SecProbe.io

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February 10, 2005

Mail Stop 0306

Donald Rabinovitch, President
AFP Imaging Corporation
250 Clearbrook Road
Elmsford, New York  10523

Via U S Mail and FAX [(914) 592-6148]

Re:	AFP Imaging Corporation
	Form 10-K for the fiscal year ended June 30, 2004
	Form 10-Q for the fiscal quarter ended September 30, 2004
	File No.  0-10832

Dear  Mr. Rabinovitch:

      We have reviewed your filings and have the following
comments.
We have limited our review to only your financial statements and
related disclosures, and do not intend to expand our review to
other
portions of your documents. Where indicated, we think you should
revise your documents in response to these comments in all future
filings with the Commission.  If you disagree, we will consider
your
explanation as to why our comment is inapplicable or a revision is
unnecessary.  Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
supplemental information so we may better understand your
disclosure.
After reviewing this information, we may or may not raise
additional
comments.

	Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects.  We welcome
any questions you may have about our comments or on any other
aspect
of our review.  Feel free to call us at the telephone numbers
listed
at the end of this letter.

Mr. Donald Rabinovitch, President
AFP Imaging Corporation
February 10, 2005
Page 2

Form 10-K for fiscal year ended June 30, 2004

Management`s Discussion and Analysis

Critical Accounting Policies and Estimates

1. Tell us why you have not presented critical accounting policy
disclosure in MD&A.  Refer to FR-60 and FR-72 for further guidance
on
these disclosures and advise.  We may have further comment about
this
disclosure upon review of your response.

Capital Resources and Liquidity - Page 13

2. We note the brief reference to operating cash flows.  Pursuant
to
FR-72, MD&A release, we normally believe that Registrant`s should
present a discussion of cash flows from operating activities.
That
discussion should identify and analyze the underlying drivers of
operating cash flows.  Please note that the form of the cash flow
statement should not drive the substance of this discussion and
that
it is insufficient to present a narrative that merely lists items
from that Statement. Please revise your disclosures in future
filings, or tell us how your discussion considers the objectives
of
the Release.

Quantitative and Qualitative Disclosures about Market Risk - Page
16

3. We read in Note 4 that the interest rate for some of your debt
is
based on the prime rate and for other debt based on LIBOR.  Please
explain to us why you believe Item 305 of Regulation S-K does not
apply to your company.  Please note that our publication
"Questions
and Answers About the New Market Risk
Disclosure Rules " contains guidance on materiality as applicable
to
this disclosure.

Financial Statements

Note 1, Nature of Business and Significant Accounting Policies

-- Inventories - Page F-7

4. We have read in Note 5 to the interim financial statements for
October 2004 the expanded disclosures for inventories explaining
your
policy for the standard cost

Mr. Donald Rabinovitch, President
AFP Imaging Corporation
February 10, 2005
Page 3

system.  Please also present these clarified disclosures in your
annual financial statements in future filings.

5. Tell us the amounts of inventory impairment charges in each of
the
past three fiscal years; and tell us how you identify and account
for
inventory impairment.  Pursuant to SAB Topic 5-BB, inventory
charges
are permanent reductions to inventory cost.  Your response should
clarify how your practices conform to the requirements of the SAB.

-- Adoption of FAS 142 - Page F-10

6. Pursuant to FAS 142,  transitional goodwill impairment is
identified and measured in a two-step process.  Your disclosure
that
the fair value of your reporting unit was less than its carrying
amount is only the first step in the transitional analysis.
Please
expand future filings to also disclose how you applied the second
step.  You should also respond supplementally and show us that
your
method complied with the requirements of the Standard.

Note 2, Inventories - Page F-11

7. Tell us why you should not disaggregate the item "work-in-
process
and finished goods" to separately present work-in-progress
inventory
from finished goods inventory.  Refer to Rule 5-02.6 to Regulation
S-
X.

Note 7, Income Taxes - Page F-14

8. Unless insignificant, please also make disclosure about any
carry
forwards for state tax operating losses.  Any significant tax
credit
carry-forwards should also be disclosed.

9. Expand future filings to disclose in more detail the nature and
reasons for the item "Adjustment to income tax liability
accounts."
Also respond supplementally and explain why the adjustment,
including
its timing, is appropriate.

10. We see that deferred income taxes for depreciation and
amortization total nearly one million dollars. That amount is
unusually material to the historical cost and the net carrying
amount
of long-lived assets reported on your balance sheet.  In a
supplemental response clarify for us how the depreciation and
amortization difference produced such a significant deferred tax
asset.

Mr. Donald Rabinovitch, President
AFP Imaging Corporation
February 10, 2005
Page 4

Note 9, Commitments and Contingencies - Page F-16

11. We read that you recorded an accrual for an environmental
claim
net of an amount expected from your insurer.  Pursuant to
paragraph
140 to SOP 96-1, the amount of an environmental remediation
liability
should be determined independently from any potential claim for
recovery. The amount of any potential recovery should be
recognized
only when realization of the claim for recovery is deemed
probable.
Confirm to us that any insurance recovery considered in the
accrual
is probable of receipt and, if true, make that explicit disclosure
in
future filings.

Note 10, Segment Information - Page F-17

12. Tell us why you should not make product line disclosure as set
forth in paragraph 37 to FAS 131.

*  *  *  *  *  *  *

      As appropriate, please respond to these comments within 10
business days or tell us when you will provide us with a response.
Please furnish a response letter that keys your responses to our
comments and provides the requested supplemental information.
Confirm that you will comply with these comments in all future
filings with the Commission.  Detailed response letters greatly
facilitate our review.  Please file your response letter on EDGAR
under the label "CORRESP."  Please understand that we may have
additional comments after reviewing your responses to our comments
and the requested supplemental information.  When sending
supplemental information regarding this filing, please include the
following ZIP+4 code in our address:  20549-0306.

	We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision.  Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.

	In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that

* the company is responsible for the adequacy and accuracy of the
disclosure in the filing;

Mr. Donald Rabinovitch, President
AFP Imaging Corporation
February 10, 2005
Page 5

* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and

* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.

In addition, please be advised that the Division of Enforcement
has
access to all information you provide to the staff of the Division
of
Corporation Finance in our review of your filing or in response to
our comments on your filing.

      You may contact Jeanne Bennett at (202) 942-1915 or me at
(202)
942-2862, if you have questions regarding our comments.  In our
absence you may contact Brian R. Cascio, Accounting Branch Chief,
at
(202) 942-1791.

      Sincerely,

      Gary R. Todd
								Reviewing Accountant

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