<?xml version="1.0"?>
<ownershipDocument>

    <schemaVersion>X0202</schemaVersion>

    <documentType>4</documentType>

    <periodOfReport>2006-07-14</periodOfReport>

    <notSubjectToSection16>0</notSubjectToSection16>

    <issuer>
        <issuerCik>0000098618</issuerCik>
        <issuerName>ALANCO TECHNOLOGIES INC</issuerName>
        <issuerTradingSymbol>ALAN</issuerTradingSymbol>
    </issuer>

    <reportingOwner>
        <reportingOwnerId>
            <rptOwnerCik>0001023679</rptOwnerCik>
            <rptOwnerName>CARPENTER HAROLD S</rptOwnerName>
        </reportingOwnerId>
        <reportingOwnerAddress>
            <rptOwnerStreet1>15575 N 83RD WAY</rptOwnerStreet1>
            <rptOwnerStreet2>SUITE 3</rptOwnerStreet2>
            <rptOwnerCity>SCOTTSDALE</rptOwnerCity>
            <rptOwnerState>AZ</rptOwnerState>
            <rptOwnerZipCode>85260</rptOwnerZipCode>
            <rptOwnerStateDescription></rptOwnerStateDescription>
        </reportingOwnerAddress>
        <reportingOwnerRelationship>
            <isDirector>1</isDirector>
            <isOfficer>0</isOfficer>
            <isTenPercentOwner>0</isTenPercentOwner>
            <isOther>0</isOther>
        </reportingOwnerRelationship>
    </reportingOwner>

    <derivativeTable>
        <derivativeTransaction>
            <securityTitle>
                <value>Series A Convertible Preferred Stock</value>
            </securityTitle>
            <conversionOrExercisePrice>
                <value>.57</value>
            </conversionOrExercisePrice>
            <transactionDate>
                <value>2006-07-14</value>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>P</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>60000</value>
                </transactionShares>
                <transactionPricePerShare>
                    <value>1.71</value>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>A</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <exerciseDate>
                <value>2006-07-14</value>
            </exerciseDate>
            <expirationDate>
                <footnoteId id="F1"/>
            </expirationDate>
            <underlyingSecurity>
                <underlyingSecurityTitle>
                    <value>Class A Common Stock</value>
                </underlyingSecurityTitle>
                <underlyingSecurityShares>
                    <value>180000</value>
                </underlyingSecurityShares>
            </underlyingSecurity>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>292875</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                </directOrIndirectOwnership>
            </ownershipNature>
        </derivativeTransaction>
        <derivativeTransaction>
            <securityTitle>
                <value>Class A Common Stock Warrant</value>
            </securityTitle>
            <conversionOrExercisePrice>
                <value>.60</value>
            </conversionOrExercisePrice>
            <transactionDate>
                <value>2006-07-14</value>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>A</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>180000</value>
                </transactionShares>
                <transactionPricePerShare>
                    <value>0</value>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>A</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <exerciseDate>
                <footnoteId id="F2"/>
            </exerciseDate>
            <expirationDate>
                <footnoteId id="F3"/>
            </expirationDate>
            <underlyingSecurity>
                <underlyingSecurityTitle>
                    <value>Class A Common Stock</value>
                </underlyingSecurityTitle>
                <underlyingSecurityShares>
                    <value>180000</value>
                </underlyingSecurityShares>
            </underlyingSecurity>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>180000</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                </directOrIndirectOwnership>
            </ownershipNature>
        </derivativeTransaction>
    </derivativeTable>

    <footnotes>
        <footnote id="F1">Until redeemed, undeterminable.</footnote>
        <footnote id="F2">Warrant cannot be exercised until issuance of warrant has been approved by shareholders.</footnote>
        <footnote id="F3">Warrant expires on the fifth anniversary of the date it is approved by shareholders.</footnote>
    </footnotes>

    <ownerSignature>
        <signatureName>Harold S. Carpenter</signatureName>
        <signatureDate>2006-07-17</signatureDate>
    </ownerSignature>
</ownershipDocument>
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X0202
4
2006-07-14
0
0000098618
ALANCO TECHNOLOGIES INC
ALAN
0001023679
CARPENTER HAROLD S
15575 N 83RD WAY
SUITE 3
SCOTTSDALE
AZ
85260
1
0
0
0
Series A Convertible Preferred Stock
.57
2006-07-14
4
P
0
60000
1.71
A
2006-07-14
Class A Common Stock
180000
292875
D
Class A Common Stock Warrant
.60
2006-07-14
4
A
0
180000
0
A
Class A Common Stock
180000
180000
D
Until redeemed, undeterminable.
Warrant cannot be exercised until issuance of warrant has been approved by shareholders.
Warrant expires on the fifth anniversary of the date it is approved by shareholders.
Harold S. Carpenter
2006-07-17