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Alanco Announces Strategic Initiatives Supporting
Company's Refocus on Wireless Asset Management Business
Plan Includes: Reverse Stock Split; Corporate Name Change and Consolidation;
Strategic Alternatives Evaluation
(Scottsdale, AZ – August 23, 2010) – Alanco Technologies, Inc. (NASDAQ: ALAN), today announced strategic initiatives to support the Company’s refocus on its StarTrak wireless asset management business, following its August 18, 2010 asset divestiture program completion.
Reverse Stock Split to Retain NASDAQ Listing: The Company believes that continued NASDAQ listing is crucial to maximize long-term market valuation and trading liquidity of the Company’s common stock. Therefore, Alanco will implement a shareholder-approved reverse stock split to maintain compliance with the NASDAQ minimum $1.00/share bid price listing requirement. The Company expects the stock split, at a ratio still to be determined, to go into effect in late August, 2010.
Corporate Name Change: The Company plans to execute a corporate name change, subject to shareholder approval, to reflect the refocused business and recognition of the StarTrak brand as the leading wireless asset management solution for the refrigeration transportation market.
Corporate Consolidation: Alanco plans to consolidate its corporate headquarters into StarTrak’s existing offices in Morris Plains, New Jersey by calendar year-end, which should result in improved communications and operational support.
Evaluation of Strategic Alternatives: The Company will solicit investment banker advice to evaluate strategic alternatives available to enhance shareholder value. The Company anticipates that a range of options will be developed as a result of this process for review with its board of directors and advisors. Although the Company is committed to maximizing shareholder value, there can be no assurance of any particular outcome or course of action.
Robert R. Kauffman, Alanco Chairman and CEO commented, “With the successful completion of our asset divestiture strategy, we can now focus on achieving the full potential of our StarTrak business, which is on pace for projected growth of 35% to over $20 million in FY2011. Also, as the Company transitions from the holding company structure, we are implementing a management succession plan to select an outstanding candidate to eventually assume my CEO responsibilities, and guide the new Company’s exciting future growth plan.”
Alanco Technologies, Inc. provides wireless monitoring and asset management solutions through its StarTrak Systems subsidiary. StarTrak Systems is the dominant provider of tracking, monitoring and control services to the refrigerated or “Reefer” segment of the transportation marketplace, enabling customers to increase efficiency and reduce costs of the refrigerated supply chain. For more information, visit the Alanco website at www.alanco.com or StarTrak Systems at www.startrak.com.
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 THAT 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 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.
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