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Ira Weingarten
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Alanco Warrant Exercise Raises $1.25 Million



(Scottsdale, AZ - September 8, 2004) - Alanco Technologies, Inc. (NASDAQ: ALAN) developer of the TSI PRISM RFID inmate tracking system for the corrections industry, today announced that the Company has raised an additional $1,250,000 of equity capital through the exercise of 100% of the outstanding warrants to purchase common stock originally issued in combination with the Company’s Series A Convertible Preferred Stock.  Each warrant granted the holder a right to purchase one share of the Company’s Class A Common Stock at a price of $0.50 per share.  The warrant agreements contained a redemption provision that resulted in acceleration of the warrant expiration date to September 3, 2004.

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 and Illinois, with a new Ohio installation under construction.

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.


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