Alanco (ALAN) 10-Q 16 Feb 16 2016 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Dec. 31, 2015	Feb. 09, 2016
Document And Entity Information
Entity Registrant Name	ALANCO TECHNOLOGIES INC
Entity Central Index Key	98,618
Document Type	10-Q
Document Period End Date	Dec. 31, 2015
Amendment Flag	false
Current Fiscal Year End Date	--06-30
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		4,982,400
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2,016

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($)	Dec. 31, 2015	Jun. 30, 2015
CURRENT ASSETS
Cash and cash equivalents	$ 331,600	$ 788,900
Accounts receivable - trade, net	22,100	45,900
Other receivables - related party	7,100	4,200
Note receivable, current - related party	60,000	60,000
Prepaid expenses and other current assets	27,500	164,500
Total current assets	448,300	1,063,500
LAND, PROPERTY AND EQUIPMENT, NET	3,853,500	3,938,600
OTHER ASSETS
Note receivable, long-term - related party, net	190,400	262,800
Trust account - asset retirement obligation	76,800	67,400
TOTAL ASSETS	4,569,000	5,332,300
CURRENT LIABILITIES
Accounts payable	136,800	151,100
Accrued expenses	153,700	191,800
Contingent payments, current	25,000	50,000
Total current liabilities	315,500	392,900
LONG-TERM LIABILITIES
Contingent payments, long-term	638,300	603,900
Asset retirement obligation	429,700	429,700
TOTAL LIABILITIES	1,383,500	1,426,500
SHAREHOLDERS' EQUITY
Preferred Stock - no shares issued or outstanding	0	0
Common Stock Class A - 75,000,000 no par shares authorized, 4,982,400 shares issued and outstanding at December 31, 2015 and June 30, 2015	109,187,100	109,159,300
Accumulated Deficit	(106,001,600)	(105,253,500)
Total shareholders' equity	3,185,500	3,905,800
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$ 4,569,000	$ 5,332,300

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - shares	Dec. 31, 2015	Jun. 30, 2015
Condensed Consolidated Balance Sheets
Class A Common Stock, Shares Authorized	75,000,000	75,000,000
Class A Common Stock, Shares Issued	4,982,400	4,982,400
Class A Common Stock, Shares Outstanding	4,982,400	4,982,400

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2015	Dec. 31, 2014
Condensed Consolidated Statements Of Operations
NET REVENUES	$ 57,700	$ 218,200	$ 172,000	$ 443,500
Cost of revenues	132,200	192,200	392,600	378,500
GROSS PROFIT (LOSS)	(74,500)	26,000	(220,600)	65,000
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Corporate expenses	107,500	30,800	201,200	106,900
Alanco Energy Services	156,200	194,600	313,200	394,100
Stock-based compensation	13,900	45,400	27,800	45,400
Selling general and administrative expenses	277,600	270,800	542,200	546,400
OPERATING LOSS	(352,100)	(244,800)	(762,800)	(481,400)
OTHER INCOME
Interest income	7,300	11,600	14,700	23,100
Gain on sale of marketable securities	0	56,400	0	103,200
Other income			0	200
NET LOSS	$ (344,800)	$ (176,800)	$ (748,100)	$ (354,900)
NET LOSS PER SHARE - BASIC AND DILUTED	$ (0.07)	$ (0.04)	$ (0.15)	$ (0.07)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING	4,982,400	5,006,800	4,982,400	4,984,500

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited) - 6 months ended Dec. 31, 2015 - USD ($)	COMMON STOCK	ACCUMULATED DEFICIT	Total
Beginning balance, Amount at Jun. 30, 2015	$ 109,159,300	$ (105,253,500)	$ 3,905,800
Beginning balance, Shares at Jun. 30, 2015	4,982,400
Value of stock-based compensation	$ 27,800		27,800
Net loss		(748,100)	(748,100)
Ending balance, Amount at Dec. 31, 2015	$ 109,187,100	$ (106,001,600)	$ 3,185,500
Ending balance, Shares at Dec. 31, 2015	4,982,400

CONDENSED CONSOLIDATED STATEME6

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	6 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (748,100)	$ (354,900)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	91,900	91,700
Accretion of fair value - contingent payments	9,400	16,800
Gain on sale of marketable securities	0	(103,200)
Stock issued for services	0	31,500
Stock-based compensation for options	27,800	13,900
Reserve recorded for American Citizenship Center, LLC note receivable	50,000	0
Changes in operating assets and liabilities:
Accounts receivable	23,800	4,400
Other receivables - related party	(2,900)	6,200
Prepaid expenses and other current assets	137,000	7,700
Trust account - asset retirement obligation	(9,400)	(9,300)
Accounts payable and accrued expenses	(52,400)	0
Contingent land payment	0	(19,800)
Net cash used in operating activities	(472,900)	(315,000)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from repayment of American Citizenship Center, LLC note receivable	22,400	65,000
Purchase of land, property, and equipment	(6,800)	(191,400)
Proceeds from sale of marketable securities	0	542,200
Net cash provided by investing activities	15,600	415,800
CASH FLOWS FROM FINANCING ACTIVITIES
Purchase of treasury shares	0	(8,100)
Net cash used in financing activities	0	(8,100)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	(457,300)	92,700
CASH AND CASH EQUIVALENTS, beginning of period	788,900	1,215,600
CASH AND CASH EQUIVALENTS, end of period	331,600	1,308,300
Non-cash investing & financing activities:
Value of stock-based compensation for options	27,800	13,900
Other comprehensive income adjustment	0	(121,200)
Note receivable issued for ACC amendment and accounting fees	$ 0	$ (29,000)

A. Basis of Presentation, Accou

A. Basis of Presentation, Accounting Policies and Recent Accounting Pronouncements	6 Months Ended
	Dec. 31, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation, Accounting Policies and Recent Accounting Pronouncements	Nature of Operations Alanco Technologies, Inc. (Stock Symbol: ALAN) was incorporated in 1969 under the laws of the State of Arizona. Unless otherwise noted, the “Company” or “Alanco” refers to Alanco Technologies, Inc. and its wholly-owned subsidiaries. During the fiscal year ended June 30, 2012, the Company formed Alanco Energy Services, Inc. (“AES”), for the purpose of obtaining property to establish a water disposal facility near Grand Junction, CO to receive produced water generated as a byproduct from oil and natural gas production in Western Colorado. The new facility started to receive produced water in August 2012. Basis of Presentation The unaudited condensed consolidated financial statements presented herein have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. In our opinion, the accompanying condensed consolidated financial statements include all adjustments necessary for a fair presentation of such condensed consolidated financial statements. Such necessary adjustments consist of normal recurring items and the elimination of all significant intercompany balances and transactions. These interim condensed consolidated financial statements should be read in conjunction with the Company’s June 30, 2015 Annual Report filed on Form 10-K. Interim results are not necessarily indicative of results for a full year. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Certain prior year numbers have been reclassified to conform to the current year presentation. Sales tax on certain revenues for the fiscal year 2015 that were classified as cost of revenues has been reclassified in the Condensed Consolidated Statement of Operations to offset revenues to conform to the current year’s presentation. In addition, the value of stock-based compensation for the fiscal year 2015 which was included in corporate expenses has been reclassified in the Condensed Consolidated Statement of Operations to a separate line item. These reclassifications had no effect on net loss or net loss per share. Fair Value of Assets and Liabilities The following are the classes of assets and liabilities measured at fair value on a recurring basis at December 31, 2015 and June 30, 2015, using quoted prices in active markets for identical assets (Level 1); significant other observable inputs (Level 2); and significant unobservable inputs (Level 3): Fair Value at December 31, 2015 Level 1: Quoted Prices Level 2: in active Significant Level 3: Total Markets Other Significant at for Identical Observable Unobservable December 31, Assets Inputs Inputs 2015 Asset Retirement Obligation $ - $ - $ 429,700 $ 429,700 Contigent Land Payment - - 663,300 663,300 $ - $ - $ 1,093,000 $ 1,093,000 Fair Value at June 30, 2015 Level 1: Quoted Prices Level 2: in active Significant Level 3: Total Markets Other Significant at for Identical Observable Unobservable June 30, Assets Inputs Inputs 2015 Asset Retirement Obligation $ - $ - $ 429,700 $ 429,700 Contigent Land Payment - - 653,900 653,900 $ - $ - $ 1,083,600 $ 1,083,600 The following is a reconciliation of the opening and closing balances for assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the six months ended December 31, 2015. Asset Contingent Retirement Land Obligation Payment Total Opening balance $ 429,700 $ 653,900 $ 1,083,600 Accretion expense - 9,400 9,400 Closing balance $ 429,700 $ 663,300 $ 1,093,000 Fair Value of Asset Retirement Obligation Fair Value of Contingent Payments Recent Accounting Pronouncements In May 2014, the FASB issued guidance regarding revenue from contracts with customers. The guidance outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes the most current revenue recognition guidance. In August 2015, this accounting pronouncement was deferred for one year, and is effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of reporting periods beginning after December 15, 2016. The Company is currently assessing the impact on its financial position and results of operation but does not anticipate the adoption of the guidance to have a material impact on its financial position and results of operations. In November 2015, the FASB issued guidance regarding balance sheet classifications of deferred taxes. The guidance requires deferred tax assets and liabilities to be classified as noncurrent. The guidance is effective for periods beginning after December 15, 2017 and interim periods within annual periods beginning after December 15, 2018 and early adoption is permitted. The Company has adopted the guidance which had no material impact on its financial position and results of operations. In January 2016, the FASB issued guidance regarding the enhancement of reporting financial instruments including aspects of recognition, measurement, presentation and disclosure. The guidance is effective for periods beginning after December 15, 2017 including interim periods within those fiscal years. While a portion of the guidance allows for early application, it does not permit complete early adoption. The Company is currently assessing the impact on its financial position and results of operations. There have been no other recent accounting pronouncements or changes in accounting pronouncements during the three months ended December 31, 2015, that are of significance, or potential significance, to us.

B. Stock-Based Compensation

B. Stock-Based Compensation	6 Months Ended
	Dec. 31, 2015
Equity [Abstract]
Stock-Based Compensation	The Company has stock-based compensation plans and reports stock-based compensation expense for all stock-based compensation awards based on the estimated grant date fair value. The value of the compensation cost is amortized on a straight-line basis over the requisite service periods of the award (generally the option vesting term). The Company estimates fair value using the Black-Scholes valuation model. Assumptions used to estimate compensation expense are determined as follows: · Expected term is determined under the simplified method using an average of the contractual term and vesting period of the award as appropriate statistical data required to properly estimate the expected term was not available; · Expected volatility of award grants made under the Company’s plans is estimated using the historical daily changes in the market price of the Company’s common stock over the expected term of the award and contemplation of future activity; · Risk-free interest rate is the implied yield on zero-coupon U.S. Treasury bonds with a remaining maturity equal to the expected term of the awards; and, · Forfeitures are based on the history of cancellations of awards granted by the Company and management’s analysis of potential future forfeitures. The Company has several employee stock option and officer and director stock option plans that have been approved by the shareholders of the Company. The plans require that options be granted at a price not less than market on the date of grant and are more fully discussed in our Form 10-K for the year ended June 30, 2015. The following table summarizes the Company’s stock option activity during the first six months of fiscal 2016: Weighted Weighted Average Average Remaining Aggregate Aggregate Exercise Price Contractual Fair Instrinsic Shares Per Share Term (1) Value (3) Value (2) Outstanding July 1, 2015 1,203,200 $0.58 3.03 $ 275,800 $ - Granted - - - - - Exercised - - - - - Forfeited or expired (3,200) $1.50 - (2,300) - Outstanding December 31, 2015 1,200,000 $0.58 2.53 $ 273,500 $ - Exercisable December 31, 2015 1,200,000 $0.58 2.53 $ 273,500 $ - (1) Remaining contractual term presented in years. (2) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the closing price of the Company's common stock as of December 31, 2015, for those awards that have an exercise price currently below the closing price as of December 31, 2015 of $0.23. (3) Aggregate Fair Value is calculated using the Black Scholes option pricing model to estimate fair value of stock-based compensation. As of December 31, 2015, there was no unamortized Black Scholes value remaining to be recognized as stock-based compensation expense.

C. Note Receivable

C. Note Receivable	6 Months Ended
	Dec. 31, 2015
Receivables [Abstract]
Note Receivable	Note receivable of $250,400 and $322,800 at December 31, 2015 and June 30, 2015, respectively, represents a note due from American Citizenship Center, LLC (“ACC”), a related party. At December 31, 2015, payments totaling $15,100 are in arrears, including principal and interest payments. In January 2016, ACC and the Company modified the loan agreement by deferring any principal payments to August 31, 2016, at which time minimum monthly payments of $10,000 are payable and continue through November 30, 2016. The minimum monthly payments are increased to $20,000 on December 31, 2016 and January 31, 2017 and to $30,000 starting February 28, 2017 with the balance due on the unchanged maturity date of August 31, 2017. All other terms of the note, including the interest rate of 9.5% per annum remained the same. Based on the minimum monthly payments noted above, the Company has classified $60,000 of the note as current and $190,400 of the note as long-term as of December 31, 2015. All interest was brought current as of February 12, 2016. ACC’s business plan is based on the Executive Action, known as DAPA, issued by President Obama in November 2014. In February 2015, twenty-six states filed a lawsuit to stop the program and the court granted an injunction meaning that the U.S. Government cannot proceed with rolling out the program until the court case is resolved. In January 2016, after a series of legal actions more fully described in the Company’s Form 10-K for the fiscal year ended June 30, 2015, the Supreme Court granted an oral hearing scheduled for April 2016 with a ruling to be made in June 2016. The delay in the DAPA program resulting from the court case has negatively impacted ACC’s operations and consequently its ability to make the minimum required payments under the current loan terms. ACC is implementing other immigration and citizenship services to improve operations while the DAPA case is pending in the Supreme Court. However, a positive DAPA ruling or other immigration reform is significant to ACC’s ability to meet its financial obligations. The Company has recorded a reserve of $50,000 as of December 31, 2015.

D. Land, Property and Equipment

D. Land, Property and Equipment	6 Months Ended
	Dec. 31, 2015
Property, Plant and Equipment [Abstract]
Land, Property and Equipment	Land, Property and Equipment at December 31, 2015 and June 30, 2015 consist of the following: June 30, 2015 Additions December 31, 2015 Office furniture and equipment $ 51,300 $ - $ 51,300 Water disposal facility 2,219,200 1,700 2,220,900 Production equipment 514,400 - 514,400 2,784,900 1,700 2,786,600 Less accumulation depreciation (491,900) (91,900) (583,800) Land and permit costs 1,645,600 5,100 1,650,700 Net book value $ 3,938,600 $ (85,100) $ 3,853,500

E. Earnings (Loss) Per Share

E. Earnings (Loss) Per Share	6 Months Ended
	Dec. 31, 2015
Earnings Per Share [Abstract]
Earnings (Loss) Per Share	Basic and diluted loss per share of common stock was computed by dividing net loss by the weighted average number of shares of common stock outstanding. Diluted earnings per share are computed based on the weighted average number of shares of common stock and dilutive securities outstanding during the period. Dilutive securities are options, warrants, convertible debt, and preferred stock that are freely exercisable into common stock at less than the prevailing market price. Dilutive securities are not included in the weighted average number of shares when inclusion would increase the earnings per share or decrease the loss per share. For the six months ended December 31, 2015 and 2014, there were no dilutive securities included in the loss per share calculation as the effect would be antidilutive. Considering all holders’ rights, total common stock equivalents issuable under these potentially dilutive securities are approximately 1,200,000 and 1,204,000 at December 31, 2015 and 2014, respectively.

F. Equity

F. Equity	6 Months Ended
	Dec. 31, 2015
Equity [Abstract]
Equity	The Company did not issue any shares of Common Stock during the six months ended December 31, 2015. During the six months ended December 31, 2015, the Company recognized the value of stock-based compensation in the amount of $27,800. In December 2011, the Company announced that its board of directors had authorized a stock repurchase program whereby the Company could repurchase up to 2 million shares of its outstanding common stock over the next 12 months. The stock repurchase program was extended, under the same limitation, through December 31, 2013. During the quarter ended December 31, 2014, the board of directors renewed the stock repurchase program, extending it through December 31, 2015. There were no shares repurchased under the program in the six months ended December 31, 2015. The Company has authorized 25,000,000 shares of Preferred Stock of which 5,000,000 shares have been allocated to Series A, 500,000 have been allocated to Series B, 400,000 have been allocated to Series C Junior Participating, 500,000 have been allocated to Series D, and 750,000 have been allocated to Series E. At December 31, 2015 and June 30, 2015, no Preferred Stock of any series was issued or outstanding.

G. Contingent Payments

G. Contingent Payments	6 Months Ended
	Dec. 31, 2015
Commitments and Contingencies Disclosure [Abstract]
Contingent Payments	Contingent payments December 31, June 30, 2015 2015 Contingent land payment $ 663,300 $ 653,900 Less current portion (25,000) (50,000) Contingent payments, long-term $ 638,300 $ 603,900 Contingent land payment

H. Asset Retirement Obligation

H. Asset Retirement Obligation	6 Months Ended
	Dec. 31, 2015
Accounting Policies [Abstract]
Asset Retirement Obligation	The Company has recognized estimated asset retirement obligations (closure cost) of $429,700 at December 31, 2015 to remove leasehold improvements, remediate any pollution issues and return the Deer Creek water disposal property to its natural state at the conclusion of the Company’s lease. The closure process is a requirement of both the Deer Creek lease and the State of Colorado, a permitting authority for such facilities. The closure cost estimate, in current dollars, was completed by an approved independent consultant experienced in estimating closure costs for water disposal operations and the estimated amount was approved by the State of Colorado. A present value discount has not been taken as the estimated closure costs, excluding regulatory changes and inflation adjustments, are anticipated to remain fairly consistent over the operational life of the facility. The Company reviews the asset retirement obligation quarterly and performs a formal annual assessment of its estimates to determine if an adjustment to the value of the asset retirement obligation is required. The laws of the State of Colorado require companies to meet environmental and asset retirement obligations by selecting an approved payment method. The Company has elected to meet its obligation by making quarterly payments of approximately $4,700 into a trust that, over the expected lease period, will build liquid assets to meet the asset retirement obligation. During the six months ended December 31, 2015, the Company made the required quarterly payments. The balances in the trust account for the asset retirement obligation as of December 31, 2015 and June 30, 2015 were $76,800 and $67,400, respectively.

I. Commitments and Contingencie

I. Commitments and Contingencies	6 Months Ended
	Dec. 31, 2015
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Legal Proceedings The Company is a defendant and counterclaimant in litigation involving its subsidiary, TSI Dissolution Corp. (formerly known as Alanco/TSI Prism Inc. (“TSI”)) and the purchaser of TSI’s assets, Black Creek Integrated Systems Corp. Black Creek filed a complaint in the Maricopa County Superior Court against TSI and the Company, being Civil Case NO. CV2011-014175, claiming various offsets from the purchase price, primarily concerning inventory adjustments, and TSI counterclaimed for monies due from Black Creek under the purchase agreement. Following a trial during fiscal 2014, the court awarded a net judgment in favor of Black Creek in the amount of $16,800, plus attorney’s fees and accrued interest, resulting in a total judgment in the amount of $128,300 for which the Company recorded an accrued liability at June 30, 2014. In addition, the Company posted a bond with the court in conjunction with the Company’s appeal of the judgment. In May 2015, the State of Arizona Division One Court of Appeals vacated the trial court’s damages award and remanded to the trial court to direct the parties to follow dispute guidelines defined in the asset purchase agreement. In addition, the appellate court’s decision vacated the trial court’s attorney’s fee award and stated that TSI is entitled to an award of fees on appeal. As a result, at June 30, 2015, the Company reversed the accrual of $128,300 for the prior judgment. The Company is currently following the court’s direction and working under the dispute guidelines defined in the asset purchase agreement. The Company believes that the lower court’s judgment failed to address, among other matters, inventory reserves established for the specific items of inventory which were the subject of Black Creek’s concerns, which if properly addressed would result in a net judgment in favor of the Company, with an attendant award of attorney’s fees in favor of the Company. Therefore, no accrual for the loss contingency was deemed necessary at December 31, 2015. The Company may from time to time be involved in litigation arising from the normal course of business. As of December 31, 2015, there was no other such litigation pending deemed material by the Company.

J. Related Party Transactions

J. Related Party Transactions	6 Months Ended
	Dec. 31, 2015
Related Party Transactions [Abstract]
Related Party Transactions	At December 31, 2015 and June 30, 2015 the Company had a note due from American Citizenship Center, LLC (“ACC”), a related party, with balances of $250,400 and $322,800, respectively. Refer to Note C – Note Receivable for further discussion. During the six months ended December 31, 2015 the Company billed ACC a total of approximately $14,700 for interest on the note. At December 31, 2015, the Company had unpaid receivables from ACC in the amount of $7,100, representing three months of interest, which payments have been subsequently paid.

K. Subsequent Events

K. Subsequent Events	6 Months Ended
	Dec. 31, 2015
Subsequent Events [Abstract]
Subsequent Events	Subsequent to December 31, 2015, ACC and the Company modified the loan agreement by deferring any principal payments to August 31, 2016, at which time minimum monthly payments of $10,000 are payable and continue through November 30, 2016. The minimum monthly payments are increased to $20,000 on December 31, 2016 and January 31, 2017 and to $30,000 starting February 28, 2017 with the balance due on the unchanged maturity date of August 31, 2017. All other terms of the note, including the interest rate of 9.5% per annum remained the same. Based on the minimum monthly payments noted above, the Company has classified $60,000 of the note as current and $190,400 of the note as long-term as of December 31, 2015. All interest was brought current as of February 12, 2016.

L. Liquidity and Going Concern

L. Liquidity and Going Concern	6 Months Ended
	Dec. 31, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Liquidity and Going Concern	During the six months ended December 31, 2015, the Company reported a net loss of ($748,100) and for fiscal year ended June 30, 2015, the Company reported a net loss of ($900,600). Historically, the Company had relied on the liquidation of its investment in Marketable Securities to fund working capital needs. The Company sold all remaining marketable securities during fiscal 2015. These factors raise doubt about the Company’s ability to continue as a going concern for the next year. Management cannot assure that it will achieve projections. If adequate funds are not available or are not available on acceptable terms, the Company’s business, operating results, financial condition and ability to continue operations may be materially adversely affected. Management has historically been successful in obtaining financing and has demonstrated the ability to implement a number of cost-cutting initiatives to reduce working capital needs or the Company may seek to sell assets. Accordingly, the accompanying consolidated financial statements have been prepared assuming the Company will continue to operate and do not include any adjustment that might be necessary if the Company is unable to continue as a going concern. As a result, the Company’s independent registered public accounting firm included an explanatory paragraph in their audit opinion on the consolidated financial statements of the Company for the fiscal year ended June 30, 2015 discussing the substantial doubt of the Company’s ability to continue as a going concern.

A. Basis of Presentation, Acc19

A. Basis of Presentation, Accounting Policies and Recent Accounting Pronouncements (Policies)	6 Months Ended
	Dec. 31, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Nature of Operations	Alanco Technologies, Inc. (Stock Symbol: ALAN) was incorporated in 1969 under the laws of the State of Arizona. Unless otherwise noted, the “Company” or “Alanco” refers to Alanco Technologies, Inc. and its wholly-owned subsidiaries. During the fiscal year ended June 30, 2012, the Company formed Alanco Energy Services, Inc. (“AES”), for the purpose of obtaining property to establish a water disposal facility near Grand Junction, CO to receive produced water generated as a byproduct from oil and natural gas production in Western Colorado. The new facility started to receive produced water in August 2012.
Basis of Presentation	The unaudited condensed consolidated financial statements presented herein have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. In our opinion, the accompanying condensed consolidated financial statements include all adjustments necessary for a fair presentation of such condensed consolidated financial statements. Such necessary adjustments consist of normal recurring items and the elimination of all significant intercompany balances and transactions. These interim condensed consolidated financial statements should be read in conjunction with the Company’s June 30, 2015 Annual Report filed on Form 10-K. Interim results are not necessarily indicative of results for a full year. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Certain prior year numbers have been reclassified to conform to the current year presentation. Sales tax on certain revenues for the fiscal year 2015 that were classified as cost of revenues has been reclassified in the Condensed Consolidated Statement of Operations to offset revenues to conform to the current year’s presentation. In addition, the value of stock-based compensation for the fiscal year 2015 which was included in corporate expenses has been reclassified in the Condensed Consolidated Statement of Operations to a separate line item. These reclassifications had no effect on net loss or net loss per share.
Fair Value of Assets and Liabilities	The estimated fair value for assets and liabilities are determined at discrete points in time based on relevant information. The Accounting Standards Codification (“ASC”) prioritizes inputs used in measuring fair value into a hierarchy of three levels: Level 1 – unadjusted quoted prices for identical assets or liabilities traded in active markets, Level 2 – observable inputs other than quoted prices included within Level 1 such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability; and Level 3 – unobservable inputs in which little or no market activity exists that are significant to the fair value of the assets or liabilities, therefore requiring an entity to develop its own assumptions that market participants would use in pricing. These estimates involve uncertainties and cannot be determined with precision. The Company’s policy is to recognize transfers into and out of Level 1, 2 and 3 categories as of the date of the event or change in circumstances occurs. The carrying amounts of receivables, prepaid expenses, accounts payable, and accrued liabilities approximate fair value given their short-term nature or their effective interest rates, which represent Level 3 input levels. The following are the classes of assets and liabilities measured at fair value on a recurring basis at December 31, 2015 and June 30, 2015, using quoted prices in active markets for identical assets (Level 1); significant other observable inputs (Level 2); and significant unobservable inputs (Level 3): Fair Value at December 31, 2015 Level 1: Quoted Prices Level 2: in active Significant Level 3: Total Markets Other Significant at for Identical Observable Unobservable December 31, Assets Inputs Inputs 2015 Asset Retirement Obligation $ - $ - $ 429,700 $ 429,700 Contigent Land Payment - - 663,300 663,300 $ - $ - $ 1,093,000 $ 1,093,000 Fair Value at June 30, 2015 Level 1: Quoted Prices Level 2: in active Significant Level 3: Total Markets Other Significant at for Identical Observable Unobservable June 30, Assets Inputs Inputs 2015 Asset Retirement Obligation $ - $ - $ 429,700 $ 429,700 Contigent Land Payment - - 653,900 653,900 $ - $ - $ 1,083,600 $ 1,083,600 The following is a reconciliation of the opening and closing balances for assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the six months ended December 31, 2015. Asset Contingent Retirement Land Obligation Payment Total Opening balance $ 429,700 $ 653,900 $ 1,083,600 Accretion expense - 9,400 9,400 Closing balance $ 429,700 $ 663,300 $ 1,093,000
Fair Value of Asset Retirement Obligation	The Deer Creek asset retirement obligation is the estimated cost to close the Deer Creek facility under terms of the lease, meeting environmental and State of Colorado regulatory requirements. The estimate is determined at discrete points in time based upon significant unobservable inputs in which little or no market activity exists that is significant to the fair value of the liability, therefore requiring the Company to develop its own assumptions. Management’s estimate of the asset retirement obligation is based upon a cost estimate developed by a consultant knowledgeable of government closure requirements and costs incurred at similar water disposal facility operations. A present value discount has not been taken as the estimated closure costs, excluding regulatory changes and inflation adjustments, are anticipated to remain fairly consistent over the operational life of the facility. The lack of an active market to validate the estimated asset retirement obligation results in the fair value of the asset retirement obligation to be a Level 3 fair value measurement. ASC Topic 410-20: Asset Retirement Obligations requires the Company to review the asset retirement obligation on a recurring basis and record changes in the period incurred.
Fair Value of Contingent Payments	The contingent land payment and contingent purchase price liabilities are also determined at discrete points in time based upon unobservable inputs in which little or no market activity exists that is significant to the fair value of the liability, therefore requiring the Company to develop its own assumptions. In calculating the estimate of fair value for both of the contingent payments, management completed an estimate of the present value of each identified contingent liability based upon projected income, cash flows and capital expenditures for the Deer Creek facility developed under plans currently approved by the Company’s board of directors. Different assumptions relative to the expansion or alternative uses of the Deer Creek and Indian Mesa facilities could result in significantly different valuations. The projected payments have been discounted at a rate of 3% per annum to determine net present value. The lack of an active market to validate the estimated contingent land liability results in the fair value of the contingent land liability to be a Level 3 fair value measurement. ASC Topic 820: Fair Value Measurement requires the Company to review the contingent land liability on a recurring basis and record changes in the period incurred.
Recent Accounting Pronouncements	In May 2014, the FASB issued guidance regarding revenue from contracts with customers. The guidance outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes the most current revenue recognition guidance. In August 2015, this accounting pronouncement was deferred for one year, and is effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of reporting periods beginning after December 15, 2016. The Company is currently assessing the impact on its financial position and results of operation but does not anticipate the adoption of the guidance to have a material impact on its financial position and results of operations. In November 2015, the FASB issued guidance regarding balance sheet classifications of deferred taxes. The guidance requires deferred tax assets and liabilities to be classified as noncurrent. The guidance is effective for periods beginning after December 15, 2017 and interim periods within annual periods beginning after December 15, 2018 and early adoption is permitted. The Company has adopted the guidance which had no material impact on its financial position and results of operations. In January 2016, the FASB issued guidance regarding the enhancement of reporting financial instruments including aspects of recognition, measurement, presentation and disclosure. The guidance is effective for periods beginning after December 15, 2017 including interim periods within those fiscal years. While a portion of the guidance allows for early application, it does not permit complete early adoption. The Company is currently assessing the impact on its financial position and results of operations. There have been no other recent accounting pronouncements or changes in accounting pronouncements during the three months ended December 31, 2015, that are of significance, or potential significance, to us.

A. Basis of Presentation, Acc20

A. Basis of Presentation, Accounting Policies and Recent Accounting Pronouncements (Tables)	6 Months Ended
	Dec. 31, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Assets and liabilities measured at fair value on a recurring basis	Fair Value at December 31, 2015 Level 1: Quoted Prices Level 2: in active Significant Level 3: Total Markets Other Significant at for Identical Observable Unobservable December 31, Assets Inputs Inputs 2015 Asset Retirement Obligation $ - $ - $ 429,700 $ 429,700 Contigent Land Payment - - 663,300 663,300 $ - $ - $ 1,093,000 $ 1,093,000 Fair Value at June 30, 2015 Level 1: Quoted Prices Level 2: in active Significant Level 3: Total Markets Other Significant at for Identical Observable Unobservable June 30, Assets Inputs Inputs 2015 Asset Retirement Obligation $ - $ - $ 429,700 $ 429,700 Contigent Land Payment - - 653,900 653,900 $ - $ - $ 1,083,600 $ 1,083,600
Reconciliation of Assets and liabilities measured at fair value on a recurring basis	Asset Contingent Retirement Land Obligation Payment Total Opening balance $ 429,700 $ 653,900 $ 1,083,600 Accretion expense - 9,400 9,400 Closing balance $ 429,700 $ 663,300 $ 1,093,000

B. Stock-Based Compensation (Ta

B. Stock-Based Compensation (Tables)	6 Months Ended
	Dec. 31, 2015
Equity [Abstract]
Stock option activity	Weighted Weighted Average Average Remaining Aggregate Aggregate Exercise Price Contractual Fair Instrinsic Shares Per Share Term (1) Value (3) Value (2) Outstanding July 1, 2015 1,203,200 $0.58 3.03 $ 275,800 $ - Granted - - - - - Exercised - - - - - Forfeited or expired (3,200) $1.50 - (2,300) - Outstanding December 31, 2015 1,200,000 $0.58 2.53 $ 273,500 $ - Exercisable December 31, 2015 1,200,000 $0.58 2.53 $ 273,500 $ - (1) Remaining contractual term presented in years. (2) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the closing price of the Company's common stock as of December 31, 2015, for those awards that have an exercise price currently below the closing price as of December 31, 2015 of $0.23. (3) Aggregate Fair Value is calculated using the Black Scholes option pricing model to estimate fair value of stock-based compensation.

D. Land, Property and Equipme22

D. Land, Property and Equipment (Tables)	6 Months Ended
	Dec. 31, 2015
D. Land Property And Equipment Tables
Land, Property and Equipment	June 30, 2015 Additions December 31, 2015 Office furniture and equipment $ 51,300 $ - $ 51,300 Water disposal facility 2,219,200 1,700 2,220,900 Production equipment 514,400 - 514,400 2,784,900 1,700 2,786,600 Less accumulation depreciation (491,900) (91,900) (583,800) Land and permit costs 1,645,600 5,100 1,650,700 Net book value $ 3,938,600 $ (85,100) $ 3,853,500

G. Contingent Payments (Tables)

G. Contingent Payments (Tables)	6 Months Ended
	Dec. 31, 2015
Commitments and Contingencies Disclosure [Abstract]
Contingent payments	December 31, June 30, 2015 2015 Contingent land payment $ 663,300 $ 653,900 Less current portion (25,000) (50,000) Contingent payments, long-term $ 638,300 $ 603,900

A. Basis of Presentation, Acc24

A. Basis of Presentation, Accounting Policies and Recent AccountingPronouncements (Details) - USD ($)	Dec. 31, 2015	Jun. 30, 2015
Asset retirement obligation	$ 429,700	$ 429,700
Contingent land payment	663,300	653,900
Total	$ 1,093,000	$ 1,083,600
Level 1: Quoted Prices Quoted Prices in active Markets for Identical Assets [Member]
Asset retirement obligation
Contingent land payment
Total
Level 2: Significant Other Observable Inputs [Member]
Asset retirement obligation
Contingent land payment
Total
Level 3: Significant Unobservable Inputs [Member]
Asset retirement obligation	$ 429,700	$ 429,700
Contingent land payment	663,300	653,900
Total	$ 1,093,000	$ 1,083,600

A. Basis of Presentation, Acc25

A. Basis of Presentation, Accounting Policies and Recent AccountingPronouncements (Details 1)	Dec. 31, 2015USD ($)
Opening balance	$ 1,083,600
Accretion expense	9,400
Closing balance	1,093,000
Asset Retirement Obligation [Member]
Opening balance	429,700
Accretion expense	0
Closing balance	429,700
Contingent Land Payment [Member]
Opening balance	653,900
Accretion expense	9,400
Closing balance	$ 663,300

B. Stock-Based Compensation (De

B. Stock-Based Compensation (Details)	6 Months Ended
	Dec. 31, 2015USD ($)$ / sharesshares
B. Stock-based Compensation Details
Shares Outstanding July 1, 2015 | shares	1,203,200
Shares Granted | shares	0
Shares Exercised | shares	0
Shares Forfeited or expired | shares	(3,200)
Shares Outstanding December 31, 2015 | shares	1,200,000
Shares Exercisable December 31, 2015 | shares	1,200,000
Weighted average exercise price per share outstanding July 1, 2015 | $ / shares	$ .58
Weighted average exercise price per share Granted | $ / shares	0
Weighted average exercise price per share Exercised | $ / shares	0
Weighted average exercise price per share Forfeited or expired | $ / shares	1.50
Weighted average exercise price per share Outstanding December 31, 2015 | $ / shares	.58
Weighted average exercise price per share Exercisable December 31, 2015 | $ / shares	$ .58
Weighted average remaining contractual term Outstanding July 1, 2015	3 years 11 days	[1]
Weighted average remaining contractual term Outstanding December 31, 2015	2 years 6 months 11 days	[1]
Weighted average remaining contractual term Exercisable December 31, 2015	2 years 6 months 11 days	[1]
Aggregate fair value outstanding July 1, 2015	$ 275,800	[2]
Aggregate fair value Granted	0	[2]
Aggregate fair value Exercised	0	[2]
Aggregate fair value Forfeited or expired	(2,300)	[2]
Aggregate fair value Outstanding December 31, 2015	273,500	[2]
Aggregate fair value Exercisable December 31, 2015	273,500	[2]
Aggregate Intrinsic Value Outstanding July 1, 2015	0	[3]
Aggregate Intrinsic Value Granted	0	[3]
Aggregate Intrinsic Value Exercised	0	[3]
Aggregate Intrinsic Value Forfeited or expired	0	[3]
Aggregate Intrinsic Value Outstanding December 31, 2015	0	[3]
Aggregate Intrinsic Value Exercisable December 31, 2015	$ 0	[3]
[1]	Remaining contractual term presented in years.
[2]	Aggregate Fair Value is calculated using the Black Scholes option pricing model to estimate fair value of stock-based compensation.
[3]	The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the closing price of the Company's common stock as of December 31, 2015, for those awards that have an exercise price currently below the closing price as of December 31, 2015 of $0.23.

B. Stock-Based Compensation (27

B. Stock-Based Compensation (Details Narrative)	Dec. 31, 2015USD ($)
Equity [Abstract]
Unamortized Black Scholes value	$ 0

C. Note Receivable (Details Nar

C. Note Receivable (Details Narrative) - USD ($)	Dec. 31, 2015	Jun. 30, 2015
Receivables [Abstract]
Note receivable	$ 250,400	$ 322,800
Minimum monthly payments	10,000
Note Receivable, current	60,000
Note Receivable, noncurrent	$ 190,400

D. Land, Property and Equipme29

D. Land, Property and Equipment (Details) - USD ($)	6 Months Ended
	Dec. 31, 2015	Jun. 30, 2015
Land, property and equipment	$ 2,786,600	$ 2,784,900
Additions	1,700
Less accumulation depreciation	(583,800)	(491,900)
Land and permit costs	1,650,700	1,645,600
Net book value	3,853,500	3,938,600
Office furniture and equipment [Member]
Land, property and equipment	$ 51,300	51,300
Additions
Water disposal facility [Member
Land, property and equipment	$ 2,220,900	2,219,200
Additions	1,700
Production equipment [Member
Land, property and equipment	$ 514,400	$ 514,400
Additions
Less accumulation depreciation [Member]
Additions	$ (91,900)
Land and permit costs [Member]
Additions	5,100
Net book value [Member]
Additions	$ (85,100)

E. Earnings (Loss) Per Share (D

E. Earnings (Loss) Per Share (Details Narrative) - shares	6 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Earnings Per Share [Abstract]
Total common stock equivalents issuable under these potentially dilutive securities	1,200,000	1,204,000

E. Equity (Details Narrative)

E. Equity (Details Narrative) - USD ($)	6 Months Ended
	Dec. 31, 2015	Jun. 30, 2015
Stock-based compensation	$ 27,800
Preferred Stock, authorized	25,000,000	25,000,000
Preferred Stock, issued	0	0
Preferred Stock, outstanding	0	0
Series A Preferred Stock [Member]
Preferred Stock, authorized	5,000,000	5,000,000
Series B Preferred Stock [Member]
Preferred Stock, authorized	500,000	500,000
Series C Preferred Stock [Member]
Preferred Stock, authorized	400,000	400,000
Series D Preferred Stock [Member]
Preferred Stock, authorized	500,000	500,000
Series E Preferred Stock [Member]
Preferred Stock, authorized	750,000	750,000

G. Contingent Payments (Details

G. Contingent Payments (Details) - USD ($)	Dec. 31, 2015	Jun. 30, 2015
G. Contingent Payments Details
Contingent land payment	$ 663,300	$ 653,900
Less current portion	(25,000)	(50,000)
Contingent payments, long-term	$ 638,300	$ 603,900

H. Asset Retirement Obligation

H. Asset Retirement Obligation (Details Narrative) - USD ($)	Dec. 31, 2015	Jun. 30, 2015
Accounting Policies [Abstract]
Payment made for asset retirement obligation	$ 9,400
Balance at trust account for asset retirement obligation	$ 76,800	$ 67,400

I. Commitments and Contingenc34

I. Commitments and Contingencies (Details Narrative) - USD ($)	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2015
Commitments and Contingencies Disclosure [Abstract]
Attorney fees and accrued interest	$ 16,800
Accrued liability	$ 128,300
Reversed accrual		$ 128,300

J. Related Party Transactions (

J. Related Party Transactions (Details Narrative) - American Citizenship Center, LLC - USD ($)	6 Months Ended
	Dec. 31, 2015	Jun. 30, 2015
Due from related party	$ 250,400	$ 322,800
Interest on note	14,700
Unpaid receivables	$ 7,100

L. Liquidity and Going Concern

L. Liquidity and Going Concern (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2015	Dec. 31, 2014	Jun. 30, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Net loss	$ (344,800)	$ (176,800)	$ (748,100)	$ (354,900)	$ (900,600)