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Alanco Announces Exclusive License/Distribution
Agreement for Malaysia


Malaysian Authorities Approve Melaka Prison for TSI PRISM™ Pilot

(Scottsdale, AZ – December 15, 2005) - Alanco Technologies, Inc. (NASDAQ: ALAN), developer of the TSI PRISM™ RFID officer duress and inmate tracking system for the corrections industry, announced today it awarded AMG Infotech, Ltd. (AMG), headquartered in Melaka, Malaysia, an exclusive license to market and distribute TSI PRISM technology in Malaysia. The AMG agreement requires minimum annual purchase commitments, and includes substantial up-front payments for marketing assistance and design services.

Privately-held AMG is a leading provider of electronic security systems to the Malaysian federal government, including correctional facilities, and their management includes former high-ranking Malaysian prison officials. AMG has successfully introduced RFID tracking to the Malaysian prison authorities as a new management tool to control inmate violence and reduce operating costs, resulting in approval of a TSI PRISM pilot project for the 700-inmate Banda Hilir prison in Melaka. System design, final pricing and construction planning is now underway for this initial Malaysian TSI PRISM installation.

The Malaysian Prison Authority operates approximately forty (40) correctional facilities, most averaging between 1,000 and 2,000 inmates, and also maintains several large drug rehabilitation centers and detention camps. AMG has established an aggressive program to capture this market opportunity, which is estimated in the range of $40-$60 million at installation value, plus substantial annual recurring service fees.

Robert R. Kauffman, Alanco’s Chairman and Chief Executive Officer, commented, “We believe that AMG has the expertise and high-level government access to rapidly develop a significant TSI PRISM market presence in Malaysia.”

“This Malaysian agreement is the first result of our new Asian marketing initiative announced in September, 2005, and we look forward to completing similar deals with other local partners in the region.”

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, Illinois, and Ohio. 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.


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