[aquaphile]

1. Retain a _good_ securities and corporate lawyer.

2. If you want to have an "independent" valuation done, use a local boutique investment banker. Your lawyer or accountant should be able to recommend someone to help with a "fair value opinion." This may be overkill, but since we don't know large the potential deal is, I thought I'd mention it.

3. Be aware that if they buy/license your product, the proceeds will be recognized as income by both the federal and state tax authorities at both the corporate and personal levels. You could end up giving the government as much as 50% of the gross proceeds (35% corporate plus 15% CA personal income tax). If you are a single product company, it is much more preferable to sell 100% of your stock to them. An acquisition of 100% of your corporate stock means that you should only end up paying 15% long-term capital gains taxes.