Alanco First Quarter Results.

SCOTTSDALE, Ariz.--(BUSINESS WIRE)--Nov. 15, 1999--

Alanco Technologies Inc. (formally Alanco Environmental Resources Corp.) (Nasdaq: ALAN) Monday reported a net loss for the first quarter ended Sept. 30, 1999 of $119,900 or $.02 per share, compared to net income of $151,400, or $.03 per share for the same quarter a year earlier.

First quarter revenues were $1,682,300, a decrease of 28 percent compared to $2,325,600 for the comparable prior year period. The decrease in net income and revenues was primarily due to the termination of the company's Wal-Mart food service segment contract under which revenues ceased in the second quarter ended Dec. 31, 1998.

The decrease in the food service segment was partially offset by a $213,800 increase, or 15 percent, in revenues from the company's environmental products segment.

On Oct. 27, 1999, Alanco announced the acquisition of Arraid Inc., the company's initial step in implementing its new information technologies business strategy.

Arraid has achieved world-wide recognition as a technology innovator providing subsystems and software upgrade solutions for legacy large-scale computer systems, with an existing installed base of several thousand systems at numerous Fortune 500 companies, as well as U.S. and foreign government agencies and military organizations.

Partnered with advanced technology innovators, Gadzoox, Crossroads, Exabyte, Legato and Hitachi, Arraid is focusing on the fastest growing segment of the computer industry, storage area networks (SAN). On Nov. 11, 1999, Arraid was selected for the fourth straight year as one of Arizona's fastest growing high tech companies.

The Arraid acquisition, effective in October 1999, did not affect Alanco's first quarter results.

Robert R. Kauffman, Alanco chairman and chief executive officer, stated, "The first quarter loss was expected within the context of the significant Wal-Mart revenue loss. However, the Company's cash position actually improved during the quarter to $953,900 from $661,700 at year ended June 30, 1999, while repaying $155,900 of capital lease and note payable obligations.

"Our balance sheet remains strong as we move into the second quarter of our fiscal year and commence our Arraid Inc. expansion program into the SAN market."

Alanco Technologies Inc. is an Arizona corporation headquartered in Scottsdale. Alanco is traded on the NASDAQ stock market under the symbol ALAN.

This press release contains statements that may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are inherently uncertain, and the actual results may differ from management's expectations. -0-

                       Alanco Technologies Inc.
                 Consolidated Statement of Operations

                                              For the Three Months
                                                  Ended Sept 30,
                                               1999           1998
Total Sales                                $ 1,682,342    $ 2,325,600
Cost of Goods Sold                          (1,081,242)    (1,101,536)
Gross Profit                                   601,100      1,224,064
General and Administrative                    (708,983)    (1,035,618)
Income (loss) from operations                 (107,883)       188,446
Other income(loss)                             (11,976)       (37,081)
Net Income (loss)                          $  (119,859)   $   151,365

Earnings Per Share - Basic & Diluted       $     (0.02)   $      0.03

Weighted Average Common Shares
& Equivalents Outstanding
      -Basic                                 5,049,225      5,050,683
      -Diluted                               5,049,225      5,149,576