Alanco Completes European Prison Contract; Unveiling New 2.4 GHz TSI PRISM(TM) Technology; New ''G'' Series Technology Opens International Market Opportunities.

SCOTTSDALE, Ariz. -- Alanco Technologies, Inc. (NASDAQ:ALAN), developer of the TSI PRISM Radio Frequency Identification (RFID) inmate tracking system for the corrections industry, today announced the final delivery of new "G" Series 2.4 gigahertz (GHz) TSI PRISM inmate tracking units, successfully completing a contract to develop and demonstrate 2.4 GHz RFID tracking technology in a European prison pilot program. The government-funded pilot project required a European compatible 2.4 GHz RFID system rather than the 900 megahertz (MHz) transmission band utilized in TSI PRISM U.S.A. installations. The final technology solution combined Alanco's TSI PRISM and AeroScout, Inc.'s 2.4 GHz, Wi-Fi 802.11 compatible Real Time Locating Services (RTLS) technologies.

Joint work on the European development contract also initiated a broader technology partnership agreement between Alanco and AeroScout, Inc., in which AeroScout granted Alanco exclusive worldwide rights to utilize their RTLS technology in the corrections market.

Robert R. Kauffman, Alanco's Chairman and Chief Executive Officer, commented, "Successful completion of the European prison development contract also commenced commercial availability of the new "G" Series TSI PRISM, providing open frequency access in most foreign countries. This pilot project should ultimately provide a showcase to demonstrate the new internationally compatible TSI PRISM technology and accelerate our worldwide market penetration."

Alanco Technologies, Inc. (NASDAQ:ALAN), headquartered in Scottsdale, Arizona, 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.