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Alanco Commences Multi-Staged Project With Los Angeles County Jail; U.S.'s Largest County Jail To Deploy Alanco's TSI PRISM RFID Tracking Technology
[May 15, 2005]

Alanco Commences Multi-Staged Project With Los Angeles County Jail; U.S.'s Largest County Jail To Deploy Alanco's TSI PRISM RFID Tracking Technology

SCOTTSDALE, Ariz. --(Business Wire)-- May 15, 2005 -- Alanco Technologies, Inc. (Nasdaq:ALAN), announced today that it has been awarded a contract by the Los Angeles County Sheriff's Department (LASD) to commence the pilot phase of a proposed multi-staged project to deploy Alanco's TSI PRISM RFID inmate tracking technology.

In the initial phase, expected to be completed in early Fall, 2005, TSI PRISM technology will be installed in the 1,800 inmate East Facility of the Pitchess Detention Center located in Castaic, California, at an approximate expected cost of $1.5 million. The TSI PRISM system, which continuously locates and tracks inmate and officer movements, will be evaluated to measure its effectiveness in reducing and resolving violent incidents and impacting operating costs. Assuming favorable performance, LASD will seek additional funding to deploy the technology in additional jail facilities, ultimately enrolling all of the approximate 18,000-inmate population in the tracking program.

Marc Klugman, Chief of the Sheriff's Correctional Services Division, commented, "The primary concern of the Sheriff's Department is the safety of both our staff and the inmates housed in our facilities. We believe that RFID tracking technology has great potential to reduce inmate violence as well as provide a powerful investigative tool."

Alanco's Chairman and Chief Executive Officer, Robert Kauffman, commented, "We look forward to working with the LASD in their efforts to improve jail safety and security through application of new state-of-the-art technology such as TSI PRISM."

Kauffman continued, "This LASD contract highlights a related new market for TSI PRISM in addition to the approximately $1 Billion potential U.S. Federal and State prison market. With approximately 700,000 inmates currently incarcerated nationwide, the potential U.S. County Jail market for TSI PRISM is in the range of $500 - $700 million."

Los Angeles County operates the largest jail in the United States, encompassing seven separate sites and housing in excess of 18,000 inmates. Arrivals of new arrestees frequently exceed 1,000 persons per day, and there is a high level of complicated logistics in transporting several thousand inmates between jail facilities, courts and other destinations. Inmate violence and assaults in the jail system are a serious and growing problem. In 2004, there were an estimated 1,330 inmate incidents in the L.A. County jails resulting in injuries to 1,742 inmates and 88 jail staff, including five inmate deaths.

Real-time RFID positioning and tracking of each inmate anywhere in the jail complex will provide staff with advance warnings of high risk inmate congregations, e.g., rival gang associations, and of inmates entering restricted areas, e.g., locations where witnesses or vulnerable inmates may be housed. Every inmate's movement throughout the day is recorded in a permanent database, providing positive identification of participants in any incident or rule violation, thereby assisting the investigation process. Officers are likewise identified and continuously tracked through the jail complex and, with the instantaneous "Officer-In-Distress" alarm feature, immediate assistance can be accurately directed to any officer in need. Additionally, TSI PRISM provides individual identification of all inmates in the distressed officer's proximity.

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 a new Ohio installation. 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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