Alanco Announces TSI PRISM(TM) Design Contract for Initial Prison Project in Australia.

SCOTTSDALE, Ariz. -- Alanco Technologies Inc. (Nasdaq: ALAN), developer of the TSI PRISM(TM) RFID officer duress and inmate tracking system for the corrections industry, announced today a contract with the Australian Capital Territory (ACT) Department of Corrections for design of a TSI PRISM system for a 375-bed multilevel prison scheduled to open in Canberra in late 2006. ACT's intention to incorporate inmate tracking technology in the new Canberra prison follows a November 2005 visit by prison officials to the 2,000-inmate Logan Correctional Facility in Lincoln, Ill., which has been operating a TSI PRISM system since 2003.

As the initial step in implementing the ACT project, the company will be appointing an Australian systems integration partner responsible for this project, as well as further development of the Australian market.

Robert R. Kauffman, Alanco's chairman and chief executive officer, commented, "This ACT design contract, our third international project in recent months following the previously announced programs in the Netherlands and Malaysia, provides further indication that TSI PRISM's value proposition of safer prisons with reduced operating costs is international in appeal and scope."

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, Illinois and Ohio. 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.