Alanco Announces Plan for Mid-October Reverse Stock Split.

SCOTTSDALE, Ariz. -- Alanco Technologies, Inc. (NASDAQ: ALAN), a leading provider of wireless tracking and asset management solutions, today announced plans to reverse split its common stock effective October 16, 2006, in order to regain compliance with NASDAQ's minimum $1.00 bid price requirement for continued listing. The actual reverse split ratio will be determined and authorized by the Company's Board of Directors based upon market conditions and Company developments. The Company had previously received authority from its shareholders to effect a reverse split in order to maintain its NASDAQ listing.

Robert R. Kauffman, Alanco Chairman and Chief Executive Officer, stated, "We believe that near term Company developments will afford us the opportunity to effect a minimal reverse ratio, say 1-for-2, and yet allow us to regain NASDAQ bid price compliance within the requisite time frame."

"Alanco's fiscal 2007 first quarter (ending September 30) financial results will show dramatic improvement primarily due to contribution from our exciting new StarTrak Systems subsidiary acquired on June 30, 2006. We also anticipate closing a highly favorable $4 million debt financing within days which will provide necessary working capital for the continued extraordinary growth we are projecting for our StarTrak and TSI PRISM wireless tracking businesses in fiscal 2007."

Alanco Technologies, Inc. (NASDAQ: ALAN), headquartered in Scottsdale, Arizona, is a rapidly growing provider of wireless tracking and asset management solutions through its StarTrak Systems and Alanco/TSI PRISM subsidiaries. Corporate website: www.alanco.com

StarTrak Systems is a leading provider of GPS tracking and wireless asset management services to the transportation industry and the dominant provider of tracking, monitoring and control services to the refrigerated or "Reefer" segment of the transportation marketplace. StarTrak products increase efficiency and reduce costs of the refrigerated supply chain through the wireless monitoring and control of critical Reefer data, including GPS location, cargo temperatures and Reefer fuel levels. StarTrak offers complete integrated solutions for tracking, monitoring and controlling refrigerated trailers, trucks, railcars, and containers. Additional information is available at www.StarTrak.com.

Alanco/TSI PRISM is the leading provider of RFID real-time tracking technologies for the corrections industry. TSI PRISM systems track and record the location and movement of inmates and officers, resulting in enhanced facility safety and security and significant staff productivity improvements. Utilizing proprietary RFID (Radio Frequency Identification) tracking technology, TSI PRISM provides real-time inmate and officer identification, location and tracking both indoors and out. TSI PRISM is currently utilized in prisons in Michigan, California, Illinois, Ohio, and Missouri. Additional information is available at www.TSIPRISM.com.

The Company also participates in the data storage industry through two subsidiary companies: Arraid, Inc., a manufacturer of proprietary storage products to upgrade older "legacy" computer systems; and Excel/Meridian Data, Inc., a manufacturer of Network Attached Storage (NAS) systems.

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 difficulty managing product costs; development of new technologies which make the company's 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.