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                                                               EXHIBIT 11.1

                           PREFERRED NETWORKS, INC.
                 COMPUTATION OF PRO FORMA NET LOSS PER SHARE

<TABLE>
<CAPTION>
                                                        Three Months      Nine Months        Nine Months 
                                                           Ended             Ended              Ended       
                                                        September 30,     September 30,      September 30,
                                                            1995              1996               1995   
                                                            ----              ----               ----   
<S>                                                      <C>                 <C>                <C>       
Primary and fully diluted:                                                                                
   Weighted average common stock outstanding                                                              
      during the period ................................    4,138,496       12,139,292         4,138,496  
   Series A Redeemable Convertible Preferred                                                              
      Stock and Series B Redeemable                                                                       
      Convertible Preferred Stock dividends                                                               
      through January 31, 1996 converted                                                                  
      into Common Stock upon consummation                                                                 
      of initial public offering (1) ...................      855,492          200,336           855,492  
   Effect of common Stock equivalents issued                                                              
      subsequent to December 18, 1994                                                                     
      computed in accordance with the treasury                                                            
      stock method as required by the SEC (2) ..........    5,019,913        1,112,483         5,019,913  
                                                         ------------     ------------      ------------  
          Total ........................................   10,013,901       13,452,111        10,013,901  
                                                         ============     ============      ============  
                                                                                                          
                                                                                                          
Net loss ............................................... $   (676,365)    $ (5,486,486)     $ (1,704,862) 
                                                         ============     ============      ============  
                                                                                                          
Pro forma net loss per share of Common Stock ........... $       (.07)    $       (.41)     $       (.17) 
                                                         ============     ============      ============  
</TABLE>



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(1)     Pro forma net loss per share reflects securities and dividends converted
        into Common Stock upon consummation of the initial public offering as if
        such conversion had occurred at the beginning of the fiscal year. A
        portion of Series A Redeemable Convertible Preferred Stock and all of
        Series B Redeemable Convertible Preferred Stock is excluded here but
        reflected below as cheap stock.

(2)     Pursuant to Securities and Exchange Commission Staff Accounting Bulletin
        No. 83, Common Stock equivalents (including a portion of Series A
        Redeemable Convertible Preferred Stock and all of Series B Redeemable
        Convertible Preferred Stock) issued at prices equal to or below the
        initial public offering price per share ("cheap stock") during the
        twelve month period immediately preceding the initial filing date of the
        Company's Registration Statement for its public offering have been
        included as outstanding for all periods presented prior to the initial
        public offering.