U.S. SECURITIES AND EXCHANGE COMMISSION


                             Washington, D.C. 20549


                                  Form 10 - QSB


                   Quarterly Report Under Section 13 or 15 (d)
                     of the Securities Exchange Act of 1934

                  For the Quarterly Period Ended March 31, 1997


                           Commission File No. 0-12968


                        INMEDICA DEVELOPMENT CORPORATION
        (Exact name of small business issuer as specified in its charter)



            Utah                                             87-0397815
(State or other jurisdiction of                  (I.R.S. Employer Identification
 incorporation of organization)                                Number)

                          60 South 600 East, Suite 150
                           Salt Lake City, Utah 84102
                    (Address of principal executive offices)

                  Registrant's telephone number: (801) 521-9300



Check  whether the issuer (1) filed all reports  required to be filed by section
13 or 15(d) of the  Exchange  Act of 1934 during the past 12 months (or for such
shorter period that the  registrant was required to file such reports),  and (2)
has been subject to such filing  requirements for the past 90 days: Yes[X] No[ ]


The number of shares outstanding of the registrant's only class of common stock,
par value $.001 per share, as of May 12, 1997 was 7,999,232 shares.


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<PAGE>



PART I - FINANCIAL INFORMATION                                       Page 1 of 2
------------------------------

Item 1.  Financial Statements


                 INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY

                      CONDENSED CONSOLIDATED BALANCE SHEET


                                     ASSETS


                                              March 31,
                                                1997
                                            (Unaudited)

        CURRENT ASSETS:
           Cash                             $  238,573
           Prepaid expenses                     15,043
                                            ----------

                Total current assets           253,616


        EQUIPMENT AND FURNITURE,
          at cost, less accumulated
          depreciation of $254,489               4,437


        OTHER ASSETS                             2,196
                                            ----------


                Total assets                $  260,249
                                            ===========
















            See notes to condensed consolidated financial statements.


                                        2

<PAGE>





                                                                     Page 2 of 2

                 INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY
                      CONDENSED CONSOLIDATED BALANCE SHEET


                      LIABILITIES AND STOCKHOLDERS' DEFICIT

                                              March 31,
                                                                             


        NOTE PAYABLE, less
              current portion                  355,000
                                            ----------

        STOCKHOLDERS' DEFICIT:
           Common stock, $.001 par value;
            20,000,000 shares authorized,
            7,999,232 issued and outstanding     7,999
           Preferred stock,  10,000,000 
            shares authorized; Series A
            preferred stock, cumulative 
            and convertible, $4.50 par 
            value, 1,000,000 shares
            designated, 25,356 shares
            issued and outstanding             114,102
           Additional paid-in capital        6,482,369
           Accumulated deficit              (6,758,975)     
                                            ----------

                Total stockholders'
                 deficit                      (154,505)
                                            ----------
                Total liabilities and
                 stockholders' deficit      $  260,249
                                            ==========


            See notes to condensed consolidated financial statements.

                                        3

<PAGE>




                 INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS



                                              For the Three
                                               Months Ended
                                                 March 31,
                                             1997        1996
                                          (Unaudited) (Unaudited)



          TOTAL OPERATING REVENUE          $     -0-         -0-
                                           ---------   ---------


          OPERATING EXPENSES:
            General and
             administrative                   47,840      36,716
            Research and
             development                      31,683      22,029
                                           ---------      ------
            Total operating expenses          79,523      58,745
                                           ---------      ------

          LOSS FROM OPERATIONS               (79,523)    (58,745)
                                           ----------    -------

          OTHER INCOME (EXPENSES):
            Miscellaneous income                   6         -
            Interest expense                  (9,503)    (14,954)
                                           ---------   ---------

            Total other expense               (9,497)    (14,954)
                                           ---------   ---------

          NET LOSS                           (89,020)    (73,699)

          PREFERRED STOCK DIVIDEND            (2,282)     (7,550)
                                             -------    --------

          NET LOSS APPLICABLE TO
           COMMON SHARES                   $ (91,302) $  (81,249)
                                           ==========   =========
          Net loss
            per common share               $    (.01) $     (.01)
                                           ==========   =========

          Weighted average number
            of common shares outstanding   7,997,612   7,485,707
                                          ==========   =========

            See notes to condensed consolidated financial statements.

                                        4

<PAGE>



                                                                     Page 1 of 2


                 INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                           INCREASE (DECREASE) IN CASH

                                                    For the Three
                                                    Months Ended
                                                      March 31,
                                                   1997       1996
                                               (Unaudited) (Unaudited)

     CASH FLOWS FROM OPERATING ACTIVITIES:

       Net loss                                   (89,020)    (73,699)
       Adjustments to reconcile net
         loss to net cash provided by
         operating activities-
           Depreciation                               291         223
           Change in assets and liabilities-
             Decrease in royalties receivable     209,280     227,520
             Decrease in prepaid
               expenses                             7,297       6,677
             Increase (decrease) in accounts
               payable                              1,003      (3,004)
             Decrease in accrued payroll           (7,829)     (6,607)
            (Decrease) increase in interest
               payable                             (1,253)      9,202
             Decrease in convertible interest
               payable                                -        (3,909)
             Decrease in related-party
               payable                            (39,000)    (25,500)
                                                 ---------    -------

               Net cash provided by
                  operating activities             80,769     130,903
                                                 --------     -------

     CASH FLOWS FROM INVESTING ACTIVITIES:

               Purchase of equipment and
                 furniture                            -        (1,375)
                                                 ---------    -------

               Net cash used in
                 investing activities                 -        (1,375)
                                                 ---------    -------


            See notes to condensed consolidated financial statements.

                                        5

<PAGE>



                                                                     Page 2 of 2

                 INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                           INCREASE (DECREASE) IN CASH

                                                      For the Three
                                                       Months Ended
                                                         March 31,
                                                     1997        1996
                                                  (Unaudited) (Unaudited)

   CASH FLOWS FROM FINANCING ACTIVITIES:

     Principal payments on
      convertible debentures                      $    -      $ (22,768)
     Preferred stock dividends                     (2,282)       (7,550)
     Principal payments on note payable           (17,500)      (12,500)
                                                ----------      --------
     Net cash used in financing activities        (19,782)      (42,818)
                                                ----------      --------


   NET INCREASE IN CASH                            60,987        86,710

   CASH AT BEGINNING OF PERIOD                    177,586       113,732
                                                 --------      --------

   CASH AT END OF PERIOD                         $238,573      $200,442
                                                 ========      ========
















            See notes to condensed consolidated financial statements.

                                        6

<PAGE>





INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY


NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)


Note A--Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial  information and with the instructions to Form 10-QSB and Item 310b of
Regulation  SB.  Accordingly,  they do not  include all of the  information  and
footnotes  required by generally  accepted  accounting  principles  for complete
financial  statements.  These  consolidated  statements  include the accounts of
InMedica Development Corporation and its wholly owned subsidiary, MicroCor, Inc.
("MicroCor").  All material  intercompany  accounts and  transactions  have been
eliminated.

In the opinion of management,  all adjustments  (consisting of normal  recurring
adjustments)  considered  necessary for fair  presentation  have been  included.
Operating  results  for the  three-month  period  ended  March 31,  1997 are not
necessarily  indicative  of the results that may be expected for the year ending
December 31, 1997. For further information,  refer to the consolidated financial
statements included in the Company's Form 10-KSB for the year ended December 31,
1996.

Note B -- Subsequent Event

Effective May 9, 1997, InMedica Development Corporation (the "Company") employed
Robert Gail  Billings  to conduct  research  and  development  on the  Company's
hematocrit  project.  The Company will pay Dr. Billings  $8,333.33 per month for
his services.

Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS

Liquidity and Capital Resources

     For the years ended  December 31, 1996 and 1995,  liquidity  was  generated
from royalty income received from Johnson and Johnson  Medical,  Inc.  ("JJMI").
This income source may not be sufficient  to provide  liquidity  needs over time
and may be  inadequate  to retire bank debt when it comes due in August 1998 and
fund continued  research and  development.  InMedica intends to continue to look
for  other  funding  sources  as to which it has no  commitments.  For the three
months ended March 31, 1997, no operating  revenues were  recognized  due to the
revenue  recognition  policy of the Company which requires sales  information to


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<PAGE>



have been received from JJMI and that cash receipts are assured.

     A principal asset of the Company, the royalty agreement with JJMI, has been
pledged to secure  repayment of the $405,000 bank debt.  Funds invested in other
potential assets of the Company such as the hematocrit device have been expensed
as incurred as research and  development.  The ability of the Company to use the
hematocrit  device as a means of  securing  funding  for the  Company is totally
dependent  upon the  success  of further  research  and  development  efforts in
producing a viable device suitable for commercialization.

Results of Operations

     InMedica has achieved  profitable  operations  during the last three years,
but has a  stockholders'  deficit  of  $154,505  and an  accumulated  deficit of
$6,758,975 as of March 31, 1997. In order for InMedica to continue  research and
development activities, it may require additional financing, for which it has no
commitments. It is impossible to estimate the amount of the JJMI royalties which
may be received in the  future.  See  Liquidity  and  Capital  Resources  for an
explanation  of why no  revenues  were  recognized  in the first  quarter of the
current year.

     The loss from  operations  of $79,523 for the quarter  ended March 31, 1997
compared  to $58,745 for the quarter  ended  March 31, 1996 was  generated  from
general and  administrative  expenses  ($47,840)  and research  and  development
($31,683), which expenses had each increased approximately $10,000 for the first
quarter of 1997, compared to the first quarter of 1996, as the Company increased
efforts to develop its technology.  Interest expense  decreased by approximately
$5,000 for the quarter  ended March 31, 1997 when  compared to the quarter ended
March 31, 1996 due to the  elimination of certain  indebtedness  during the last
year.

     PART II - OTHER INFORMATION

Item 1.           Legal Proceedings:
                  None

Item 2.           Changes in Securities:
                  None

Item 3.           Defaults Upon Senior Securities:
                  None

Item 4.           Submission of Matters to a Vote of Security Holders:
                  None

Item 5.           Other Information:

Effective May 9, 1997, InMedica Development Corporation (the "Company") employed

<PAGE>

Robert  Gail  Billings,  age 63, to  conduct  research  and  development  on its
hemocratic project. See Note B to the Financial Statements for information as to
the salary of Mr.  Billings.  From 1992 until 1997 Dr.  Billings was employed as
Vice  President  for Research and  Development  of Utah Medical  Products,  Inc.
("Utah Medical"),  a Salt Lake City based publicly held company  specializing in
medical technology.  Prior to that time, he was employed as an engineer for Utah
Medical in research and development.  From 1976 until 1990 he was Vice President
of Research and  Development for Tenet  Information  Services of Salt Lake City,
which was engaged in the  development  of  computer  systems  and  software  for
pulmonary  function  test  analysis.  During the period  1971-1976  he conducted
medical research for Primary Children's Medical Center,  Salt Lake City, Utah as
a graduate  student and later as a post-doctoral  fellow.  Prior to that time he
was employed for 15 years in the aerospace industry. He holds a BS in Electrical
Engineering from the University of Utah (1956), an MS in Electrical  Engineering
from Utah State University (1965) and a PhD in Biophysics from the University of
Utah (1975).

Item 6.   Exhibits and Reports on Form 8-K:

          Exhibits:  None

          Form 8-K:  None


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<PAGE>




                                   SIGNATURES

         In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                                INMEDICA DEVELOPMENT CORPORATION


Dated: May  13, 1997
                                                By /s/ Larry E. Clark
                                                  ------------------------------
                                                   Larry E. Clark, CEO



                                                By /s/ Richard Bruggeman
                                                  ------------------------------
                                                   Richard Bruggeman, Treasurer






                                       10

<PAGE>




                                    EXHIBITS


Exhibits  filed with the Form 10-QSB of InMedica  Development  Corporation,  SEC
File No. 0-12968:


Exhibit No.      SB Item No.       Description
----------------------------------------------
   1              (27)          Financial Data Schedule


                                       11