SC 13G/A 1 gsesystemsamended4thamend.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13G (Under the Securities Exchange Act of 1934) (Amendment No.4)* GSE Systems, Inc. ------------------------------------------------------ (Name of Issuer) Common Stock --------------------------------- (Title of Class of Securities) 36227K106 ----------------------- (Cusip Number) December 31, 2009 _______________________________ (Date of event which requires filing of this statement) Check the appropriate box to designate the rule pursuant to which this schedule is filed: [X] Rule 13d-1 (b) Babson Capital Management LLC [X] Rule 13d-1 (c) Cobbs Wharf Master Fund, L.P. [ ] Rule 13d-1 (d) *The remainder of this cover page shall be filled out for a reporting person's initial filing of this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter the disclosures provided in a prior cover page. The information required in the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act, but shall be subject to all other provisions of the Act (however, see the Notes.) [Continued on the following page(s)] Page 1 of 8 Pages CUSIP No 36227K106 Page 2 of 8 Pages ______________________________________________________________ 1. Name of reporting person S.S. or I.R.S. identification no. of above person Babson Capital Management LLC 51-0504477 ---------------------------------------------------------------- 2. Check the appropriate box if a member of a group (a)( ) (b)( X ) ---------------------------------------------------------------- 3. SEC use only ---------------------------------------------------------------- 4. Citizenship or place of organization Delaware ---------------------------------------------------------------- 5. Sole Voting Power 472,100 Number of ----------------------------- shares 6. Shared Voting Power beneficially owned by 0 each ----------------------------- Reporting 7. Sole Dispositive Power person with 472,100 ----------------------------- 8. Shared Dispositive Power 0 --------------------------------------------------------------- 9. Aggregate amount beneficially owned by each reporting person 472,100 --------------------------------------------------------------- 10. Check if the aggregate amount in row (9) excludes certain shares ---------------------------------------------------------------- 11. Percent of class represented by amount in row 9 2.49% ---------------------------------------------------------------- 12. Type of Reporting person IA CUSIP No 36227K106 Page 3 of 8 Pages ______________________________________________________________ 1. Name of reporting person S.S. or I.R.S. identification no. of above person Cobbs Wharf Master Fund, L. P. ---------------------------------------------------------------- 2. Check the appropriate box if a member of a group (a)( ) (b)( X ) ---------------------------------------------------------------- 3. SEC use only ---------------------------------------------------------------- 4. Citizenship or place of organization Grand Cayman ---------------------------------------------------------------- 5. Sole Voting Power 0 Number of ----------------------------- shares 6. Shared Voting Power beneficially owned by 0 each ----------------------------- Reporting 7. Sole Dispositive Power person with 0 ----------------------------- 8. Shared Dispositive Power 0 --------------------------------------------------------------- 9. Aggregate amount beneficially owned by each reporting person 0 --------------------------------------------------------------- 10. Check if the aggregate amount in row (9) excludes certain shares ---------------------------------------------------------------- 11. Percent of class represented by amount in row 9 0% ---------------------------------------------------------------- 12. Type of Reporting person PN CUSIP No 36227K106 Page 4 of 8 Pages ______________________________________________________________ SCHEDULE 13G ITEM 1(A): NAME OF ISSUER: GSE Systems, Inc. 1(B): ADDRESS OF ISSUER'S PRINCIPAL EXECUTIVE OFFICES: 1332 Londontown Blvd., Suite 200 Sykesville, MD 21784 ITEM 2(A): NAME OF PERSON FILING: (i) Babson Capital Management LLC (Babson) as investment adviser. (ii) Cobbs Wharf Master Fund, L.P. (Cobbs Wharf) ITEM 2(B): ADDRESS OF PRINCIPAL BUSINESS OFFICE: Babson Capital Management LLC 470 Atlantic Avenue Boston, MA 02210-2208 Cobbs Wharf Master Fund, L.P. 470 Atlantic Avenue Boston, MA 02210-2208 ITEM 2(C): CITIZENSHIP: See Cover Page ITEM 2(D): TITLE OF CLASS OF SECURITIES: See Cover Page ITEM 2(E): CUSIP NUMBER: See Cover Page ITEM 3: TYPE OF REPORTING PERSON: If this statement is filed pursuant to Sections 240.13d-1 (b) or 240.13d-2 (b) or (c), check whether the filing person is a: (e) [x] An investment adviser in accordance with Section 240.13d-1 (b) (1) (ii) (E) ITEM 4: OWNERSHIP: (a)AMOUNT BENEFICIALLY OWNED: Babson Capital Management LLC (Babson Capital) in its capacity as investment adviser, may be deemed the beneficial owner of 472,100 shares of common stock of the Issuer which are owned by investment advisory client(s). This constitutes 2.49% of the shares outstanding based on 18,925,370 shares of common stock outstanding as reported in the Issuer's Quarterly Report on Form 10-Q for the period ending September 30, 2009. Cobbs Wharf Master Fund, L.P. no longer beneficially owns shares. Cobbs Wharf Master Fund, L.P., a Cayman Islands limited partnership to which Babson Capital served as investment adviser, was liquidated and has ceased operations and the shares of GSE Systems, Inc. previously reported in the Schedule 13G amendment(3), were sold as part of the Fund's liquidation. CUSIP No 36227K106 Page 5 of 8 Pages ______________________________________________________________ ITEM 5: OWNERSHIP OF FIVE PERCENT OR LESS OF A CLASS: If this statement is being filed to report the fact that as of the date hereof the reporting person has ceased to be the beneficial owner of more than five per cent of the class of securities check the following: [x] ITEM 6: OWNERSHIP OF MORE THAN FIVE PERCENT ON BEHALF OF ANOTHER PERSON: N/A ITEM 7: IDENTIFICATION AND CLASSIFICATION OF THE SUBSIDIARY WHICH ACQUIRED THE SECURITY BEING REPORTED ON BY THE PARENT HOLDING COMPANY: N/A ITEM 8: IDENTIFICATION AND CLASSIFICATION OF MEMBERS OF THE GROUP: N/A ITEM 9: NOTICE OF DISSOLUTION OF GROUP: N/A ITEM 10: CERTIFICATION: BABSON CAPITAL MANAGEMENT LLC CERTIFICATION: By signing below I certify that, to the best of my knowledge and belief, the securities referred to above were acquired and are held in the ordinary course of business and were not acquired and are not held for the purpose of or with the effect of changing or influencing the control of the issuer of the securities and were not acquired and are not held in connection with or as a participant in any transaction having such purpose or effect. SIGNATURE: After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Date: February 12, 2010 Babson Capital Management LLC Signature: // Melissa Lagrant // Name/Title: Melissa Lagrant Managing Director CUSIP No 36227K106 Page 6 of 8 Pages ______________________________________________________________ COBBS WHARF MASTER FUND, L.P.CERTIFICATION: By signing below I certify that, to the best of my knowledge and belief, the securities referred to above were acquired and are held in the ordinary course of business and were not acquired and are not held for the purpose of or with the effect of changing or influencing the control of the issuer of the securities and were not acquired and are not held in connection with or as a participant in any transaction having such purpose or effect. SIGNATURE: After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Date: February 12, 2010 Cobbs Wharf Master Fund, L.P. By: Cobbs Wharf Management, LLC Its General Partner By: // Melissa Lagrant // Name: Melissa Lagrant Title: Managing Director CUSIP No 36227K106 Page 7 of 8 Pages ______________________________________________________________ JOINT FILING AGREEMENT This will confirm the agreement by and among all the undersigned that the amended Schedule 13G filed on or about this date and any future amendments thereto with respect to the beneficial ownership by the undersigned of common shares of GSE Systems, Inc. is being filed on behalf of each of the undersigned in accordance with Rule 13d-1(k)(1). This agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. February 12, 2010 -------------------- Date Babson Capital Management LLC _____________________________ By: // Melissa Lagrant // Name: Melissa Lagrant Title: Managing Director February 12, 2010 -------------------- Date Cobbs Wharf Master Fund, L.P. _____________________________ By: Cobbs Wharf Management, LLC Its General Partner By: // Melissa Lagrant // Name: Melissa Lagrant Title: Managing Director CUSIP No 36227K106 Page 8 of 8 Pages ______________________________________________________________ February 12, 2010 Securities and Exchange Commission Operations Center Attn: Stop 0-7 6432 General Green Way Alexandria, VA 22312-2413 Re: SCHEDULE 13G ON BEHALF OF GSE SYSTEMS, INC. FOR THE YEAR ENDING DECEMBER 31, 2009 Dear Sir or Madam: Babson Capital Management LLC and Cobbs Wharf Master Fund, L.P. are filing today an amendment to the previously amended Schedule 13G through the EDGAR system as required by Section 240.13d-1(b) to reflect a change in reporting persons and a change in beneficial ownership of the outstanding stock of the above-mentioned issuer. Please note that the shares as to which this Schedule is filed are owned by investment advisory clients of Babson Capital Management LLC, which may be deemed a beneficial owner of the shares only by virtue of the direct or indirect investment discretion it possesses pursuant to the provisions of investment advisory agreements with such clients. A copy of the Schedule 13G is being sent to the issuer as required by Rule 13d-7. Comments or questions concerning the above may be directed to the undersigned at (617)761-3731. Sincerely, // Melissa Lagrant // Melissa Lagrant Managing Director