7.  Intangible Assets

Intangible assets consisted of the following (in thousands):

The Company recorded amortization expense of $0.1 million and $0.2 million for the first quarter of Fiscal 2013 and Fiscal 2012, respectively. Intangible assets consisted of the following (in thousands):

Expected future amortization expense of intangible assets as of June 30, 2012 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 $16,000 and $18,600 were earned by Solar for the first quarter of Fiscal 2013 and 2012, respectively. Earned royalties of approximately $16,000 and $17,500 were unpaid as of June 30, 2012 and March 31, 2012, respectively, and are included in accounts payable and 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.