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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 2013,2014, the Company had not met the listing criteria.

										BID PRICES
		BID PRICES								High				Low
		High				Low
2013
2014
First Quarter			22.92				19.55				33.49				27.00
Second Quarter			26.49				20.50				31.00				26.20
Third Quarter			26.25				21.00				31.00				26.22
Fourth Quarter			30.00				24.50				27.00				20.50
2012
2013
First Quarter			18.00				14.60				22.92				19.55
Second Quarter			19.41				16.07				26.49				20.50
Third Quarter			18.01				17.00				26.25				21.00
Fourth Quarter			19.55				17.00				30.00				24.50

As of March 14, 2014,31, 2015, the approximate number of holders of record of each class of equity securities of the Registrant were:

				NUMBER OF
TITLE OF CLASS			NUMBER OF	HOLDERS OF RECORD
	Common Stock, $.30 Par Value		128		120

Dividends have been declared and paid annually when warranted by profitability. On March 6, 2014,12, 2015, the Board of Directors declared dividends of $.11 per share to stockholders of record on April 11, 2014.10, 2015. Dividends paid to stockholders for 2014 were $.11 and for 2013 were $.15 and for 2012 were $.20.$.15.

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

None

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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 to								Period to Period
		Total Revenue								Increase (Decrease)
		Year Ended December 31,								Years Ended
			2014				2013				2014-2013				2013-2012
NET SALES:
Candied Fruit			65.8	%			65.3	%			6.5	%			(9.2	)%
Molded Plastics			34.2				34.7				3.9				(0.3	)
Total Sales			100.0				100.0				5.6				(6.3	)
Cost of Sales			78.4				76.4				8.3				(4.9	)
Selling, General and
Administrative Expenses			18.1				19.3				(0.8	)			(0.4	)
Amortization Expense			0.6				0.6				-				-
Interest Expense			-				-				(72.5	)			(15.2	)
Total Expenses			97.1				96.3				(6.4	)			(4.0	)
Income from Operations			2.9				3.7				(17.3	)			(42.3	)
Other Income, Net			0.2				1.5				(85.2	)			505.5
Income Before Provision for Income Taxes			3.1				5.1				(36.9	)			(21.9	)
Provision for Income Taxes			1.1				1.9				(36.0	)			(21.6	)
Net Income			1.9	%			3.3	%			(37.4	)%			(22.0	)%

		Relationship to Total Revenue Year Ended December 31,								Period to Period Increase (Decrease) Years Ended
		2013				2012				2013 – 2012				2012 – 2011
NET SALES:
Candied Fruit			65.6	%			67.7	%			(9.3	)%			1.7	%
Molded Plastics			34.4				32.3				(0.3	)			7.1
Total Sales			100.0				100.0				(6.4	)			3.4
Cost of Sales			75.8				74.6				(4.9	)			5.0
Selling, General and Administrative Expenses			20.0				18.9				(1.2	)			4.4
Amortization Expense			0.6				0.6				—				0.3
Interest Expense			—				—				(15.2	)			8.3
Total Expenses			96.4				94.1				(4.2	)			4.9
Income from Operations			3.6				5.9				(42.3	)			(16.1	)
Other Income, Net			1.5				0.2				505.5				100.0
Income Before Provision for Income Taxes			5.1				6.1				(21.9	)			(18.7	)
Provision for Income Taxes			1.8				2.2				(21.6	)			(18.7	)
Net Income			3.3	%			3.9	%			(22.0	)%			(18.7	)%

II-2

Item 7.

Management’s Discussion and Analysis or Plan of Operation (Continued)

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 4 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, 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.

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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, 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.

II-3

Item 7.

Management’s Discussion and Analysis or Plan of Operation (Continued)

Accounts Receivable and Revenue Recognition

Management reviews subsequent collections on accounts receivable 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. Management considers the remaining accounts receivable to be fully collectible; accordingly, no allowance for doubtful accounts has been established as of December 31, 20132014 and 2012.2013. 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 or delivery of goods, depending on the agreed upon terms with its customers.

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, 20132014 and 2012,2013, 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. Accumulated amortization at December 31, 20132014 and 20122013 totaled approximately $1,070,000 and $944,000, and $818,000, respectively.

Other Identifiable Intangible Assets

Identifiable intangible assets included in Other Assets consist of debt issueissuance costs.

Debt issueissuance costs at December 31, 20132014 and 2012,2013, net of accumulated amortization of approximately $9,000$27,000 and $27,000,$9,000, respectively, amounted to approximately $27,000$9,000 and $9,000,$27,000, respectively, and are amortized over the two 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, 20132014 and 2012,2013, the Company determined that its identifiable intangible assets were not impaired.

Impact of Recently Issued Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09,Revenue from Contracts with Customers(Topic 606).The guidance in this update supersedes the revenue recognition requirements in Topic 605,Revenue Recognition,and most industry-specific guidance throughout Industry topics of the Codification. Additionally, this Update supersedes some cost guidance included in Subtopic 605-35, Revenue Recognition - Construction-Type and Production-Type Contracts.In addition, the existing requirements for the recognition of a gain or loss on the transfer of nonfinancial assets that are not in a contract with a customer (for example, assets within the scope of Topic 360, Property, Plant, and Equipment, and intangible assets within the scope of Topic 350, Intangibles-Goodwill and Other) are amended to be consistent with the guidance on recognition and measurement (including the constraint on revenue) in this Update. Under the new guidance, an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU No. 2014-09 is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. We are currently evaluating the impact of adopting the guidance on our financial statements.

Except as noted above, the Company’s management does not believe that any recent codified pronouncements by the Financial Accounting Standards Board (“FASB”) (including its EITF), the AICPA or the Securities and Exchange Commission will have a material impact on the Company’s current or future consolidated financial statements.

TABLE OF CONTENTS2014 Compared to 2013

Results of Operations

2013 Compared to 2012

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 represented 65.6%65.8% of consolidated net sales during the current twelve month reporting period ending December 31, 2014. Fruit segment net sales for 2014 increased $1,006,910 or 6.5% to $16,581,479 from $15,574,569 for the similar reporting period of 2013. Two major factors were responsible for this increase in glace’ fruit sales. First, additional orders were received and shipped of glace’ fruit sold in bulk quantities to large manufacturing bakers during the past year. Bulk fruit sales which represented 29% of total glace’ fruit sales were $4,805,747 for 2014 compared to $4,380,343 for 2013, an increase of $425,404. Secondly, additional purchase orders for retail glace’ fruit products sold to national and regional supermarkets were also received and shipped as a coordinated effort between Paradise, Inc.’s in-house sales force and the Company’s outside food broker network produced an increase of $581,506 in retail glace’ fruit sales during 2014 compared to 2013.

2014 Compared to 2013 (Continued)

Results of Operations (Continued)

Paradise Plastics, Inc., a wholly owned subsidiary of Paradise, Inc., represented 34.2% of consolidated net sales during 2014. Total plastics net sales increased 3.9% to $8,601,555 for the twelve months ending December 31, 2014 compared to $8,280,692 for the similar reporting period of December 31, 2013 as the recent trend for plastics products related to the housing market continued to offset a decline in sales of custom molding injection products. Paradise Plastics, Inc. is continuing to aggressively expand its plastics segment revenue, which includes sales to such diverse industries as medical supplies, food processing and aerospace. To assist in the effort, management made a financial and time commitment during the first half of 2014 to become ISO9001 compliant. The certification process which was completed in June of 2014, represents a series of standards, developed by the International Organization Standardization (ISO) for manufacturing companies and will be emphasized as we continue to seek new business opportunities going forward.

Consolidated cost of sales, as a percentage of net sales, increased 2.0% during the twelve months ending December 31, 2014 compared to the similar reporting period of 2013. Two factors contributing to this change are as follows. First, as mentioned above, Paradise, Inc.’s fruit segment experienced an increase in the sale of bulk glace’ fruit products. Historically, the profit margins from the sale of bulk fruit are less than what is realized from retail glace’ fruit sales. Secondly, the amount of raw fruit materials processed into finished glace’ inventory was approximately 800,000 pounds less during the Company’s production period, May – September, 2014, compared to the similar period of 2013. While variable expenses such as labor and utilities were favorably impacted by the decrease in production, expenses such as property insurance, depreciation and amortization of the Company’s property, plant and equipment which are relatively fixed, more than offset the positive effect of labor and utility expenses.

Selling, general and administrative expenses, decreased 0.7% for the twelve months ending December 31, 2014 compared to the similar reporting period of 2013. The main reason for this decrease was related to the reduction in travel expenses of the Company’s sales force as greater emphasis was placed on Paradise, Inc.’s network of outside food brokers. These brokers, located throughout the United States, can be at times a more cost effective approach to submitting marketing and promotional programs to Paradise, Inc.’s customers.

2014 Compared to 2013 (Continued)

Results of Operations (Continued)

Paradise, Inc.’s interest expense on its revolving line of credit for the twelve months ended December 31, 2014 was $2,216 compared to $8,054 for December 31, 2013. Interest expense during 2014 is directly related to cash advances received from the Company’s primary lender’s revolving line of credit as the Company needs to procure sizable amounts of inventory months in advance of its holiday selling season. As of December 31, 2014, the Company’s revolving line of credit balance was $0, its letters of credit balance was approximately $113,000 and all debt and loan covenants required by its primary lender were in full compliance. Paradise, Inc.’s revolving line of credit has a maximum limit of $12,000,000 with a borrowing base of 80% of the Company’s eligible receivables plus the lesser of $6,000,000 or 50% of the Company’s eligible inventory from January through May of each year and 60% of eligible inventory from June to December of each year. This agreement is secured by all the assets of the Company and the agreement requires 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 without bank approval. Interest is payable monthly at the bank’s LIBOR rate plus 1.75%. Paradise, Inc.’s revolving line of credit is with a financial institution for a two year period maturing on June 23, 2015.

Other Significant Items

Other Income for the twelve months ended December 31, 2014 totaled $52,301 compared to $353,656 for the similar period for 2013. The reason for this decrease is related to the settlement of Paradise, Inc.’s claim filed with the Deepwater Horizon Economic and Property Program (the “Settlement Program”) arising out of damages suffered as a result of the Deepwater Horizon Incident. Upon review by the claims administrator of the Settlement Program and after a 30 day period in which BP Exploration & Production, Inc. could file a protest contesting this amount, a settlement check for $277,546 was awarded to Paradise, Inc. Funds were received on August 30, 2013 and this amount is reflected in Other Income on the Company’s Consolidated Statements of Income.

Accounts Receivable balance at December 31, 2014 was $3,046,669 compared to $2,369,321 at December 31, 2013. This represents an increase of $677,348 or 28.6%. The primary reason for this increase is attributable to timing as several large customers of glace’ retail fruit delayed their purchasing and subsequent receipt of product by as much as sixty days. Therefore, receipt of payment from these customers for product received transferred into the first quarter of 2015. As disclosed in Note 1 under significant accounting policies, management provides for estimated product returns by applying an allowance against Accounts Receivable for the invoice amount of the return. During 2014, the Company did experience a slight increase in returns from customers which resulted in the allowance for returns of $912,789 compared to $897,546 against the accounts receivable balance at December 31, 2013.

2014 Compared to 2013 (Continued)

Other Significant Items (Continued)

Inventory at December 31, 2014, including the annual provision for estimated returns, totaled $7,484,909 compared to $8,837,798. This decrease represents $1,352,889 or a 15.3% reduction in ending inventory at December 31, 2014 compared to December 31, 2013. This decrease is directly related to the fact that Paradise, Inc. processed approximately 800,000 pounds less of raw fruit materials into higher priced finished glace’ fruit inventory for 2014 versus 2013.

The Company finances ongoing operations primarily with cash provided by our operating activities, which are seasonal in nature. The principal sources of liquidity are cash flows provided by operating activities, existing cash, and a line of credit facility. At December 31, 2014 and December 31, 2013, the Company had $7,788,010 and $5,916,366, respectively, in cash. Additionally, a revolving line of credit facility is available with a maximum limit of $12 million and a borrowing limit of 80% of the Company’s eligible receivables plus up to 50% of the Company’s eligible inventory. Up to $1,200,000 of the facility is available for issuance of import letters of credit. At December 31, 2014 and 2013, $112,879 and $0, respectively, was due for issued letters of credit under the facility and there were no outstanding advances at December 31, 2014 and 2013. Net cash provided by operating activities increased $1,424,156 for the twelve months ended December 31, 2014 as compared to December 31, 2013. The primary reasons for this increase are as follows: payments for the purchase of fruit segment inventory in 2014 were $1,363,484 less than 2013, income tax payments made during 2014 year were $604,483 less than 2013 and collections of accounts receivable decreased by $692,591 in 2014 as compared to 2013.

Summary

Paradise, Inc.’s consolidated net sales increased to $25,183,034 for 2014 compared to $23,855,261 for 2013. Net income after provision for income taxes was $489,566 or $0.94 earnings per share for 2014 compared to $781,960 or $1.50 earnings per share for 2013.

2013 Compared to 2012

Results of Operations

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 represented 65.3% of consolidated net sales during the current twelve month reporting period ending December 31, 2013. Fruit segment net sales for 2013 decreased 9.3%9.2% to $15,775,685$15,574,569 from $17,397,551$17,155,559 for the similar reporting period of 2012. A major reason for this decrease is the changing buying patterns of Paradise, Inc.’s retail customers who in the past would purchase glace’ fruit at their national or regional headquarters and are now directing the local store manager to decide how much product to carry and place on their store shelves. Paradise, Inc.’s sales managers along with support from its network of food brokers continues to work with local grocery managers to increase their awareness of glace’ fruit as a staple in their traditional holiday baking displays for Thanksgiving and Christmas.

Paradise Plastics, Inc., a wholly owned subsidiary of Paradise, Inc., represented 34.4%34.7% of consolidated net sales during 2013. Total plastics net sales decreased less than .3% to $8,280,692 for the twelve months ending December 31, 2013 compared to $8,304,752 for the similar reporting period of December 31, 2012 as increased demand for plastics products related to the housing market continued to offset a decline in sales of custom molding injection orders.

Consolidated cost of sales, as a percentage of net sales, increased 1.2%decreased 4.9% during the twelve months ending December 31, 2013 compared to the similar reporting period of 2012. There are two reasons for this increase.decrease. First, Paradise, Inc. received and processed approximately 2,800,000 less pounds of strawberries through its facilities during the first six months of 2013 compared to the similar period of 2012. Secondly, certain raw fruit material received from one of the Company’s suppliers, subject to specific size and quality requirements, before being processed and placed into inventory had a higher rejection rate than in the previous year. Thus, processing a smaller amount of raw fruit production over a relatively fixed level of factory overhead resulted in an increasea decrease of cost of sales for 2013 compared to 2012.

Selling, general and administrative expenses, as a percentage of net sales, increased 1.1%remained consistent with the prior years as increases in health care premiums were offset by savings related to professional fees during the twelve months ending December 31, 2013 compared to the similar reporting period of 2012. This increase is primarily related to the rising cost of the Company’s employee health insurance program. Management is working closely with its insurance consultant to ensure that as the Affordable Health Care Act is implemented, Paradise, Inc. will be in compliance with all applicable federal and state laws.

Paradise, Inc.’s interest expense on its revolving line of credit for the twelve months ended December 31, 2013 was $8,054 compared to $9,493 for December 31, 2012. Interest expense during 2013 was directly related to cash advances received from the Company’s primary lender’s revolving line of credit as the Company needs to procure sizable amounts of inventory months in advance of its holiday selling season. As of December 31, 2013, the Company’s revolving line of credit balance was $0 and all loan covenants required by its primary lender were in full compliance.

2013 Compared to 2012 (Continued)

Results of Operations (Continued)

As previously reported in the Company’s second quarter filing of this year, Paradise, Inc. renewed its revolving line of credit with a financial institution for a two year period maturing on June 23, 2015. Paradise, Inc.’s revolving line of credit has a maximum limit of $12,000,000 with a borrowing base of 80% of the Company’s eligible receivables plus the lesser of $6,000,000 or 50% of the Company’s eligible inventory from January through May of each year and 60% of eligible inventory from June to December of each year. This agreement is secured by all the assets of the Company and the agreement requires 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 without bank approval. Interest is payable monthly at the bank’s LIBOR rate plus 1.75%.

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Other Significant Items

During 2012, Paradise, Inc. filed a claim with the Deepwater Horizon Economic and Property Program (the “Settlement Program”) arising out of damages suffered as a result of the Deepwater Horizon Incident. Upon review by the claims administrator of the Settlement Program and after a 30 day period in which BP Exploration & Production, Inc. could file a protest contesting this amount, a settlement check for $277,546 was awarded to Paradise, Inc. Funds were received on August 30, 2013 and this amount is reflected in Other Income on the Company’s consolidated Statements of Income.

Accounts Receivable balance at December 31, 2013 was $2,369,321 compared to $1,893,160 at December 31, 2012. This represents an increase of $476,161 or 25.2%. The primary reason for this increase is attributable to the accounting for estimated product returns. As disclosed in Note 1 under significant accounting policies, management provides for estimated product returns by applying an allowance against Accounts Receivable for the invoice amount of the return. During 2012, as previously reported, the Company did experience an increase in product returns from a long time customer which resulted in the allowance for product returns to total $1,562,566. For 2013, returns were in line with the Company’s historical average resulting in an allowance of $897,546 against the accounts receivable balance at December 31, 2013.

The Company finances ongoing operations primarily with cash provided by our operating activities which are seasonal in nature. The principal sources of liquidity are cash flows provided by operating activities, existing cash, and a line of credit facility. At December 31, 2013 and December 31, 2012, the Company had $5,916,366 and $6,384,087, respectively, in cash. Additionally, a revolving line of credit with a maximum limit of $12 million and a borrowing limit of 80% of the Company’s eligible receivables plus up to 50% of the Company’s eligible inventory, of which $0 was outstanding at December 31, 2013 and December 31, 2012. The line of credit agreement which was renewed in June 2013 expires in June 2015. Net cash provided by operating activities increased $1,487,244 for the twelve months ended December 31, 2013 as compared to December 31, 2012. The primary reasons for this increase are as follows: income tax payments made during 2013 year were $323,318 less than 2012 and payments for the purchase of inventory decreased $1,759,976.

2013 Compared to 2012 (Continued)

Summary

Paradise, Inc.’s consolidated net sales decreased to $24,056,377$23,855,261 for 2013 compared to $25,702,303$25,460,311 for 2012. Net income after provision for income taxes was $781,960 or $1.50 earnings per share for 2013 compared to $1,002,932 or $1.93 earnings per share for 2012.

2012 Compared to 2011

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 represented 67.7% of consolidated net sales during the current twelve month reporting period ending December 31, 2012. Fruit segment net sales for 2012 increased 1.7% to $17,397,551 compared to $17,107,763 for the similar reporting period of 2011. Consolidation within the supermarket industry over the past twelve months, has limited in certain regions of the country, the number of opportunities available to the Company to market its glace’ fruit products. To counter this impact, the Company continues to aggressively promote sales of bulk fruit and recently dried fruit products which are not targeted to the supermarket industry. As to its dried fruit products, the Company promotes these products to such non-traditional customers as convenience stores, airports and over the internet on a year round basis.

Paradise Plastics, Inc., a wholly owned subsidiary of Paradise, Inc., represented 32.3% of consolidated net sales during 2012. Total plastics net sales increased 7.1% to $8,304,752 for the twelve months ending December 31, 2012 compared to $7,754,707 for the similar reporting period of December 31, 2011. This increase is two-fold. First, Paradise Plastics, Inc.’s net sales continued to increase to customers within the housing market. As reported in previous filings, the downturn in the economy during 2008 resulted in a decrease in purchase orders received and fulfilled by the Company. With the rebound in the housing

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market over the past several years, Paradise Plastics, Inc. continued to benefit from this improvement with an uptick in orders related to this market. Secondly, the commitment to diversify to other industries such as military, medical and recreation continued to provide increased sales and growth during the past year.

Consolidated cost of goods sold, expressed as an overall percentage of net sales increased 1.2% for the twelve months ending December 31, 2012 compared to the similar reporting period for 2011. This increase was related to rising prices absorbed from raw fruit suppliers along with corresponding increases incurred for in-bound freight charges during 2012.

Selling, general and administrative expenses for the period ending December 31, 2012 increased 4.4% compared to the similar reporting period for 2011. This increase is primarily related to advertising expenses associated with the sale of its glace’ fruit products. During the past year, management spent additional funds to support inclusion of glace’ fruit items within baking center displays for various supermarket customers. This increased the visibility of the Company’s glace’ fruit products, which in past years, may have been placed on shelves set back from other traditional holiday baking items. From initial reports received from customers, management is pleased by the results these baking center displays had in increasing awareness of the Company’s glace’ fruit products. Participating in baking center displays will be a vital part of the Company’s marketing strategy going forward.

Interest expense for the twelve months ending December 31, 2012 totaled $9,493 compared to $8,764 for the similar reporting period of 2011. Interest expense during 2012 was directly related to cash advances received from the Company’s primary lender’s revolving line of credit as the Company needs to procure sizable amounts of inventory months in advance of its holiday selling season. As of December 31, 2012, the Company’s revolving line of credit balance was $0 and all loan covenants required by its primary lender were in full compliance.

Other Significant Items

Other Income for the twelve months ended December 31, 2012 was $58,408 compared to $128,109 for the similar period of 2011. As mentioned in previous filings, on February 22, 2011, Paradise, Inc. received $150,000 from a former supplier to settle a dispute dating back to September, 2004. This amount is reflected as part of Other Income on the Company’s income statement during 2011. Other Income reflected in this account is primary related to fluctuations in the cash surrender value of insurance policies owned by the Company on behalf of two senior executives.

Accounts Receivable balance at December 31, 2012 was $1,893,160 compared to $2,579,362 at December 31, 2011. This change is a decrease of $686,202 or 26.6%. As disclosed in Note 1 under significant accounting policies, the company writes off all year-end balances that are not deemed collectible by the time the consolidated financial statements are issued. In addition, management provides for estimated product returns by applying an allowance against Accounts Receivable for the invoice amount of the return. For 2012, the Company did experience an increase in product returns from a long time customer which resulted in an increase in the allowance for returns by $558,777.

Inventory as of December 31, 2012 totaled $8,856,379 compared to $6,196,517 as of December 31, 2011. This increase of $2,659,862 was primarily driven by the Company’s need to procure a sufficient amount of raw fruit materials leading into its 2013 production season. As mentioned above, Paradise, Inc.’s. production season will commence as early as January in order to be ready to ship glace’ fruit products to customers in time for the holiday selling season beginning in mid-September of each year. Management is consistently reviewing economic, harvest and weather conditions throughout the year to see what effect changes to these factors will have on the future availability of the Company’s raw fruit materials. Based on the Company’s assessment of these issues during the first half of 2012, management increased the procurement of raw fruit materials during the third and fourth quarters of 2012. This increase in raw fruit inventory at December 31, 2012 will now provide the Company adequate inventory levels to commence its projected 2013 production needs.

The Company finances ongoing operations primarily with cash provided by our operating activities which are seasonal in nature. The principal sources of liquidity are cash flows provided by operating activities,

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existing cash, and a line of credit facility. At December 31, 2012 and December 31, 2011, the Company had $6,384,087 and $7,468,908, respectively, in cash. Additionally, a revolving line of credit with a maximum limit of $12 million and a borrowing limit of 80% of the Company’s eligible receivables plus up to 50% of the Company’s eligible inventory, of which $0 was outstanding at December 31, 2012 and December 31, 2011. Net cash used in operating activities decreased $4,025,804 for the twelve months ended December 31, 2012. The primary reasons for this decrease are as follows; income tax payments made during 2012 year were $505,910 greater than 2011; payments for the purchase of inventory increased $2,113,834. These increases in cash outlays were partially offset by an increase in Accounts Receivable payments of $962,031 from Paradise, Inc.’s customers during 2012 compared to 2011.

Summary

Paradise, Inc.’s consolidated net sales increased to $25,702,303 for 2012 compared to $24,862,470 for 2011. Net income after provision for income taxes was $1,002,932 or $1.93 earnings per share for 2012 compared to $1,233,270 or $2.37 earnings per share for 2011.

TABLE OF CONTENTS

Item 8.Consolidated Financial Statements

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors of

Paradise, Inc.

We have audited the accompanying consolidated balance sheets of Paradise, Inc., and subsidiaries (“the Company”) as of December 31, 20132014 and 20122013 and the related consolidated statements of income, changes in stockholders’ equity and cash flows for each of the years in the two year period ended December 31, 2013.2014. Paradise, Inc.’s management is responsible for these consolidated financial statements. 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 audit 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 audit 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, 20132014 and 2012,2013, and the results of its operations and its cash flows for each of the years in the two year period ended December 31, 20132014 in conformity with accounting principles generally accepted in the United States of America.

/s/

  /s/ Warren Averett, LLC

Tampa, Florida

March 27, 201431, 2015

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TABLE OF CONTENTS

PARADISE, INC.

AND SUBSIDIARIES

Consolidated Balance Sheets

ASSETS

		DECEMBER 31,
		2013				2012
CURRENT ASSETS:
Cash		$	5,916,366			$	6,384,087
Accounts Receivable, Net of Allowance for Doubtful Accounts of $-0- and Allowance for Returns of $897,546 (2013) and $1,562,556 (2012)			2,369,321				1,893,160
Inventories			8,837,798				8,856,379
Income Tax Receivable			279,219				225,794
Prepaid Expenses and Other Current Assets			304,812				296,728
Deferred Income Tax Asset			330,198				152,250
Total Current Assets			18,037,714				17,808,398
PROPERTY, PLANT AND EQUIPMENT:
Net of Accumulated Depreciation of $17,410,823 (2013) and $18,454,410 (2012)			3,816,928				3,946,124
GOODWILL			413,280				413,280
CUSTOMER BASE AND NON-COMPETE AGREEMENT			313,862				439,747
OTHER ASSETS			283,979				281,935
TOTAL ASSETS		$	22,865,763			$	22,889,484

LIABILITIES AND STOCKHOLDERS’ EQUITY

		DECEMBER 31,
		2013				2012
CURRENT LIABILITIES:
Short-Term Debt		$	—			$	515,866
Accounts Payable			308,319				375,067
Accrued Expenses			923,540				1,093,698
Total Current Liabilities			1,231,859				1,984,631
DEFERRED INCOME TAX LIABILITY			297,094				272,063
Total Liabilities			1,528,953				2,256,694
STOCKHOLDERS’ EQUITY:
Common Stock, $.30 Par Value, 2,000,000 Shares Authorized, 583,094 Shares Issued and 519,600 Shares Outstanding			174,928				174,928
Capital in Excess of Par Value			1,288,793				1,288,793
Retained Earnings			20,146,308				19,442,288
			21,610,029				20,906,009
Less: Common Stock in Treasury, at Cost, 63,494 Shares (2013 and 2012)			273,219				273,219
Total Stockholders’ Equity			21,336,810				20,632,790
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$	22,865,763			$	22,889,484

 

		DECEMBER 31,
		2014				2013
CURRENT ASSETS:
Cash		$	7,788,010			$	5,916,366
Accounts Receivable, Net of Allowance for Doubtful Accounts of $ -0- and Allowance for Returns of $912,789 (2014) and $897,546 (2013)			3,046,669				2,369,321
Inventories			7,484,909				8,837,798
Income Tax Receivable			78,277				279,219
Prepaid Expenses and Other Current Assets			306,951				304,812
Deferred Income Tax Asset			277,291				330,198
Total Current Assets			18,982,107				18,037,714
PROPERTY, PLANT AND EQUIPMENT:
Net of Accumulated Depreciation of $17,880,096 (2014) and $17,410,823 (2013)			3,473,829				3,816,928
GOODWILL			413,280				413,280
CUSTOMER BASE AND NON-COMPETE AGREEMENT			187,977				313,862
OTHER ASSETS			451,373				283,979
TOTAL ASSETS		$	23,508,566			$	22,865,763

The Accompanying Notes are an Integral Part of These Consolidated Financial Statements

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II-9

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LIABILITIES AND STOCKHOLDERS’ EQUITY

		DECEMBER 31,
		2014				2013
CURRENT LIABILITIES:
Short-Term Debt		$	112,879			$	-
Accounts Payable			603,342				308,319
Accrued Expenses			819,458				923,540
Total Current Liabilities			1,535,679				1,231,859
DEFERRED INCOME TAX LIABILITY			203,667				297,094
Total Liabilities			1,739,346				1,528,953
STOCKHOLDERS’ EQUITY:
Common Stock, $.30 Par Value, 2,000,000 Shares Authorized, 583,094 Shares Issued and 519,600 Shares Outstanding			174,928				174,928
Capital in Excess of Par Value			1,288,793				1,288,793
Retained Earnings			20,578,718				20,146,308
			22,042,439				21,610,029
Less: Common Stock in Treasury, at Cost, 63,494 Shares			273,219				273,219
Total Stockholders’ Equity			21,769,220				21,336,810
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$	23,508,566			$	22,865,763

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PARADISE, INC.

AND SUBSIDIARIES

Consolidated Statements of Income

		FOR THE YEARS ENDED DECEMBER 31,
		2013				2012
NET SALES		$	24,056,377			$	25,702,303
COSTS AND EXPENSES:
Cost of Goods Sold			18,231,584				19,178,541
Selling, General and Administrative Expenses			4,801,409				4,860,697
Amortization Expense			143,885				143,885
Interest Expense			8,054				9,493
Total Costs and Expenses			23,184,932				24,192,616
INCOME FROM OPERATIONS			871,445				1,509,687
OTHER INCOME – NET			353,656				58,408
INCOME BEFORE PROVISION FOR INCOME TAXES			1,225,101				1,568,095
PROVISION FOR INCOME TAXES			443,141				565,163
NET INCOME		$	781,960			$	1,002,932
EARNINGS PER SHARE:
Basic		$	1.50			$	1.93
Diluted		$	1.50			$	1.93

  

		FOR THE YEARS ENDED
		DECEMBER 31,
		2014				2013
NET SALES		$	25,183,034			$	23,855,261
COSTS AND EXPENSES:
Cost of Goods Sold			19,750,152				18,231,584
Selling, General and Administrative Expenses			4,565,688				4,600,293
Amortization Expense			143,885				143,885
Interest Expense			2,216				8,054
Total Costs and Expenses			24,461,941				22,983,816
INCOME FROM OPERATIONS			721,093				871,445
OTHER INCOME – NET			52,301				353,656
INCOME BEFORE PROVISION FOR INCOME TAXES			773,394				1,225,101
PROVISION FOR INCOME TAXES			283,828				443,141
NET INCOME		$	489,566			$	781,960
EARNINGS PER SHARE:
Basic		$	0.94			$	1.50
Diluted		$	0.94			$	1.50

The Accompanying Notes are an Integral Part of These Consolidated Financial Statements

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TABLE OF CONTENTS

PARADISE, INC.

AND SUBSIDIARIES

Consolidated Statements of Changes in Stockholders’ Equity

For the Years Ended December 31, 20132014 and 20122013

		COMMON STOCK				CAPITAL IN EXCESS OF PAR VALUE				RETAINED EARNINGS				TREASURY STOCK				TOTAL
Balance, December 31, 2011		$	174,928			$	1,288,793			$	18,543,276			$	(273,219	)		$	19,733,778
Cash Dividends Declared, $.20 per Share											(103,920	)							(103,920	)
Net Income											1,002,932								1,002,932
Balance, December 31, 2012			174,928				1,288,793				19,442,288				(273,219	)			20,632,790
Cash Dividends Declared, $.15 per Share											(77,940	)							(77,940	)
Net Income											781,960								781,960
Balance, December 31, 2013		$	174,928			$	1,288,793			$	20,146,308			$	(273,219	)		$	21,336,810

 

						CAPITAL IN
		COMMON				EXCESS OF				RETAINED				TREASURY
		STOCK				PAR VALUE				EARNINGS				STOCK				TOTAL
Balance, December 31, 2012		$	174,928			$	1,288,793			$	19,442,288			$	(273,219	)		$	20,632,790
Cash Dividends Declared, $.15 per Share											(77,940	)							(77,940	)
Net Income											781,960								781,960
Balance, December 31, 2013			174,928				1,288,793				20,146,308				(273,219	)			21,336,810
Cash Dividends Declared, $.11 per Share											(57,156	)							(57,156	)
Net Income											489,566								489,566
Balance, December 31, 2014		$	174,928			$	1,288,793			$	20,578,718			$	(273,219	)		$	21,769,220

The Accompanying Notes are an Integral Part of These Consolidated Financial Statements

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PARADISE, INC.

AND SUBSIDIARIES

Consolidated Statements of Cash Flows

		FOR THE YEARS ENDED
		DECEMBER 31,
		2014				2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income		$	489,566			$	781,960
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Provision for Sales Returns			15,243				(665,010	)
Provision for Estimated Inventory Returns			(10,595	)			487,879
Provision for Deferred Income Taxes			(40,520	)			(152,917	)
Depreciation and Amortization			623,502				603,977
Decrease (Increase) in:
Accounts Receivable			(692,591	)			188,849
Inventories			1,363,484				(469,298	)
Prepaid Expenses and Other Current Assets			(2,139	)			(8,084	)
Income Tax Receivable			200,942				(53,425	)
Other Assets			(213,784	)			23,366
Increase (Decrease) in:
Accounts Payable			295,521				(66,748	)
Accrued Expenses			(104,082	)			(170,158	)
Net Cash Provided by Operating Activities			1,924,547				500,391
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of Property, Plant and Equipment			(137,020	)			(330,896	)
Change in Cash Surrender Value of Life Insurance			28,394				(43,410	)
Net Cash Used in Investing Activities			(108,626	)			(374,306	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net Proceeds from (Payments on) Short-Term Debt			112,879				(515,866	)
Dividends Paid			(57,156	)			(77,940	)
Net Cash Provided by (Used in) Financing Activities			55,723				(593,806	)

		FOR THE YEARS ENDED DECEMBER 31,
		2013				2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income		$	781,960			$	1,002,932
Adjustments to Reconcile Net Income to Net Cash Provided by (Used in) Operating Activities:
Provision for Sales Returns			(665,010	)			558,777
Provision for Estimated Inventory Returns			487,879				(430,588	)
Provision for Deferred Income Taxes			(152,917	)			188,834
Depreciation and Amortization			603,977				613,120
Decrease (Increase) in:
Accounts Receivable			188,849				127,425
Inventories			(469,298	)			(2,229,274	)
Prepaid Expenses and Other Current Assets			(8,084	)			(1,315	)
Income Tax Receivable			(53,425	)			(225,794	)
Other Assets			23,366				(111,919	)
Increase (Decrease) in:
Accounts Payable			(66,748	)			16,218
Accrued Expenses			(170,158	)			(124,591	)
Income Taxes Payable			—				(370,678	)
Net Cash Provided by (Used in) Operating Activities			500,391				(986,853	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of Property, Plant and Equipment			(330,896	)			(231,315	)
Change in Cash Surrender Value of Life Insurance			(43,410	)			34,647
Net Cash Used in Investing Activities			(374,306	)			(196,668	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net (Payments on) Proceeds from Short-Term Debt			(515,866	)			202,620
Dividends Paid			(77,940	)			(103,920	)
Net Cash (Used in) Provided by Financing Activities			(593,806	)			98,700
NET CHANGE IN CASH			(467,721	)			(1,084,821	)
CASH, at Beginning of Year			6,384,087				7,468,908
CASH, at End of Year		$	5,916,366			$	6,384,087
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash Paid During the Year for:
Interest		$	8,054			$	9,493
Income Taxes		$	649,483			$	972,801

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PARADISE, INC.

AND SUBSIDIARIES

Consolidated Statements of Cash Flows (Continued)

		FOR THE YEARS ENDED
		DECEMBER 31,
		2014				2013
NET CHANGE IN CASH			1,871,644				(467,721	)
CASH, at Beginning of Year			5,916,366				6,384,087
CASH, at End of Year		$	7,788,010			$	5,916,366
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash Paid During the Year for:
Interest		$	2,216			$	8,054
Income Taxes		$	45,000			$	649,483

The Accompanying Notes are an Integral Part of These Consolidated Financial Statements

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TABLE OF CONTENTS

PARADISE, INC.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 20132014 AND 20122013

NOTE 1: SIGNIFICANT ACCOUNTING POLICIES

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, 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.

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PARADISE, INC.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2014 AND 2013

NOTE 1:

SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Accounts Receivable and Revenue Recognition

Management reviews subsequent collections on accounts receivable 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.

Management considers the remaining accounts receivable to be fully collectible; accordingly, no allowance for doubtful accounts has been established as of December 31, 20132014 and 2012.2013. 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 or delivery of goods, depending on the agreed upon terms with 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.

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TABLE OF CONTENTS

PARADISE, INC.
AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2013 AND 2012

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 property, plant and equipment are:

		Years
		Years
Buildings and Improvements			10 -– 40
Machinery 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.

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PARADISE, INC.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2014 AND 2013

NOTE 1:

SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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, 20132014 and 2012,2013, 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 issueissuance costs.

Debt issue

Gross debt issuance costs, amounted to approximately $36,000 as of December 31, 20132014 and 2012,2013, and are amortized over the two 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, 20132014 and 2012,2013, 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, 2014 and 2013 and 2012 was $143,885 and $143,885, respectively.$143,885.

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PARADISE, INC.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2014 AND 2013

NOTE 1:

SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Identifiable Intangible Assets (Continued)

Accumulated amortization for the same periodsas of December 31, 2014 and 2013 totaled $1,097,023 and $953,138, (2013) and $845,253 (2012), respectively.

Future amortization expense is anticipated to be as follows:

2014		$	143,885
2015		$	134,885
2016		$	62,092

2015		$	134,885
2016		$	62,092

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TABLE OF CONTENTS

PARADISE, INC.
AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2013 AND 2012

NOTE 1: SIGNIFICANT ACCOUNTING POLICIES  – (continued)

Selling Expenses

The Company considers freight delivery costs to be selling expenses and has included $668,862 (2014) and $586,578 (2013) and $590,485 (2012) 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 $233,764$7,029 (2014) and $32,648 (2013) and $260,898 (2012) and are included in selling, general and administrative expenses in the accompanying statements of income.

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PARADISE, INC.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2014 AND 2013

NOTE 1:

SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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, 20132014 and 2012,2013, the Company incurred $36,757$49,231 and $35,499,$36,757, 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 519,600 shares at December 31, 20132014 and 2012.2013. There are no dilutive securities outstanding at December 31, 20132014 and 2012.2013.

Reclassifications

Certain minor reclassifications have been made to the 20122013 consolidated financial statements in order to conform to the classifications used in 2013.2014.

Impact of Recently Issued Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09,Revenue from Contracts with Customers(Topic 606).The guidance in this update supersedes the revenue recognition requirements in Topic 605,Revenue Recognition,and most industry-specific guidance throughout Industry topics of the Codification. Additionally, this Update supersedes some cost guidance included in Subtopic 605-35, Revenue Recognition - Construction-Type and Production-Type Contracts.In addition, the existing requirements for the recognition of a gain or loss on the transfer of nonfinancial assets that are not in a contract with a customer (for example, assets within the scope of Topic 360, Property, Plant, and Equipment, and intangible assets within the scope of Topic 350, Intangibles-Goodwill and Other) are amended to be consistent with the guidance on recognition and measurement (including the constraint on revenue) in this Update. Under the new guidance, an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU No. 2014-09 is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. We are currently evaluating the impact of adopting the guidance on our financial statements.

II-23

PARADISE, INC.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2014 AND 2013

NOTE 1:

SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Impact of Recently Issued Accounting Pronouncements (Continued)

Except as noted above, the Company’s management does not believe that any recent codified pronouncements by the Financial Accounting Standards Board (“FASB”) (including its EITF), the AICPA or the Securities and Exchange Commission will have a material impact on the Company’s current or future consolidated financial statements.

NOTE 2: INVENTORIES

		2013				2012
Supplies		$	164,962			$	158,925
Raw Materials			1,806,727				2,340,505
Work in Progress			993,061				561,043
Finished Goods			5,873,048				5,795,906
Total		$	8,837,798			$	8,856,379

NOTE 2:

INVENTORIES

		2014				2013
Supplies		$	168,275			$	164,962
Raw Materials			1,923,235				1,806,727
Work in Progress			987,614				993,061
Finished Goods			4,405,785				5,873,048
Total		$	7,484,909			$	8,837,798

Included in Finished Goods inventory are estimated returns related to the Provision for Sales Returns totaling $688,821 (2014) and $678,226 (2013) and $1,166,105 (2012).

Substantially all inventories are pledged as collateral for certain short-term obligations.

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TABLE OF CONTENTS

PARADISE, INC.
AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2013 AND 2012

NOTE 3: PROPERTY, PLANT AND EQUIPMENT

NOTE 3:

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consisted of the following:

		2014				2013
Land and Improvements		$	656,040			$	656,040
Buildings and Improvements			7,095,184				7,048,114
Machinery and Equipment			13,602,701				13,523,597
Total			21,353,925				21,227,751
Less:  Accumulated Depreciation			17,880,096				17,410,823
NET		$	3,473,829			$	3,816,928

		2013				2012
Land and Improvements		$	656,040			$	656,040
Buildings and Improvements			7,048,114				7,127,321
Machinery and Equipment			13,523,597				14,617,173
Total			21,227,751				22,400,534
Less: Accumulated Depreciation			17,410,823				18,454,410
NET		$	3,816,928			$	3,946,124

II-24

PARADISE, INC.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2014 AND 2013

NOTE 3:

PROPERTY, PLANT AND EQUIPMENT (CONTINUED)

All of the real property, machinery and equipment are pledged as collateral for the Company’s short-term debt obligations.

Depreciation expense for the years ended December 31, 2014 and 2013 was $479,617 and 2012 was $460,092, and $469,235, respectively.

NOTE 4: SHORT-TERM DEBT

		2013				2012
Letters of credit and other short-term debt under a revolving line of credit with a bank.		$	—			$	515,866
TOTAL		$	—			$	515,866

NOTE 4:

SHORT-TERM DEBT

		2014				2013
Letters of credit and other short-term debt under a revolving line of credit with a bank.		$	112,879			$	-
TOTAL		$	112,879			$	-

The Company has a revolving loan agreement with a financial institution with a maximum limit of $12,000,000 and a borrowing limit of 80% of the Company’s eligible receivables plus the lessor of $6,000,000 or 50% of the Company’s eligible inventory from January through May of each year and 60% of eligible inventory from June to December of each year. This agreement is secured by all of the assets of the Company and matures on June 23, 2015. Interest is payable monthly at the bank’s LIBOR rate plus 1.75%. (1.9% at December 31, 2014).

This agreement requires 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, 20132014 and 2012.2013.

NOTE 5: OPERATING LEASES

NOTE 5:

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 $85,148 (2014) and $87,070 (2013) and $74,885 (2012), respectively.

II-25

PARADISE, INC.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2014 AND 2013

NOTE 5:

OPERATING LEASES (CONTINUED)

At December 31, 2013,2014, future minimum payments required under leases with terms greater than one year are as follows:

Years Ending December 31,		Operating Leases
2014		$	57,567
2015			53,127
2016			27,475
2017			12,246
Total Minimum Lease Payments		$	150,415

Years Ending		Operating
December 31,		Leases
2015		$	61,524
2016			35,574
2017			3,695
Total Minimum Lease Payments		$	100,793

II-16

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TABLE OF CONTENTS

PARADISE, INC.
AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2013 AND 2012

NOTE 6: ACCRUED EXPENSES

NOTE 6:

ACCRUED EXPENSES

Accrued Expenses consisted of the following:

		2014				2013
Accrued Payroll and Bonuses		$	219,719			$	486,399
Accrued Brokerage Payable			294,739				197,443
Other Accrued Expenses			15,539				24,126
Coupon Reimbursement			70,795				59,179
Accrued Credit Due to Customers			132,329				132,892
Accrued Insurance Payable			7,931				23,501
Income Taxes Payable			78,406				-
Total		$	819,458			$	923,540

		2013				2012
Accrued Payroll and Bonuses		$	486,399			$	400,471
Accrued Brokerage Payable			197,443				226,742
Other Accrued Expenses			24,126				78,566
Coupon Reimbursement			59,179				77,941
Accrued Credit Due to Customers			132,892				260,288
Accrued Insurance Payable			23,501				49,690
Total		$	923,540			$	1,093,698

II-26

PARADISE, INC.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2014 AND 2013

NOTE 7: PROVISION FOR FEDERAL AND STATE INCOME TAXES

NOTE 7:

PROVISION FOR FEDERAL AND STATE INCOME TAXES

The provisions for income taxes are comprised of the following amounts:

										2014				2013
		2013				2012
Current:
Federal		$	534,180			$	301,644			$	276,941			$	534,180
State			61,878				74,685				47,407				61,878
			596,058				376,329
											324,348				596,058
Deferred:
Federal			(138,166	)			170,618				(36,611	)			(138,166	)
State			(14,751	)			18,216				(3,909	)			(14,751	)
			(152,917	)			188,834
											(40,520	)			(152,917	)
Total Provision for Income Taxes		$	443,141			$	565,163			$	283,828			$	443,141

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:

		2014				2013
Income Taxes Computed at Statutory Rate		$	262,954			$	416,534
State Income Tax,
Net of Federal Income Tax Benefit			28,074				44,489
Other, Net			(7,200	)			(17,882	)
Provision for Income Taxes		$	283,828			$	443,141

		2013				2012
Income Taxes Computed at Statutory Rate		$	416,534			$	533,152
State Income Tax, Net of Federal Income Tax Benefit			44,489				56,922
Other, Net			(17,882	)			(24,911	)
Provision for Income Taxes		$	443,141			$	565,163

II-27

PARADISE, INC.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2014 AND 2013

NOTE 7:

PROVISION FOR FEDERAL AND STATE INCOME TAXES (CONTINUED)

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-17

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TABLE OF CONTENTS

PARADISE, INC.
AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2013 AND 2012

NOTE 7: PROVISION FOR FEDERAL AND STATE INCOME TAXES  – (continued)

Significant components of the Company’s deferred tax assets and liabilities at December 31, 20132014 and 20122013 were:

		2014				2013
Deferred Tax Assets resulting from:
Inventory Valuation		$	193,012			$	247,668
Allowance for Sales Returns and Related Provision for Return of Finished Goods			84,279				82,530
Total Deferred Tax Assets			277,291				330,198
Deferred Tax Liabilities resulting from:
Tax over Book Depreciation			(203,667	)			(297,094	)
Net Deferred Tax Asset		$	73,624			$	33,104
The Net Deferred Tax Asset is reflected in the Balance Sheet under these captions:
Current Deferred Income Tax Asset		$	277,291			$	330,198
Long-Term Deferred Income Tax Liability			(203,667	)			(297,094	)
		$	73,624			$	33,104

		2013				2012
Deferred Tax Assets resulting from:
Inventory Valuation		$	247,668			$	3,065
Allowance for Sales Returns and Related Provision for Return of Finished Goods			82,530				149,185
Total Deferred Tax Assets			330,198				152,250
Deferred Tax Liabilities resulting from:
Tax over Book Depreciation			(297,094	)			(272,063	)
Net Deferred Tax Asset (Liability)		$	33,104			$	(119,813	)
The Net Deferred Tax Asset (Liability) is reflected in the Balance Sheet under these captions:
Current Deferred Income Tax Asset		$	330,198			$	152,250
Long-Term Deferred Income Tax Liability			(297,094	)			(272,063	)
		$	33,104			$	(119,813	)

II-28

PARADISE, INC.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2014 AND 2013

NOTE 7:

PROVISION FOR FEDERAL AND STATE INCOME TAXES (CONTINUED)

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 20102011 – 2012.2013.

As of December 31, 20132014 and 2012,2013, 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.

II-29

II-18

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TABLE OF CONTENTS

PARADISE, INC.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 20132014 AND 20122013

NOTE 8: BUSINESS SEGMENT DATA

NOTE 8:

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		OPERATION
BUSINESS SEGMENT		OPERATION
Candied 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				YEAR ENDED
		2014				2013
NET SALES IN EACH SEGMENT
Candied Fruit:
Sales to Unaffiliated Customers		$	16,581,479			$	15,574,569
Molded Plastics:
Sales to Unaffiliated Customers			8,601,555				8,280,692
Net Sales		$	25,183,034			$	23,855,261

II-30

		YEAR ENDED 2013				YEAR ENDED 2012
NET SALES IN EACH SEGMENT
Candied Fruit:
Sales to Unaffiliated Customers		$	15,775,685			$	17,397,551
Molded Plastics:
Sales to Unaffiliated Customers			8,280,692				8,304,752
Net Sales		$	24,056,377			$	25,702,303

PARADISE, INC.

		YEAR ENDED 2013				YEAR ENDED 2012
THE OPERATING PROFIT OF EACH SEGMENT IS LISTED BELOW
Candied Fruit		$	3,568,561			$	4,267,788
Molded Plastics			2,112,347				2,112,089
Operating Profit of Segments			5,680,908				6,379,877
General Corporate Expenses, Net			(4,746,053	)			(4,812,666	)
General Corporate Depreciation and Amortization Expense			(55,356	)			(48,031	)
Interest Expense			(8,054	)			(9,493	)
Other Income			353,656				58,408
Income Before Provision for Income Taxes		$	1,225,101			$	1,568,095

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2014 AND 2013

NOTE 8:

BUSINESS SEGMENT DATA (CONTINUED)

		YEAR ENDED				YEAR ENDED
		2014				2013
THE OPERATING PROFIT OF EACH SEGMENT IS LISTED BELOW
Candied Fruit		$	3,150,602			$	3,367,445
Molded Plastics			2,138,395				2,112,347
Operating Profit of Segments			5,288,997				5,479,792
General Corporate Expenses, Net			(4,468,045	)			(4,544,937	)
General Corporate Depreciation and Amortization Expense			(97,643	)			(55,356	)
Interest Expense			(2,216	)			(8,054	)
Other Income			52,301				353,656
Income Before Provision for Income Taxes		$	773,394			$	1,225,101

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 ENDED				YEAR ENDED
		2014				2013
Identifiable Assets of Each Segment are Listed Below:
Candied Fruit		$	9,289,619			$	10,303,650
Molded Plastics			4,719,576				4,615,521
Identifiable Assets			13,922,189				14,919,171
General Corporate Assets			9,499,371				7,946,592
Total Assets		$	23,508,566			$	22,865,763

		YEAR ENDED 2013				YEAR ENDED 2012
Identifiable Assets of Each Segment are Listed Below:
Candied Fruit		$	10,303,650			$	10,443,925
Molded Plastics			4,615,521				4,354,603
Identifiable Assets			14,919,171				14,798,528
General Corporate Assets			7,946,592				8,090,956
Total Assets		$	22,865,763			$	22,889,484

II-31

PARADISE, INC.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2014 AND 2013

NOTE 8:

BUSINESS SEGMENT DATA (CONTINUED)

Included in Identifiable Assets of the Molded Plastics Segment is goodwill totaling $413,280 at both December 31, 20132014 and 2012.2013.

II-19

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TABLE OF CONTENTS

PARADISE, INC.
AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2013 AND 2012

NOTE 8: BUSINESS SEGMENT DATA  – (continued)

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 ENDED				YEAR ENDED
										2014				2013
		YEAR ENDED 2013				YEAR ENDED 2012
Depreciation and Amortization Expense of Each Segment are Listed Below:
Candied Fruit		$	374,382			$	401,862			$	370,970			$	374,382
Molded Plastics			174,239				163,227				154,959				174,239
Segment Depreciation and Amortization Expense			548,621				565,089				525,859				548,621
General Corporate Depreciation and Amortization Expense			55,356				48,031				97,643				55,356
Total Depreciation and Amortization Expense		$	603,977			$	613,120			$	623,502			$	603,977

										YEAR ENDED				YEAR ENDED
										2014				2013
		YEAR ENDED 2013				YEAR ENDED 2012
Capital Expenditures of Each Segment are Listed Below:
Candied Fruit		$	62,840			$	182,792			$	59,630			$	62,840
Molded Plastics			193,924				48,523				77,390				193,924
Segment Capital Expenditures			256,764				231,315				137,020				256,764
General Corporate Capital Expenditures			74,132				—				-				74,132
Total Capital Expenditures		$	330,896			$	231,315			$	137,020			$	330,896

The Company conducts operations only within the United States. Foreign sales are insignificant; primarily all sales are to domestic companies.

NOTE 9: MAJOR CUSTOMERS

II-32

PARADISE, INC.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2014 AND 2013

NOTE 9:

MAJOR CUSTOMERS

During 2013,2014, the Company derived approximately 12.9%15.9% and 19.7%19.5% of its consolidated revenues from Wal-Mart Stores, Inc. and Aqua Cal, Inc., respectively. During 2012,2013, the Company derived 16%approximately 12.9% and 13%19.7% of its consolidated revenue from Wal-Mart Stores, Inc. and Aqua Cal, Inc., respectively. As of December 31, 20132014 and 2012,2013, Wal-Mart Stores, Inc.’s accounts receivable balance represented 79.4%80.9% and 56%79.4% of total accounts receivable before allowance for returns, respectively, and Aqua Cal, Inc.’s accounts receivable balance represented 19.4%15.5% and 12%19.4% of total accounts receivable at December 31, 2014 and 2013, and 2012, respectively.

NOTE 10: MAJOR VENDORS

NOTE 10:

MAJOR VENDORS

During 20132014 and 2012,2013, the Company purchased 11%28% and 11%, respectively, of its inventory from two and one supplier (Oregon Cherry Growers).suppliers, respectively. As of December 31, 20132014 and 2012,2013, the Company did not have any amounts owed to this supplier.these suppliers.

NOTE 11: CONCENTRATION OF CREDIT RISK

NOTE 11:

CONCENTRATION OF CREDIT RISK

Cash is maintained at a major financial institution and, at times, balances may exceed federally insured limits. The Company has never experienced any losses related to these balances. The Company’s cash balances of $6,384,087 were fully insured at December 31, 2012 due to a temporary federal program in effect through December 31, 2012. Under the program, there was no limit to the amount of insurance for eligible accounts, including non-interest bearing accounts. Beginning 2013, insurance coverage reverted back to $250,000 per depositor at each financial institution. The Company’s deposits in excess of federally insured limits at December 31, 2014 and 2013 approximated $5,666,000.were approximately $7,615,000 and $5,763,000, respectively.

II-20

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NOTE 12:

OTHER INCOME

TABLE OF CONTENTS

PARADISE, INC.
AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2013 AND 2012

NOTE 12: OTHER ISSUES

During 2012, Paradise, Inc. filed a claim with the Deepwater Horizon Economic and Property Program (the “Settlement Program”) arising out of damages suffered as a result of the Deepwater Horizon Incident. Upon review by the claims administrator of the Settlement Program and after a 30 day period in which BP Exploration & Production, Inc. could file a protest contesting this amount, a settlement check for $277,546 was awarded to Paradise, Inc. Funds were received on August 30, 2013 and this amount is reflected in Other Income on the Company’s consolidated2013 Consolidated Statements of Income.

NOTE 13: SUBSEQUENT EVENT

NOTE 13:

SUBSEQUENT EVENT

On March 6, 2014,12, 2015, Paradise, Inc. declared a regular dividend of $.11 per share to stockholders of record at April 11, 2014.10, 2015.

II-33

II-21

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Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

TABLE OF CONTENTS

Item 9.Changes in Registrant’s Certifying Accountant

Previous Independent Auditors

As previously reported in Form 8-K dated January 8, 2013, the Registrant (the “Company”) has been advised that, effective January 1, 2013, Pender Newkirk & Company LLP (“Pender Newkirk”) has discontinued its audit practice and that the partners and employees of Pender Newkirk have joined the firm of Warren Averett, LLC. Warren Averett, LLC will serve as the Company’s principal independent auditing firm. The decision to retain Warren Averett, LLC as the Company’s principal independent auditing firm has been approved by the Company’s Board of Directors (and Audit Committee).Not applicable.

Item 9A.Controls and Procedures

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, 20132014 pursuant to Exchange Act Rule 13a-15(e). 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, 2013,2014, 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, 20132014 that have materially affected, or are reasonable likely to materially affect, our internal control over financial reporting.

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, 2013.2014. Management’s evaluation was based on criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) inInternal Control — IntegratedControl-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:

II-34

Item 9A.

Controls and Procedures (Continued)

Management’s Annual Report on Internal Control over Financial Reporting (Continued)

(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.

II-22

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TABLE OF CONTENTS

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 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. 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, 2013,2014, our internal control over financial reporting was effective.

Management’s Annual Report on Internal Control Over Financial Reporting does not include an attestation report from the Company’s registered public accounting firm Warren Averett, LLC.

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

Item 9B.

Other Information

II-23

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TABLE OF CONTENTSNot applicable.

PART III

Item 10.Directors, Executive Officers and Corporate Governance

Directors of the Registrant

II-35

PART III

Item 10.

Directors, Executive Officers and Corporate Governance

Directors of the Registrant
Melvin S. Gordon —	–	CEO, Chairman and Director of the Registrant, 8081 years old.
	Term of office will expire at next stockholders’ meeting.
	Officer with Registrant past 4950 years.
Eugene L. Weiner —	–	Vice-President of the Registrant, 8283 years old.
	Term of office will expire at next stockholders’ meeting.
	Officer with Registrant past 4849 years. (See note on page III-2)
Randy S. Gordon —	–	President of the Registrant, 5859 years old.
	Term of office will expire at next stockholders’ meeting.
	Employee or officer of Registrant past 36 years.
Tracy W. Schulis –	Senior Vice-President and Secretary of the Registrant,
	57 years old.  Term of office will expire at next stockholders’
	meeting.  Employee or officer of Registrant past 35 years.
Tracy W. Schulis —
SeniorMark H. Gordon –	Executive Vice-President and Secretary of the Registrant, 5652 years old.
	Term of office will expire at next stockholders’ meeting. Employee or officer of Registrant past 34 years.
Mark H. Gordon —		Executive Vice-President of the Registrant, 51 years old. Term of office will expire at next stockholders’ meeting. Employee or Officer of Registrant past 2829 years.

Executive Officers of the Registrant

Executive Officers of the Registrant
Melvin S. Gordon —	–	CEO, Chairman and Director, 8081 years old.
	Term of office will expire at next annual directors’ meeting.
	Officer with Registrant past 4950 years.
Eugene L. Weiner — –	Vice-President, 83 years old.
	Vice-President, 82 years old. Term of office will expire at next annual directors’ meeting.
	Officer with Registrant past 4849 years.
Randy S. Gordon — –	President, 59 years old.
	President, 58 years old. Term of office will expire at next annual directors’ meeting.
	Employee or officer of Registrant past 36 years.
Tracy W. Schulis –	Senior Vice-President and Secretary, 57 years old.
	Term of office will expire at next annual directors’ meeting.
	Employee or officer of Registrant past 35 years.
Tracy W. Schulis —
Mark H. Gordon –	Executive Vice-President, 52 years old.
	Senior Vice-President and Secretary, 56 years old. Term of office will expire at next annual directors’ meeting.
	Employee or officerOfficer of Registrant past 3429 years.
Mark H. Gordon —
Executive Vice-President, 51Jack M. Laskowitz –	CFO and Treasurer, 58 years old.
	Term of office will expire at next annual directors’ meeting. Employee or Officer of Registrant past 28 years.
Jack M. Laskowitz —		CFO and Treasurer, 57 years old. Term of office will expire at next annual directors’ meeting. Employee or officer with Registrant past 1314 years.

III-1

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.

Item 10.

Directors, Executive Officers and Corporate Governance (Continued)

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.

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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 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)

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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, 2014 and 2013 and 2012 to its Chief Executive Officer and the four other highest paid executive officers whose total remuneration exceeded $100,000.

		COMPENSATION
												ALL OTHER
NAME AND PRINCIPAL												COMPENSATION
POSITION		YEAR		SALARY				BONUS				(1 and 2)
Melvin S. Gordon,
Chief Exec. Officer		2014		$	318,968			$	42,217			$	5,574
		2013			318,968				70,236				5,151
Randy S. Gordon,
President		2014			202,070				41,037				29,884
		2013			202,070				65,481				29,330
Tracy W. Schulis,
Senior Vice-President and Secretary		2014			202,070				45,041				44,756
		2013			202,070				70,657				44,237
Mark H. Gordon,
Executive Vice-President		2014			202,070				37,677				17,668
		2013			202,070				61,137				16,973
Jack M. Laskowitz,
Chief Financial Officer		2014			112,121				18,763				14,190
		2013			112,121				30,343				13,871

		COMPENSATION												ALL OTHER COMPENSATION (1 and 2)
NAME AND PRINCIPAL POSITION		YEAR				SALARY				BONUS
Melvin S. Gordon, Chief Exec. Officer			2013			$	318,968			$	70,236			$	5,151
			2012				318,968				100,435				4,973
Randy S. Gordon, President			2013				202,070				65,481				29,330
			2012				202,070				89,444				29,360
Tracy W. Schulis, Senior Vice-President and Secretary			2013				202,070				70,657				44,237
			2012				202,070				94,620				43,881
Mark H. Gordon, Executive Vice-President			2013				202,070				61,137				16,973
			2012				202,070				85,100				17,308
Jack M. Laskowitz, Chief Financial Officer			2013				112,121				30,343				13,871
			2012				112,121				41,960				13,766

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.

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Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

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

(a)

The following table sets forth as of December 31, 2013,2014, 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 OF CLASS				AMOUNT & NATURE OF BENEFICIAL OWNERSHIP(1)				PERCENT OF CLASS
Melvin S. Gordon 2611 Bayshore Blvd. Tampa, Florida			Common				192,742	(1)			37.1	%
TOTAL							192,742				37.1	%

				AMOUNT & NATURE
NAME AND ADDRESS OF		TITLE OF		OF BENEFICIAL				PERCENT
BENEFICIAL OWNER		CLASS		OWNERSHIP (1)				OF CLASS
Melvin S. Gordon		Common
2611 Bayshore Blvd.
Tampa, Florida					192,742	(1)			37.1	%
TOTAL					192,742				37.1	%

(1)

Includes 141,760 shares owned by the Helen A. Weaner Family Partnership, Ltd., Mr. Melvin S. Gordon, sole trustee.

(b)

Beneficial ownership of common stock held by all directors and officers of the Company as a group:

				AMOUNT & NATURE
		TITLE OF		OF BENEFICIAL				PERCENT
		CLASS		OWNERSHIP (1)				OF CLASS
Directors and Officers as a Group		Common			206,109				39.7	%
Melvin S. Gordon		Common			192,742	(2)			37.1	%
Eugene L. Weiner		Common			307				0
Randy S. Gordon		Common			7,400				1.4
Tracy W. Schulis		Common			2,060				0.4
Mark H. Gordon		Common			3,600				0.7

		TITLE OF CLASS				AMOUNT & NATURE OF BENEFICIAL OWNERSHIP(1)				PERCENT OF CLASS
Directors and Officers as a Group			Common				217,947				41.9	%
Melvin S. Gordon			Common				192,742	(2)			37.1	%
Eugene L. Weiner			Common				307				0
Randy S. Gordon			Common				7,400				1.4
Tracy W. Schulis			Common				8,648				1.7
Mark H. Gordon			Common				8,600				1.7
Jack 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., Mr. Melvin S. Gordon, sole trustee.

(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

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Item 13.

Certain Relationships, Related Transactions and Director Independence

None

Item 14.Principal Accountant Fees and Services

Item 14.

Principal Accountant Fees and Services

Audit Fees

The aggregate fees billed for professional services rendered by Warren Averett, LLC for the audits 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 2014 and 2013 were $134,597 and 2012 were $151,448, and $132,528, respectively. At the time of this filing, not all audit fees had been billed for the 20132014 fiscal year.

All Other Fees

During 2013 and 2012, Warren Averett, LLC provided assistance with a claim that the Company filed under the court-approved Deepwater Horizon Economic and Property Damages Settlement. Fees billed for these services were $0 and $24,758 for the years ended December 31, 2013 and 2012, respectively.

There were no other fees billed by Warren Averett, LLC for other products and services provided during the years ended December 31, 20132014 and 2012.2013.

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 our auditors.

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PART IV

Item 15.Exhibits and Financial Statement Schedules

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-10 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)

101.INS            XBRL Instance Document (filed herewith).

101.SCH            XBRL Taxonomy Schema (filed herewith).

101.CAL            XBRL Taxonomy Extension Calculation Linkbase (filed herewith).

101.DEF            XBRL Taxonomy Extension Definition Linkbase (filed herewith).

101.LAB           XBRL Taxonomy Extension Label Linkbase (filed herewith).

101.PRE            XBRL Taxonomy Extension Presentation Linkbase (filed herewith).

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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-10 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)

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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 27, 2014 Date31, 2015		PARADISE, INC.
Date
		/s/ Melvin S. Gordon
		Melvin 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. Gordon Melvin S. Gordon		CEO, Chairman		March 31, 2015
Melvin S. Gordon		and Director		March 27, 2014 Date
/s/ Eugene L. Weiner		Vice-President		March 31, 2015
Eugene L. Weiner		Vice-President and Director		March 27, 2014 Date
/s/ Randy S. Gordon Randy S. Gordon		President and Director		March 27, 2014 31, 2015
Randy S. Gordon				Date
/s/ Tracy W. Schulis Tracy W. Schulis		Senior Vice-President,		March 31, 2015
Tracy W. Schulis		Secretary and Director		March 27, 2014 Date
/s/ Mark H. Gordon Mark H. Gordon		Executive Vice-President		March 31, 2015
Mark H. Gordon		and Director		March 27, 2014 Date
/s/ Jack M. Laskowitz Jack M. Laskowitz		CFO and Treasurer		March 27, 2014 31, 2015
Jack M. Laskowitz				Date

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