordon,Executive Vice-President

          

          

          2010

          

          

          

          202,070

          

          

          

          64,210

          

          

          

          8,8492009

          

          

          

          214,308

          

          

          

          19,408

          

          

          

          8,428Jack M. Laskowitz,Chief Financial Officer

          

          

          2010

          

          

          

          112,121

          

          

          

          32,472

          

          

          

          10,5292009

          

          

          

          117,274

          

          

          

          9,232

          

          

          

          10,420
  NOTES TO THE ABOVE TABLE 1.

          Includes personal use of Company automobiles and PS-58 costs. 2.

          All Other Compensation includes life insurance premiums paid on behalf of the officers in accordance with the Companys 162 bonus plan along with matching contributions provided for by the Companys 401(k) Retirement Savings Plan. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters (a) The following table sets forth as of December 31, 2010, information concerning the beneficial ownership of the common stock of the Company by the persons who own, are known by the company to own, or who the Company has been advised have filed with the S.E.C. declarations of beneficial ownership, of more than 5% of the outstanding common stock.  NAME AND ADDRESS OF BENEFICIAL OWNER

          

          TITLE OFCLASS

          

          AMOUNT & NATUREOF BENEFICIALOWNERSHIP(1)

          

          PERCENTOF CLASSMelvin S. Gordon2611 Bayshore Blvd.Tampa, Florida

          

          

          Common

          

          

          

          192,742

          (1)

          

          

          37.1

          %TOTAL

          

          

          

          

          

          

          192,742

          

          

          

          37.1

          %
  (1)

          Includes 141,760 shares owned by the Helen A. Weaner Family Partnership, Ltd., control of which Mr. Gordon shares with his wife as Trustees.
 III-2    TABLE OF CONTENTS (b) Beneficial ownership of common stock held by all directors and officers of the Company as a group:  TITLE OFCLASS

          

          AMOUNT & NATUREOF BENEFICIALOWNERSHIP(1)

          

          PERCENTOF CLASSDirectors and Officers as a Group

          

          

          Common

          

          

          

          217,947

          

          

          

          41.9

          %Melvin S. Gordon

          

          

          Common

          

          

          

          192,742

          (2)

          

          

          37.1

          %Eugene L. Weiner

          

          

          Common

          

          

          

          307

          

          

          

          0Randy S. Gordon

          

          

          Common

          

          

          

          7,400

          

          

          

          1.4Tracy W. Schulis

          

          

          Common

          

          

          

          8,648

          

          

          

          1.7Mark H. Gordon

          

          

          Common

          

          

          

          8,600

          

          

          

          1.7Jack M. Laskowitz

          

          

          Common

          

          

          

          250

          

          

          

          0
  (1)

          The nature of the beneficial ownership for all shares is sole voting and investment power. (2)

          Includes 141,760 shares owned by the Helen A. Weaner Family Partnership, Ltd., control of which Mr. Gordon shares with his wife as Trustees. (c) The Company knows of no contractual arrangements which may at a subsequent date result in a change in control of the Company. Item 13. Certain Relationships, Related Transactions and Director Independence None Item 14. Principal Accountant Fees and Services Audit Fees The aggregate fees billed for professional services rendered by Pender Newkirk & Company LLP for the audit of the Companys annual consolidated financial statements and review of consolidated financial statements included in the Companys Forms 10-Q for fiscal years 2010 and 2009 were $121,500 and $130,196, respectively. At the time of this filing, not all audit fees had been billed for the 2010 fiscal year. No other fees were paid to Pender Newkirk & Company LLP. The Company has not formally designated an audit committee and as a result, the entire board of directors performs the duties of an audit committee. Its the Boards policy to pre-approve all services provided by Pender Newkirk & Company LLP. Item 15. Exhibits and Financial Statement Schedules  Exhibit (3) 

          

          Articles of Incorporation and By-Laws (Incorporated by reference from Exhibits to Paradise, Inc.s Annual Report on Form 10-KSB for the year ended December 31, 1993, filed on March 31, 1994)Exhibit (11) 

          

          Statement Re: Computation of Per Share Earnings (Incorporated by reference from Exhibits to page II-15 of this Form 10-K)Exhibit (31.1) 

          

          Certification of Chief Executive Officer pursuant to Rule 13a-14(a) (filed herewith)Exhibit (31.2) 

          

          Certification of Chief Financial Officer pursuant to Rule 13a-14(a) (filed herewith)Exhibit (32.1) 

          

          Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 (filed herewith)Exhibit (32.2) 

          

          Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350 (filed herewith)
 III-3    TABLE OF CONTENTS SIGNATURES In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.  March 30, 2011

          

          PARADISE, INC.Date/s/ Melvin S. GordonMelvin S. Gordon CEO, Chairman and Director
 In accordance with the Exchange Act this report has been signed below by the following persons on behalf of the Registrant in the capacities and on the dates indicated.  /s/ Melvin S. GordonMelvin S. Gordon

          

          CEO, Chairman and Director

          

          March 30, 2011Date/s/ Eugene L. WeinerEugene L. Weiner

          

          Vice-President and Director

          

          March 30, 2011Date/s/ Randy S. GordonRandy S. Gordon

          

          President and Director

          

          March 30, 2011Date/s/ Tracy W. SchulisTracy W. Schulis

          

          Senior Vice-President, Secretary and Director

          

          March 30, 2011Date/s/ Mark H. GordonMark H. Gordon

          

          Executive Vice-President and Director

          

          March 30, 2011Date/s/ Jack M. LaskowitzJack M. Laskowitz

          

          CFO and Treasurer

          

          March 30, 2011Date
 III-4