EXHIBIT 11.1 ZITEL CORPORATION COMPUTATION OF NET INCOME (LOSS) PER COMMON AND COMMON EQUIVALENT SHARE Year Ended September 30, ------------------------------------- 1994 1995 1996 ----------- ----------- ----------- Average common shares outstanding 12,654,000 14,158,000 14,726,000 Computation of incremental outstanding shares Net effect of dilutive stock options based on treasury stock method 0 1,008,000 900,000 12,654,000 15,166,000 15,626,000 Net income (loss) $(6,961,000) $8,526,000 $4,049,000 Net income (loss) per share $ (0.55) $ 0.56 $ 0.26 Primary and fully diluted income (loss) per share differ by less than one cent in all periods. Page 43