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Securities registered pursuant to Section 12(b) of the Act:

 

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On April 14, 2020, GSE Systems, Inc. (the “Company”) issued a press release announcing its financial results for the year ended December 31, 2019 (the “Earnings Release”) and furnished the required related Current Report on Form 8-K (the “Report”) to the U.S.  Securities and Exchange Commission on the same day.

Before June 15, 2020, the Company concluded that, as a result of the global COVID-19 pandemic’s impact on the Company’s operating performance and the financial covenants contained in the Company’s debt agreements with Citizen’s Bank related to such operating performance, the Company believes that it is probable that the Company will not meet the requirements of its financial covenants during all of 2020. If the Company’s debt becomes due and payable as a result of a covenant violation, it calls into question the Company’s ability to continue as a going concern. As a result of the foregoing, the Company no longer believes that it can rely upon forecasted future earnings and their impact on future taxable income in its valuation allowance analysis. Accordingly, as reflected in the Company’s annual report filed on Form 10-K on June 11, 2020, the Company has determined that it does not have sufficient positive, objectively verifiable evidence to substantiate the realizability of the U.S. deferred tax assets at December 31, 2019 and, therefore, a valuation allowance is appropriate on its U.S. deferred tax assets in the amount of $6.9 million, with the exception of its alternative minimum tax credit that will be refunded upon the filing of its 2019 U.S. federal income tax return. Further, due to a history of losses in the U.K. and Sweden and the inability to rely upon forecasted future earnings in China and Slovakia due to the going concern opinion, the Company does not have sufficient positive, objectively verifiable evidence to substantiate the recovery of the deferred tax assets for its U.K., Swedish, and Chinese deferred tax assets at December 31, 2019. Accordingly, a full valuation allowance of $0.7 million has been established on these deferred tax assets, predominantly comprised of net operating losses.

•	The Company experienced an operating loss of $(1.9) million rather than $(1.5) million as disclosed in the Earnings Release;

•	The Company incurred a net loss of $(6.6) million or $(0.32) per diluted share rather than net income of $(0.6) million and $0.03 per diluted share, respectively.

•	Adjusted net income was $6.0 million or $0.29 per diluted share rather than $1.2 million and $0.06 per diluted share, respectively.

 Finally, the Company recorded tax expense of $6.6 million for the quarter ended December 31, 2019 and, because the Company does not believe that it is more likely than not that they will be able to realize their deferred tax assets for its U.S. and foreign deferred tax assets at December 31, 2019, established a $7.6 million valuation allowance for its net deferred tax assets.

 No other changes were required to the information disclosed in the Earnings Release and none of the foregoing impacts revenue, gross profit or Adjusted EBITDA for either the year- or quarter-ended December 31, 2019.

 A copy of the June 15, 2020 earnings release, reflecting the forgoing corrections, is attached hereto as an exhibit to this Form 8-K/A.

 The information furnished in this Item 2.02, including Exhibit 99.1 is not deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section. This information will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.

99.1 The press release of GSE Systems, Inc., dated June 15, 2020, announcing financial results for the quarter and year ended December 31, 2019.