The accompanying unaudited consolidated financial statements of Paradise, Inc. (the “Company”) have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements.

The information furnished herein reflects all adjustments and accruals that management believes is necessary to fairly state the operating results for the respective periods. The notes to the unaudited consolidated financial statements should be read in conjunction with the notes to the consolidated financial statements contained in the Company’s Form 10-K for the year ended December 31, 2010.2011. The Company’s management believes that the disclosures are sufficient for interim financial reporting purposes.

Other recent accounting pronouncements issued by the FASB (including its EITF), the AICPA, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements.

Basic and diluted earnings (loss) per common share assuming no dilution, isare based on the weighted average number of shares outstanding during the period:  (519,600 asand assumed to be outstanding of September 30, 2011 and 519,350 as of September 30, 2010).

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

For the ninethree month period ended September 30,March 31, 2012 and 2011, and 2010, sales of frozen strawberry products totaled $323,495$465,887 and $192,797,$293,421, respectively.

The Company does not account for intersegment transfers as if the transfers were to third parties.

The Company does not prepare operating profit or loss information on a segment basis for internal use, until the end of each year. Due to the seasonal nature of the fruit segment, management believes that it is not practical to prepare this information for interim reporting purposes. Therefore, reporting is not required by accounting principles generally accepted in the United States of America.

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.

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact should be considered “forward-looking statements” for the purpose of these provisions, including statements that include projections of, or expectations about, earnings, revenues or other financial items, statements about our plans and objectives for future operations, statements concerning proposed new products or services  , statements regarding future economic conditions or performance, statements concerning our expectations regarding the attraction and retention of customers, statements about market risk and statements underlying any of the foregoing. In some cases, forward-looking statements can be identified by the use of such terminology as “may”, “will”, “expects”, “potential”, or “continue”, or the negative thereof or other similar words. Although we believe that the expectations reflected in our forward-looking statements are reasonable, we can give no assurance that such expectations or any of our forward-looking statements will prove to be correct. Actual results and developments are likely to be different from, and may be materially different from, those expressed or implied by our forward-looking statements. Forward-looking statements are subject to inherent risks and uncertainties.

Paradise, Inc.’s main business segment, glace’ fruit, a prime ingredient of fruitcakes and other holiday confections, represented 68.1%68.9% of total net sales during 2010.2011. These products are sold to manufacturing bakers, institutional users, supermarkets and other retailers throughout the country. Consumer demand for glace’ fruit product is traditionally strongest during the Thanksgiving and Christmas season. Historically,Almost 80% of glace’ fruit product sales are recorded from theduring an eight to ten weeksweek period beginning in mid September.

Since the majority of the Company’s customers require delivery of glace’ candied fruit products during this relatively short period of time, Paradise, Inc. must operate at consistent levels of production from as early as January through the middle of November of each year in order to meet peak demand.demands. Furthermore, the Company must make substantial borrowings of short-term working capital to cover the cost of raw materials, factory overhead and labor expense associated with production for inventory. This combination of building and financing inventories during the year, without the opportunity to record any significant fruit product income, results in the generation of operating losses well into the third quarter of each year. Therefore, it is the opinion of management that any meaningful forecastforecasts of annual net sales or profit levels require analysis of a full year’s operations.

In addition, comparison of current quarterly results to the preceding quarter produces an incomplete picture on the Company’s performance due to year-to-year changes in production schedules, seasonal harvests and availability of raw materials, and in the timing of customer orders and shipments. Thus, the discussion of information presented within this report is focused on the review of the Company’s current year-to-date results as compared to the similar period last year.

Paradise, Inc.’s other business segment, Paradise Plastics, Inc., a wholly owned subsidiary of Paradise, Inc., produces producing custom molding products, that areis not subject to the seasonality of the glace’ fruit business. This segment represents all injection molding and thermoforming operations, including the packaging for the Company’s fruit products. Only sales to unaffiliated customers are reported.

Paradise, Inc.’s fruit segment net sales increased 14.6% compared to the similar reporting period last year, primarily due to timing differences in the receipt of customer orders and corresponding shipping dates for delivery of the Company’s retail glace’ fruit products.  Paradise, Inc. recognizes revenue based upon shipment of goods to its customers.  Changes in shipping dates requested by retail glace’ customers between interim reporting dates will lead to fluctuations in net sales. Paradise, Inc. has been consistent in previous filings to disclose that interim filings are not reliable indicators of year-end results.  The Company must wait until all orders and re-orders for glace’ fruit products leading up and through the holiday season have been fulfilled before any determination of profitability is ascertained.

Paradise Plastics, Inc.’s sales to unaffiliated customers for the first quarter of 2011 remained consistent with2012 increased to $2,392,061 compared to $2,061,536 for the similar reporting period for 2010of 2011, representing a 16.0% increase. Plastics sales continued to improve as increased orders from industries as diverse as medical supplies, food processing and aerospace offset decreases in plastics orders received from industries relatedand shipped to existing long-term customers within the housing market.

Consolidated cost of sales as a percentage of net sales increased 1.0% during the first nine months of 2011 compared to the similar reporting period for 2010 as increases in the cost of raw fruit commodities and freight-in expenses absorbed from the Paradise, Inc.’s suppliers outpaced the Company’s ability to past these increases to its customers.  Inventory as of September 30, 2011 decreased $1,292,048 compared to inventory levels as of September 30, 2010. This continues a trend in the Company’s effort to reduce its overall inventory position as Paradise, Inc. finances the majority of its raw materials with short-term borrowing from its revolving  line of credit.  For the nine months ended September 30, 2011, interest expense incurred related to inventory purchases equaled $8,344 compared to $25,847 for the similar reporting period for 2010.

Selling, general & administrative expenses totaled $805,525 for the first quarter of 2012 compared to $805,860 for the similar reporting period of 2011 as increases in cost to attend various trade shows were offset by decreases in expenses related to professional fees for legal and audit services.

Other Significant Items

Other Income for the first quarter of 2012 totaled $76,844 and was primarily related to sales of recycled plastics materials. In comparison, for the similar reporting period of 2011, Other Income totaled $154,069. This amount, as previously filed in the Company’s first quarter filing for 2011, was related to the receipt of $150,000 from a former supplier to settle a disagreement dating back to September, 2004. All legal expenses incurred by Paradise, Inc. to settle this matter were paid during the past twelve months exceededfirst quarter of 2011.

Inventory as of March 31, 2012 was $8,725,068 compared to $8,274,839 representing an increase of $450,229 or 5.4% and is primarily due to a timing difference as the amountreceipt of new assets placed into service.

Paradise, Inc.’s consolidated net sales increased 8.4% for the first ninethree months of 2011ended March 31, 2012 totaled $3,268,870 compared to $2,618,939 for the similar reporting period of 2011, representing an increase of $649,931. This increase is the result of the following three factors. First, tolling fees earned for 2010the processing of various strawberry products on behalf of a local Florida distributor increased $172,466. Secondly, gross bulk fruit sales to manufacturing bakeries and supermarkets increased $81,135 and thirdly, plastics sales continued to rebound from the recent downturn in the housing market increased $330,525. However, as timing differences resultedmentioned in a greater amountall previous first quarter filings, with less than 5% of purchase orders received and shipped foranticipated annual glace’ fruit orders from existing long term customers during September, 2011  compared to October, 2010.  However, with more than 80% of Paradise, Inc.’s annual fruit segment net sales scheduledyet to commence in mid September and continue throughoutbe realized as of the fourth quarterdate of 2011,this filing, no meaningfulreasonable estimate or forecast of consolidated financial analysisperformance may be developed fromdetermined at this interim filing.  As stated in previous interim filings, only a full year’s reporting will provide the necessary information to determine the Company’s profitability.

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make assessments, estimates and assumptions that affect the amounts reported in the consolidated financial statements. We evaluate the accounting policies and estimates used to prepare the consolidated financial statements on an ongoing basis. Critical accounting estimates are those that require management’s most difficult, complex, or subjective judgments and have the most potential to impact our financial position and operating results. For a detailed discussion of our critical accounting estimates, see our Annual Report on Form 10-K for the year ended December 31, 2010.2011. There have been no material changes to our critical accounting estimates during the ninethree months ended September 30, 2011.March 31, 2012.