As filed with the Securities and Exchange Commission on August 23, 2005
Registration No. 333-126472
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 1
ON
FORM S-2
TO
FORM S-3
REGISTRATION STATEMENT
Under
The Securities Act Of 1933
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GSE SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
Delaware 52-1868008
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
9189 Red Branch Road
Columbia, MD 21045
(410) 772-3500
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
John V. Moran
Chief Executive Officer
GSE Systems, Inc.
9189 Red Branch Road
Columbia, MD 21045
(410) 772-3500
Fax: (410) 772-3599
(Name and address, including zip code, and telephone
number, including area code, of agent for service)
-----------------------
Copy to:
Robert J. Hasday, Esq.
Duane Morris LLP
380 Lexington Avenue
New York, NY 10168
(212) 692-1000
Fax: (212) 692-1020
-----------------------
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [ ]
If the registrant elects to deliver its latest annual report to security
holders, or a complete and legible facsimile thereof, pursuant to Item 11(a)(1)
of this Form, check the following box. [ ]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
-----------------------
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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[GP Strategies Letterhead]
, 2005
Dear GP Strategies Stockholder:
I am pleased to send you the attached prospectus concerning GSE Systems,
Inc. and notify you of the special distribution of shares of GSE Systems common
stock to the holders of GP Strategies common stock and Class B Capital Stock. On
June 20, 2005, the board of directors of GP Strategies Corporation approved the
spin-off of GP Strategies' approximately 57% interest in GSE Systems through a
special distribution of the shares of GSE Systems held by GP Strategies to GP
Strategies stockholders. As a result, GP Strategies stockholders will receive in
the spin-off ____ share of GSE Systems common stock for each share of GP
Strategies common stock or Class B Capital Stock held.
GSE Systems provides simulation solutions and services to the nuclear and
fossil electric utility industry, the chemical and petrochemical industries and
to the US Military Complex. It also provides plant monitoring and signal
analysis monitoring and optimization software primarily to the power industry.
Shares of GSE Systems common stock are listed on the American Stock Exchange
under the symbol "GVP."
The enclosed Prospectus describes the distribution of shares of GSE Systems
common stock and contains important information about GSE Systems and its
business. I suggest that you read it carefully.
No action is required on your part to receive your GSE Systems shares. You
will not be required either to pay anything for the new shares or to surrender
any certificates representing shares of GP Strategies stock. However, the
distribution may be taxable to you as a dividend. Please read the information
set forth under the caption "Material Federal Income Tax Consequences of the
Spin-Off" in the attached Prospectus and consult your tax advisor with respect
to the income tax consequences of the distribution to you.
If you have any questions regarding the distribution, please contact Lydia
M. DeSantis at (914) 249-9700, or GP Strategies' stock transfer agent and
registrar, Computershare Investor Services LLC, P.O. Box A3504, Chicago, IL
60690-3504, Telephone: 312-360-5430.
Very truly yours,
Scott N. Greenberg
Chief Executive Officer
GP Strategies Corporation
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the resigsration statement filed with the
Securities and Exchange Commission is effective. This prospectus in not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted. Subject to
Completion, dated August 23, 2005.
PROSPECTUS
GSE SYSTEMS, INC.
5,154,052 Shares of Common Stock
At this time, General Physics Corporation, a wholly-owned subsidiary of GP
Strategies Corporation, holds an approximately 57% interest in GSE Systems, Inc.
In this spin-off, General Physics will distribute all of the shares of GSE
Systems to GP Strategies and immediately thereafter GP Strategies will
distribute all of the shares of GSE Systems common stock received from General
Physics to GP Strategies stockholders on a pro rata basis. Each of you, as a
holder of GP Strategies' common stock or Class B capital stock, will receive
____ share of GSE Systems common stock for each share of GP Strategies common
stock or Class B capital stock you owned on the close of business on ___, 2005,
the record date for the spin-off. If as a result of the foregoing ratio you
would be entitled to a fraction of a share of GSE Systems common stock, you will
receive cash in lieu of a fractional share interest.
We are sending you this Prospectus to describe the spin-off. We expect the
spin-off to occur on or about , 2005. You will receive your
proportionate number of shares of GSE Systems common stock through our transfer
agent's book-entry registration system. These shares will not be in certificated
form. Following the spin-off, recipient stockholders may request to receive
their shares of our common stock in certificated form. Immediately after the
spin-off is completed, neither GP Strategies nor General Physics will own any
shares of GSE Systems common stock. We refer to ourselves in this Prospectus as
"GSE Systems," "GSE," the "Company," or "we" or "us."
No stockholder action is necessary to receive your shares of GSE Systems
common stock. This means that you do not need to pay anything to GP Strategies
or to GSE Systems, and you do not need to surrender any shares of GP Strategies'
common stock or Class B capital stock to receive your shares of GSE Systems
common stock. In addition, a stockholder vote is not required for the spin-off
to occur. GP Strategies is not asking you for a proxy, and GP Strategies
requests that you do not send a proxy.
As you review this Prospectus, you should carefully consider the matters
described in "Risk Factors" beginning on page 3. Our common stock is listed on
the American Stock Exchange under the symbol "GVP." On _____, 2005, the closing
sale price of the common stock on the American Stock Exchange was $______.
-----------------------
These securities have not been approved or disapproved by the Securities
and Exchange Commission or any state securities commission nor has the
Securities and Exchange Commission or any state securities commission passed
upon the accuracy or adequacy of this Prospectus. Any representation to the
contrary is a criminal offense.
-----------------------
This Prospectus does not constitute an offer to sell or the solicitation of
an offer to buy any securities. Changes may occur after the date of this
Prospectus and neither GSE Systems nor GP Strategies will update the information
contained herein except in the normal course of their respective public
disclosures.
Stockholders of GP Strategies with inquiries related to the spin-off should
contact Lydia M. DeSantis at (914) 249-9700, or GP Strategies' stock transfer
agent and registrar, Computershare Investor Services LLC, P.O. Box A3504,
Chicago, IL 60690-3504, Telephone: 312-360-5430.
The date of this Prospectus is ____, 2005.
TABLE OF CONTENTS
Page
WHERE YOU CAN FIND MORE INFORMATION............................................2
THE COMPANY....................................................................3
RISK FACTORS...................................................................3
THE SPIN-OFF...................................................................7
RELATIONSHIP BETWEEN GP STRATEGIES AND GSE SYSTEMS............................10
LEGAL MATTERS.................................................................11
EXPERTS.......................................................................11
You should rely only on the information contained in this document or to
which we have referred you. We have not authorized anyone to provide you with
information that is different. This document may only be used where it is legal
to sell these securities. The information in this document may only be accurate
on the date of this document.
Special Note Regarding Forward-Looking Statements
This prospectus contains "forward-looking" statements that have been made
pursuant to the Private Securities Litigation Reform Act of 1995 which reflect
our expectations regarding our future growth, results of operations, performance
and business prospects and opportunities. Wherever possible, words such as
"anticipate," "believe," "plan," "expect" and similar expressions have been used
to identify these forward-looking statements. These statements reflect our
current beliefs and are based on information currently available to us.
Accordingly, these statements are subject to risks and uncertainties, including
those listed under "Risk Factors," which could cause our actual growth, results,
performance and business prospects and opportunities to differ from those
expressed in, or implied by, these statements. Except as otherwise required by
federal securities law, we are not obligated to update or revise these
forward-looking statements to reflect new events or circumstances.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy
statements and other information with the Securities and Exchange Commission
("SEC"). You may read and copy any document we file at the public reference
facilities of the SEC located at Station Place, 100 F Street, N.E., Washington
D.C. 20549. You may obtain information on the operation of the SEC's public
reference facilities by calling the SEC at 1-800-SEC-0330. You can also access
copies of this material electronically on the SEC's home page on the World Wide
Web at http://www.sec.gov.
This prospectus is part of a registration statement(Registration No.
333-126472) we filed with the SEC. The SEC permits us to "incorporate by
reference" the information we file with them, which means that we can disclose
important information to you by referring you to those documents. The
information incorporated by reference is considered to be part of this
prospectus. However, any information contained herein shall modify or supersede
information contained in documents we filed with the SEC before the date of this
prospectus. We incorporate by reference our Annual Report on Form 10-K for the
year ended December 31, 2004, filed on March 17, 2005, our Annual Report on Form
10-K/A for the year ended December 31, 2004, filed on May 2, 2005, our Annual
Report on Form 10-K/A for the year ended December 31, 2004, filed on August 15,
2005, our Quarterly Report on Form 10-Q for the quarter ended March 31, 2005,
filed on May 16, 2005, our Quarterly Report on Form 10-Q/A for the quarter ended
March 31, 2005, filed on August 16, 2005, our Quarterly Report on Form 10-Q for
the quarter ended June 30, 2005, filed on August 15, 2005, our Current Reports
on Form 8-K, filed on March 18, 2005, May 11, 2005, May 27, 2005 and August 11,
2005, our Current Report on Form 8-K/A, filed on August 16, 2005, and the
description of our common stock contained in our registration statement pursuant
to Section 12 of the Exchange Act, and any amendment or report filed for the
purpose of updating such description, filed by us with the SEC.
A copy of our Annual Report on Form 10-K for the year ended December 31,
2004, as amended, and our Quarterly Report on Form 10-Q for the quarter ended
June 30, 2005, are being delivered with this prospectus. You may write or
telephone us to obtain at no cost a copy of any or all of the documents
incorporated by reference. You should direct written requests to 9189 Red Branch
Road, Columbia, Maryland 21045, Attn: Secretary. Our telephone number is (410)
772-3500. However, we will not send you exhibits to a document, unless the
exhibits are specifically incorporated by reference in the document.
THE COMPANY
GSE Systems, Inc. is a leader in real-time, high fidelity simulation. The
Company provides simulation solutions and services to the nuclear and fossil
electric utility industry, the chemical and petrochemical industries and to the
US Military Complex. In addition, the Company provides plant monitoring and
signal analysis monitoring and optimization software primarily to the power
industry. Our executive offices are located at 9189 Red Branch Road, Columbia,
Maryland 21045. Our telephone number is (410) 772-3500. We maintain a Web site
at http://www.gses.com. Nothing contained in such Web site should be deemed a
part of this prospectus.
RISK FACTORS
You should carefully consider the risks described below before making an
investment decision. The risks and uncertainties described below may not be the
only ones we will face. Additional risks and uncertainties not presently known
to us or that we currently deem not material may also impair our business
operations. If any of the following risks actually occur, our business,
financial condition or results of operations could be materially adversely
affected. In such case, the trading price of our common stock could decline, and
you may lose all or part of your investment.
The Company has limited cash resources. If the Company is unable to
generate adequate cash flow from operations, it will need additional capital to
fund its operations.
For the years ended December 31, 2003 and 2002, the Company experienced net
losses from continuing operations of $1.9 million and $4.3 million,
respectively, and had only $82,000 of income from continuing operations for the
year ended December 31, 2004. The Company also had a net loss of $1.6 million
for the first six months of fiscal 2005. The Company's backlog has decreased
from $30.4 million at December 31, 2003 to $19.6 million at December 31, 2004
and $14.7 million at June 30, 2005. The Company has cash available through a
credit facility of $1.5 million, of which $725,000 had been utilized at June 30,
2005. In addition, the Company recently issued and sold to an investor a senior
subordinated secured convertible note of the Company and a warrant to purchase
shares of our common stock for an aggregate purchase price of $2,000,000.
However, if the Company's income from continuing operations does not improve, it
may need additional capital to fund its operations. If adequate funds are not
available, GSE may be required to curtail its operations.
The Company will continue to rely on GP Strategies for certain services.
The Company's business has historically relied on GP Strategies for various
services.
On January 1, 2004, the Company entered into a Management Services
Agreement with GP Strategies Corporation in which GP Strategies agreed to
provide corporate support services to GSE, including accounting, finance, human
resources, legal, network support and tax. In addition, GSE uses General
Physics' financial system. In 2004, GSE was charged $685,000 for General
Physics' services. The agreement has been extended through December 31, 2005
without an increase in the fee. The agreement can be renewed for successive
one-year terms.
In addition, the Company does not have an independent credit facility;
instead, $1.5 million of General Physics' available credit facility has been
carved out for use by the Company.
Although GP Strategies will no longer have any ownership interest in the
Company following the spin-off, the Company will continue to rely on these
services for the foreseeable future. However, there can be no assurance that GP
Strategies will continue to be willing to provide such services to the Company
after the spin-off.
The Company's expense levels are based upon its expectations as to future
revenues, so it may be unable to adjust spending to compensate for a revenue
shortfall. Accordingly, any revenue shortfall would likely have a
disproportionate effect on the Company's operating results.
The Company's revenues were $29.5 million and $25.0 million in 2004 and
2003, respectively, and $13.0 million for the six months ended June 30, 2005.
The Company's operating results have fluctuated in the past and may fluctuate
significantly in the future as a result of a variety of factors, including
purchasing patterns, timing of new products and enhancements by the Company and
its competitors, and fluctuating foreign economic conditions. Since the
Company's expense levels are based in part on its expectations as to future
revenues and includes certain fixed costs, the Company may be unable to adjust
spending in a timely manner to compensate for any revenue shortfall and such
revenue shortfalls would likely have a disproportionate adverse effect on
operating results. The Company believes that these factors may cause the market
price for its common stock to fluctuate, perhaps significantly. In addition, in
recent years the stock market in general, and the shares of technology companies
in particular, have experienced extreme price fluctuations. The Company's
common stock has also experienced a relatively low trading volume, making it
further susceptible to extreme price fluctuations.
Risk of International Sales and Operations.
Sales of products and the provision of services to end users outside the
United States accounted for approximately 65.1% of the Company's consolidated
revenue in 2004. The Company anticipates that international sales and services
will continue to account for a significant portion of its revenue in the
foreseeable future. As a result, the Company may be subject to certain risks,
including risks associated with the application and imposition of protective
legislation and regulations relating to import or export (including export of
high technology products) or otherwise resulting from trade or foreign policy
and risks associated with exchange rate fluctuations. Additional risks include
potentially adverse tax consequences, tariffs, quotas and other barriers,
potential difficulties involving the Company's strategic alliances and managing
foreign sales agents or representatives and potential difficulties in accounts
receivable collection. The Company currently sells products and provides
services to customers in emerging market economies such as Russia, Ukraine,
Bulgaria, and the Czech Republic. Although end users in the Ukraine accounted
for 20.7%, 28.7%, and 22.8% of the Company's consolidated revenue in 2004, 2003,
and 2002, respectively, GSE's customer for these projects was Battelle's Pacific
Northwest National Laboratory, which is the purchasing agent for the U.S.
Department of Energy ("DOE"). The DOE provides funding for various projects in
Eastern and Central Europe. Accordingly, the Company is not subject to the
political and financial risks that are normally faced when doing business in the
Ukraine. The Company has taken steps designed to reduce the additional risks
associated with doing business in these countries, but the Company believes that
such risks may still exist and include, among others, general political and
economic instability, lack of currency convertibility, as well as uncertainty
with respect to the efficacy of applicable legal systems. There can be no
assurance that these and other factors will not have a material adverse effect
on the Company's business, financial condition or results of operations.
The Company relies on one customer for a substantial portion of its
revenue. The loss of this customer would have a material adverse effect upon the
Company's revenues and results of operations.
For the years ended December 31, 2004, 2003, and 2002, one customer
(Battelle's Pacific Northwest National Laboratory) accounted for approximately
24.0%, 28.7%, and 22.8%, respectively, of the Company's consolidated revenue.
The Pacific Northwest National Laboratory is the purchasing agent for the DOE
and the numerous projects the Company performs in Eastern and Central Europe. If
the Company lost this customer, the Company's revenue and results of operations
would be materially and adversely affected.
The Company's business is substantially dependent on sales to the nuclear
power industry. Any disruption in this industry would have a material adverse
effect upon the Company's revenue.
In 2004, 85% of our revenue was from customers in the nuclear power
industry. The Company will continue to derive a significant portion of its
revenue from customers in the nuclear power industry for the foreseeable future.
The Company's ability to supply nuclear power plant simulators and related
products and services is dependent on the continued operation of nuclear power
plants and, to a lesser extent, on the construction of new nuclear power plants.
A wide range of factors affect the continued operation and construction of
nuclear power plants, including the political and regulatory environment, the
availability and cost of alternative means of power generation, the occurrence
of future nuclear incidents, and general economic conditions.
The Company's available credit facility imposes significant operating and
financial restrictions, which may prevent it from capitalizing on business
opportunities.
GSE's available credit facility, which has been carved out of General
Physics' credit facility, imposes significant operating and financial
restrictions. These restrictions affect, and in certain cases limit, among other
things, the Company's ability to:
* incur additional indebtedness and liens;
* make capital expenditures;
* make investments and acquisitions and sell assets; and
* consolidate, merge or sell all or substantially all of its assets.
At June 30, 2005, the Company was not in compliance with its debt service
coverage ratio. The Company obtained a letter dated August 4, 2005 in which the
lender has agreed to forebear from exercising its rights under the credit
agreement against the Company and other borrowers with respect to this event of
default until the Company has delivered to the lender the Company's financial
statements for the year ending December 31, 2005. Borrowings outstanding under
this arrangement are guaranteed by GP Strategies.
There can be no assurance that these restrictions will not adversely affect
the Company's ability to finance its future operations or capital needs or to
engage in other business activities that may be in the interest of stockholders.
The Company is dependent on product innovation and research and
development, which costs are incurred prior to revenues for new products and
improvements.
The Company believes that its success will depend in large part on its
ability to maintain and enhance its current product line, develop new products,
maintain technological competitiveness and meet an expanding range of customer
needs. The Company's product development activities are aimed at the development
and expansion of its library of software modeling tools, the improvement of its
display systems and workstation technologies, and the advancement and upgrading
of its simulation technology. The life cycles for software modeling tools,
graphical user interfaces, and simulation technology are variable and largely
determined by competitive pressures. Consequently, the Company will need to
continue to make significant investments in research and development to enhance
and expand its capabilities in these areas and to maintain its competitive
advantage. There can be no assurance that the Company will have the financial
resources to support such investments.
The Company relies upon its intellectual property rights for the success of
its business; however, the steps it has taken to protect its intellectual
property may be inadequate.
Although the Company believes that factors such as the technological and
creative skills of its personnel, new product developments, frequent product
enhancements and reliable product maintenance are important to establishing and
maintaining a technological leadership position, the Company's business depends,
in part, on its intellectual property rights in its proprietary technology and
information. The Company relies upon a combination of trade secret, copyright,
patent and trademark law, contractual arrangements and technical means to
protect its intellectual property rights. The Company enters into
confidentiality agreements with its employees, consultants, joint venture and
alliance partners, customers and other third parties that are granted access to
its proprietary information, and limits access to and distribution of its
proprietary information. There can be no assurance, however, that the Company
has protected or will be able to protect its proprietary technology and
information adequately, that the unauthorized disclosure or use of the Company's
proprietary information will be prevented, that others have not or will not
develop similar technology or information independently, or, to the extent the
Company owns patents, that others have not or will not be able to design around
those patents. Furthermore, the laws of certain countries in which the Company's
products are sold do not protect the Company's products and intellectual
property rights to the same extent as the laws of the United States.
The industries in which GSE operates are highly competitive. This
competition may prevent the Company from raising prices at the same pace as its
costs increase.
The Company's businesses operate in highly competitive environments with
both domestic and foreign competitors, many of whom have substantially greater
financial, marketing and other resources than the Company. The principal factors
affecting competition include price, technological proficiency, ease of system
configuration, product reliability, applications expertise, engineering support,
local presence and financial stability. The Company believes that competition in
the simulation fields may further intensify in the future as a result of
advances in technology, consolidations and/or strategic alliances among
competitors, increased costs required to develop new technology and the
increasing importance of software content in systems and products. As the
Company's business has a significant international component, changes in the
value of the dollar could adversely affect the Company's ability to compete
internationally.
GSE will continue to pursue new acquisitions and joint ventures, and any of
these transactions could adversely affect its operating results or result in
increased costs or other problems.
The Company intends to continue to pursue new acquisitions and joint
ventures, a pursuit which could consume substantial time and resources.
Identifying appropriate acquisition candidates and negotiating and consummating
acquisitions can be a lengthy and costly process. The Company may also encounter
substantial unanticipated costs or other problems associated with the acquired
businesses. The risks inherent in this strategy could have an adverse impact on
the Company's results of operation or financial condition. There can be no
assurance that the Company will have the financial resources to fulfill its
strategy.
The nuclear power industry, the Company's largest customer group, is
associated with a number of hazards which could create significant liabilities
for the Company.
The Company's business could expose it to third party claims with respect
to product, environmental and other similar liabilities. Although the Company
has sought to protect itself from these potential liabilities through a variety
of legal and contractual provisions as well as through liability insurance, the
effectiveness of such protections has not been fully tested. Certain of the
Company's products and services are used by the nuclear power industry primarily
in operator training. Although the Company's contracts for such products and
services typically contain provisions designed to protect the Company from
potential liabilities associated with such use, there can be no assurance that
the Company would not be materially adversely affected by claims or actions
which may potentially arise.
The terms of our recent financing may require us to issue an indeterminate
number of shares of our common stock which may be dilutive and restrict us from
taking certain actions.
We have recently issued and sold to an investor a senior subordinated
secured convertible note of the Company and a warrant to purchase shares of our
common stock. The note is convertible, in part or in whole, into shares of our
common stock based on a conversion price of $1.925. However, the conversion
price, and thus the number of shares into which the note may be converted, is
subject to adjustment if we issue or sell certain shares of common stock or
convertible securities for a consideration per share less than the then
effective conversion price, in which case the conversion price will be reduced
to an amount equal to the consideration per share in such new issuance. The
exercise price of the warrant, but not the number of shares for which it is
exercisable, is similarly subject to adjustment.
In addition, under the terms of the financing, while the note is
outstanding, the Company may not, among other things, (i) acquire, sell or
otherwise transfer any material assets or rights of the Company or a subsidiary,
or enter into any contract or agreement relating to the sale of assets, which is
not consummated pursuant to an arms length transaction, (ii) enter into any
contract, agreement or transaction with any officer, director, stockholder or
affiliate of the Company or a subsidiary other than ordinary course transactions
that are consistent with past practice and pursuant to arms length terms, (iii)
pay or declare any dividend or make any distribution upon, redeem, retire or
repurchase or otherwise acquire, any shares of capital stock or other securities
of the Company or a subsidiary, other than certain dividends currently owed to
ManTech International, (iv) materially change the Company's or any subsidiary's
line of business as currently conducted, or (v) incur any additional
indebtedness senior to the note. Furthermore, the note and the warrant each
prevent the Company from engaging in any fundamental transaction (such as a
merger, consolidation, or sale of the Company) while it is outstanding, unless
the successor assumes in writing all of the obligations of the Company under it
and the successor is a publicly traded company with common stock traded on the
Amex, Nasdaq, or the New York Stock Exchange.
THE SPIN-OFF
Background
As of _____, 2005, General Physics, a wholly-owned subsidiary of GP
Strategies, held 5,154,052 shares of GSE Systems common stock, or an
approximately 57% interest in GSE Systems. The board of directors of GP
Strategies has determined to separate its interest in GSE Systems from its other
businesses by means of a spin-off. To accomplish the spin-off, General Physics
will distribute all of the shares of GSE Systems to GP Strategies and
immediately thereafter, GP Strategies will distribute all of the shares of GSE
Systems common stock received from General Physics to GP Strategies stockholders
on a pro rata basis. A stockholder vote is not required or being sought for the
spin-off to occur.
Reasons for the Spin-Off
The GP Strategies Board of Directors has determined that the distribution
of all of its interest in GSE Systems to owners of GP Strategies common stock
and Class B capital stock will enable the management of each of GP Strategies
and GSE Systems to operate and develop those businesses more effectively. The GP
Strategies Board of Directors has concluded that the spin-off is in the best
interests of GP Strategies and GP Strategies' stockholders because it believes
that the spin-off will allow GP Strategies' management to focus solely on its
core business, General Physics, and will simplify the financial presentation of
GP Strategies thereby improving the ability of investors to understand GP
Strategies' financial position.
The GP Strategies Board of Directors explored various alternatives to the
spin-off, including a sale of its shares of GSE stock, but determined that the
spin-off would be in the best interests of GP Strategies' stockholders.
Manner of Effecting the Spin-Off
GP Strategies will effect the spin-off as of the close of business on
____, 2005. At that time, General Physics will distribute to GP Strategies all
of the shares of GSE Systems common stock it holds. Immediately thereafter, GP
Strategies will distribute all of such shares of GSE Systems stock to the
holders of GP Strategies common stock and Class B capital stock on a pro-rata
basis. As of ____ , 2005, the record date for the distribution, there were
______ shares of GP Strategies common stock outstanding and ______ shares of GP
Strategies Class B capital stock outstanding. Accordingly, each holder of GP
Strategies stock on the record date will receive ____ share of GSE Systems
common stock for each share of GP Strategies common stock or Class B capital
stock held as of the close of business on _____ , 2005.
GSE Systems stock will be issued as uncertificated shares registered in
book-entry form through the direct registration system. No certificates
representing GSE Systems common stock will be mailed to registered holders of GP
Strategies common stock in the ordinary course. If you are a stockholder of
record of GP Strategies stock on the record date, GSE Systems' transfer agent,
Continental Stock Transfer & Trust Co., will hold your book-entry shares. On or
about ____ , 2005, Continental Stock Transfer will mail you a direct
registration transaction advice reflecting your ownership interest in shares of
GSE Systems common stock. When you receive this advice, you will receive
information explaining the direct registration system and telling you how to
obtain physical certificates if you desire to do so. You may also retain,
transfer or sell the shares, or transfer the shares to a brokerage account.
Notwithstanding the foregoing, holders of legended stock certificates
representing GP common stock or Class B capital stock will receive legended
physical stock certificates representing their GSE Systems common stock.
No owner of GP Strategies stock will be required to pay any cash or other
consideration for shares of GSE Systems received in the spin-off or to surrender
or exchange any shares of GP Strategies stock to receive shares of GSE Systems.
GP Strategies and General Physics may be deemed "underwriters" within the
meaning of Section 2(a)(11) of the Securities Act as a result of the
distribution by General Physics of GSE Systems stock to GP Strategies and the
distribution by GP Strategies of such stock to GP Strategies stockholders.
Treatment of Fractional Shares
Fractional shares of GSE Systems common stock will not be issued to holders
of GP Strategies stock as part of the distribution nor credited to book-entry
accounts. Instead, the distribution agent will aggregate fractional shares into
whole shares and sell them in the open market at then-prevailing prices on
behalf of holders who otherwise would be entitled to receive fractional share
interests, and such persons will receive a cash payment in the amount of their
pro rata share of the net sale proceeds. The distribution agent, in its sole
discretion, without any influence from GP Strategies or GSE Systems, will
determine when, how, through which broker-dealer and at what price to sell such
whole shares. Any broker-dealer used by the distribution agent will not be an
affiliate of either GP Strategies or GSE Systems. Sales of fractional shares of
our common stock are expected to be made as soon as practicable after the
distribution date, and checks representing proceeds of these sales will be
mailed there after. GP Strategies will bear the cost of brokerage commissions
incurred in connection with such sales. None of GP Strategies, the distribution
agent nor we guarantee that you will receive any minimum sale price for your
fractional shares of GSE Systems common stock. You will not be paid any interest
on the proceeds of the sale.
Results of Spin-Off
As of the close of business on ______ , 2005, GP Strategies had
approximately ____ stockholders of record. Except for holders of GP
Strategies stock who would be entitled to fractional shares only, each of these
GP Strategies stockholders will become stockholders of GSE Systems once the
spin-off is effected. Immediately after the spin-off is completed, neither GP
Strategies nor General Physics will own any shares of GSE Systems common stock.
The spin-off will not affect the number of outstanding shares of GP Strategies
stock or the rights of GP Strategies stockholders.
Shares of GP Strategies common stock are currently listed on the New York
Stock Exchange under the symbol "GPX." Prior to the record date for the
spin-off, GP Strategies stock will trade on a regular basis reflecting the value
of GP Strategies that includes its interest in GSE Systems. GP Strategies common
stock will continue to trade on the New York Stock Exchange following the
spin-off.
After the spin-off, shares of GSE Systems common stock will continue to be
listed on the American Stock Exchange under the symbol "GVP." The prices at
which the GSE Systems common stock will trade following the spin-off will be
determined by the marketplace and may be influenced by the spin-off.
GSE Systems common stock distributed in the spin-off generally will be
freely transferable under the Securities Act except for securities received by
persons who may be deemed to be affiliates of GSE Systems pursuant to Rule 405
under the Securities Act. Persons who may be deemed to be affiliates of GSE
Systems after the spin-off generally include individuals or entities that
control, are controlled by, or are under common control with GSE Systems,
including directors of GSE Systems. Persons who are affiliates of GSE Systems
will be permitted to sell their shares of GSE Systems common stock received in
the spin-off only pursuant to an effective registration statement under the
Securities Act or pursuant to an exemption from the registration requirements of
the Securities Act, such as the exemption provided by Rule 144 under the
Securities Act (subject to the conditions set forth in Rule 144, other than its
holding period requirements).
Other Consequences
The exercise price of outstanding GP Strategies options and warrants will
be adjusted based on the relative fair market values of the GP Strategies stock
before and after the spin-off.
Material Federal Income Tax Consequences of the Spin-Off
The following discussion is a summary description of the material U.S.
federal income tax consequences of the spin-off applicable to GP Strategies
stockholders. This discussion does not purport to consider all aspects of U.S.
federal income taxation that may be relevant to a GP Strategies stockholder.
This discussion is based upon the provisions of the Internal Revenue Code of
1986, as amended (the "Code"), existing regulations and administrative and
judicial interpretations of the Code, all of which are as in effect as of the
date of this Prospectus and are subject to change, possibly with retroactive
effect. This discussion applies only to GP Strategies stockholders who hold
their shares of GP Strategies stock as capital assets within the meaning of
Section 1221 of the Code, and does not apply to the following:
* stockholders who received their shares of GP Strategies stock as
compensation;
* stockholders who hold their shares of GP Strategies common stock as
part of a "straddle," "hedge," "conversion transaction," "synthetic
security" or other integrated investment;
* stockholders, including, without limitation, financial institutions,
insurance companies, tax-exempt organizations, dealers or traders in
securities and stockholders subject to the alternative minimum tax,
who may be subject to special rules;
* stockholders whose functional currency is not the U.S. dollar; or
* stockholders who, for U.S. federal income tax purposes, are
non-resident alien individuals, foreign corporations, foreign
partnerships, foreign estates or foreign trusts.
This discussion also does not consider the effect of any foreign, state or
local laws or any U.S. federal laws other than those pertaining to the income
tax.
Accordingly, you should consult your tax advisor to determine the tax
effect to you of the spin-off, including the application and effect of foreign
or U.S. federal, state, local or other tax laws.
The distribution of the shares of GSE Systems common stock by GP Strategies
to its stockholders will be a taxable dividend to the stockholders to the extent
that the distribution is made out of current or accumulated earnings and profits
of GP Strategies. If the amount of the distribution exceeds current and
accumulated earnings and profits, the excess amount will be a tax-free return of
capital to the extent of the stockholder's tax basis in the GP Strategies stock
and then any remaining amount will be taxable gain to the stockholder. No loss
will be recognized. Any gain recognized by a stockholder will be capital gain.
Capital gains are long term if the GP Strategies stock is held for more than
twelve months at the time of the distribution. For individuals, the maximum
federal income tax rate applicable to long-term capital gains and dividends is
generally 15%.
Use of Proceeds
We will receive no proceeds from the distribution of GSE Systems common
stock.
RELATIONSHIP BETWEEN GP STRATEGIES AND GSE SYSTEMS
As of ______ , 2005, General Physics owned an approximately 57% interest
in GSE Systems.
On January 1, 2004, the Company entered into a Management Services
Agreement with GP Strategies in which GP Strategies agreed to provide corporate
support services to GSE, including accounting, finance, human resources, legal,
network support and tax. In addition, GSE uses General Physics' financial
system. In 2004, GSE was charged $685,000 for General Physics' services. The
agreement has been extended through December 31, 2005 without an increase in the
fee. The agreement can be renewed for successive one-year terms.
In addition, the Company does not have an independent credit facility;
instead, $1.5 million of General Physics' available credit facility has been
carved out for use by the Company. While GP Strategies has guaranteed the amount
of such credit facility currently utilized by GSE Systems, there can be no
assurance that the credit facility would continue to be made available after
such amount was repaid.
GSE Systems and GP Strategies believe that these agreements are at fair
market value and are on terms comparable to those that would have been reached
in arm's-length negotiations had the parties been unaffiliated at the time of
the negotiations.
There can be no assurance that GP Strategies will continue to be willing to
provide such services to the Company after the spin-off.
LEGAL MATTERS
Certain legal matters with respect to the shares of common stock offered by
this prospectus have been passed upon by Andrea D. Kantor, General Counsel of
the Company.
EXPERTS
The consolidated financial statements of GSE Systems Inc. as of December
31, 2004 and 2003, and for each of the years in the three-year period ended
December 31, 2004, have been incorporated by reference herein and in the
registration statement in reliance upon the report of KPMG LLP, independent
registered public accounting firm, incorporated by reference herein, and upon
the authority of said firm as experts in accounting and auditing.
--------------------------------------------------------------------------------
GSE SYSTEMS, INC.
COMMON STOCK
PROSPECTUS
, 2005
--------------------------------------------------------------------------------
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the expenses in connection with this
offering. All of the amounts (except the SEC registration fee) are estimated.
SEC registration fee $1,013.08
Legal fees and expenses 7,000.00
Accounting fees and expenses 4,000.00
Miscellaneous 7,000.00
--------
Total $19,013.08
==========
Item 15. Indemnification of Directors and Officers.
Under Section 145 of the General Corporation Law of the State of Delaware
(the "DGCL"), a corporation may indemnify its directors, officers, employees and
agents and its former directors, officers, employees and agents and those who
serve, at the corporation's request, in such capacities with another enterprise,
against expenses (including attorney's fees), as well as judgments, fines and
settlements in nonderivative lawsuits, actually and reasonably incurred in
connection with the defense of any action, suit or proceeding in which they or
any of them were or are made parties or are threatened to be made parties by
reason of their serving or having served in such capacity. The DGCL provides,
however, that such person must have acted in good faith and in a manner he or
she reasonably believed to be in (or not opposed to) the best interests of the
corporation and, in the case of a criminal action, such person must have had no
reasonable cause to believe his or her conduct was unlawful. In addition, the
DGCL does not permit indemnification in an action or suit by or in the right of
the corporation, where such person has been adjudged liable to the corporation,
unless, and only to the extent that, a court determines that such person fairly
and reasonably is entitled to indemnity for costs the court deems proper in
light of liability adjudication. Indemnity is mandatory to the extent a claim,
issue or matter has been successfully defended.
The Company's Third Amended and Restated Certificate of Incorporation (the
"Restated Certificate") provides that the Company shall indemnify and hold
harmless, to the fullest extent permitted by Section 145 of the DGCL, as the
same may be amended and supplemented, every person who was or is made a party or
is threatened to be made a party or is otherwise involved in any action, suit of
proceeding by reason of the fact that such person is or was serving as a
director or officer of the Company or, while serving as a director or officer of
the Company, is or was serving at the request of the Company as a director,
trustee, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against all expense, liability and loss
reasonably incurred or suffered by such person in connection therewith if such
person satisfied the applicable level of care to permit such indemnification
under the DGCL. The Restated Certificate provides that, subject to any
requirements imposed by law or the Company's Bylaws, the right to
indemnification includes the right to be paid expenses incurred in defending any
proceeding in advance of its final disposition. The Company's Amended and
Restated By-Laws (the "By-Laws") provide that, if and to the extent required by
the DGCL, such an advance payment will only be made upon delivery to the Company
of an undertaking, by or on behalf of the director or officer, to repay all
amounts so advanced if it is ultimately determined that such director is not
entitled to indemnification.
Section 102(b)(7) of the DGCL permits a corporation to include in its
certificate of incorporation a provision eliminating or limiting the personal
liability of a director to the corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director, provided that such provision
shall not eliminate or limit the liability of a director (i) for any breach of
the director's duty of loyalty to the corporation or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the DGCL (relating to
unlawful payment of dividends and unlawful stock purchase and redemption) or
(iv) for any transaction from which the director derived an improper personal
benefit.
The Restated Certificate also provides that a director shall, to the
maximum extent permitted by Section 102(b)(7) of the DGCL (or any successor
provision), have no personal liability to the Company or its stockholders for
monetary damages for breach of fiduciary duty as a director.
Item 16. Exhibits.
Number Description
------ -----------
3.1 Third Amended and Restated Certificate of Incorporation of the
Company. Previously filed in connection with the GSE Systems, Inc. Form
8-K as filed with the Securities and Exchange Commission on
October 24, 2001 and incorporated herein by reference.
3.2 Form of Amended and Restated Bylaws of the Company. Previously filed
in connection with Amendment No. 1 to the GSE Systems, Inc. Form
S-1 Registration Statement as filed with the Securities and Exchange
Commission on June 14, 1995 and incorporated herein by reference.
4.1 Specimen Common Stock Certificate of the Company. Previously filed
in connection with Amendment No. 3 to the GSE Systems, Inc. Form
S-1 Registration Statement as filed with the Securities and Exchange
Commission on July 24, 1995 and incorporated herein by reference.
5.1 Opinion of Andrea D. Kantor.
10.1 Agreement among ManTech International Corporation, National Patent
Development Corporation, GPS Technologies, Inc., General Physics
Corporation, Vattenfall Engineering AB and GSE Systems, Inc. (dated as
of April 13, 1994). Previously filed in connection with the GSE Systems,
Inc. Form S-1 Registration Statement as filed with the Securities and
Exchange Commission on April 24, 1995 and incorporated herein by
reference.
10.2 GSE Systems, Inc. 1995 Long-Term Incentive Plan, amended as of June 16,
2005. Previously filed in connection with the GSE Systems, Inc. Form
DEF 4A as filed with the Securities and Exchange Commission on May 31,
2005 and incorporated herein by reference.
10.3 Form of Option Agreement Under the GSE Systems, Inc. 1995 Long-Term
Incentive Plan. Previously filed in connection with the GSE Systems,
Inc. Form 10-K as filed with the Securities and Exchange Commission on
March 22, 1996 and incorporated herein by reference.
10.4 Office Lease Agreement between Sterling Rutherford Plaza, L.L.C. and
GSE Systems, Inc. (dated as of February 10, 1998). Previously filed
in connection with the GSE Systems, Inc. Form 10-K as filed with
the Securities and Exchange Commission on March 21, 1998 and
incorporated herein by reference.
10.5 Office Lease Agreement between Red Branch Road, L.L.C. and GSE Systems,
Inc. (dated February 10, 1998). Previously filed in connection with the
GSE Systems, Inc. Form 10-K as filed with the Securities and
Exchange Commission on March 21, 1998 and incorporated herein by
reference.
10.6 Warrant Agreements with GP Strategies and ManTech International
Corporation (dated September 13, 1999). Previously filed in connection
with the GSE Systems, Inc. Form 8-K as filed with the Securities and
Exchange Commission on August 15, 2001 and incorporated herein by
reference.
10.7 Change of Control Agreements between GSE Systems, Inc. and Jerry Jen and
Jeffery G. Hough (dated March 10, 2000). Previously filed in connection
with the GSE Systems, Inc. Form 8-K as filed with the Securities and
Exchange Commission on August 1, 2001 and incorporated herein by
reference.
10.8 $1,000,000 promissory note dated June 25, 2001 to ManTech International
Corporation. Previously filed in connection with the GSE Systems, Inc.
Form 8-K as filed with the Securities and Exchange Commission on
August 1, 2001 and incorporated herein by reference.
10.9 Preferred Stock Issuance Agreement by and between GSE Systems, Inc. and
ManTech International Corporation (dated December 5, 2001). Previously
filed in connection with the GSE Systems, Inc. Form 8-K as filed with
the Securities and Exchange Commission on December 12, 2001 and
incorporated herein by reference.
10.10 Asset Sale and Purchase Agreement between GSE Systems, Inc. and
Novatech LLC dated September 25, 2003. Previously filed in connection
with the GSE Systems, Inc. Form 8-K as filed with the Securities and
Exchange Commission on October 10, 2003 and incorporated herein by
reference.
10.11 Management Services Agreement between GSE Systems, Inc. and GP
Strategies Corporation dated January 1, 2004. Previously filed in
connection with the GSE Systems, Inc. Form 10-K filed with the
Securities and Exchange Commission on April 14, 2004 and incorporated
herein by reference.
10.12 First Amendment dated March 30, 2004 to the Financing and Security
Agreement among General Physics Corporation, Skillright, Inc., GSE
Systems, Inc., GSE Power Systems, Inc., and MSHI, Inc. and Wachovia
Bank, National Association. Previously filed in connection with the GSE
Systems, Inc. Form 10-K filed with the Securities and Exchange
Commission on April 14, 2004 and incorporated herein by reference.
10.13 Third Amendment dated July 30, 2004 to the Financing and Security
Agreement among General Physics Corporation, Skillright, Inc., GSE
Systems, Inc., GSE Power Systems, Inc. and MSHI, Inc. and Wachovia
Bank National Association. Previously filed in connection with the GSE
Systems, Form 10-Q filed with the Securities and Exchange Commission on
November 14, 2004 and incorporated herein by reference.
10.14 Forbearance letter dated August 4, 2005. Previously filed in connection
with the GSE Systems, Inc. Form 10-Q filed with the Securities and
Exchange Commission on August 15, 2005.
23.1 Consent of KPMG LLP.
23.2 Consent of Andrea D. Kantor (contained in Exhibit 5.1).
24.1 Powers of Attorney.*
99.1 Form of Right of First Refusal Agreement. Previously filed in
connection with Amendment No. 3 to the GSE Systems, Inc. Form S-1
Registration Statement as filed with the Securities and Exchange
Commission on July 24, 1995 and incorporated herein by reference.
* Previously filed
Item 17. Undertakings.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
of 1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-2 and has duly caused this Amendment No. 1 on
Form S-2 to Registration Statement on Form S-3 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Columbia, the State of
Maryland, on the 23rd day of August, 2005.
GSE SYSTEMS, INC.
BY: /s/ John V. Moran
--------------------------------
Name: John V. Moran
Title: Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the 23rd day of August, 2005.
*
--------------------------
John V. Moran
Chief Executive Officer and Director
(Principal Executive Officer)
*
--------------------------
Jeffery G. Hough
Senior Vice President and Chief
Financial Officer and Director
(Principal Financial and Accounting
Officer)
*
--------------------------
Jerome I. Feldman
Chairman of the Board
*
--------------------------
Dr. Sheldon L. Glashow
Director
*
--------------------------
Scott N. Greenberg
Director
*
--------------------------
Dr. Roger Hagengruber
Director
*
--------------------------
Chin-our Jerry Jen
Director
*
--------------------------
Andrea Kantor
Director
*
--------------------------
Joseph W. Lewis
Director
*
--------------------------
George J. Pedersen
Director
*
--------------------------
Douglas Sharp
Director
* By: /s/ Jeffery G. Hough
----------------------------------------
Jeffery G. Hough, Attorney-in-Fact
Pursuant to Power of Attorney, dated June 30, 2005
EXHIBIT INDEX
Number Description
------ -----------
3.1 Third Amended and Restated Certificate of Incorporation of the Company.
Previously filed in connection with the GSE Systems, Inc. Form 8-K as
filed with the Securities and Exchange Commission on October 24,
2001 and incorporated herein by reference.
3.2 Form of Amended and Restated Bylaws of the Company. Previously filed in
connection with Amendment No. 1 to the GSE Systems, Inc. Form S-1
Registration Statement as filed with the Securities and Exchange
Commission on June 14, 1995 and incorporated herein by reference.
4.1 Specimen Common Stock Certificate of the Company. Previously filed in
connection with Amendment No. 3 to the GSE Systems, Inc. Form S-1
Registration Statement as filed with the Securities and Exchange
Commission on July 24, 1995 and incorporated herein by reference.
5.1 Opinion of Andrea D. Kantor.
10.1 Agreement among ManTech International Corporation, National Patent
Development Corporation, GPS Technologies, Inc., General Physics
Corporation, Vattenfall Engineering AB and GSE Systems, Inc. dated as of
April 13, 1994). Previously filed in connection with the GSE Systems,
Inc. Form S-1 Registration Statement as filed with the Securities and
Exchange Commission on April 24, 1995 and incorporated herein by
reference.
10.2 GSE Systems, Inc. 1995 Long-Term Incentive Plan, amended as of June 16,
2005. Previously filed in connection with the GSE Systems, Inc. Form DEF
14A as filed with the Securities and Exchange Commission on May 31, 2005
and incorporated herein by reference.
10.3 Form of Option Agreement Under the GSE Systems, Inc. 1995 Long-Term
Incentive Plan. Previously filed in connection with the GSE Systems,
Inc. Form 10-K as filed with the Securities and Exchange Commission on
March 22, 1996 and incorporated herein by reference.
10.4 Office Lease Agreement between Sterling Rutherford Plaza, L.L.C. and GSE
Systems, Inc. (dated as of February 10, 1998). Previously filed in
connection with the GSE Systems, Inc. Form 10-K as filed with the
Securities and Exchange Commission on March 21, 1998 and incorporated
herein by reference.
10.5 Office Lease Agreement between Red Branch Road, L.L.C. and GSE Systems,
Inc. dated February 10, 1998). Previously filed in connection with the
GSE Systems, Inc. Form 10-K as filed with the Securities and
Exchange Commission on March 21, 1998 and incorporated herein by
reference.
10.6 Warrant Agreements with GP Strategies and ManTech International
Corporation (dated September 13, 1999). Previously filed in connection
with the GSE Systems, Inc. Form 8-K as filed with the Securities and
Exchange Commission on August 15, 2001 and incorporated herein by
reference.
10.7 Change of Control Agreements between GSE Systems, Inc. and Jerry Jen and
Jeffery G. Hough (dated March 10, 2000). Previously filed in connection
with the GSE Systems, Inc. Form 8-K as filed with the Securities and
Exchange Commission on August 1, 2001 and incorporated herein by
reference.
10.8 $1,000,000 promissory note dated June 25, 2001 to ManTech International
Corporation. Previously filed in connection with the GSE Systems, Inc.
Form 8-K as filed with the Securities and Exchange Commission on
August 1, 2001 and incorporated herein by reference.
10.9 Preferred Stock Issuance Agreement by and between GSE Systems, Inc. and
ManTech International Corporation (dated December 5, 2001). Previously
filed in connection with the GSE Systems, Inc. Form 8-K as filed with
the Securities and Exchange Commission on December 12, 2001 and
incorporated herein by reference.
10.10 Asset Sale and Purchase Agreement between GSE Systems, Inc. and Novatech
LLC dated September 25, 2003. Previously filed in connection with the
GSE Systems, Inc. Form 8-K as filed with the Securities and Exchange
Commission on October 10, 2003 and incorporated herein by reference.
10.11 Management Services Agreement between GSE Systems, Inc. and GP
Strategies Corporation dated January 1, 2004. Previously filed in
connection with the GSE Systems, Inc. Form 10-K filed with the
Securities and Exchange Commission n April 14, 2004 and incorporated
herein by reference.
10.12 First Amendment dated March 30, 2004 to the Financing and Security
Agreement among General Physics Corporation, Skillright, Inc., GSE
Systems, Inc., GSE Power Systems, Inc., and MSHI, Inc. and Wachovia
Bank, National Association. Previously filed in connection with the GSE
Systems, Inc. Form 10-K filed with the Securities and Exchange
Commission on April 14, 2004 and incorporated herein by reference.
10.13 Third Amendment dated July 30, 2004 to the Financing and Security
Agreement among General Physics Corporation, Skillright, Inc., GSE
Systems, Inc., GSE Power Systems, Inc. and MSHI, Inc. and Wachovia Bank
National Association. Previously filed in connection with the GSE
Systems, Form 10-Q filed with the Securities and Exchange Commission on
November 14, 2004 and incorporated herein by reference.
10.14 Forbearance letter dated August 4, 2005. Previously filed in connection
with the GSE Systems, Inc. Form 10-Q filed with the Securities and
Exchange Commission on August 9, 2005.
23.1 Consent of KPMG LLP.
23.2 Consent of Andrea D. Kantor (contained in Exhibit 5.1).
24.1 Powers of Attorney.*
99.1 Form of Right of First Refusal Agreement. Previously filed in connection
with Amendment No. 3 to the GSE Systems, Inc. Form S-1 Registration
Statement as filed with the Securities and Exchange Commission on
July 24, 1995 and incorporated herein by reference.
* Previously filed