<PAGE> 1
EXHIBIT 11.1
BSQUARE CORPORATION
STATEMENT REGARDING COMPUTATION OF EARNINGS PER SHARE
(in thousands, except per share amounts)
The following table provides a reconciliation of the numerators and
denominators used in calculating basic and diluted earnings per share for the
three and six-month periods ended June 30, 2000 and 1999:
<TABLE>
<CAPTION>
Three Months Six Months
Ended June 30, Ended June 30,
--------------------- ---------------------
2000 1999 2000 1999
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net income (loss) (numerator diluted) $ (2,475) $ 442 $ (1,480) $ 871
Less: Accretion of mandatorily redeemable
Convertible preferred stock -- (30) -- (58)
-------- -------- -------- --------
Net income (loss) available to common shareholders
(numerator basic) $ (2,475) $ 412 $ (1,480) $ 813
======== ======== ======== ========
Shares (denominator basic):
Weighted average common shares outstanding 33,076 18,476 32,821 18,467
======== ======== ======== ========
Basic earnings (loss) per share $ (0.07) $ 0.02 $ (0.05) $ 0.04
======== ======== ======== ========
Shares (denominator diluted)(1):
Weighted average common shares outstanding 33,076 18,476 32,821 18,467
Mandatorily redeemable convertible preferred stock -- 8,333 -- 8,333
Common stock equivalents(2) -- 2,336 -- 2,145
-------- -------- -------- --------
Weighted average common shares and equivalents outstanding 33,076 29,145 32,821 28,945
======== ======== ======== ========
Diluted earnings (loss) per share $ (0.07) $ 0.02 $ (0.05) $ 0.03
======== ======== ======== ========
</TABLE>
(1) Share amounts presented for 1999 give effect to the issuance of 261,391
shares to the former shareholders of BlueWater Systems to effect its
acquisition by BSQUARE. The transaction was accounted for as a pooling
of interests.
(2) As the Company incurred a net loss attributable to common shareholders
for the three and six-month periods ended June 30, 2000, the effect of
common stock equivalents is excluded in those periods, as their effects
are anti-dilutive.
