UNITED
      STATES


SECURITIES
      AND EXCHANGE COMMISSION


WASHINGTON,
      DC 20549





**FORM
      10-Q**





(Mark
      One)


xQuarterly
      report
      pursuant to Section 13 or 15(d) of the Securities Exchange Act of
      1934





For
      the
      quarterly period ended September 30, 2008





oTransition
      report
      pursuant to Section 13 or 15(d) of the Securities Exchange Action of
      1934


For
        the
        transition period from ____________________________ to
        ____________________________





Commission
      File Number 0-19266





**ALLIED
      HEALTHCARE PRODUCTS, INC.**





1720
      Sublette Avenue


St.
      Louis, Missouri 63110


314/771-2400


IRS
      Employment ID 25-1370721





Indicate
      by check mark whether the registrant (1) has filed all reports required to
      be
      filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
      the
      preceding twelve months (or for such shorter periods that the registrant was
      required to file such reports, and (2) has been subject to such filing
      requirements for the past ninety days.





Yes
x No
o





Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, a non-accelerated filer, or a smaller reporting company.
      See
      definitions of "large accelerated filer,” “accelerated filer" and “smaller
      reporting company” in Rule 12b-2 of the Exchange Act.




Large accelerated filer ̈
            
            Accelerated filer ̈
            
            Non-accelerated filer ̈
            
            Smaller reporting company x(Do not check if a smallerreporting company)





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act).





Yes
o No
x




The
      number of shares of common stock outstanding at November 2, 2008 is 7,901,327
      shares.









**INDEX**Page
              NumberPart
                I –
            Financial
                InformationItem
                1.
            Financial
                StatementsConsolidated
                Statement of Operations -
            
            3Three
                months ended September 30,2008
                and 2007 (Unaudited)Consolidated
                Balance Sheet -
            
            4
                -
                5September
                30, 2008 (Unaudited) andJune
                30, 2008Consolidated
                Statement of Cash Flows -
            
            6Three
                months ended September 30, 2008 and 2007(Unaudited)Notes
                to Consolidated Financial Statements
            
            7
                -
                9Item
                2.
            Management’s
                Discussion and Analysis of
            
            10
                - 12Financial
                Condition and Results of OperationsItem
                3.
            Quantitative
                and Qualitative Disclosure
            
            13about
                Market Risk****
            Item
                4T.
            Controls
                and Procedures
            
            13Part
                II -
            Other
                InformationItem
                6.
            Exhibits
            
            15Signature
            
            15





SAFE
      HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995





Statements
      contained in this Report, which are not historical facts or information, are
      "forward-looking statements." Words such as "believe," "expect," "intend,"
      "will," "should," and other expressions that indicate future events and trends
      identify such forward-looking statements. These forward-looking statements
      involve risks and uncertainties, which could cause the outcome and future
      results of operations, and financial condition to be materially different than
      stated or anticipated based on the forward-looking statements. Such risks and
      uncertainties include both general economic risks and uncertainties, risks
      and
      uncertainties affecting the demand for and economic factors affecting the
      delivery of health care services, and specific matters which relate directly
      to
      the Company's operations and properties as discussed in the Company’s annual
      report on Form 10-K for the year ended June 30, 2008. The Company cautions
      that
      any forward-looking statements contained in this report reflects only the belief
      of the Company or its management at the time the statement was made. Although
      the Company believes such forward-looking statements are based upon reasonable
      assumptions, such assumptions may ultimately prove inaccurate or incomplete.
      The
      Company undertakes no obligation to update any forward-looking statement to
      reflect events or circumstances after the date on which the statement was
      made.





2





**PART
      I.**  **FINANCIAL
      INFORMATION**





**Item
      1.**  **Financial
      Statements**





**ALLIED
      HEALTHCARE PRODUCTS, INC.**


**CONSOLIDATED
      STATEMENT OF OPERATIONS**


**(UNAUDITED)**





Three months ended
            
            Three months endedSeptember 30,
            
            September 30,2008
            
            2007Net
                sales
            
            $
            14,441,011
            
            $
            14,101,618Cost
                of sales
            
            
            10,939,957
            
            
            10,934,605Gross
                profit
            
            
            3,501,054
            
            
            3,167,013Selling,
                general andadministrative
                expenses
            
            
            3,183,587
            
            
            3,042,969Income
                from operations
            
            
            317,467
            
            
            124,044Interest
                income
            
            
            (30,659
            )
            
            (40,769
            )Other,
                net
            
            
            12,067
            
            
            15,150(18,592
            )
            
            (25,619
            )Income
                before provisionfor
                income taxes
            
            
            336,059
            
            
            149,663Provision
                for income taxes
            
            
            127,702
            
            
            62,597Net
                income
            
            $
            208,357
            
            $
            87,066Basic
                and diluted earnings per share
            
            $
            0.03
            
            $
            0.01Weighted
                average shares
            
            
            7,891,232
            
            
            7,883,577outstanding
                - basicWeighted
                average sharesoutstanding
                - diluted
            
            
            8,132,931
            
            
            8,106,796





See
      accompanying Notes to Consolidated Financial Statements.





3




**ALLIED
      HEALTHCARE PRODUCTS, INC.**


**CONSOLIDATED
      BALANCE SHEET**


**ASSETS**




(Unaudited)September 30,
            
            June 30,2008
            
            2008Current
                assets:Cash
                and cash equivalents
            
            $
            4,124,456
            
            $
            6,149,015Accounts
                receivable, net of allowancesof
                $300,000
            
            
            6,372,369
            
            
            6,441,683Inventories,
                net
            
            
            12,776,424
            
            
            12,046,450Other
                current assets
            
            
            554,744
            
            
            394,975Total
                current assets
            
            
            23,827,993
            
            
            25,032,123Property,
                plant and equipment, net
            
            
            11,174,253
            
            
            10,542,573Goodwill
            
            
            15,979,830
            
            
            15,979,830Other
                assets, net
            
            
            700,267
            
            
            703,328Total
                assets
            
            $
            51,682,343
            
            $
            52,257,854





See
      accompanying Notes to Consolidated Financial Statements.





**(CONTINUED)**





4




**ALLIED
      HEALTHCARE PRODUCTS, INC.**


**CONSOLIDATED
      BALANCE SHEET**


**(CONTINUED)**


**LIABILITIES
      AND STOCKHOLDERS' EQUITY**





(Unaudited)September 30,
            
            June 30,2008
            
            2008Current
                liabilities:Accounts
                payable
            
            $
            2,726,387
            
            $
            2,590,804Other
                accrued liabilities
            
            
            2,124,890
            
            
            2,960,334Deferred
                income taxes
            
            
            523,226
            
            
            500,238Deferred
                revenue
            
            
            690,000
            
            
            690,000Total
                current liabilities
            
            
            6,064,503
            
            
            6,741,376Deferred
                revenue
            
            
            2,005,000
            
            
            2,177,500Commitments
                and contingenciesStockholders'
                equity:Preferred
                stock; $0.01 par value; 1,500,000 sharesauthorized;
                no shares issued and outstanding
            
            
            -
            
            
            -Series
                A preferred stock; $0.01 par value; 200,000 sharesauthorized;
                no shares issued and outstanding
            
            
            -
            
            
            -Common
                stock; $0.01 par value; 30,000,000 sharesauthorized;
                10,204,819 and 10,188,569 shares issuedat
                September 30, 2008 and June 30, 2008, respectively;7,901,327
                and 7,885,077 shares outstanding atSeptember
                30, 2008 and June 30, 2008, respectively
            
            
            102,048
            
            
            101,886Additional
                paid-in capital
            
            
            47,589,427
            
            
            47,524,084Retained
                earnings
            
            
            16,652,793
            
            
            16,444,436Less
                treasury stock, at cost; 2,303,492 shares atSeptember
                30, 2008 and June 30, 2008
            
            
            (20,731,428
            )
            
            (20,731,428
            )Total
                stockholders' equity
            
            
            43,612,840
            
            
            43,338,978Total
                liabilities and stockholders' equity
            
            $
            51,682,343
            
            $
            52,257,854





See
      accompanying Notes to Consolidated Financial Statements.





5




**ALLIED
      HEALTHCARE PRODUCTS, INC.**


**CONSOLIDATED
      STATEMENT OF CASH FLOWS**


**(UNAUDITED)**





Three months endedSeptember 30,2008
            
            2007Cash
                flows from operating activities:Net
                income
            
            $
            208,357
            
            $
            87,066Adjustments
                to reconcile net income to netcash
                provided by (used in) operating activities:Depreciation
                and amortization
            
            
            375,667
            
            
            330,000Stock
                based compensation
            
            
            (4,521
            )
            
            18,674Provision
                for doubtful accounts and salesreturns
                and allowances
            
            
            (18,311
            )
            
            (95,186
            )Deferred
                tax benefit
            
            
            22,988
            
            
            (7,470
            )Loss
                on disposition of equipment
            
            
            -
            
            
            5,228Changes
                in operating assets and liabilities:Accounts
                receivable
            
            
            87,625
            
            
            (48,859
            )Inventories
            
            
            (729,974
            )
            
            804,160Other
                current assets
            
            
            (159,769
            )
            
            (343,990
            )Accounts
                payable
            
            
            135,583
            
            
            (29,915
            )Deferred
                revenue
            
            
            (172,500
            )
            
            (116,250
            )Other
                accrued liabilities
            
            
            (846,512
            )
            
            (110,569
            )Net
                cash provided by (used in) operating activities
            
            
            (1,101,367
            )
            
            492,889Cash
                flows from investing activities:Capital
                expenditures
            
            
            (1,004,286
            )
            
            (79,263
            )Purchase
                of intangible asset
            
            
            -
            
            
            (35,000
            )Net
                cash used in investing activities
            
            
            (1,004,286
            )
            
            (114,263
            )Cash
                flows from financing activities:Stock
                options exercised
            
            
            81,094
            
            
            -Net
                cash provided by financing activities
            
            
            81,094
            
            
            -Net
                increase (decrease) in cash and cash equivalents
            
            
            (2,024,559
            )
            
            378,626Cash
                and cash equivalents at beginning of period
            
            
            6,149,015
            
            
            3,638,870Cash
                and cash equivalents at end of period
            
            $
            4,124,456
            
            $
            4,017,496





See
      accompanying Notes to Consolidated Financial Statements.





6





**ALLIED
      HEALTHCARE PRODUCTS, INC.**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**(UNAUDITED)**




1.  Unaudited
      Consolidated Financial Statements





The
      accompanying unaudited consolidated financial statements have been prepared
      in
      accordance with the instructions for Form 10-Q and do not include all of the
      information and disclosures required by accounting principles generally accepted
      in the United States of America for complete financial statements. In the
      opinion of management, all adjustments, consisting only of normal recurring
      adjustments considered necessary for a fair presentation, have been included.
      Operating results for any quarter are not necessarily indicative of the results
      for any other quarter or for the full year. These statements should be read
      in
      conjunction with the consolidated financial statements and notes to the
      consolidated financial statements thereto included in the Company’s Form 10-K
      for the year ended June 30, 2008.





Recent
      Accounting Pronouncements




In
      December 2007, the FASB issued SFAS No. 141 (revised 2007), Business
      Combinations (FAS 141(R)). FAS 141(R) requires that the fair value of the
      purchase price of an acquisition including the issuance of equity securities
      be
      determined on the acquisition date; requires that all assets, liabilities,
      noncontrolling interests, contingent consideration, contingencies, and
      in-process research and development costs of an acquired business be recorded
      at
      fair value at the acquisition date; requires that acquisition costs generally
      be
      expensed as incurred; requires that restructuring costs generally be expensed
      in
      periods subsequent to the acquisition date; and requires that changes in
      deferred tax asset valuation allowances and acquired income tax uncertainties
      after the measurement period impact income tax expense. FAS 141(R) also broadens
      the definition of a business combination and expands disclosures related to
      business combinations. FAS 141(R) will be applied prospectively to business
      combinations occurring after the beginning of the Company's fiscal year 2010,
      except that business combinations consummated prior to the effective date must
      apply FAS 141(R) income tax requirements immediately upon adoption. The Company
      is currently evaluating the impact of FAS 141(R) on its financial position,
      results of operations, and cash flows, and does not anticipate any material
      effect on the Company's consolidated financial statements.




In
      September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”, which
      defines fair value, establishes a framework for measuring fair value in
      generally accepted accounting principles, and expands disclosures about fair
      value measurements. SFAS No. 157 does not require any new fair value
      measurements, but provides guidance on how to measure fair value by providing
      a
      fair value hierarchy used to classify the source of the information. This
      statement was effective for us beginning July 1, 2008. Adoption
      of SFAS No. 157 did not have a material impact on the Company’s results of
      operations, financial position or cash flows.





7





2.  Inventories





Inventories
      are comprised as follows:





September 30, 2008
            
            June 30, 2008Work-in
                progress
            
            $
            1,211,739
            
            $
            807,358Raw
                materials and component parts
            
            
            9,057,106
            
            
            8,072,976Finished
                goods
            
            
            3,807,030
            
            
            4,465,599Reserve
                for obsolete and excessinventory
            
            
            (1,299,451
            )
            
            (1,299,483
            )$
            12,776,424
            
            $
            12,046,450




3.  Earnings
      per share




Basic
      earnings per share are based on the weighted average number of shares of all
      common stock outstanding during the period. Diluted earnings per share are
      based
      on the sum of the weighted average number of shares of common stock and common
      stock equivalents outstanding during the period. The number of basic shares
      outstanding for the three months ended September 30, 2008 and 2007 were
      7,891,232 and 7,883,577 respectively. The number of diluted shares outstanding
      for the three months ended September 30, 2008 and 2007 was 8,132,931 and
      8,106,796 respectively.




4.  Commitments
      and Contingencies





The
      Company is subject to various investigations, claims and legal proceedings
      covering a wide range of matters that arise in the ordinary course of its
      business activities. The Company has recognized the costs and associated
      liabilities only for those investigations, claims and legal proceedings for
      which, in its view, it is probable that liabilities have been incurred and
      the
      related amounts are estimable. Based upon information currently available,
      management believes that existing accrued liabilities are sufficient and that
      it
      is not reasonably possible at this time to believe that any additional
      liabilities will result from the resolution of these matters that would have
      a
      material adverse effect on the Company’s consolidated results of operations,
      financial position or cash flows.





5.
      Financing





On
      September 30, 2008, the Bank and the Company agreed to an amendment of the
      credit facility. In conjunction with the amendment to the Company’s credit
      facility, the Bank extended the maturity on the Company’s revolving credit
      facility to September 1, 2010, with automatic renewals. The amendment also
      increased the capital expenditure limitation to $4,000,000, from $2,000,000,
      for
      the fiscal year ended June 30, 2009. The entire credit facility continues to
      accrue interest at the Bank’s prime rate. The prime rate was 5.00% on September
      30, 2008. The interest rate on prime rate loans may increase from prime to
      prime
      plus 0.75% if the ratio of the Company’s funded debt to EBITDA exceeds 2.5. The
      amended credit facility continues to provide the Company with a rate of LIBOR
      plus 1.75%, at the Company’s option. The optional LIBOR rate may increase from
      LIBOR plus 1.75% to LIBOR plus 2.75% based on the Company’s fixed charge
      coverage ratio. The 90-day LIBOR rate was 4.05% at September 30,
      2008.





8





At
      September 30, 2008 the Company had no aggregate indebtedness, including capital
      lease obligations, short-term debt and long term debt.





The
      Company was in compliance with all of the financial covenants associated with
      its credit facility at September 30, 2008.





6.
      Baralyme® Agreement





A
      reconciliation of deferred revenue resulting from the agreement with Abbott
      Laboratories (“Abbott”), with the amounts received under the agreement, and
      amounts recognized as net sales is as follows:





Three Months endedSeptember 30,2008
            
            2007Beginning
                balance
            
            $
            2,867,500
            
            $
            2,402,500Payment
                Received fromAbbott
                Laboratories
            
            
            -
            
            
            -Revenue
                recognizedas
                net sales
            
            
            (172,500
            )
            
            (116,250
            )2,695,000
            
            
            2,286,250Less
                - Current portionof
                deferred revenue
            
            
            (690,000
            )
            
            (465,000
            )$
            2,005,000
            
            $
            1,821,250





In
      addition to the provisions of the agreement relating to the withdrawal of the
      Baralyme® product, Abbott has agreed to pay Allied up to $2,150,000 in product
      development costs to pursue development of a new carbon dioxide absorption
      product for use in connection with inhalation anesthetics that does not contain
      potassium hydroxide and does not produce a significant exothermic reaction
      with
      currently available inhalation agents. As of September 30, 2008; $2,051,000
      has
      been received, and $99,000 is receivable, as a result of product development
      activities. For the three months ended September 30, 2008; $99,000, has been
      included in Net Sales. For the three months ended September 30, 2008; $94,000
      has been included in Cost of Sales.





9




**Item
        2. Management’s Discussion and Analysis of Financial Condition and Results of
        Operations**
 
 **RESULTS
        OF OPERATIONS**
 
 **Three
        Months ended September 30, 2008 compared to three months ended September
        30,
        2007.**
 
 Allied
        had net sales of $14.4 million for the three months ended September 30, 2008,
        up
        $0.3 million, or 2.1%, from net sales of $14.1 million in the prior year
        same
        quarter. Customer purchase order releases were $0.3 million lower than in
        the
        prior year same quarter. Additionally, customer orders were $0.1 million
        higher
        than the prior year same quarter. Purchase order release times depend on
        the
        scheduling practices of individual customers, and do vary over
        time.
 
 Domestic
        sales were up 8.9% from the prior year same quarter, while international
        business, which represented 16.7% of first quarter sales, was down 21.0%.
        Orders
        for the Company’s products for the three months ended September 30, 2008 of
        $13.3 million were $0.1 million or 0.8% higher than orders for the prior
        year
        same quarter of $13.2 million. Domestic orders are down 4.2% over the prior
        year
        same quarter while international orders which represented 19.0% of first
        quarter
        orders were up 28.6%. The Company currently believes that the increase in
        international orders is a result of order timing, and is not reflective of
        a
        gain of market share.
 
 Sales
        for
        the three months ended September 30, 2008 include $172,500 for the recognition
        into income of payments resulting from the agreement with Abbott Laboratories
        to
        cease the production and distribution of Baralyme®. Sales for the three months
        ended September 30, 2008 also include $99,000 as a result of product development
        activities to pursue development of a new carbon dioxide absorption product.
        The
        agreement with Abbott provides for Abbott to pay Allied up to $2,150,000
        in
        product development cost to pursue development of a new carbon dioxide
        absorption product for use in connection with inhalation anesthetics that
        does
        not contain potassium hydroxide and does not produce a significant exothermic
        reaction with currently available inhalation agents.
 
 The
        Company ceased the sale of Baralyme® on August 27 th ,
        2004.
        Sales for the three months ended September 30, 2007 include $116,250 for
        the
        recognition into income of payments resulting from the agreement with Abbott
        Laboratories to cease the production and distribution of Baralyme®. Sales for
        the three months ended September 30, 2007 also include $97,551 as a result
        of
        product development activities to pursue development of a new carbon dioxide
        absorption product. Income from the agreement will continue to be recognized
        over eight years, the term of the agreement, at $57,350 per month. Allied
        continues to sell Carbolime®, a carbon dioxide absorbent with a different
        formulation than Baralyme®.
  10
  Gross
        profit for the three months ended September 30, 2008 was $3.5 million, or
        24.3%
        of net sales, compared to $3.2 million, or 22.7% of net sales, for the three
        months ended September 30, 2007. Increases in material cost negatively impacted
        gross margins during the first quarter of fiscal 2008. Material cost during
        the
        first quarter was approximately 1.9% higher than in the first quarter of
        the
        prior year. Gross profit during the first quarter was favorably impacted
        by an
        approximately 2.1% price increase in selected products. Cost of sales for
        the
        three months ended September 30, 2008 also included $94,000 as a result of
        product development of a new carbon dioxide absorption product.
 
 Selling,
        general and administrative expenses for the three months ended September
        30,
        2008 were $3.2 million compared to selling, general and administrative expenses
        of $3.0 million for the three months ended September 30, 2007. Salaries and
        benefits increased approximately $117,000. This increase is primarily due
        to
        employee turnover in the first quarter of the prior fiscal year. There have
        not
        been changes in staffing levels compared to the same quarter of the prior
        fiscal
        year. Additionally, legal expenses increased by approximately $52,000, as
        a
        result of product liability claims.
 
 Income
        from operations was $0.3 million for the three months ended September 30,
        2008
        compared to income from operations of $0.1 million for the three months ended
        September 30, 2007. Interest income was $30,659 for the three months ended
        September 30, 2008 compared to interest income of $40,769 for the three months
        ended September 30, 2007. Allied had income before provision for income taxes
        in
        the first quarter of fiscal 2009 of $0.3 million, compared to income before
        provision for income taxes in the first quarter of fiscal 2008 of $0.1 million.
        The Company recorded a tax provision of $0.1 million for the three-months
        ended
        September 30, 2008 and 2007.
 
 Net
        income for the first quarter of fiscal 2009 was $0.2 million or $0.03 per
        basic
        and diluted share compared to net income of $0.1 million or $0.01 per basic
        and
        diluted share for the first quarter of fiscal 2008. The weighted average
        number
        of common shares outstanding, used in the calculation of basic earnings per
        share for the first quarters of fiscal 2009 and 2008 were 7,891,232 and
        7,883,577 shares, respectively. The weighted average number of common shares
        outstanding used in the calculation of diluted earnings per share for the
        first
        quarters of fiscal 2009 and fiscal 2008 were 8,132,931 and 8,106,796 shares,
        respectively.
 
 **LIQUIDITY
        AND CAPITAL RESOURCES**
 
 The
        Company believes that available resources and anticipated cash flows from
        operations are sufficient to meet operating requirements in the coming
        year.
  11
  The
        Company’s working capital was $17.8 million at September 30, 2008 compared to
        $18.3 million at June 30, 2008. Accrued liabilities decreased $0.8 million,
        inventory increased $0.7 million and other current assets increased $0.2
        million. At September 30, 2008 these increases in working capital were offset
        by
        a decrease in Cash and cash equivalents of $2.0 million. Accounts payable
        increased $0.1 million and accounts receivable decreased $0.1 million to
        $6.4
        million at September 30, 2008. Accounts receivable as measured in days of
        sales
        outstanding (“DSO”) increased to 40 DSO at September 30, 2008, up from 34 DSO at
        June 30, 2008.
 
 On
        September 30, 2008, the Bank and the Company agreed to an amendment of the
        credit facility. In conjunction with the amendment to the Company’s credit
        facility, the Bank extended the maturity on the Company’s revolving credit
        facility to September 1, 2010, with automatic renewals. The amendment also
        increased the capital expenditure limitation to $4,000,000, from $2,000,000,
        for
        the fiscal year ended June 30, 2009. The entire credit facility continues
        to
        accrue interest at the Bank’s prime rate. The prime rate was 5.00% on September
        30, 2008. The interest rate on prime rate loans may increase from prime to
        prime
        plus 0.75% if the ratio of the Company’s funded debt to EBITDA exceeds 2.5. The
        amended credit facility continues to provide the Company with a rate of LIBOR
        plus 1.75%, at the Company’s option. The optional LIBOR rate may increase from
        LIBOR plus 1.75% to LIBOR plus 2.75% based on the Company’s fixed charge
        coverage ratio. The 90-day LIBOR rate was 4.05% at September 30,
        2008.
 
 At
        September 30, 2008 the Company had no aggregate indebtedness, including capital
        lease obligations, short-term debt and long term debt.
 
 The
        Company was in compliance with all of the financial covenants associated
        with
        its credit facility at September 30, 2008.
 
 In
        the
        event that economic conditions were to severely worsen for a protracted period
        of time, we believe that our borrowing capacity under our credit facilities
        will
        provide sufficient financial flexibility. The Company would have options
        available to ensure liquidity in addition to increased borrowing. Capital
        expenditures, which are budgeted at $3.4 million for the fiscal year ended
        June
        30, 2009, could be postponed. At September 30, 2008, the Company had no bank
        debt. Based on the Company’s current level of debt, and performance, debt would
        bear interest at the Bank’s prime rate. The Company’s agreement with the Bank
        does include provisions for higher interest rates at higher debt levels and
        different levels of Company performance.
 
 Inflation
        has not had a material effect on the Company’s business or results of
        operations.
 
 **Litigation
        and Contingencies**
 
 The
        Company becomes, from time to time, a party to personal injury litigation
        arising out of incidents involving the use of its products. The Company believes
        that any potential judgments resulting from these claims over its self-insured
        retention will be covered by the Company’s product liability
        insurance.
  12
  **Recent
        Accounting Pronouncements**
  In
        December 2007, the FASB issued SFAS No. 141 (revised 2007), Business
        Combinations (FAS 141(R)). FAS 141(R) requires that the fair value of the
        purchase price of an acquisition including the issuance of equity securities
        be
        determined on the acquisition date; requires that all assets, liabilities,
        noncontrolling interests, contingent consideration, contingencies, and
        in-process research and development costs of an acquired business be recorded
        at
        fair value at the acquisition date; requires that acquisition costs generally
        be
        expensed as incurred; requires that restructuring costs generally be expensed
        in
        periods subsequent to the acquisition date; and requires that changes in
        deferred tax asset valuation allowances and acquired income tax uncertainties
        after the measurement period impact income tax expense. FAS 141(R) also broadens
        the definition of a business combination and expands disclosures related
        to
        business combinations. FAS 141(R) will be applied prospectively to business
        combinations occurring after the beginning of the Company's fiscal year 2010,
        except that business combinations consummated prior to the effective date
        must
        apply FAS 141(R) income tax requirements immediately upon adoption. The Company
        is currently evaluating the impact of FAS 141(R) on its financial position,
        results of operations, and cash flows, and does not anticipate any material
        effect on the Company's consolidated financial statements.
  In
        September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”, which
        defines fair value, establishes a framework for measuring fair value in
        generally accepted accounting principles, and expands disclosures about fair
        value measurements. SFAS No. 157 does not require any new fair value
        measurements, but provides guidance on how to measure fair value by providing
        a
        fair value hierarchy used to classify the source of the information. This
        statement was effective for us beginning July 1, 2008. Adoption
        of SFAS No. 157 did not have a material impact on the Company’s results of
        operations, financial position or cash flows.
 
 **Item
        3. Quantitative and Qualitative Disclosure about Market
        Risk**
 
 At
        September 30, 2008, the Company did not have any debt outstanding. The revolving
        credit facility bears an interest rate using the commercial bank’s “floating
        reference rate” or LIBOR as the basis, as defined in the loan agreement, and
        therefore is subject to additional expense should there be an increase in
        market
        interest rates.
 
 The
        Company had no holdings of derivative financial or commodity instruments
        at
        September 30, 2008. Allied Healthcare Products has international sales; however
        these sales are denominated in U.S. dollars, mitigating foreign exchange
        rate
        fluctuation risk.
 
 **Item
        4T. Controls and Procedures**
 
 (a)
              Management’s
                  annual report on internal control over financial
                  reporting.
  13
  The
        Company maintains controls and procedures designed to ensure that information
        required to be disclosed in the reports that the Company files or submits
        under
        the Securities Exchange Act of 1934 is recorded, processed, summarized, and
        reported within the time periods specified in the rules and forms of the
        Securities and Exchange Commission and that such information is accumulated
        and
        communicated to the Company's management, including its Chief Executive Officer
        and Chief Financial Officer, as appropriate, to allow timely decisions regarding
        required disclosure. Based upon their evaluation of those controls and
        procedures performed as of September 30, 2008, the Chief Executive Officer
        and
        Chief Financial Officer of the Company concluded that its disclosure controls
        and procedures were effective.
  The
        management of Allied Healthcare Products, Inc. is responsible for establishing
        and maintaining adequate internal control over financial reporting and for
        the
        preparation and integrity of the accompanying financial statements and other
        related information in this report. The Audit Committee of the Board of
        Directors, which is comprised of directors who are not employees of the Company,
        meets regularly with management, the Company’s internal control outside
        consultants, and the independent registered public accounting firm. The internal
        control consultants and the independent registered public accounting firm
        have
        free and direct access to the Audit Committee, and they meet periodically,
        without management present, to discuss appropriate matters. Based on
        management’s evaluation, conducted under the criteria established in Internal
        Control - - Integrated Framework issued by the Committee of Sponsoring
        Organizations of the Treadway Commission, management concluded that its internal
        control over financial reporting was effective as of September 30,
        2008.
 
 This
        quarterly report does not include an attestation report of the Company’s
        registered public accounting firm regarding internal control over financial
        reporting. Management’s report was not subject to attestation by the Company’s
        registered public accounting firm pursuant to temporary rules of the Securities
        and Exchange Commission that permit the Company to provide only management’s
        report in this annual report
 
 (b)
        Changes in internal control over financial reporting
 
 There
        were no changes in the Company’s internal controls for financial reporting or
        other factors during the first quarter of the most recent fiscal year that
        could
        significantly affect such internal controls. However, the Company has been
        engaged in the process of further reviewing and documenting its disclosure
        controls and procedures, including its internal accounting controls. The
        company
        may from time to time make changes aimed at enhancing the effectiveness of
        its
        disclosure controls and procedures, including its internal controls, to ensure
        that the Company’s systems evolve with its business.
  14
  Part
        II.  OTHER
        INFORMATION
 
 **Item
        6.**  **Exhibits**
 
 (a)
              Exhibits:
 
 31.1
              Certification
                  of Chief Executive Officer (filed
                  herewith)
 
 31.2
              Certification
                  of Chief Financial Officer (filed
                  herewith)
 
 32.1
              Sarbanes-Oxley
                  Certification of Chief Executive Officer (furnished
                  herewith)*
 
 32.2
              Sarbanes-Oxley
                  Certification of Chief Financial Officer (furnished
                  herewith)*
 
 99.1
              Press
                  Release dated November 7, 2008 announcing first quarter
                  earnings*
 
 *Notwithstanding
        any incorporation of this Quarterly Report on Form 10-Q in any other filing
        by
        the Registrant, Exhibits furnished herewith and designated with an asterisk
        (*)
        shall not be deemed incorporated by reference to any other filing under the
        Securities Act of 1933 or the Securities Exchange Act of 1934 unless
        specifically otherwise set forth therein.
 
 SIGNATURE
 
 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 thereunto
        duly authorized.
 
 ALLIED
                  HEALTHCARE PRODUCTS, INC./s/
                  Daniel C. DunnDaniel
                  C. Dunn
                Chief
                  Financial OfficerDate:
                  November 7, 2008
  15