**UNITED      STATES**
**SECURITIES      AND EXCHANGE COMMISSION**

**FORM      10-Q**

**Quarterly      Report Pursuant to Section 13 or 15 (d)**

**of      the Securities Exchange Act of 1934**

**AFP      Imaging Corporation**

|   | New                  York                        |   |   | 13-2956272                                            |   |
|--------|--------------------------------------------------|--------|--------|-------------------------------------------------------|--------|
|   | (State                  or Other Jurisdiction of |   |   | (I.R.S.                  Employer Identification No.) |   |
|   | Incorporation                  or Organization)  |   |   |                                                  |   |

|  250                  Clearbrook Road, Elmsford, New York | 10523                       |
|----------------------------------------------------------------|-----------------------------|
| (Address                  of Principal Executive Offices)      | (Zip                  Code) |

| Indicate                      by check mark whether the registrant: (1) has filed all reports                      required                      to be filed by Section 13 or 15 (d) of the Securities Exchange                      Act of 1934                      during the preceding 12 months (or for such shorter period                      that the                      registrant was required to file such reports),                      and (2) has been subject to such filing requirements for the                      past 90                      days.  Yes __X__ No                      _____ |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Large                      accelerated filer_____ | Accelerated                      filer______ | Non-accelerated                      filer___X___ |
|---------------------------------------------------|----------------------------------------------|---------------------------------------------------|

----

**AFP        Imaging Corporation**

|                            |                                                                                                                                                                                                          | Page    |
|---------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------|
|                            |                                                                                                                                                                                                          |    |
| **Part                    I.**  | **Financial                    Information**                                                                                                                                                                  |    |
|                            |                                                                                                                                                                                                          |    |
| Item                    1.      | Financial                    Statements                                                                                                                                                                       |    |
|                            |                                                                                                                                                                                                          |    |
|                            | Condensed                    Consolidated                    Balance                    Sheets                    as                    of December 31, 2006(unaudited)                    and June 30, 2006  |  4 |
|                            |                                                                                                                                                                                                          |    |
|                            | Condensed                    Consolidated Statements of Operations for                    the six months endedDecember                    31, 2006 and 2005                    (unaudited)                    |  5 |
|                            |                                                                                                                                                                                                          |    |
|                            | Condensed                    Consolidated Statements of Shareholders’                    Equity for the sixmonths                    ended December 31, 2006 and 2005                    (unaudited)    |  6 |
|                            |                                                                                                                                                                                                          |    |
|                            | Condensed                    Consolidated                    Statements                    of Cash Flows for the six months endedDecember                    31, 2006 and 2005                    (unaudited) | 7       |
|                            |                                                                                                                                                                                                          |    |
|                            | Notes                    to                    Consolidated                    Interim Financial Statements                                                                                                   | 8-11    |
|                            |                                                                                                                                                                                                          |    |
| Item                    2.      | Management’s                    Discussion                    and Analysis of Financial Condition and Results of                    Operations                                                          | 12-16   |
|                            |                                                                                                                                                                                                          |    |
| Item                    3.      | Quantitative                    and                    Qualitative Disclosures About Market Risk                                                                                                              | 16      |
|                            |                                                                                                                                                                                                          |    |
| Item                    4.      | Controls                    and                    Procedures                                                                                                                                                 | 17      |
|                            |                                                                                                                                                                                                          |    |
| **Part                    II.** | **Other                    Information**                                                                                                                                                                      |    |
|                            |                                                                                                                                                                                                          |    |
| Item                    1.      | Legal                    Proceedings                                                                                                                                                                          | 18      |
|                            |                                                                                                                                                                                                          |    |
| Item                    6.      | Exhibits                                                                                                                                                                                                      | 18      |
|                            |                                                                                                                                                                                                          |    |
| Signatures                      | 19-25                                                                                                                                                                                                         |

----

|   | · | adverse                  changes in general economic conditions, |
|--------|--------|------------------------------------------------------------------|

|   | · | the                  Company’s ability to repay its debts when due, |
|--------|--------|---------------------------------------------------------------------------|

|   | · | changes                  in the markets for the Company’s products and services, |
|--------|--------|----------------------------------------------------------------------------------------|

|   | · | the                  ability of the Company to successfully design, develop, manufacture                  and                  sell new products, |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the                  Company’s ability to successfully market its existing and new products, |
|--------|--------|----------------------------------------------------------------------------------------------------|

|   | · | adverse                  business conditions, |
|--------|--------|-----------------------------------------------|

|   | · | changing                  industry and competitive                  conditions, |
|--------|--------|---------------------------------------------------------------------------------|

|   | · | the                  effect of technological advancements on the marketability of the                  Company’s                  products, |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | maintaining                  operating efficiencies, |
|--------|--------|------------------------------------------------------|

|   | · | pricing                  pressures, |
|--------|--------|-------------------------------------|

|   | · | risks                  associated with foreign sales, |
|--------|--------|-------------------------------------------------------|

|   | · | the                  Company’s ability to attract and retain key personnel, |
|--------|--------|-----------------------------------------------------------------------------------|

|   | · | difficulties                  in maintaining adequate long-term financing to meet the Company’s                  obligations and fund the Company’s                  operations, |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | changes                  in the nature or enforcement of laws and regulations concerning                  the                  Company’s products, services, suppliers, or                  customers, |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | determinations                  in various outstanding legal                  matters, |
|--------|--------|----------------------------------------------------------------------------------------|

|   | · | the                  success of the Company’s strategy to increase its market share in the                  industries in which it competes, |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the                  Company’s ability to successfully integrate the operations of any entity                  acquired by the Company with the Company’s                  operations, |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | changes                  in currency exchange rates and regulations,                  and |
|--------|--------|-------------------------------------------------------------------------------------------|

|   | · | other                  factors set forth in this Quarterly Report on Form 10-Q, and the                  Company’s                  Annual Report on Form 10-K for the year ended June 30, 2006, and                  from time                  to time in the Company’s other filings with the Securities and Exchange                  Commission. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**PART        I. Financial Information**

----

**Item          1: FINANCIAL STATEMENTS**

**AFP          Imaging Corporation and          Subsidiaries**

**Condensed          Consolidated Balance Sheets - December 31, 2006 and June 30,          2006**

| **Assets**                                                                                                                                              |   | **December                    31,****2006** |           | **June                    30,****2006** |   | **Liabilities                    and Shareholders' Equity** |    | **December                    31,****2006**                                                                                                                                                                                                                                                                                                                    |   | **June                    30,****2006** |           |
|---------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------|----------------|-----------------------------------------|--------|-------------------------------------------------------------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------|----------------|
|                                                                                                                                                    |   | (Unaudited)                                 |           |                                    |   |                                                        |    | (Unaudited)                                                                                                                                                                                                                                                                                                                                                    |   |                                    |           |
| Current                    Assets:                                                                                                                      |   |                                        |           |                                    |   | Current                    Liabilities:                     |    |                                                                                                                                                                                                                                                                                                                                                           |   |                                    |           |
| Cash                    and cash equivalents                                                                                                            |   | $                                           | 6,063,354      |                                    | $      | 5,213,289                                                   |    | Current                    portion of long-term debt                                                                                                                                                                                                                                                                                                           |   | $                                       | 1,451,310      |   | $ | - |   |
| Accounts                    receivable, less                    allowance for doubtful accounts of $95,000 and $90,000,                    respectively |   |                                        | 3,331,577      |                                    |   | 2,757,114                                                   |    | Accounts                    payable                                                                                                                                                                                                                                                                                                                            |   |                                    | 1,555,895      |   |   | 2,035,117 |   |
|                                                                                                                                                    |   |                                        |           |                                    |   |                                                        |    | Accrued                    expenses                                                                                                                                                                                                                                                                                                                            |   |                                    | 1,660,684      |   |   | 1,565,174 |   |
|                    Inventories                                                                                                                     |   |                                        | 4,562,002      |                                    |   | 4,834,510                                                   |    | **Total                    current liabilities**                                                                                                                                                                                                                                                                                                               |   |                                    | 4,667,889      |   |   | 3,600,291 |   |
|                                                                                                                                                    |   |                                        |           |                                    |   |                                                        |    |                                                                                                                                                                                                                                                                                                                                                           |   |                                    |           |   |   |   |   |
| Prepaid                    expenses and other current assets                                                                                            |   |                                        | 104,548        |                                    |   | 97,189                                                      |    |  Deferred                  Liabilities                                                                                                                                                                                                                                                                                                                    |   |                                    | 224,034        |   |   | 71,204 |   |
| Deferred                    income taxes                                                                                                                |   |                                        | 680,000        |                                    |   | 680,000                                                     |    |                                                                                                                                                                                                                                                                                                                                                           |   |                                    |           |   |   |   |   |
|                                                                                                                                                    |   |                                        |           |                                    |   |                                                        |    | **Total                    liabilities**                                                                                                                                                                                                                                                                                                                       |   |                                    | 4,891,923      |   |   | 3,671,495 |   |
| **Total                    current assets**                                                                                                             |   |                                        | 14,741,481     |                                    |   | 13,582,102                                                  |    |                                                                                                                                                                                                                                                                                                                                                           |   |                                    |           |   |   |   |   |
|                                                                                                                                                    |   |                                        |           |                                    |   |                                                        |    | Common                  Stock subject to registration rights                                                                                                                                                                                                                                                                                                   |   |                                    | 4,744,323      |   |   | 4,744,323 |   |
| Property                    and Equipment                                                                                                               |   |                                        |           |                                    |   |                                                        |    |                                                                                                                                                                                                                                                                                                                                                           |   |                                    |           |   |   |   |   |
| At                    cost                                                                                                                              |   |                                        | 1,891,113      |                                    |   | 1,828,149                                                   |    | Shareholders’                  Equity:                                                                                                                                                                                                                                                                                                                   |   |                                    |           |   |   |   |   |
| Less                    accumulated depreciation                                                                                                        |   |                                        | (1,563,644     | )                                       |   | (1,450,484                                                  | )  | Preferred                    stock - $.01 par value;authorized                      5,000,000 shares, none issued                                                                                                                                                                                                                                              |   |                                    | -              |   |   | - |   |
|                                                                                                                                                    |   |                                        | 327,469        |                                    |   | 377,665                                                     |    | Common                      stock, $.01 par value; authorized30,000,000                      shares, issued andoutstanding                      12,428,800 and 12,345,994(including                      2,777,777 shares subject toregistration                      rights) shares at December31,                      2006, and June 30, 2006, respectively |   |                                    | 96,510         |   |   | 95,682 |   |
|                    Other                    Assets                                                                                                 |   |                                        | 559,590        |                                    |   | 380,797                                                     |    | Common                    stock warrants                                                                                                                                                                                                                                                                                                                       |   |                                    | 91,131         |   |   | 110,931 |   |
|                                                                                                                                                    |   |                                        |           |                                    |   |                                                        |    | Paid-in                  capital in excess of par                                                                                                                                                                                                                                                                                                              |   |                                    | 11,854,584     |   |   | 11,805,852 |   |
|                                                                                                                                                    |   |                                        |           |                                    |   |                                                        |    | Accumulated                  deficit                                                                                                                                                                                                                                                                                                                           |   |                                    | (6,049,931     | ) |   | (6,087,719 | ) |
|                                                                                                                                                    |   |                                        |           |                                    |   |                                                        |    | **Total                  shareholders’ equity**                                                                                                                                                                                                                                                                                                          |   |                                    | 5,992,294      |   |   | 5,924,746 |   |
|                                                                                                                                                    |   |                                        |           |                                    |   |                                                        |    |                                                                                                                                                                                                                                                                                                                                                           |   |                                    |           |   |   |   |   |
|                                                                                                                                                    |   |                                        |           |                                    |   |                                                        |    | **Total                  Liabilities and Shareholders’**                                                                                                                                                                                                                                                                                                 |   |                                    |           |   |   |   |   |
| **Total                    Assets**                                                                                                                     |   | **$**                                       | **15,628,540** |                                    | **$**  | **14,340,564**                                              |    | **Equity**                                                                                                                                                                                                                                                                                                                                                     |   | **$**                                   | **15,628,540** |   | **$** | **14,340,564** |   |

----

**AFP          Imaging Corporation and          Subsidiaries**

**Condensed          Consolidated Statements of Operations**

|                                                            |   | **Three                    Months Ended****December                    31,** |          | **Six                    Months Ended****December                    31,** |   |
|-----------------------------------------------------------------|--------|------------------------------------------------------------------------------|---------------|----------------------------------------------------------------------------|--------|
|                                                            |   |                                                                         |          |                                                                       |   |   |   |   |   |
|                                                            |   | **2006**                                                                     |          | **2005**                                                                   |   | **2006** |   | **2005** |   |
|                                                            |   |                                                                         |          |                                                                       |   |   |   |   |   |
| **Net                    sales**                                |   | **$**                                                                        | **7,884,637** |                                                                       | **$**  | **6,359,879** |   | **$** | **13,376,765** |   | **$** | **11,489,993** |   |
|                                                            |   |                                                                         |          |                                                                       |   |   |   |   |   |   |   |   |   |
| Cost                    of sales                                |   |                                                                         | 4,702,387     |                                                                       |   | 3,807,489 |   |   | 8,484,312 |   |   | 7,090,085 |   |
|                                                            |   |                                                                         |          |                                                                       |   |   |   |   |   |   |   |   |   |
| Gross                    profit                                 |   |                                                                         | 3,182,250     |                                                                       |   | 2,552,390 |   |   | 4,892,453 |   |   | 4,399,908 |   |
|                                                            |   |                                                                         |          |                                                                       |   |   |   |   |   |   |   |   |   |
| Selling,                    general and administrative expenses |   |                                                                         | 2,391,425     |                                                                       |   | 2,024,073 |   |   | 4,523,397 |   |   | 3,799,647 |   |
| Research                    and development expenses            |   |                                                                         | 195,056       |                                                                       |   | 189,894 |   |   | 373,536 |   |   | 344,579 |   |
|                                                            |   |                                                                         | 2,586,481     |                                                                       |   | 2,213,967 |   |   | 4,896,933 |   |   | 4,144,226 |   |
|                                                            |   |                                                                         |          |                                                                       |   |   |   |   |   |   |   |   |   |
| Operating                    income/(loss)                      |   |                                                                         | 595,769       |                                                                       |   | 338,423 |   |   | (4,480 | ) |   | 255,682 |   |
|                                                            |   |                                                                         |          |                                                                       |   |   |   |   |   |   |   |   |   |
|                                                            |   |                                                                         |          |                                                                       |   |   |   |   |   |   |   |   |   |
| Interest                    income, net of (interest expense)   |   |                                                                         | 24,523        |                                                                       |   | (28,167 | ) |   | 56,912 |   |   | (55,322 | ) |
|                                                            |   |                                                                         |          |                                                                       |   |   |   |   |   |   |   |   |   |
| Income                    before provision for income taxes     |   |                                                                         | 620,292       |                                                                       |   | 310,256 |   |   | 52,432 |   |   | 200,360 |   |
|                                                            |   |                                                                         |          |                                                                       |   |   |   |   |   |   |   |   |   |
| Provision                    for income taxes                   |   |                                                                         | 14,644        |                                                                       |   | --- |   |   | 14,644 |   |   | --- |   |
|                                                            |   |                                                                         |          |                                                                       |   |   |   |   |   |   |   |   |   |
| **Net                    income**                               |   | **$**                                                                        | **605,648**   |                                                                       | **$**  | **310,256** |   | **$** | **37,788** |   | **$** | **200,360** |   |
|                                                            |   |                                                                         |          |                                                                       |   |   |   |   |   |   |   |   |   |
|                                                            |   |                                                                         |          |                                                                       |   |   |   |   |   |   |   |   |   |
| Net                    income per common share:                 |   |                                                                         |          |                                                                       |   |   |   |   |   |   |   |   |   |
| Basic                                                           |   | $                                                                            | .05           |                                                                       | $      | .03 |   | $ | --- |   | $ | .02 |   |
| Diluted                                                         |   | $                                                                            | .05           |                                                                       | $      | .03 |   | $ | --- |   | $ | .02 |   |
|                                                            |   |                                                                         |          |                                                                       |   |   |   |   |   |   |   |   |   |
| Weighted                    average outstanding common stock:   |   |                                                                         |          |                                                                       |   |   |   |   |   |   |   |   |   |
| Basic                                                           |   |                                                                         | 12,428,800    |                                                                       |   | 9,568,217 |   |   | 12,401,703 |   |   | 9,553,796 |   |
| Diluted                                                         |   |                                                                         | 12,728,692    |                                                                       |   | 10,021,838 |   |   | 12,753,476 |   |   | 10,054,972 |   |

----

| **AFP                    Imaging Corporation and Subsidiaries****Condensed                    Consolidated Statements of Shareholders’ Equity****For                    the Six Months Ended December 31, 2006 and                    2005** |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  (Unaudited)                                                                                                                                         |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                      |   |  **Common** |   | **Common****Stock** |   | **Paid-in****Capital                    In** |   |  **Accumulated** |   |   |   |
|                                                                                                                                                      |   | **Stock** |   | **Warrants** |   | **Excess                    of Par** |   | **Deficit** |   | **Total** |   |
|                                                                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |
| **Balance                    June 30, 2005**                                                                                                              |   | **$** | **94,077** |   | **$** | **19,800** |   | **$** | **11,641,821** |   | **$** | **(7,093,067** | **)** | **$** | **4,662,631** |   |
|                                                                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance                    of 160,500 shares ofcommon                    stock in connection with theexercise                    of stock options        |   |   | 1,605 |   |   | --- |   |   | 81,633 |   |   | --- |   |   | 83,238 |   |
|                                                                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock-based                    compensation expense                                                                                                       |   |   | --- |   |   | --- |   |   | 36,508 |   |   | --- |   |   | 36,508 |   |
|                                                                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                    income for six months                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| ended                    December 31, 2005                                                                                                                |   |   | --- |   |   | --- |   |   | --- |   |   | 200,360 |   |   | 200,360 |   |
|                                                                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Balance                    December 31, 2005**                                                                                                          |   | **$** | **95,682** |   | **$** | **19,800** |   | **$** | **11,759,962** |   | **$** | **(6,892,707** | **)** | **$** | **4,982,737** |   |
|                                                                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Balance                    June 30, 2006**                                                                                                              |   | **$** | **95,682** |   | **$** | **110,931** |   | **$** | **11,805,852** |   | **$** | **(6,087,719** | **)** | **$** | **5,924,746** |   |
|                                                                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance                    of 82,800 shares of commonstock                    in connection with the exerciseof                    common stock warrants |   |   | 828 |   |   | (19,800 | ) |   | 18,972 |   |   | --- |   |   | --- |   |
|                                                                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock-based                    compensation expense                                                                                                       |   |   | --- |   |   | --- |   |   | 42,329 |   |   | --- |   |   | 42,329 |   |
|                                                                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Additional                    fees associated with issuanceof                    common stock in May 2006                                                 |   |   | --- |   |   | --- |   |   | (12,569 | ) |   | --- |   |   | (12,569 | ) |
|                                                                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                    income for six months ended                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| December                    31, 2006                                                                                                                      |   |   | --- |   |   | --- |   |   | --- |   |   | 37,788 |   |   | 37,788 |   |
|                                                                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Balance                    December 31, 2006**                                                                                                          |   | **$** | **96,510** |   | **$** | **91,131** |   | **$** | **11,854,584** |   | **$** | **(6,049,931** | **)** | **$** | **5,992,294** |   |

----

**AFP        Imaging Corporation and        Subsidiaries**

**Condensed          Consolidated Statements of Cash Flows**

|                                                                                                                    |   | Six                    months endedDecember                    31, |      |
|-------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------|-----------|
|                                                                                                                    |   | 2006                                                               |      | 2005 |   |
| Cash                    flows from operating activities:                                                                |   |                                                               |      |   |   |
| Net                    income                                                                                           |   | $                                                                  | 37,788    |   | $ | 200,360 |   |
| Adjustments                    to reconcile net income to net cash provided by operating                    activities- |   |                                                               |      |   |   |   |   |
| Depreciation                    and amortization                                                                        |   |                                                               | 117,540   |   |   | 116,249 |   |
| Non-cash                    compensation expense                                                                        |   |                                                               | 42,329    |   |   | 36,508 |   |
| Write-off                    of deferred financing costs                                                                |   |                                                               | 50,000    |   |   | --- |   |
| Change                    in assets and liabilities:                                                                    |   |                                                               |      |   |   |   |   |
| (Increase)/decrease                    in accounts receivable                                                           |   |                                                               | (574,463  | ) |   | 32,008 |   |
| Decrease                    in inventories                                                                              |   |                                                               | 272,508   |   |   | 569,830 |   |
| (Increase)/decrease                    in prepaid expenses and other assets                                             |   |                                                               | (16,559   | ) |   | 14,786 |   |
| (Decrease)                    in accounts payable                                                                       |   |                                                               | (479,222  | ) |   | (193,368 | ) |
| Increase                    in accrued expenses                                                                         |   |                                                               | 95,510    |   |   | 81,545 |   |
| Increase/(decrease)                    in deferred liabilities                                                          |   |                                                               | 152,830   |   |   | (22,110 | ) |
|                                                                                                                    |   |                                                               |      |   |   |   |   |
| Total                    adjustments                                                                                    |   |                                                               | (339,527  | ) |   | 635,448 |   |
|                                                                                                                    |   |                                                               |      |   |   |   |   |
| **Net                    cash (used by)/provided by operating activities**                                              |   |                                                               | (301,739  | ) |   | 835,808 |   |
|                                                                                                                    |   |                                                               |      |   |   |   |   |
| Cash                    flows from investing activities:                                                                |   |                                                               |      |   |   |   |   |
| Purchases                    of property and equipment                                                                  |   |                                                               | (62,964   | ) |   | (130,298 | ) |
| Costs                    related to a proposed acquisition                                                              |   |                                                               | (223,973  | ) |   | --- |   |
|                                                                                                                    |   |                                                               |      |   |   |   |   |
| **Net                    cash used in investing activities**                                                            |   |                                                               | (286,937  | ) |   | (130,298 | ) |
|                                                                                                                    |   |                                                               |      |   |   |   |   |
| Cash                    flow from financing activities:                                                                 |   |                                                               |      |   |   |   |   |
| Borrowing                    of debt                                                                                    |   |                                                               | 1,451,310 |   |   | 237,265 |   |
| Repayment                    of debt                                                                                    |   |                                                               | ---       |   |   | (133,333 | ) |
| Proceeds                    from exercise of common stock options                                                       |   |                                                               | ---       |   |   | 83,238 |   |
| Payment                    of fees associated with issuance of common stock in May                    2006              |   |                                                               | (12,569   | ) |   | --- |   |
|                                                                                                                    |   |                                                               |      |   |   |   |   |
| **Net                    cash provided by financing activities**                                                        |   |                                                               | 1,438,741 |   |   | 187,170 |   |
|                                                                                                                    |   |                                                               |      |   |   |   |   |
| Net                    increase in cash and cash equivalents                                                            |   |                                                               | 850,065   |   |   | 892,680 |   |
|                                                                                                                    |   |                                                               |      |   |   |   |   |
| Cash                    and cash equivalents, at beginning of period                                                    |   |                                                               | 5,213,289 |   |   | 331,009 |   |
|                                                                                                                    |   |                                                               |      |   |   |   |   |
| Cash                    and cash equivalents, at end of period                                                          |   | $                                                                  | 6,063,354 |   | $ | 1,223,689 |   |
|                                                                                                                    |   |                                                               |      |   |   |   |   |
| **Supplemental                    cash flow disclosures:**Cash                    paid during the periods for-          |   |                                                               |      |   |   |   |   |
| Interest                                                                                                                |   | $                                                                  | 55,375    |   | $ | 57,417 |   |
| Income                    taxes, net of refunds                                                                         |   | $                                                                  | 16,371    |   |   | ($1,537 | ) |
|                                                                                                                    |   |                                                               |      |   |   |   |   |
| **Supplemental                    Schedule of Non Cash Activity:**                                                      |   |                                                               |      |   |   |   |   |
| Cashless                    exercise of common stock warrants                                                           |   | $                                                                  | 19,800    |   |   | --- |   |

----

**AFP      Imaging Corporation and      Subsidiaries**

**Notes        to Consolidated Financial Statements**

**December        31, 2006**

**(1)        **
**Genera**

**l:**

| AFP                  Imaging Corporation (together with its subsidiaries, the “Company”) was                  organized on September 20, 1978 under the laws of the State of                  New York.                  Since such date, the Company has been engaged in the business of                  designing, developing, manufacturing and distributing equipment                  for                  generating, capturing, producing and recording medical, veterinary                  and                  dental images through digital technology, as well as the chemical                  processing of photosensitive materials. Medical, dental, veterinary                  and                  industrial professionals use these products. The Company’s products are                  distributed to worldwide markets under various brand names to the                  diagnostic professionals and through a network of independent and                  unaffiliated dealers. The Company has only one business segment                  -                  medical/dental. |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| The                accounting policies followed during the interim periods reported                on herein                are in conformity with accounting principles generally accepted in                the                United States and are consistent with those applied for annual periods,                as                described in the Company's consolidated financial statements included                in                the Company's Annual Report on Form 10-K for the year ended June                30, 2006.                The Condensed Consolidated Balance Sheet at June 30, 2006 has been                derived                from the audited financial statements. |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Included                in other assets at December 31, 2006 and June 30, 2006 is $524,469                and                $350,496, respectively, relating to deferred costs in connection                with a                proposed acquisition. Such costs will be included in the determination                of                purchase price upon the consummation of such acquisition or written                off as                expense should such proposed acquisition be                abandoned. |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**(2)        **
**Stock        Option Plans:**

| The                Company currently has in effect two employee incentive stock plans,                under                which approximately 1,100,000 shares of Company common stock were                originally authorized and available for issuance. Options that are                granted                under the plans generally are fully vested when granted. Under the                terms                of these plans, options to purchase common stock of the Company may                be                granted at not less than 85% of the fair market value of the stock                on the                date of grant (100% in the case of incentive stock options qualifying                under Section 422A of the Internal Revenue Code (“ISOs”) or 110% in the                case of ISOs granted to persons owning more than 10% of the outstanding                stock of the Company). As of March 31, 2005, all of the outstanding                stock                options issued by the Company had been fully                vested. |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Effective                July 1, 2005, the Company adopted the fair value based method of                accounting for stock-based employee compensation under the provisions                of                Statement of Financial Accounting Standards No. 123 (Revised 2004),*Share                Based Payment*                (“SFAS No. 123R”), using the modified prospective method without                restatement of the interim periods prior to the adoption date, as                described in SFAS 123R. As a result, the Company has begun recognizing                expense in an amount equal to the fair value of share-based payments                (including stock option awards) on their date of grant over the vesting                period of the awards. Under SFAS 123R, the Company must recognize                compensation expense for (1) all share-based payments granted on                or after                July 1, 2005 and (2) any partially vested options as of July 1, 2005.                Prior to the adoption of SFAS 123R, the Company accounted for these                plans                pursuant to Accounting Principles Board Opinion No. 25 *Accounting                for Stock Issued to Employees*.                Therefore, compensation expense related to stock option awards was                not                reflected in operating expenses in any period prior to July 2005                (first                quarter of Fiscal Year 2006), and prior period results have not been                restated. For the three and six months ended December 31, 2006, non-cash                stock based compensation expense related to stock option awards was                $0 and                $42,329 respectively, and for the three and six months ended December                31,                2005, non-cash stock based compensation expense related to stock                option                awards was and $8,206 and $25,850, respectively. These charges have                all                been included in operating                expenses. |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| The                  fair value of each option granted under the Company’s incentive stock                  plans during the three and six months ended December 31, 2006 and                  2005 was                  estimated on the date of grant using the Black-Scholes option pricing                  method. Using this model, fair value is calculated based on assumptions                  with respect to (a) expected volatility of the market price of                  Company                  common stock, (b) the periods of time over which employees, directors                  and                  other option holders are expected to hold their options prior to                  exercise                  (expected lives), (c) expected dividend yield on Company common                  stock and                  (d) risk-free interest rates which are based on quoted US Treasury                  rates                  for securities with maturities approximating the options’ expected lives.                  Expected volatility has been estimated based on actual movements                  in the                  Company’s stock price over the most recent historical periods equivalent                  to the options’ expected lives. Expected lives are principally based on                  the Company’s limited historical exercise experience with option grants                  with similar prices. The expected dividend yield is zero as the                  Company                  has never paid dividends, does not currently anticipate paying                  any                  dividends in the foreseeable future and is restricted from paying                  dividends under the terms of its senior secured debt. The weighted-average                  of the fair value of the options granted during the three and six                  months                  ended December 31, 2006 was $0 and $2.15 per option, respectively,                  and the                  weighted-average of the fair value of the options granted during                  the three                  and six months ended December 31, 2005 was $1.91 and $1.96 per                  option,                  respectively. |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Stock              options to purchase an aggregate of 20,000 shares of Company common              stock              were granted to the Company’s non-employee Board of Director members in              the six-month period ended December 31, 2006; no stock options were              granted during the three-month period ended December 31, 2006, in              accordance with the Company’s policy for non-employee director              compensation. Stock options to purchase an aggregate of 10,000 shares              of              Company common stock were granted to the Company’s non-employee Board of              Director members in each of the three-month periods ended September              30,              2005 and December 31, 2005, in accordance with the Company’s policy for              non-employee director compensation. All of these stock options were              issued              with a ten-year useful life. |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**(**
**3)        Per Share Data**
**:**

|                              |   | Three                    months ended December 31, |       | Six                    months ended December 31, |   |
|-----------------------------------|--------|----------------------------------------------------|------------|--------------------------------------------------|--------|
|                              |   | 2006                                               |       | 2005                                             |   | 2006 |   | 2005 |   |
| Basic                    Shares   |   |                                               | 12,428,800 |                                             |   | 9,568,217 |   |   | 12,401,703 |   |   | 9,553,796 |   |
| Dilutive:                         |   |                                               |       |                                             |   |   |   |   |   |   |   |   |   |
| Options                           |   |                                               | 299,892    |                                             |   | 370,116 |   |   | 324,997 |   |   | 416,146 |   |
| Warrants                          |   |                                               | ---        |                                             |   | 83,505 |   |   | 26,776 |   |   | 85,030 |   |
| Diluted                    Shares |   |                                               | 12,728,692 |                                             |   | 10,021,838 |   |   | 12,753,476 |   |   | 10,054,972 |   |

| The                  diluted weighted average number of shares outstanding for the six                  months                  ended December 31, 2006 and 2005 does not include the potential                  exercise                  of 191,000 and 28,000 stock options respectively, as such amounts                  were                  antidilutive. The diluted weighted average number of shares outstanding                  for the six months ended December 31, 2006, does not include the                  potential                  exercise of 50,000 warrants, as such amounts were                  antidilutive. |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**(4)        Short Term Debt**
**:**

**(5)        **
**Inventory**
**:**

|                                                     |   |  December                    31, 2006 |      | June                    30, 2006 |   |
|----------------------------------------------------------|--------|--------------------------------------------|-----------|----------------------------------|--------|
|                                                     |   | (Unaudited)                                |      |                             |   |
| Raw                    materials and sub-component parts |   | $                                          | 2,182,105 |                             | $      | 1,984,979 |   |
| Work-in-process                    and finished goods    |   |                                       | 2,379,897 |                             |   | 2,849,531 |   |
|                                                     |   | $                                          | 4,562,002 |                             | $      | 4,834,510 |   |

**(6)        **
**Income        Taxes**
**:**

| Income                  taxes are accounted for under the asset and liability method. Deferred                  income taxes are recorded for temporary differences between financial                  statement carrying amounts and the tax basis of assets and liabilities.                  Deferred tax assets reflect the tax rates expected to be in effect                  in the                  period in which the differences are expected to reverse. The Company                  records a valuation allowance to reduce its deferred tax asset                  to an                  amount that is more likely than not to be realized. As of December                  31,                  2006, the Company has recorded a deferred tax asset of $680,000,                  which                  primarily relates to losses recorded in prior years, and which                  the Company                  believes it is likely that the Company will utilize these prior                  year net                  operating loss carry forwards. Should circumstance change and the                  Company                  determine that it will not be able to utilize its net operating                  loss                  carryforward, such as a continuous decline in future taxable income,                  the                  Company will reevaluate its valuation allowance. As of June 30,                  2006, the                  Company had approximately $7.39 million in federal net operating                  loss                  carryforwards, and approximately $12.13 million in state net operating                  loss carryforwards. |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**(7)**
**Commitments        and Contingencies:**

----

**(8)**
** **
**New        Accounting Standards:**

*Fair        Value Measurements *

*Employers’        Accounting for Defined Benefit Pension and Other Postretirement Plans-an        Amendment of FASB Statements No. 87, 88, 106 and 132R *

*Accounting        for Registration Payment Arrangements *
*Accounting        for Contingencies.*

----

**Item          2: Management's Discussion and Analysis of Financial Condition          and Results of Operation**

**Capital          Resources and Liquidity**

| The                      Company’s working capital at December 31, 2006 increased by approximately                      $91,800 from June 30, 2006. This increase is principally due                      to net                      income, increases in accounts receivable, reductions in accounts                      payable,                      offset by decreases                      in inventory, and additional                      borrowings on the Company’s senior secured debt.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| Operating                      cash flows were lower in the current six-month period due to                      the                      significant reduction in accounts payable and a large increase                      in accounts                      receivable. The sales in the second quarter FY 2007 were approximately                      24%                      greater than the fourth quarter FY 2006, and based on customary                      collection                      periods, these receivables were still outstanding as of December                      31, 2006.                      The second quarter FY 2007 had sales with approximately 8%                      pre-tax                      earnings which offset the first quarter FY 2007 loss and generated                      additional cash to reduce accounts payable. The large cash                      balance at                      December 31, 2006, as well as the increase in the Company’s revolver loan,                      are due to the Company’s scheduled holiday closing during the last week of                      December, at which time no cash deposits were transferred to                      the senior                      lender to reduce the outstanding debt. This policy is consistent                      with                      prior years’ treatment of cash at calendar year-end. The Company is                      requiring advance deposits from its customers on the new high                      dollar                      valued equipment, which is consistent with the vendor’s terms of sale.                      Otherwise, the Company has neither changed its payment policies                      to its                      vendors, nor revised its payment terms with its                      customers.                          |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| On                      May 2, 2006, the Company completed a private placement of its                      common stock                      to a group of selected institutional and other accredited investors.                      The                      Company sold a total of 2,777,777 shares of its common stock                      at $1.80 per                      share. The Company has granted the                      investors certain registration rights with respect to the resale                      of the                      shares acquired. The Company intends to use the net proceeds                      for working                      capital, new product development, general corporate purposes                      and possibly                      for strategic acquisitions in the medical, dental                      and/or veterinary imaging equipment markets. There currently                      are no                      material commitments or arrangements with respect to any of                      the net                      proceeds of the private placement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| With                      respect to the above described financing, the Company filed                      a registration                      statement which was declared effective on July 14, 2006. If                      this                      registration statement is subsequently suspended for a specified                      period of                      time, the Company could be required to pay a penalty of 1%                      of the                      financing per month to the investors. Additionally, the Company                      is                      required to file amendments to the registration statement as                      necessary to                      keep the registration effective for 24 months from the closing                      date. In                      accordance with the provisions of EITF Topic D-98, the net                      proceeds from                      the private placement are classified as temporary equity on                      the                      accompanying June 30, 2006 balance sheet. The financing amount                      will be                      reclassified to shareholder’s equity upon the termination of the 24-month                      period. The Company has no reason to believe that the registration                      statement will be subject to any suspension.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| On                      September 21, 2004, the Company renewed its senior secured                      credit facility                      (the “Renewed Revolving Credit Loan”) with its existing senior secured                      lender for an additional three-year period. The Renewed Revolving                      Credit                      Loan consists of a $2.5 million revolving line of credit, which                      is secured                      by all of the Company’s inventory, accounts receivable, equipment, officer                      life insurance policies and proceeds thereof, trademarks, licenses,                      patents and general intangibles. The Renewed Revolving Credit                      Loan has an                      interest rate of 1.375% over the prime rate (8.25% as of December                      31,                      2006), a specific formula to calculate available funds based                      on eligible                      accounts receivable and inventory, and certain reporting requirements                      to                      the senior secured lender. The Renewed Revolving Credit Loan                      also requires                      that certain financial ratios and net worth amounts be maintained.                      The                      Renewed Revolving Credit Loan provides for increases in the                      interest rate                      charged on monies outstanding under specific circumstances.                      As of December                      31, 2006, the amount outstanding under the Renewed Revolving                      Credit Loan                      was $1,451,310 and the Company was in compliance with all the                      terms and                      conditions of the Renewed Revolving Credit Loan. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| In                      August and September 2006, the Company’s senior secured lender chose to                      exercise its warrant to purchase 100,000 shares of the Company’s common                      stock by converting the warrant into 82,806 shares of common                      stock in a                      cashless exercise in a manner as specified in the warrant.                      This warrant                      was due to expire in September 2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| The                      terms of the Renewed Revolving Credit Loan limit the amount                      of capital                      expenditures. Capital expenditures for the first six months                      of fiscal 2007                      were approximately $63,000, consisting of the purchase of several                      new                      high-end sales demonstration computers, an additional module                      for the                      Customer Relationship Management system, improvements to the                      Company’s                      existing network, and tooling expenditures related to the redesign,                      development and production of new imaging                      products.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |

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**Results          of Operations - Six Months Fiscal 2007 Versus Six Months Fiscal          2006**

----

**Results          of Operations - Second Quarter Fiscal 2007 Versus Second Quarter Fiscal          2006**

----

**Critical        Accounting Policies and Estimates**

----

**Item        3: Quantitative and Qualitative Disclosures About Market        Risk**

----

**Item        4: Controls and Procedures.**

----

**Part        II Other Information**

**Item        1: Legal Proceedings****.**

**Item        4: Submission of Matters to a Vote of Security        Holders**

|   |                                       | For                    Election | Against                    Election |        |
|--------|---------------------------------------|---------------------------------|-------------------------------------|--------|
|   | David                    Vozick       | 9,753,726                       | 287,305                             |   |
|   | Donald                    Rabinovitch | 9,768,426                       | 272,605                             |   |
|   | Jack                    Becker        | 9,752,726                       | 288,305                             |   |
|   | Robert                    Blatt       | 9,767,821                       | 273,210                             |   |

**Item        6:** **Exhibits****.**

|   | 31.1   | Certification                    of Co-Principal Executive Officer pursuant to Exchange Act Rule                    13a - 14                    (a).                                         |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | 31.2   | Certification                    of Co-Principal Executive Officer pursuant to Exchange Act Rule                    13a - 14                    (a).                                         |
|   | 31.3   | Certification                    of Chief Financial Officer pursuant to Exchange Act Rule 13a                    - 14                    (a).                                                |
|   |   |                                                                                                                                                                                         |
|   | 32.1   | Certification                    of Co-Principal Executive Officer pursuant to 18 U.S.C. Section                    1350 of                    the Sarbanes - Oxley Act of 2002.             |
|   | 32.2   | Certification                    of Co-Principal Executive Officer pursuant to 18 U.S.C. Section                    1350 of                    the Sarbanes - Oxley Act of 2002.             |
|   | 32.3   | Certification                    of Chief Financial Officer pursuant to 18 U.S.C. Section 1350                    of the                    Sarbanes - Oxley Act of                    2002. |

----

**Signatures**

|         |                                                                                                                                                                                                   |                                 |
|--------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------|
|         | **AFP                    IMAGING CORPORATION****(Registrant****)**                                                                                                                                     |
|    |                                                                                                                                                                                              |                            |
|         | By:                                                                                                                                                                                          | /s/ David                Vozick |
|         | **David                  Vozick**Chairman                  of the Board,(Co-Principal                  Executive Officer)Secretary,                  TreasurerDate:                  February 12, 2007 |

|   |                                                                                                                                                        |                                       |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------|
|   | By:                                                                                                                                               | /s/ Donald                Rabinovitch |
|   | **Donald                  Rabinovitch**President                  (Co-Principal                  Executive Officer)Date:                  February 12, 2007 |

|   |                                                                                                                                                                           |                                 |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------|
|   | By:                                                                                                                                                                  | /s/ Elise                Nissen |
|   | **Elise                  Nissen**Chief                  Financial Officer(Principal                  Financial and Accounting Officer)Date:                  February 12, 2007 |