AFP Imaging Receives North and South American Distribution Exclusive From Yoshida Corporation of Japan for Digital Dental Panoramic and Pan/Cepholometric Imaging Devices Expanding AFP's Dental Business and Reports Third Quarter and Nine Months Results for Fiscal 1999.

ELMSFORD, N.Y.--(BUSINESS WIRE)--May 27, 1999--

AFP Imaging (OTCBB: AFPC): AFP Imaging Corporation announced today that it reached an exclusive distribution agreement with Yoshida Corporation of Japan, for their line of Panoramic and Pan/Cepholometric imaging devices for Dental Radiography. This integrated patient chair and x-ray unit is primarily used for whole jaw x-ray imaging by dentists, orthodontists and oral surgeons. It will further expand the scope of DENT-X offerings to our domestic and international dental dealer network, and will strengthen the overall AFP Imaging business. The agreement covers North, Central, and South America. A total of over 60,000 "pan" units are in use today in the United States. The Yoshida panoramic unit is well known internationally under the tradename Panoura Ultra Pan.

AFP Imaging will transfer the distribution of the Panoramic radiographic equipment line from its former distributor to DENT-X, the dental products division of AFP Imaging. Yoshida's panoramic dental x-ray equipment has been sold in the USA and Latin America for over twenty years and is considered a mid-priced industry standard. The estimated overall annual sales in the USA for panoramic units is about 4,000 units. The Company's goal is to achieve an 8% to 10% market share per year which could add several million dollars in revenue to AFP. In addition, this new series of radiographic imaging products will enhance the profession's perception of DENT-X as a full line dental imaging company. Panoramic x-ray machines can record images either on x-ray film or digitally which is complimentary to the current DENT-X line of high-tech dental imaging systems. Yoshida's strong reputation for manufacturing a high quality product, combined with the DENT-X brand and dental market distribution capability is expected to dramatically increase the market share of the DENT-X/ Yoshida business in the future.

The Company reported its third quarter and nine months results for the period ended March 31, 1999. Third quarter revenues for Fiscal 1999 were $6,700,297 as compared to the third quarter revenues for Fiscal 1998 of $8,548,583. Revenues for the nine months just ended were $21,829,122 compared to $26,313,956 for the same period last year. Even though sales were down $1.1 million from the immediate past quarter, the Company's loss before Special Charges was $156,000 less than the previous quarter, a clear indication of the effectiveness of the Expense Reduction Plan implemented during the third quarter fiscal 1999.

The Company recorded, in the third quarter fiscal 1999, a Special Charge of $750,000 to reduce the goodwill amount associated with the acquisition of a business, due to the recognized impairment in this product line. The current quarter had a loss of $484,830 or ($.13) per share and a loss for the nine months of $1,274,939 or ($.21) per share, exclusive of the Special Charge. This is compared to a loss of $58,113 for the third quarter fiscal 1998 and a profit of $668,668 for the nine months fiscal 1998, both exclusive of Special Charges recorded in Fiscal 1998. The net loss for the quarter and nine months fiscal 1999 were $1,213,523 or ($.13) per share and $2,027,622 or ($.21) per share, respectively.

The remarks contained in this press release and presented elsewhere by management from time to time contain forward-looking statements which involve risks and uncertainties. The Company's actual results may differ significantly from the results discussed in this press release or in other forward-looking statements presented by management. Among the factors that could cause actual results to differ materially include failure of revenue on new products to develop as estimated, regulatory delays, loss of existing customers, general downward trends in the Company's industry and other risk factors detailed from time to time in the Company's reports filed with the SEC.

AFP Imaging is a medical equipment supplier whose imaging products are widely applied in dental and medical diagnostics. The Company's digital imaging

technology is providing the gateway for future growth. AFP's products are used by medical, dental and industrial professional. Dental products include x-ray units, digital x-ray sensors, film processors, chemistry, video camera and panoramic units. The Company's products are sold worldwide under various brand names which include AFP, DENT-X and SENS-A-RAY 2000(TM). -0-

                    Three Months Ended           Nine Months Ended
                         March 31,                   March 31,

                    1999          1998          1999          1998
                    ----          ----          ----          ----

Net Sales       $ 6,700,297   $ 8,548,583  $ 21,829,122  $ 26,313,956

Income (Loss)
Before
 Special
 Charges       ($   484,830) ($    58,113) ($ 1,274,939)  $   668,668

Special
 Charges       ($   750,000) ($ 1,700,000) ($   750,000) ($ 3,320,983)

Loss Before
 Taxes         ($ 1,234,830) ($ 1,758,113) ($ 2,024,939) ($ 2,652,315)

Provision
 (Benefit) for
  Taxes        ($    21,317)          --    $     2,683  $     50,480

Net Loss       ($ 1,213,513) ($ 1,758,113) ($ 2,027,622) ($ 2,702,795)

Weighted
 average
 outstanding
 of common
 stock            9,271,054     9,767,949     9,436,686     8,594,533

Net loss per
Common Share

     Basic     ($       .13) ($       .18) ($       .21) ($       .31)

     Diluted   ($       .13) ($       .18) ($       .21) ($       .31)