Alanco Introduces TSI BIOTRAK Fingerprint Identification Capability; Optional Software To Generate Recurring Revenue From TSI PRISM Installations.

Business Editors/High-Tech Writers

SCOTTSDALE, Ariz.--(BUSINESS WIRE)--Feb. 5, 2003

Alanco Technologies Inc. (Nasdaq: ALAN) announced today that it has introduced a fingerprint identification software module, trade-named TSI BIOTRAK(TM), as a new feature addition to its TSI PRISM(TM) RFID continuous tracking technology for prison inmate management and officer safety. The initial sale and successful installation and operation of the new TSI BIOTRAK software was recently completed at a midwestern prison.

Alanco's proprietary TSI BIOTRAK fingerprint identification software module is combined with off-the-shelf hardware to significantly reduce the time and effort involved in managing shift changes of officers and other prison staff. Shift change at a typical prison can involve in excess of 150 officers and staff, with manual identification and individual assignment of keys and radios consuming up to one minute per person. The addition of a TSI BIOTRAK subsystem can reduce the shift change process to less than 20 seconds per person, providing time savings in excess of three and one-half hours averaged over three shift changes per day.

The company believes that the new software module, which will be offered as an optional feature on all existing and future TSI PRISM installations, will gain broad acceptance throughout the corrections industry as a significant value-added feature to the basic technology package.

Alanco Chairman and Chief Executive Officer Robert R. Kauffman stated, "TSI's open architecture is highly conducive to new software applications offering additional productivity, safety and security enhancements in the corrections environment. The new TSI BIOTRAK module is the first of numerous additional TSI PRISM software upgrade opportunities representing a significant future recurring revenue stream from an expanding base of installations."

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 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.