8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 19, 2007

AFP Imaging Corporation

(Exact name of registrant as specified in its charter)

New York	0-10832	13-2956272
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)

250 Clearbrook Road
Elmsford, New York	10523
(Address of principal executive offices)	(Zip Code)

Registrant's telephone number, including area code: (914) 592-6100

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01. Entry into a Material Definitive Agreement.

Reference is made to the description of the employment agreements contained in Item 2.01 below, which is incorporated by reference herein.

Item 2.01. Completion of Acquisition or Disposition of Assets.

On April 19, 2007, the Registrant, through a wholly-owned subsidiary, consummated the acquisition of Quantitative Radiology srl, an Italian corporation (“QR”), by acquiring all of the outstanding share capital of QR from the shareholders thereof. The consideration for the acquisition was an aggregate of €13 million, €12 million of which was paid at closing and the remaining €1 million of which had previously been paid to the shareholders of QR as a down payment upon the execution and delivery of the definitive acquisition agreement. Funding for the acquisition was principally derived from two sources, the first of which was the proceeds raised from a private offering of the Registrant’s common stock to equity investors and the second of which was the loan proceeds from ComVest Capital, LLC in connection with a term loan and revolving credit facility.

The QR shareholders from whom the Registrant acquired QR consist of Gianmaria Tommasi, QR’s president, Mara Tacconi, Attilio Tacconi, Pierluigi Mozzo and NIM srl. No material relationship exists among any such person or entity and the Registrant other than in connection with the acquisition of QR, except that the Registrant currently, through its Dent-X division, acts as QR’s exclusive distributor in North and South America, excluding Brazil. The basis for determining the purchase price was arms-length negotiation among the parties with the assistance of an investment banker.

In connection with the acquisition, on April 19, 2007, the Registrant, through its wholly-owned subsidiary, entered into employment agreements with each of Mr. Tommasi, Ms. Tacconi, Mr. Tacconi and Mr. Mozzo, each for a term of five years, with annual salaries equal to €140,000 for Messrs. Tommasi, Tacconi and Mozzo and €80,000 for Ms. Tacconi. Each employment arrangement is terminable at the option of the Registrant after the first anniversary of the date of employment, in which event any employee so terminated would be entitled to one-half of the stated salary for the remaining term. Each agreement contains a non-compete clause which prohibits the employee from engaging in activities competitive with the business of QR for a period of five years from the date of termination of employment.

QR is a global supplier of state-of-the-art, in-office 3D dental computed tomography (CT). QR uses an imaging technology that features a cone shaped beam (a CBCT scanner) of x-rays.

Item 9.01.Financial Statements and Exhibits.

(a) FinancialStatements of Businesses Acquired.

Financial Statements of Quantitative Radiology srl will be filed pursuant to an amendment to this Report within 71 calendar days after the date that this Report is required to be filed.

(b) Pro Forma Financial Information.

Pro Form financial information of Quantitative Radiology srl will be filed pursuant to an amendment to this Report within 71 calendar days after the date that this Report is required to be filed.

(c) Exhibits.

Exhibit No.	Description
99.1	Press Release issued by AFP Imaging Corporation on April 23, 2007

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		AFP IMAGING CORPORATION
		(Registrant)
Date: April 25, 2007	By:	/s/ Elise Nissen
		Elise Nissen
		Chief Financial Officer

EX-99.1

Exhibit 99.1

AFP IMAGING COMPLETES THE ACQUISITION OF “QR, srl”,

A LEADING EDGE, 3-D IMAGING TECHNOLOGY COMPANY

Elmsford, NY, April 23, 2007 - AFP Imaging Corporation (OTCBB: AFPC.OB) announced today that it has successfully completed the acquisition of Quantitative Radiology, srl (“QR”) of Verona, Italy. Over the past ten years, QR has been the global leader in developing, manufacturing and distributing a unique, three-dimensional, digital x-ray imaging technology, NewTom, for dentists and other professionals. This is known as Cone Beam CT scanning (“CBCT”). NewTom is a specialized x-ray system in conjunction with proprietary software that reconstructs the 3-D radiographic images from the captured data. QR has a manufacturing facility in Verona, Italy and uses dealers and distributors throughout the world. AFP has been QR’s exclusive distributor for North America for the past year. Industry estimates of the CBCT dental market size, for the next two years, is about $200 million. At the time of acquisition, QR’s installed base, worldwide, was approximately five hundred units. The purchase was funded through a combination of new equity investors and senior debt. Sales for AFP’s fourth quarter and fiscal year ending June 30, 2007 will include QR’s revenues and operating income beginning April 20, 2007.

QR markets their product under the name “NewTom 3G” and is FDA certified for sale in the USA. It is CE approved for sale in Europe and other parts of the world. The NewTom 3G, CBCT scanner, has a manufacturer’s suggested retail price between $150,000 and $250,000 depending upon its configuration and the size of its field of view. AFP has recently displayed, at several major international dental trade shows, another advanced NewTom model, the “Vertical Generation” (“VG”). In this model, the patient can now stand, sit or be in a wheel chair as compared to the patient lying down on a horizontal support table. AFP is currently the only supplier in the world with both model configurations to suit the varied clinical needs for different patient conditions. Elderly, infirm or trauma patients can be better accommodated in the horizontal mode and smaller private dental facilities can take advantage of the vertical or upright patient positioning when space limitations prevail. Both systems use the same basic x-ray source and QR’s proprietary software. AFP and QR will continue to expand and invest in additional research and development for other medical applications as well as future enhancements of the software. This technology is the gateway to employing precision drill guidance for implant treatment today and robotic procedures that will evolve in the near future. Sales and Marketing by both organizations will be integrated for an improved worldwide presence, expanded educational effort and overall technical support.

Historically, QR, AFP Imaging and its Dent-X dental equipment product lines have been industry innovators. In 1997, our Company entered the digital x-ray sensor field by acquiring a Swedish imaging group that was one of the first organizations to combine intra oral dental x-rays with digital, computer reconstructed images. These diagnostic sensors replace the need for dental x-ray film. Simultaneously, QR was focused on researching and designing the first generation of low dose, in office, dental x-ray equipment using three-dimensional software techniques, similar to whole body CT scanners. The product and technology has evolved over the past ten years. The CBCT scans the anatomical area from the bridge of the nose to the teeth and then down to the throat. Now, with the consolidation of AFP and QR, the Company will expand its joint efforts and knowledge to provide additional sophisticated, diagnostic equipment. 3-D digital imaging has many clinical and consultation advantages over historic analog x-ray films or even digital, two-dimensional radiographs. The primary users are dentists, implantologists, oral surgeons, orthodontists and dental radiologists as well as Ear, Nose and Throat (ENT) medical specialists. The NewTom 3G provides critical diagnostic information, with accurate three-dimensional images, that facilitates the evaluation of the patient’s condition and aides in the planning for future treatment. By using a NewTom 3G in the office, the doctor’s practice can be more efficient and simultaneously more cost effective for the patient.

David Vozick, Chairman of AFP said, “The QR acquisition was an important step in our long term growth strategy. This will certainly provide external financial expansion from the consolidation but more importantly a base from which additional internal, organic growth will come from in the future. Along with QR’s overall business, we gained a very strong product development team, in Italy, that with Dr. Molteni is an important asset to expand our digital product design efforts plus the development of application software.”

“To take full advantage of the opportunities before us, AFP also announced that Mr. Daniel Fields has joined the company as Executive Vice President of Sales. He will direct the North American sales efforts for all of our dental, medical CBCT and veterinary product lines. Daniel has extensive experience in marketing and selling sophisticated, high end products to the professional medical user. This includes surgical lasers as well as dental practice service expansion through “dental spas”. Mr. Fields will coordinate and integrate sales of all product lines where equipment and software cross over between medical, dental and veterinary applications. He will explore other market needs and requirements to add additional products that can be sold and delivered through direct and dealer distribution channels.”

Dr. Molteni, AFP’s Executive Vice President of Technology said, “We are very pleased to add this state of the art technology to AFP’s broad, imaging product line. 3-D is the necessary key to future robotic procedures that are now about to enter the dental operatory. Other remote controlled surgical procedures have become commonplace today in hospital operating rooms. Giving the dental specialist or ENT physician the ability to accurately complete a complex procedure supported by a sophisticated piece of our in-office imaging equipment is part of an overall trend to improve health care services on an ambulatory, cost effective, out patient basis. AFP views itself as a serious supplier of equipment for these and other clinical applications.”

AFP Imaging is a diagnostic imaging supplier whose products are distributed worldwide with clinical applications for dental, medical and veterinary professionals. The company’s quality assurance program is ISO 9001 certified, an international standard. The company’s digital imaging technologies and product lines are providing the gateway for future internal and external growth. Through its global distribution network, the company has produced branded products that are installed in approximately 100,000 dental and medical facilities. Each site serves as a reference point for future user upgrades of equipment. The company’s products are distributed under various trademarked brand names that include AFP, DENT-X, EVA and NEWTOM. For additional corporate information please visit our web sites at www.afpimaging.com, www.dent-x.com and www.newtomdental.com.

The remarks contained in this press release and presented elsewhere by management from time to time contain forward-looking statements, which involve risks and uncertainties, including statements regarding the Company’s plans, objectives, expectations and intentions. The Company’s actual results may differ significantly from the results discussed in this press release or in other forward-looking statements presented by management. Among the factors that could cause actual results to differ materially include the failure of revenue on new products to develop as estimated, regulatory delays, loss of existing customers, the Company’s inability to meet increasing demand for its new products, general downward trends in the Company’s industry and other risk factors as described in the Company’s filings with the Securities and Exchange Commission. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any such statements to reflect any change in the Company’s expectation or any change in events, conditions or circumstances on which such statement is based.

FOR IMMEDIATE RELEASE

Contact: David Vozick, Chairman

AFP Imaging Corporation

914-592-6100