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                                                                    EXHIBIT 11.1

 
                         SUMMIT MEDICAL SYSTEMS, INC.
                 STATEMENT RE: SUPPLEMENTAL COMPUTATION OF NET
                            INCOME (LOSS) PER SHARE


<TABLE> 
<CAPTION> 
                                                               Year ended December 31,
                                                  ---------------------------------------------------
                                                      1996               1995               1994        
                                                  ---------------------------------------------------
<S>                                               <C>              <C>               <C>             
PRIMARY EARNINGS PER SHARE                                                                          
                                                                                                    
  Weighted average shares outstanding                 9,398,931       5,884,570         4,223,339    
                                                                                                    
  SAB No. 83 shares--for stock options granted                                                      
  at exercise prices less than the 12 months                                                        
  preceding the initial public offering                                                             
  using the treasury method                                 -            64,048           115,524    
                                                                                                    
  Additional shares from the conversion of                                                          
  all series of convertible preferred stock                 -           628,304           591,050    
                                                  ---------------------------------------------------
                                                      9,398,931       6,580,922         4,929,913    
                                                  ===================================================
                                                                                                    
  Net loss                                        $ (12,836,132)   $ (9,023,854)     $ (1,173,190)   
                                                  ===================================================
                                                                                                    
                                                                                                    
  Net loss per share                              $       (1.37)   $      (1.37)     $      (0.24)   
                                                  ===================================================
                                                                                                    
FULLY DILUTED EARNINGS PER SHARE:                                                                   
  Weighted average shares outstanding                 9,398,931       5,884,570         4,223,339    
                                                                                                    
  SAB No. 83 shares--for stock options granted                                                      
  at exercise prices less than the 12 months                                                        
  preceding the initial public offering                                                             
  using the treasury method                                 -            68,048           115,524    
                                                                                                    
  Additional shares from the conversion of                                                          
  all series of convertible preferred stock                 -           626,304           591,050    
                                                  ---------------------------------------------------
                                                      9,396,931       6,580,922         4,929,913    
                                                  ===================================================
                                                                                                    
   Net loss                                       $ (12,836,132)   $ (9,023,854)     $ (1,173,190)   
                                                                                                    
   Net loss per share                             $       (1.37)   $      (1.37)     $      (0.24)   
                                                  ===================================================
</TABLE>