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

                                 October 2, 2006
                                (Date of Report)


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

                                    0-9437
                            (Commission File No.)

               Arizona                                  86-0220694
      (State or 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 satisfy 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 CRF 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 240.134-4(c))

Item 1.01 Entry into a Material Definitive Agreement
Item 2.03 Creation of a direct financial obligation
Item 3.02 Unregistered Sales of Equity Securities

On September 29, 2006, Alanco Technologies, Inc. (the "Company") entered into a
$4 million loan agreement with ComVest Capital LLC of West Palm Beach, Florida.
Provisions of the term loan include interest only payments for the first year
with the loan balance amortized over the following three years. The loan bears
interest at prime plus 2-1/2 percent, is secured by assets of the Company, and
will be used to repay short term notes and for working capital to fund
operations. The Company paid closing fees to ComVest and the placement agent in
cash, common stock and warrants.

                                   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: October 2, 2006                     ALANCO TECHNOLOGIES, INC.
                                        By: /s/ John A Carlson
                                           -------------------
                                           Chief Financial Officer