FOR IMMEDIATE RELEASE

CONTACTS:   Alanco Investor Relations                    Equity Communications
            (480) 607-1010                               Ira Weingarten
            www.alanco.com                               (805) 897-1880
            --------------
                                                         equity@silcom.com

                    Alanco Announces $15 Million Acquisition
                            of StarTrak Systems, LLC

         Leading Provider of GPS Tracking/Wireless Data Services to the
       Refrigerated Transport Industry Projected to Contribute Profitable,
         $20 Million Sales Revenue in Fiscal Year Beginning July 1, 2006


(Scottsdale, AZ - June 26, 2006) - Alanco Technologies, Inc. (NASDAQ: ALAN)
today announced signing a definitive agreement to acquire 100% of privately-held
StarTrak Systems, LLC (StarTrak), located in Morris Plains, New Jersey, a
leading provider of GPS tracking and wireless subscription data services to the
transportation industry. StarTrak is focused upon the refrigerated or "Reefer"
segment of the transport industry, providing the dominant share of all wireless
tracking, monitoring and control services to this market segment.

The StarTrak acquisition will provide an immediate, significant contribution to
Alanco sales revenue and profitability. StarTrak sales are growing rapidly,
currently over $1 million per month, with a firm order backlog of about $13
million. The business achieved profitability in March, 2006, and management
projects sales and net profit before taxes of approximately $20 million and $2
million, respectively, for its new fiscal year beginning July 1.

StarTrak products increase efficiency and reduce costs of the refrigerated
supply chain through the wireless monitoring and control of critical Reefer
data, including GPS location, cargo temperatures and Reefer fuel levels. Data
from multiple thousands of mobile Reefer units is transmitted to StarTrak's data
center for integration with client logistics information and delivered to the
client via internet or direct feed. A unique, proprietary feature of StarTrak's
information services to its clients is the capability to remotely troubleshoot
individual Reefer assets and transmit control commands to correct field problems
such as improper temperature conditions. StarTrak's clients enjoy a high return
on their Reefer tracking and management system, significantly reducing fleet
expenses through less cargo spoilage, reduced fuel costs, and improved asset
utilization.

StarTrak's business model features a high level of recurring revenue based on
monthly client subscription information services. A typical StarTrak Reefer
product costs the client in the range of $500 to $1,000. Client subscription
services, billed and collected monthly, total in the range of $300 to $500
annually per Reefer unit. StarTrak currently has in excess of 10,000 Reefer
units in service, each generating monthly revenue. The total potential North
American Reefer market is estimated in the range of 400,000 to 500,000 units,
with StarTrak's current market penetration at less than 3%.

The StarTrak acquisition, valued at approximately $15 million, is an all-stock
transaction consisting of 13.2 million Alanco common shares, plus assumption of
approximately $5 million in liabilities. The sellers may earn additional shares
by meeting profitability performance targets for fiscal years 2007 and 2008. The
transaction is scheduled to close on June 30, 2006.

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Robert R. Kauffman, Alanco Chairman and Chief Executive Officer, commented, "We
feel extremely fortunate in acquiring StarTrak as it just begins what we believe
will be a period of extraordinary future sales and profit growth. StarTrak's GPS
tracking, wireless information services technology, and large commercial market
opportunity complement our unique TSI PRISM RFID tracking business, further
establishing Alanco's leadership role in developing new markets for wireless
tracking/management of people and assets."

StarTrak Co-founder, President and Chief Executive Officer, Tim Slifkin, stated,
"In looking for a way to continue StarTrak's rapid growth, we are excited to be
working with Alanco's experienced public company management to offer Alanco
shareholders, now including ourselves, an enhanced, profitable, and rapidly
growing Alanco/StarTrak/TSI PRISM public company."

Added Tom Robinson, StarTrak Co-founder and Executive Vice President, "We are
excited by the opportunity and potential reward in growing StarTrak as a major
part of a NASDAQ-listed public company."

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, Ohio,
and Missouri. 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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