8-K

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                    FORM 8-K

                                 CURRENT REPORT

                       Pursuant to Section 13 or 15(d) of
                      The Securities Exchange Act of 1934



                                DECEMBER 31, 2007
                                -----------------
                                (Date of Report)

                           ALANCO TECHNOLOGIES, INC.
                           -------------------------
             (Exact name of Registrant as specified in its charter)


                                    0-9437
                                   ---------
                             (Commission File No.)

                    ARIZONA                        86-0220694
         ---------------------------     ---------------------------------
        (State of other jurisdiction(    (IRS Employer Identification No.)



             15575 N 83RD WAY, SUITE 3, SCOTTSDALE, ARIZONA  85260
             -------------------------------------------------------
            (Address of Principal Executive Office)       (Zip Code)


                                 (480) 607-1010
              ----------------------------------------------------
              (Registrant's telephone number, including area code)


Check the appropriate box below if the Form 8-K filing is intended to
simultaneously safisfy the filing obligation of the registrant under any of
the following provisions (see General Instruction A.2. below):

(  ) Written communication pursuant to Rule 425 under the Securities Act
     (17 CFR 230.425)

(  ) Soliciting material pursuant to Rule 14a-12 under the Exchange Act
     (17 CFR 240.14a-12)

(  ) Pre-commencement communications pursuant to Rule 14d-2(b) under the
     Exchange Act (17 CFR 240.14d-2(b))

(  ) Pre-commencement communications pursuant to Rule 13e-4(c) under the
     Exchange Act (17 CFR 240.13e-4(c))

Item 1.01  Entry into a Material Definitive Agreement
Item 2.03  Creation of a Direct Financial Obligation

On December 27, 2007, the Company executed an amendment to its Loan Agreement
with Comvest Capital, LLC modifying the required prepayment of the loan in the
event the Company raises funds through the issuance of equity.

Item 9.01  Financial Statements and Exhibits

     Exhibits 99.1 Amendment No. 3 to Loan Agreement.

                                   SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

Date: December 31, 2007                 ALANCO TECHNOLOGIES, INC.

                                        By: /s/John A Carlson
                                            -----------------------
                                            Chief Financial Officer

EX-99

                        AMENDMENT NO. 3 TO LOAN AGREEMENT

         AGREEMENT (this "Agreement"), made as of the 27th day of December,
2007, by and between COMVEST CAPITAL LLC, a Delaware limited liability company
(the "Lender"), and ALANCO TECHNOLOGIES, INC., an Arizona corporation (the
"Borrower");

                              W I T N E S S E T H:


         WHEREAS, the Lender and the Borrower are parties to a Loan Agreement
dated as of September 28, 2006 (as heretofore amended by Amendment No. 1 dated
as of May 4, 2007 and by Amendment No. 2 dated as of July 20, 2007, the "Loan
Agreement"), the terms and conditions of which are hereby incorporated herein by
reference); and

         WHEREAS, the Borrower has requested certain modifications to the Loan
Agreement with respect to certain anticipated equity proceeds to be received by
the Borrower, as set forth herein; and

         WHEREAS, the Lender is willing to make such modifications to the Loan
Agreement, on the terms and conditions set forth herein;

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereby agree, effective on and as of the
date hereof, as follows:

         1. Definitions.

            (a) Except as otherwise defined herein, all capitalized terms used
in this Agreement have the respective meanings ascribed to them in the Loan
Agreement.

            (b) For purposes of this Agreement, the following term shall have
the meanings indicated:

                "Covered Net Equity Proceeds" shall mean any and all net
proceeds (whether in cash or in kind (with any non-cash property being valued at
its fair market value), other than any converted portion of the Tenix Note)
received by the Borrower or any Subsidiary between the date hereof and January
31, 2008 from the issuance or sale of any common stock or preferred stock of the
Borrower, or any security convertible or exercisable into or exchangeable for
any common stock or preferred stock of the Borrower, other than securities
excluded pursuant to clause (y) of Section 2.02(b) of the Loan Agreement. For
purposes hereof, "net proceeds" shall be calculated in accordance the last
sentence of Section 2.02(b) of the Loan Agreement.

                "Excluded Proceeds Amount" shall mean the sum of $1,250,000, as
a one-time exclusion in the aggregate as to all receipts of Covered Net Equity
Proceeds.

                "Foregone  Prepayment  Amount"  shall mean (a) if, as, when and
to the extent  received, the Excluded Proceeds Amount, and (b) with respect to
each receipt of Covered Net Equity Proceeds after receipt of the Excluded
Proceeds Amount, an amount equal to (i) the amount which, but for the amendments
set forth in this Agreement, would have been required to be prepaid on the
Obligations under Section 2.02(b) of the Loan Agreement (including, on a
one-time basis, the prepayment in respect of the Excluded Proceeds Amount),
minus (ii) the amount of the required prepayment in accordance with Section 2
of this Agreement.


                "Tenix Note" shall mean the promissory note dated June 21, 2006
in the original principal amount of $2,000,000, issued by the Borrower to Tenix
Investments.

         2. Application of Covered Net Equity Proceeds.

            (a) Anything contained in Section 2.02(d) of the Loan Agreement or
in the Note to the contrary notwithstanding, in the event that and at such time
as the Borrower or any Subsidiary shall from time to time receive any Covered
Net Equity Proceeds, the Borrower shall, within five (5) Business Days after
such receipt, deliver to the Lender (i) a detailed calculation of the amount of
the subject Covered Net Equity Proceeds, (ii) a prepayment in respect of the
Note in an amount equal to 17.5% of the total such Covered Net Equity Proceeds
in excess of the Excluded Proceeds Amount, which shall be applied to the
principal installments under the Note in [direct] order of maturity, (iii) a
detailed calculation of the Foregone Prepayment Amount in respect of such
Covered Net Equity Proceeds (determined as hereinafter provided), and (iv)
payment of a fee in an amount equal to one (1%) percent of the Foregone
Prepayment Amount).  Acceptance of such calculations and payments shall be
without prejudice to the Lender's right thereafter to verify such calculations
and the amounts of such payments, and to correct any error and collect any
deficiency (with reasonable collection costs) on demand.

            (b) The Borrower hereby confirms that it and its Subsidiaries have,
prior to the date of this Agreement, received net proceeds of the type described
in Section 2.02(b) of the Loan Agreement in an aggregate amount in excess of the
$2,000,000 threshold amount in Section 2.02(b)(i)(A) of the Loan Agreement, and
thus no portion of such threshold amount remains unused or available.

            (c) Any and all net proceeds of the type described in Section
2.02(b) of the Loan Agreement which are received subsequent to January 31, 2008
shall be subject to prepayment under Section 2.02(b) of the Loan Agreement as in
effect prior to this Agreement, with no threshold amount under Section 2.02(b)
(i)(A) of the Loan Agreement.

         3. Conversion Rights.

            (a) Anything contained in the Loan Agreement or the Note to the
contrary notwithstanding, a portion of the Note equal to the Foregone Prepayment
Amount (or, if less, the remaining portion of the principal balance of the Note
which was not theretofore convertible) shall, from and after the Borrower's or
any Subsidiary's receipt of the subject Covered Net Equity Proceeds, become
convertible in whole or in part into shares of Common Stock at a rate per share
equal to 135% of the lowest price per share at which the Borrower issued any
securities generating Covered Net Equity Proceeds; provided, however, that upon
any conversion of all or any portion of the Tenix Note into shares of Common
Stock or other equity securities of the Borrower on or prior to January 31, 2008
at a price per share which is less than 74.074% of the then-effective conversion
price applicable under this paragraph 3(a), then the conversion price applicable
under this paragraph 3(a) shall thereupon be reduced to a price equal to 135% of
the conversion price applied in such conversion of the Tenix Note. The number
and type of shares receivable upon conversion, and the conversion price per
share, shall be subject to adjustment from time to time in accordance with
Exhibit A attached hereto. In addition, in the event that the Borrower grants
any weighted average, full ratchet or other such anti-dilution protection with
respect to any securities generating Covered Net Equity Proceeds, the Borrower
shall be deemed simultaneously to have granted the same protection (measured
against the conversion price per share under the Note from time to time) with
respect to the conversion rights under the Note.


            (b) All principal payments or prepayments hereafter made under the
Note shall be deemed to be applied in respect of the non-convertible portion of
the Note until the non-convertible portion has been paid in full, and then to
the convertible portions in descending order of conversion price. Anything
contained in the Note to the contrary notwithstanding, the Borrower shall be
required to give the Lender thirty (30) days' notice prior to any prepayment of
any convertible portion of the Note, and the Lender shall retain the right to
elect to convert all or any portion of such convertible principal prior to the
date fixed by the Borrower for prepayment.

            (c) The shares of Common Stock issued and/or issuable upon
conversion of the Note (the "Conversion Shares") shall be entitled, on a pari
passu basis with the subject investors, to the most favorable registration
rights granted to any investor providing any Covered Net Equity Proceeds, and
the Borrower shall promptly provide a copy of all registration rights agreements
or other such undertakings which the Borrower provides or makes to investors
providing Covered Net Equity Proceeds. In the event that no registration rights
are granted to any such investors, then the Conversion Shares and the holders
thereof from time to time shall be entitled to registration rights substantially
equivalent to, and on substantially the same terms as, the Registration Rights
Agreement (as if such agreement were executed and delivered on and as of the
date of first receipt of any Covered Net Equity Proceeds). Notwithstanding the
foregoing or any conflicting provision in the Registration Rights Agreement or
in any registration rights granted to any other Person in connection with
Covered Net Equity Proceeds, the registration statement covering the Conversion
Shares shall also include all "Conversion Shares" as defined in the Amendment
No. 2 forming a part of the Loan Agreement, and the Borrower shall use all
commercially reasonable efforts to cause such registration statement to be filed
with the SEC on or before February 29, 2008 and to become effective on or before
April 30, 2008; and in the event that such registration statement is not filed
with the SEC on or before February 29, 2008 or is not declared effective by the
SEC on or before April 30, 2008, then the Borrower shall be liable to the Lender
for late filing fees at a rate equal to the greater of (i) $500 per calendar day
(which shall be payable monthly in arrears on the last day of each calendar
month, and upon the effectiveness of the registration statement) until the
registration statement is declared effective (up to an aggregate maximum fee
hereunder of $100,000), or (ii) the highest late filing fees payable to any
investor providing any Covered Net Equity Proceeds (up to the foregoing
aggregate maximum).

         4. Illustrative Examples. Solely for purposes of illustration:

            (a) With respect to all or any portion of the Excluded Proceeds
Amount, (i) no prepayment under the Note shall be required, (ii) a fee shall be
payable under Section 2(a)(iv) above, and (iii) a portion of the Note equal to
the entire subject Covered Net Equity Proceeds shall become convertible in
accordance with paragraph 3(a) above.

            (b) In the event that Covered Net Equity Proceeds received after
receipt of the Excluded Proceeds Amount are in the amount of $4,000,000, then
(i) the amount of the required prepayment therefrom shall be 17.5% of
$4,000,000, which equals $700,000, (ii) the amount of prepayment that would have
been required under the Loan Agreement but for this Agreement would be
$5,250,000 (representing the Excluded Proceeds Amount plus the additional
Covered Net Equity Proceeds received) times 50%, which equals $2,625,000, (iii)
the Foregone Prepayment Amount would be $2,625,000 minus $700,000, which equals
$1,925,000, (iv) the fee payable under Section 2(a)(iv) above would be 1% of
$1,925,000, which equals $19,250, and (v) in accordance with Section 3 above,
the Note would thereupon become convertible as to a principal amount equal, at
all times prior to conversion, to the lesser of $1,925,000 or the outstanding
principal balance of the Note which was not theretofore convertible.


         5. Further Provisions.

            (a) From and after the receipt by the Lender of any prepayment as
contemplated hereunder, the Lender may attach this Agreement as an allonge to
the existing Note. At any time after January 31, 2008, upon request of either
the Lender or the Borrower, the Borrower shall issue to the Lender a replacement
note in a principal amount equal to the remaining principal balance of the Loan
and giving effect to the amendments effected pursuant to the Amendment No. 2 to
Loan Agreement dated as of July 20, 2007 and this Agreement.

            (b) Failure to make any payment under this Agreement as and when due
and payable shall constitute an Event of Default.

         6. No Novation. The Borrower hereby acknowledges, confirms and agrees
that none of the amendments effected by this Agreement constitutes or shall
constitute a novation of any of the Obligations.

         7. Ongoing Force and Effect. Except as and to the extent expressly
provided in this Agreement, all covenants, terms and conditions of the Loan
Documents shall remain unchanged and in full force and effect. All references to
the Loan Agreement contained in the Loan Documents shall hereafter mean and
refer to the Loan Agreement as amended by this Agreement.

         8. Expenses. The Borrower shall pay or reimburse the Lender on demand
for all out-of-pocket costs, charges and expenses of the Lender (including
reasonable attorneys' fees) in connection with the preparation, execution and
delivery of this Agreement.

         9. Miscellaneous.

            (a) This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.

            (b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except by means of a written agreement signed by the party
to be charged therewith, and then only in the specific instance and for the
specific purpose stated therein.

            (c) This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and assigns,
except that the Borrower shall have no right to assign any of its rights or
obligations hereunder or any interest herein without the prior written consent
of the Lender.


            (d) The paragraph headings in this Agreement are included for
convenience of reference only, and shall not affect the construction or
interpretation of any of the provisions hereof.

        10. Certain Consent. Pursuant to Sections 6.01(f) and 6.12 of the Loan
Agreement, the Lender hereby consents to (a) an increase in the maximum
permitted principal amount of Line of Credit Obligations from $2,000,000 to
$3,000,000, and (b) the extension of the maturity date of the Line of Credit
Documents and maturity of the principal of the Line of Credit Obligations
through December 31, 2009.

               [The remainder of this page is intentionally blank]



         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the date first set forth above.

                         COMVEST CAPITAL LLC

                         By: _________________________________
                              Name:  Larry E. Lenig, Jr.
                              Title: Vice Chairman

                         ALANCO TECHNOLOGIES, INC.

                         By: _________________________________
                              Name:
                              Title:





                                    EXHIBIT A

            (a) Mechanics of Conversion. Upon notice to the Borrower of the
Lender's conversion election, the Borrower shall, in accordance with Section
(b), issue to the Lender (or to the Lender's designee(s) set forth in the
Lender's conversion election) the number of shares of Common Stock to which the
Lender shall be entitled upon such conversion, and shall deliver or cause to be
delivered to the Lender or such designee(s) the certificates representing such
shares of Common Stock. All shares of Common Stock issued or delivered upon any
conversion shall, when issued or delivered, be duly authorized, validly issued,
fully paid and nonassessable. In lieu of any fractional share to which the
Lender would otherwise be entitled, the Borrower shall pay cash equal to such
fraction multiplied by the per share Conversion Price.

            (b) Issuance of Common Stock Upon Conversion. Within a reasonable
time, not exceeding five (5) Business Days after the date of the Borrower's
receipt of any conversion election (the "Conversion Date"), the Borrower shall
deliver or cause to be delivered, to or upon the written order of the Lender,
certificates representing the number of fully paid and nonassessable shares of
Common Stock into which principal of the Note has been converted. If so
requested by the Borrower, the Lender shall, within a reasonable time (not
exceeding five (5) Business Days after receipt by the Lender of such
certificates), surrender the Note to the Borrower for cancellation, against
delivery of a replacement Note representing the remaining balance (if any) of
the Note which has not been converted. Subject to the following provisions, such
conversion shall be deemed to have occurred on the Conversion Date, so that the
Lender or the Lender's designee(s) shall be treated for all purposes as having
become the record holder of such shares of Common Stock at such time.

            (c) Taxes on Conversion. The issuance of certificates for shares for
Common Stock upon the conversion of the Note shall be made without charge by the
Borrower to the Lender for any tax in respect of the issuance of such
certificates and such certificates shall be issued in the name of, or in
such names as may be directed by, the Lender of this Note; provided, however,
that the Borrower shall not be required to pay any tax which may be payable in
respect of any transfer involved in the issuance or delivery of any such
certificate in a name other than that of the holder of the Note, and the
Borrower shall not be required to issue or deliver such certificates unless or
until the person or persons requesting the issuance thereof shall have paid to
the Borrower the amount of any such tax or shall have established to the
satisfaction of the Borrower that any such tax has been paid.

            (d) Adjustment of Shares.

                (i) Stock Dividends, Distributions or Subdivisions.  In the
event that, at any time and from time to time from and after the date of this
Agreement, the Borrower shall issue additional shares of Common Stock (or
securities convertible into Common Stock) in a stock dividend, stock
distribution or subdivision paid with respect to Common Stock, or declare any
dividend or other distribution payable in additional shares of Common Stock (or
securities convertible into Common Stock) or effect a split or subdivision of
the outstanding shares of Common Stock, then, concurrently with the
effectiveness of such stock dividend, stock distribution or subdivision, the
then-effective Conversion Price shall be proportionately decreased, and the
number of shares of Common Stock issuable upon conversion of this Note shall
thus be proportionately increased.


                (ii) Combinations or Consolidations. In the event that, at any
time and from time to time from and after the date of this Agreement, the
outstanding shares of Common Stock shall be combined or consolidated, by
reclassification or otherwise, into a lesser number of shares of Common Stock,
then, concurrently with the effectiveness of such combination or consolidation,
the then-effective Conversion Price shall be proportionately increased, and the
number of shares of Common Stock issuable upon conversion of the Note shall thus
be proportionately decreased.

                (iii) Other Dividends or Distributions. If the Borrower, at any
time or from time to time after the date of this Agreement, makes a distribution
to the holders of Common Stock which is payable in securities of the Borrower
other than Common Stock, then, in each such event, provision shall be made so
that the Lender shall receive upon conversion of this Note, in addition to the
number of shares of Common Stock, the amount of such securities of the Borrower
which would have been received if the portion of the Note so converted had been
exercised for Common Stock on the date of such event, subject to adjustments
subsequent to the date of such event with respect to such distributed securities
which shall be on terms as nearly equivalent as practicable to the adjustments
provided in this Section (d)(iii) and all other adjustments under this Section
(d). Nothing contained in this Section (d)(iii) shall be deemed to permit the
payment of any distribution in violation of the Loan Agreement.

                (iv) Merger, Consolidation or Exchange. If, at any time or from
time to time after the date of this Agreement, there occurs any merger,
consolidation, arrangement or statutory share exchange of the Borrower with or
into any other person or entity, then, in each such event, provision shall be
made so that the Lender shall receive upon conversion of the Note the kind and
amount of shares and other securities and property (including cash) which would
have been received upon such merger, consolidation, arrangement or statutory
share exchange by the Lender if the portion of the Note so converted had been
exercised for shares of Common Stock immediately prior to such merger,
consolidation, arrangement or statutory share exchange, subject to adjustments
for events subsequent to the effective date of such merger, consolidation,
arrangement or statutory share exchange with respect to such shares and other
securities which shall be on terms as nearly equivalent as practicable to the
adjustments provided in this Section (d)(iv) and all other adjustments under
this Section (d). Nothing contained in this Section (d)(iv) shall be deemed to
permit any such transaction in violation of the Loan Agreement.

                (v) Recapitalization or Reclassification. If, at any time or
from time to time after the date of this Agreement, the shares of Common Stock
issuable upon conversion of the Note are changed into the same or a different
number of securities of any class of the Borrower, whether by recapitalization,
reclassification or otherwise (other than a merger, consolidation, arrangement
or statutory share exchange provided for elsewhere in this Section (d)), then,
in each such event, provision shall be made so that the Lender shall receive
upon conversion of the Note the kind and amount of securities or other property
which would have been received in connection with such recapitalization,
reclassification or other change by the Lender if the portion of the Note so
converted had been converted immediately prior to such recapitalization,
reclassification or change, subject to adjustments for events subsequent to the
effective date of such recapitalization, reclassification or other change with
respect to such securities which shall be on terms as nearly equivalent as
practicable to the adjustments provided in this Section (d)(v) and all other
adjustments under this Section (d).


                (vi) Extraordinary Dividends or Distributions. If, at any time
or from time to time after the date of this Agreement, the Borrower shall
declare a dividend or any other distribution upon the Common Stock payable
otherwise than out of current earnings, retained earnings or earned surplus and
otherwise than in shares of Common Stock, then the Conversion Price in effect
immediately prior to such declaration shall be reduced by an amount equal, in
the case of a dividend or distribution in cash, to the amount thereof payable
per share of Common Stock or, in the case of any other dividend or distribution,
to the value thereof per share of Common Stock at the time such dividend or
distribution was declared, as determined by the Board of Directors of the
Borrower in good faith. Such reductions shall take effect as of the date on
which a record is taken for the purposes of the subject dividend or
distribution, or, if a record is not taken, the date as of which the holders of
record of Common Stock entitled to such dividend or distribution are to be
determined. Nothing contained in this Section (d)(vi) shall be deemed to permit
the payment of any dividend in violation of the Loan Agreement.

                (vii) Certificate of Adjustment. Whenever the Conversion Price
and/or the number of share of Common Stock receivable upon conversion of the
Note is adjusted, the Borrower shall promptly deliver to the Lender a
certificate of adjustment, setting forth the Conversion Price and/or shares of
Common Stock issuable after adjustment, a brief statement of the facts requiring
the adjustment and the computation by which the adjustment was made. The
certificate of adjustment shall be prima facie evidence of the correctness of
the adjustment.

                (viii) Successive Application. The provisions of this Section
(d) shall be applicable successively to each event described herein which may
occur subsequent to the date of this Note and prior to the conversion in full of
the convertible portion of the Note.

                (ix) Fractional Shares. No fractional shares of Common Stock
shall be issuable by reason of any adjustments made pursuant to this Section
(d); and in lieu of any such fractional shares, the Borrower shall pay cash
therefor in accordance with Section (a) above.

            (e) No Impairment. The Borrower will not, by amendment of its
Organic Documents or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed hereunder but will at all times in good
faith assist in the carrying out of all the provisions hereof and in the taking
of all such action as may be necessary or appropriate in order to protect the
conversion rights under the Note against impairment. In the event of any merger
or consolidation in which the Borrower is not the surviving entity, the Borrower
shall make appropriate arrangements in order that, upon any subsequent
conversion of the Note, the Lender shall become entitled to receive the same
securities or other consideration that the Lender would have received had such
conversion been made immediately prior to the consummation of such merger or
consolidation, subject to further adjustments, of the type provided herein, with
respect to any events relating to any such securities occurring subsequent to
the consummation of such merger or consolidation.

            (f) Common Stock Reserved. The Borrower shall at all times reserve
and keep available out of its authorized but unissued Common Stock such number
of shares of Common Stock as shall from time to time be sufficient to effect the
full conversion of the convertible portion of the Note into Common Stock.


            (g) Restricted Securities. The shares of Common Stock issuable to
the Lender hereunder (the "Shares") may not, at the time of issuance, have been
registered under any federal or state securities laws, and may constitute
"restricted securities" within the meaning of federal and state securities laws.
By its receipt of Shares, if the Shares are not then the subject of an effective
registration statement under the Securities Act, the Lender will be deemed to
acknowledge and confirm that it is receiving such Shares for its own account for
investment, and not with a view to the resale or distribution thereof in
violation of any federal or state securities laws.