Alanco Completes Largest TSI PRISM Contract at the Logan Correctional Facility in Illinois; Major Prison Installation to Showcase New Technology.

Business Editors

SCOTTSDALE, Ariz.--(BUSINESS WIRE)--May 15, 2003

Alanco Technologies Inc. (NASDAQ: ALAN) announced today that the Logan Correctional Center in Lincoln, Ill., became the nation's first major medium-security prison to implement Alanco's TSI PRISM(TM) RFID officer safety and inmate management system, establishing a major milestone in reducing operating costs and preventing inmate violence in our nation's correctional facilities.

Utilizing belt-worn RFID radio transmitters for officers and inmate wristband units, the TSI PRISM system allows Logan administrators to continuously monitor and track the location and movement of approximately 2,000 inmates at the 50-acre complex. Logan becomes the third facility in the United States to utilize the new state-of-the-art TSI PRISM officer safety and inmate management technology, joining the California State Prison in Calipatria, and W. J. Maxey juvenile facility in Whitmore Lake, Mich.

Over seven years and approximately $25 million have been invested in the development of the TSI PRISM technology. In three years of testing at California's Calipatria prison, incidents of violence declined by 65 percent and escapes were completely eliminated. The company anticipates that the Logan facility will also experience a significant decline in inmate violence incidents, as inmates respond favorably to the behavioral impact of continuous monitoring. Reduced prison violence results in a much safer staff environment and also reduces costs related to these incidents, such as medical services, investigations, and staff overtime resulting from prison lockdowns. In addition, the capability of the TSI PRISM system to record a permanent archive database of all inmate movements within the facility over virtually any time frame should dramatically reduce the state's exposure to potential lawsuits by inmates.

Alanco Chief Executive Officer Robert R. Kauffman stated, "The successful completion of the Logan project represents a major milestone in the market development of our TSI PRISM technology in the corrections industry. This large, medium-security prison provides a new showcase for our unique technology and its capability to make a positive contribution to prison efficiency and safety. There is increasing interest in TSI PRISM among corrections professionals throughout the U.S. as continuing budget pressures demand new and innovative management tools to improve safety of both staff and inmates and reduce operating costs."

Alanco Technologies Inc., headquartered in Scottsdale, 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 dramatically 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. The TSI PRISM system is currently utilized in prisons in Michigan and California, and a new 2,000-bed medium-security prison in Illinois. 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.