1 SPECIALIZED AUDIO LABORATORIES, INC. EXHIBIT 11.1 COMPUTATION OF LOSS PER COMMON SHARE NINE MONTH FOUR MONTHS FISCAL YEARS ENDED PERIOD ENDED FISCAL YEAR ENDED ENDED ------------------------------------ SEPTEMBER 30, DECEMBER 31, DECEMBER 31, AUGUST 31, AUGUST 31, AUGUST 31, 1996 1995 1994 1994 1993 1992 -------------------------------------------------------------------------------------- PRIMARY EARNINGS PER COMMON SHARE: Weighted Average Common Shares 18,487,584 15,933,516 14,329,235 12,376,579 10,518,998 7,295,073 Weighted Average Escrowed Performance Shares(1) (5,776,700) (5,776,700) (5,776,700) (5,485,033) (4,776,700) (4,776,700) --------------------------------------------------------------------------------------- Adjusted Weighted Average Common Shares 12,710,884 10,158,816 8,552,536 6,891,548 5,740,296 2,518,373 ====================================================================================== Net Loss for Period (3,630,580) (3,241,285) (1,193,261) (1,806,367) (2,103,417) (1,088,294) ====================================================================================== Primary Loss Per Share (0.29) (0.32) (0.14) (0.26) (0.37) (0.42) ====================================================================================== FULLY DILUTED EARNINGS PER COMMON SHARE: Adjusted Weighted Average Common Shares 12,710,884 10,156,816 8,552,535 6,891,546 5,740,298 2,518,373 Weighted Average Escrowed Performance Shares(1) 5,776,700 5,776,700 5,776,700 5,485,033 4,776,700 4,778,700 Shares to be Issued on Option Exercise(2) 702,640 806,068 621,486 648,836 444,585 431,667 Shares to be Issued on Warrant Exercise(2) 82,386 312,704 23,143 0 71,385 233,333 -------------------------------------------------------------------------------------- Fully Diluted Weighted Average Common Shares 19,252,612 17,052,286 14,873,854 13,025,417 11,032,958 7,960,073 ====================================================================================== Net Loss for Period (from above) (3,630,580) (3,241,285) (1,193,261) (1,808,387) (2,103,417) (1,068,294) ====================================================================================== Fully Diluted Loss Per Share (0.19) (0.19) (0.08) (0.14) (0.19) (0.13) ====================================================================================== - ---------- (1) Escrowed performance shares have been excluded from the determination of primary loss per share as the conditions for release have not yet been attained. (2) Outstanding options and warrants to purchase common shares have not been included in the calculation of primary loss per share as the effect of including such securities would be antidilutive. For purposes of computing the fully diluted loss per share, the treasury stock method has been used and the shares have been treated as outstanding for the entire period.