Translation
Notice: This document is an excerpt translation of the original Japanese document and is only for reference purposes. In theevent of any discrepancy between this translated document and the original Japanese document, the latter shall prevail.

February 17, 2023

Company Name: LAC Co., Ltd.
President & Representative Director: Itsuro Nishimoto
Stock code: 3857 (TSE Standard)Contact: Takayuki Morozumi, Executive Officer
Phone: +81-3-6757-0100

Notice Regarding Recording of Extraordinary
Loss and Revision of Full-Year to Earnings Forecast
LAC Co., Ltd. (hereinafter, “LAC”) announces that, at a meeting of the Board of Directors held on February 13, 2023,
it resolved to book an extraordinary loss in the third quarter of the fiscal year ending March 31, 2023, and to revise
its full-year consolidated earnings forecasts, as outlined below.

1. Recording of extraordinary loss
In 2012, LAC absorbed three subsidiaries: Little eArth Corporation Co., Ltd., A&I System Co., Ltd., and IT Crew
Co., Ltd. In order to integrate the different systems that had been used at each company and upgrade some of thesystems that had become obsolete, in 2018 we started planning and developing a new company backbone systemwith the aim of bringing it online in October 2020.
However, we were subsequently forced to extend the timeline of this project because of additional developments
and other factors, and in recent times, the diversification of working styles driven by teleworking and advancements
in cloud-based digitalization, etc. are rapidly transforming the socio-economic environment. Even though it isimperative that we flexibly adapt to changes in our operating environment, we decided to suspend the developmentof the aforementioned system and build a new one instead, because we determined that the system we had beendeveloping would be incapable of delivering the functionality currently needed.
As a result, we intend to book an extraordinary loss of 1,820 million yen in connection with the development of acompany backbone system in the third quarter of the fiscal year ending March 31, 2023. Please note that therebuilding of a new system will have no impact on the Company’s business operations.

2. Revised full-year consolidated financial results forecast for the fiscal year ended March 31, 2023
(Millions of yen)
Net salesOperating income

Ordinary income

Net income
attributable toowners of parent

Earnings pershare (yen)Previous forecast (A)50,000

2,100

2,100

1,410

46.73

Revised forecast (B)43,0001,600

1,600(300)(9.94)

Difference (B - A)

(7,000)

(500)

(500)

(1,710)-Change(14.0%)(23.8%)(23.8%)--(Reference) Consolidated
financial results for fiscal year
ended March 31, 2022）

42,660

1,595

1,769

1,401

53.60

- more --2-

3. Reasons for revision
Given the current challenging socio-economic situation of a resurgence of COVID-19 case numbers, depreciationin the Japanese yen, global semiconductor shortages, rising crude oil prices, and the prolonged war in Ukraine, etc.,
we expect full-year consolidated net sales, operating income, and ordinary income to fall short of our previous
forecasts because of lackluster sales of products in both the Security Solutions Services business (SSS business)and the System Integration Services business (SIS business), as well as weaker-than-expected growth in the salesof services.
We also forecast a net loss attributable to owners of the parent owing to the booking of the aforementioned
extraordinary loss.

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