Alanco's TSI PRISM Selected for Second Michigan Juvenile Facility.

SCOTTSDALE, Ariz. -- Alanco Technologies Inc. (NASDAQ: ALAN), developer of the TSI PRISM(TM) RFID inmate tracking system for the corrections industry, today announced notification from Spectrum Human Services Inc., a Michigan-based private prison operator, that its affiliate, Spectrum Juvenile Justice Services, has selected the Alanco proprietary tracking technology for installation at its new Calumet II juvenile detention facility to be constructed at Highland Park, Mich. The present construction plan anticipates completion of the TSI PRISM system in early spring 2005, with an estimated contract value of approximately $500,000. The Calumet II project will be Alanco's second juvenile facility TSI PRISM installation in the state of Michigan, following completion of the W.J. Maxey Boys Training School in 2003.

The TSI PRISM system will allow Calumet II administrators to continuously monitor and track location and movement of all officers, staff and inmates within the correctional facility. The system archives location and movement data, for weeks or months, and can identify participants in specific incidents occurring anywhere in the facility. This historical data record can be accessed by prison investigators instantaneously. The system's real-time, anywhere monitoring can significantly modify inmate behavior, which is increasingly being evidenced by a reduction in violent incidents at the growing number of TSI PRISM monitored institutions.

Dr. Nelson Griffis, chief operating officer of Spectrum Juvenile Justice Services and former director of W.J. Maxey, stated, "We chose the TSI PRISM system to increase the safety of our staff and to use the system's tracking capability to continuously make youth accountable for their movements. After initial activation of the TSI PRISM system at Maxey in 2002, staff safety increased, and I was impressed by the accuracy of the positioning data the system generated. The TSI PRISM system exceeded my expectations."

Alanco Chairman and CEO Robert R. Kauffman commented, "This opportunity to provide TSI PRISM for a second juvenile facility in Michigan is a strong endorsement of our unique value proposition in providing for enhanced staff safety and inmate accountability. This will also be our first project for a private-sector prison operator, an important market segment which we believe can greatly benefit from innovative utilization of our TSI PRISM technology."

Alanco Technologies Inc., headquartered in Scottsdale, Ariz., is the developer of the TSI PRISM RFID continuous tracking system for the corrections industry, which tracks the location and movement of inmates and officers, resulting in significant prison operating cost reductions and enhanced officer safety and facility security. Utilizing RFID (Radio Frequency Identification) tracking technology with proprietary software and patented hardware components, TSI PRISM provides real-time inmate and officer identification, location and tracking capabilities both indoors and out. TSI PRISM is currently utilized in prisons in Michigan, California and Illinois, with a new Ohio installation under construction.

Except for historical information, the statements contained in this press release are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All such forward-looking statements are subject to, and are qualified by, risks and uncertainties that could cause actual results to differ materially from those expressed or implied by those statements. These risks and uncertainties include, but are not limited to, reduced demand for information technology equipment; competitive pricing and products obsolete; rapid industry changes; failure of an acquired business to further the company's strategies; the ability to maintain satisfactory relationships with lenders and to remain in compliance with financial loan covenants and other requirements under current banking agreements; and the ability to secure and maintain key contracts and relationships.