7.  Intangible Assets

Intangible assets consisted of the following (in thousands):

The Company recorded amortization expense of $0.2 million and $0.4 million for the three and six months ended September 30, 2011, respectively. The Company recorded amortization expense of $0.2 million and $0.5 million for the three and six months ended September 30, 2010, respectively.

Expected future amortization expense of intangible assets as of September 30, 2011 is as follows:

Intangible assets consisted of the following (in thousands):

Expected future amortization expense of intangible assets as of March 31, 2011 is as follows:

The manufacturing license provides the Company with the ability to manufacture recuperator cores previously purchased from Solar Turbines Incorporated (“Solar”). The Company is required to pay a per-unit royalty fee over a seventeen-year period for cores manufactured and sold by the Company using the technology. Royalties of approximately $19,800 and $18,200 were earned by Solar for the three months ended September 30, 2011 and 2010, respectively. Royalties of approximately $38,400 and $28,400 were earned by Solar for the six months ended September 30, 2011 and 2010, respectively. Earned royalties of approximately $19,800 and $17,700 were unpaid as of September 30, 2011 and March 31, 2011, respectively, and are included in accrued expenses in the accompanying balance sheets.

On February 1, 2010, the Company acquired the 100 kW (“TA100”) microturbine product line from Calnetix Power Solutions, Inc. (“CPS”) to expand the Company’s microturbine product line and to gain relationships with distributors to supply the Company’s products. The acquired intangible assets include technology, parts and service customer relationships, TA100 customer relationships, backlog and trade name. These intangible assets have estimated useful lives between one and ten years. The fair value assigned to identifiable intangible assets acquired has been determined primarily by using the income approach. Purchased identifiable intangible assets, except for backlog, are amortized on a straight-line basis over their respective useful lives and classified as a component of cost of goods sold or selling, general and administrative expenses based on the function of the underlying asset. Backlog is amortized on a per unit basis as the backlog units are sold and presented as a component of cost of goods sold.