Notice of Proposed Sale of Securities

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 144

NOTICE OF PROPOSED SALE OF SECURITIES
PURSUANT TO RULE 144 UNDER THE SECURITIES ACT OF 1933

ATTENTION: TRANSMIT FOR FILING 3 COPIES OF THIS FORM CONCURRENTLY WITH EITHER PLACING AN ORDER WITH A BROKER TO EXECUTE A SALE OR EXECUTING A SALE DIRECTLY WITH A MARKET MAKER.


1(a) NAME OF ISSUER (Please type or print)
(b) IRS IDENT. NO.
(c) S.E.C. FILE NO.
GSE Systems, Inc.
52-1868008
001-14785


1(d) ADDRESS OF ISSUER
STREET
CITY
STATE
ZIP CODE
(e) TELEPHONE NO.
 
7133 Rutherford Rd.
Suite 200
Baltimore,
MD
21244
Area Code
410
Number
277-3780



2(a) NAME OF PERSON FOR WHOSE
SECURITIES ARE TO BE SOLD
(b) I.R.S. NO.
(c) RELATIONSHIP
TO ISSUER
(d) ADDRESS STREET
CITY
STATE
ZIP CODE
Gill Grady
224-82-7962
Officer
1650 Village Green
Woodbine
MD
21797



INSTRUCTION: The person filing this notice should contact the issuer to obtain the I.R.S. Identification Number
and the SEC File Number


3(a)
Title of the Class of Securities To Be Sold
Name and Address of Each Broker Through Whom the Securities are to be Offered or Each Market Maker who is Acquiring the Securities
SEC USE ONLY
 
(c)
Number of Shares or Other Units To Be Sold
 
(See instr. 3c))
(d)
Aggregate Market Value
(e)
Number of Shares or Other Units Outstanding
(See instr. 3(e))
(f)
Approximate Date of Sale
(See instr. 3(f))
(MO. DAY YR.)
(g)
Name of Each Securities Exchange
(See instr. 3(g))
Broker-Dealer
File Number
Common Stock
TD Ameritrade
1005 N. Ameritrade Pl.
Bellevue, NE 68005
 
15,000
54,150
9,441,490
08/18/06
Amex


INSTRUCTIONS:
1.  
(a) Name of issuer.
(b) Issuer's IRS Identification Number.
(c) Issuer's SEC file number, if any.
(d) Issuer's address, including zip code.
(e) Issuer's telephone number, including area code.

2.  
(a) Name of person for whose account the securities are to be sold.
(b) Such person's or I.R.S. Identification number, if such a person is an entity.
(c) Such person's relationship to the issuer (e.g., officer, director, 10 percent stockholder,
or member of immediate family of any of the foregoing).
(d) Such person's address, including zip code.

3.  
(a) Title of the class of securities to be sold
(b) Name and address of each broker through whom the securities are intended to be sold.
(c) Number of shares or other units to be sold (if debt securities, give the aggregate face amount).
(d) Aggregate market value of the securities to be sold as of a specified date within 10 days prior
to the filing of this notice.
(e) Number of shares or other units of the class outstanding, or if debt securities the face amount
thereof outstanding, as shown by the most recent report or statement published by the issuer.
(f) Approximate date on which the securities are to be sold.
(g) Name of each securities exchange, if any, on which the securities are intended to be sold.




TABLE I--SECURITIES TO BE SOLD

Furnish the following information with respect to the acquisition of the
securities to be sold and with respect to the payment of all or any part of the
purchase price or other consideration therefor:



Title of the Class
Date you Acquired
Nature of Acquisition Transaction
Name of Person from Whom Acquired
(If gift, also give date donor acquired)
Amount of Securities Acquired
Date of Payment
Nature of Payment
Common
08/11/06
Purchase through conversion of stock options
GSE Systems, Inc.
15,000
08/11/06
cash




INSTRUCTIONS:
1.  
If the securities were purchased and full payment therefore was not made in
cash at the time of purchase, explain in the table or in a note thereto the
nature of the consideration given. If the consideration consisted of any
note or other obligation, or if payment was made in installments describe
the arrangement and state when the note or other obligation was discharged
in full or the last installment paid.
2.  
If within two years after the acquisition of the securities the person for
whose account they are to be sold had any short positions, put or other
option to dispose of securities referred to in paragraph (d)(3) of Rule 144,
furnish full information with respect thereto.



TABLE II--SECURITIES SOLD DURING THE PAST THREE MONTHS

Furnish The Following Information as to All Securities of The Issuer Sold During The Past Three Months By The Person For Whose Account The Securities Are To Be Sold.


Name and Address of Seller
Title of Securities Sold
Date of Sale
Amount of Securities Sold
Gross Proceeds
None
        



REMARKS:
 

 
INSTRUCTIONS:
See the definition of "person" in paragraph (a) of Rule 144. Information is to be given not only as to the person for whose account the securities are to be sold but also as to all other persons included in that definition. In addition, information shall be given as to sales by all persons whose sales are required by paragraph (e) of Rule 144 to be aggregated with sales for the account of the person filing this notice.
 
ATTENTION:
The person for whose account the securities to which this notice relates are to be sold hereby represents by signing this notice that he does not know any material adverse information in regard to the current and prospective operations of the issuer of the securities to be sold which has not been publicly disclosed.

08/11/06
----------------------------------------
(DATE OF NOTICE)
 
 
/s/  Gill Grady
----------------------------------------
(SIGNATURE)

The notice shall be signed by the persons for whose account the securities are to be sold. At least one copy of the notice shall be manually signed. Any copies not manually signed shall bear typed or printed signatures.

ATTENTION: INTERNATIONAL MISSTATEMENTS OR OMISSION OF FACTS CONSTITUTE FEDERAL CRIMINAL VIOLATIONS (SEE 18 U.S.C. 1001).