1 EXHIBIT 11.1 REALNETWORKS, INC. AND SUBSIDIARIES PRO FORMA NET LOSS PER SHARE CALCULATION With SAB 83 Adjustment Year ended Nine months ended December 31, September 30, 1996 1997 ------------ ----------------- SUMMARY INFORMATION Net loss $(3,789,245) $(8,574,716) Accretion of difference between carrying amount and redemption amount of redeemable, convertible preferred stock (31,000) (345,900) ----------- ----------- Net loss used in calculation of pro forma net loss per share $(3,820,245) $(8,920,616) =========== =========== Common shares outstanding at beginning of period 36,948 535,491 Weighted average common stock issued upon exercise of employee stock options 283,874 320,396 Weighted average common stock issued for services -- 667 Stock warrants and options -- not dilutive (SAB 83 effect included in adjustment below) -- -- ----------- ----------- Weighted average outstanding common stock 320,822 856,554 Assumed conversion of redeemable, convertible preferred stock and convertible preferred stock 25,396,829 25,396,829 SAB 83 adjustment 2,061,670 2,061,670 ----------- ----------- Shares used in computing pro forma net loss per share 27,779,321 28,315,053 =========== =========== Pro forma net loss per share $ (0.14) $ (0.32) =========== ===========