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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 14, 1999
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AFP Imaging Corporation
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(Exact name of registrant as specified in its charter)
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New York 0-10832 13-2956272
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(State or other jurisdiction (Commission I.R.S. Employer
of incorporation or File Number) Identification No.)
organization)
250 Clearbrook Road, Elmsford, New York 10523
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (914) 592-6100
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(Former name or former address, if changed since last report)
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Item 5. Other Events:
Cade Adams, the sole shareholder of ProDen SYSTEMS, INC., a Washington
Corporation (the "Holder") notified DENT-X International, Inc.
("DENT-X"), a New York Corporation and a wholly owned subsidiary of AFP
Imaging Corporation (the "Registrant") that since Holder and DENT-X
have not resolved Holder's claim that it was currently entitled to the
sum of $500,000 under DENT-X's $2,500,000 Promissory Note dated
December 23, 1997 ("Promissory Note") received in connection with
DENT-X's purchase from the Holder of substantially all of the Holder's
assets, properties and rights, Holder declared the Promissory Note in
default and elected to accelerate the balance due thereunder. The
Holder and DENT-X will next attempt to resolve the controversy through
mediation as provided under the Asset Purchase Agreement ("Asset
Purchase Agreement") dated December 24, 1997 among DENT-X, the
Registrant, the Holder and Cade Adams. If the controversy cannot be
resolved through mediation, the dispute shall be settled by binding
arbitration.
Registrant believes that it has a variety of defenses and counterclaims
to the Holder's claim, including fraud in the inducement and the
Holder's breach of its representations under the Asset Purchase
Agreement.
In any event, the Promissory Note is subordinated to the terms of
Registrant's senior debt. The Promissory Note provides that in the
event the Registrant is in default of the Registrant's and/or its
affiliate's senior debt and the Holder shall have received written
notice thereof, during the continuance of such event of default, all
such senior debt outstanding at the time of such notice shall first be
paid in full before any payment is permitted on the Promissory Note.
The Registrant has been advised by its senior lender that it intends to
call such an event of default if the Holder is meritorious in its
claim.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
AFP Imaging Corporation
Dated: April 15, 1999 By: /s/ David Vozick
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David Vozick,
Chairman of the Board
