Summary of ELECTROGLAS INC

Bankruptcy or Receivership, Creation of a Direct Financial Obligation or an Oblig

Item 1.03. Bankruptcy or Receivership.

On July 9, 2009, Electroglas, Inc. (the "Company") and Electroglas International, Inc. (collectively, the "Debtors") filed voluntary petitions for relief under Chapter 11 of Title 11 of the United States Code (the "Bankruptcy Code") in the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy Court") (the "Chapter 11 Cases"). The Debtors will continue to manage their properties and operate their businesses as "debtors-in-possession" under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court.

A copy of the press release, dated July 10, 2009, announcing the filing of the Chapter 11 Cases is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement.

The filing of the bankruptcy petition described above constituted an event of default under the Indenture (defined below) and results in the acceleration of all amounts due under such obligation (the "Accelerated Direct Financial Obligation"). The aggregate amount of the Accelerated Direct Financial Obligation is approximately $25,852,821. In addition to the Accelerated Direct Financial Obligation, there is approximately $804,687.50 in outstanding unpaid interest due on the Notes (defined below). The ability of the creditors to seek remedies to enforce their rights under such agreements is automatically stayed as a result of the filing of the Chapter 11 Cases, and the creditors' rights of enforcement are subject to the applicable provisions of the Bankruptcy Code. The automatic stay invoked by the filing of the Chapter 11 Cases effectively precludes any action against the Company resulting from such acceleration, absent Bankruptcy Court approval.

Х Indenture, dated as of March 26, 2007, between the Company, Electroglas International, Inc., as Guarantor and The Bank of New York, as Trustee, for the 6.25% Convertible Senior Subordinated Secured Notes due 2027 (the "Notes"). The current principal amount outstanding under the Notes is $25,750,000.

Item 9.01. Financial Statements and Exhibits.

                      (c)     Exhibits.

                Exhibit No.      Description

                99.1             Press Release dated July 10, 2009.