Fully-Diluted Basis Law and Legal Definition
Fully diluted basis is a methodology for calculating any per share ratios whereby the denominator is the total number of shares issued by the company on the assumption that all warrants, options and preferred stocks are exercised. It is the assumption of the highest potential amount of common stock a company will have outstanding, regardless of vesting provisions and assuming all options and other securities like convertible notes are converted into common stock. That is, assume the highest share count possible given all the outstanding instruments that have the potential to convert into common stock.
