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, 1998
                  ---------------------------------------------


                           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)

                               825 North 300 West
                            Salt Lake City Utah 84103
                    (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 11, 1998 was 8,550,899 shares.


                                        1

<PAGE>



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

Item 1.  Financial Statements


                 INMEDICA DEVELOPMENT CORPORATION ANDSUBSIDIARY
                      CONDENSED CONSOLIDATED BALANCE SHEET


                                     ASSETS


                                             March 31,
                                                1998
                                            -----------
                                            (Unaudited)

        CURRENT ASSETS:
           Cash                             $   77,676
           Prepaid expenses                     13,463
                                            -----------

                Total current assets            91,139


        EQUIPMENT AND FURNITURE,
          at cost, less accumulated
          depreciation of $250,771               2,218


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

                Total assets                $   95,553
                                            ===========
















            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,
                                               1998
                                               ----
                                            (Unaudited)

        CURRENT LIABILITIES:
           Consulting fee payable to
              related party                 $   34,664
           Note payable to
              related party                    145,000
           Accrued interest                      3,214
           Accounts payable                      7,526
           Accrued payroll                         792
                                            ----------


                Total current liabilities      191,196
                                            ----------

        STOCKHOLDERS' DEFICIT:
           Common stock, $.001 par value;
            20,000,000 shares authorized,
            8,550,899 issued and outstanding     8,551
           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        6,754,337
           Accumulated deficit              (6,972,633)
                                            ----------
                Total stockholders'
                 deficit                      ( 95,643)
                                            ----------
                Total liabilities and
                 stockholders' deficit      $   95,553
                                            ==========


            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,
                                                    ---------
                                               1998        1997
                                               ----        ----
                                                  (Unaudited)



          TOTAL OPERATING REVENUES         $     -0-        -0-
                                           ---------  ---------

          OPERATING EXPENSES:
            General and
             administrative                   70,964     47,840
            Research and
             development                      66,358     31,683
                                           ---------  ---------
            Total operating expenses         137,322     79,523
                                           ---------  ---------
          LOSS FROM OPERATIONS              (137,322)   (79,523)
                                           ---------  ---------

          OTHER INCOME (EXPENSE):
            Miscellaneous income                 595          6
            Interest expense                  (3,214)    (9,503)
                                           ---------  ---------

            Total other expense               (2,619)    (9,497)
                                           ---------  ---------

          NET LOSS                          (139,941)   (89,020)

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

          NET LOSS APPLICABLE TO
           COMMON SHARES                   $(142,223) $ (91,302)
                                           =========  =========
          Net loss per common share
            (basic and diluted)            $    (.02) $    (.01)
                                           =========  =========

          Weighted average number
            of common shares outstanding   8,550,899  7,997,612
                                           ========== =========

            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,
                                                      ---------
                                                  1998        1997
                                                  ----        ----
                                                     (Unaudited)

     CASH FLOWS FROM OPERATING ACTIVITIES:

       Net loss                                  $(139,941)  $(89,020)
       Adjustments to reconcile net
         loss to net cash provided by
         operating activities-
           Depreciation                                216        291
           Expense related to stock options
             issued as compensation for
             services                               22,250          -
           Change in assets and liabilities-
            Decrease in royalties receivable        67,200    209,280
            Decrease in prepaid
               expenses                              5,000      7,297
             Increase in consulting payable         12,999          -
             Increase in accounts payable            6,495      1,003
             Decrease in accrued payroll            (6,152)    (7,829)
             Decrease in interest payable           (1,538)    (1,253)
             Decrease in related-party
               payable                             (25,000)   (39,000)
                                                  --------    -------

               Net cash (used in) provided by
                  operating activities             (58,471)    80,769
                                                  --------    -------












            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,
                                                     1998        1997
                                                     ----        ----
                                                       (Unaudited)

   CASH FLOWS FROM FINANCING ACTIVITIES:

     Preferred stock dividends                    (2,282)       (2,282)
    Principal payments on note payable                 -       (17,500)
                                                 --------     --------
     Net cash used in financing activities        (2,282)      (19,782)
                                                 --------     --------


   NET (DECREASE) INCREASE IN CASH               (60,753)       60,987

   CASH AT BEGINNING OF PERIOD                   138,429       177,586
                                                 --------     --------

   CASH AT END OF PERIOD                        $ 77,676      $238,573
                                                 ========     ========







            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,  1998 are not
necessarily  indicative  of the results that may be expected for the year ending
December 31, 1998. For further information,  refer to the consolidated financial
statements included in the Company's Form 10-KSB for the year ended December 31,
1997.

Royalties  received  from the Johnson and Johnson  agreement  are  presently the
Company's  sole source of revenue  and the  Company is not able to estimate  the
duration or amount of future  royalties from the Johnson and Johnson  agreement.
Accordingly,  there can be no assurance as to continuing  royalty receipts.  The
Company generated a net loss from operations of $137,322 during the period ended
March 31, 1998 and as of March 31, 1998, the Company had an accumulated  deficit
of $6,972,633.  These  conditions  raise  substantial  doubt as to the Company's
ability to continue as a going  concern.  The Company's  continued  existence is
dependent upon its ability to achieve a viable operating plan.


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

Liquidity and Capital Resources

     For the years ended  December 31, 1997 and 1996,  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 debt when it comes due in August 1999 and fund
continued research and development.

                                       7
<PAGE>


InMedica  intends to continue to look for other  funding  sources as to which it
has no  commitments.  For the three months  ended March 31,  1998,  no operating
revenues were  recognized due to the revenue  recognition  policy of the Company
which requires  sales  information to have been received from JJMI and that cash
receipts are assured.

     The royalty agreement with JJMI has been pledged to secure repayment of the
$145,000 related party note payable. 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 a stockholders' deficit of $ 95,643 and an accumulated deficit
of $6,972,633  as of March 31, 1998. 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 1998.

     The loss from  operations  of $137,322 for the quarter ended March 31, 1998
compared  to $79,523 for the quarter  ended  March 31, 1997 was  generated  from
general and  administrative  expenses  ($70,964)  and research  and  development
($66,358).  Research and development  expense increased more than $30,000 due to
salary  expense  for a  new  employee  engaged  in  research  on  the  Company's
hematocrit  project  and legal  expense  related  to patent  work.  General  and
administrative  expense  included  $22,250 of expense  related to stock  options
issued as non-cash  compensation to a prior  contractor  which vested during the
first quarter of 1998.  Interest expense  decreased by approximately  $6,000 for
the quarter  ended March 31, 1998 when  compared to the quarter  ended March 31,
1997 due to the continuing reduction of indebtedness during the last year.

     PART II - OTHER INFORMATION
     ---------------------------

Item 1.           Legal Proceedings:
                  None

Item 2.           Changes in Securities:
                  None



                                       8
<PAGE>
 


Item 3.   Defaults Upon Senior Securities:
          None

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

Item 5. Other Information: The Company continues research and development of its
hematocrit  technology,  including  some limited human testing of the equipment.
There can be no assurance that a viable commerical  product or technology can be
developed by the Company. The Company has not demonstrated the technology (which
is in the  developmental  stage) to any potential buyer or potential partner and
has no agreements or committments for any merger or acquisition  relating to the
Company or the technology.

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

                  Exhibits:    1  Agreement among InMedica Development
                  Corporation, David Wheeler, Nevada Cancer Center and
                  Chris Bringhurst dated April 16, 1998.    2  Financial
                  Data Schedule


                  Form 8-K:  None


                                       9
<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, 1998
            --                              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              (10)          Agreement among InMedica
                                Development Corporation, David
                                Wheeler, Nevada Cancer Center and
                                Chris Bringhurst dated April 16,
                                1998.

   2              (27)          Financial Data Schedule


                                       11
<PAGE>


                                              EXHIBIT 1


                                    AGREEMENT

          An Agreement  and  Assignment  made the 16th day of April , 1998 among
David Wheeler  ("Wheeler"),  an individual  residing in Las Vegas,  Nevada,  the
Nevada  Cancer  Center,  of Las Vegas,  Nevada,  Dr. Chris B.  Bringhurst  ("Dr.
Bringhurst")  an  individual  of Las  Vegas,  Nevada  and  InMedica  Development
Corporation, a Utah corporation ("InMedica").


          1. Assignment of Stock Options.  Wheeler hereby assigns all his right,
title and interest in 37,500 options to purchase the common stock of InMedica to
Dr.  Bringhurst which options are exercisable for a period of two years from the
date of this assignment for $1.22 per share. Exercise of the options shall be by
notice  to  InMedica  and  tender  of the  exercise  price  together  with  such
representations and disclosures as InMedica may require to comply with state and
federal securities laws regarding the issuance of its common stock.

          2. Payment to Wheeler.  InMedica agrees to pay Wheeler or his nominee,
$3,750 by check.

          3. Acceptance of Assignment by Dr. Bringhurst.  Dr. Bringhurst accepts
the assignment of the Options upon the terms and conditions  found in the Option
Agreement in full  satisfaction  of any and all obligations of InMedica owing to
him on account of certain investigational testing done by InMedica at the Nevada
Cancer Center during the years 1996 and 1997.

          4.  Consent of Nevada  Cancer  Center and Release.  The Nevada  Cancer
Center hereby  consents to the  assignment  of the options to Dr.  Bringhurst in
lieu of any payment owing to it by InMedica and in full  satisfaction of any and
all  obligations  of  InMedica  to the  Nevada  Cancer  Center on account of all
investigational  human  testing  done by  InMedica at the Nevada  Cancer  Center
during the years 1996 and 1997.  Further,  Nevada  Cancer  Center  releases  and
forever  discharges  InMedica,  its  officers,  directors,   attorneys,  agents,
employees and other representatives from any and all liability, costs, expenses,
attorneys fees and other charges on account of such  investigational  testing or
the costs and expenses  thereof,  whether  such claim is  presently  existing or
subsequently discovered.

          5.  Future  Testing and Use of Nevada  Cancer  Center.  Nevada  Cancer
Center agrees that InMedica may conduct additional investigational human testing
of its non-invasive  hematocrit  device in its facilities  during 1998 including
clinical trials for FDA purposes for the following  consideration:  $250 per day
for the  use of  facilities  and  $30 per  patient  tested  during  the  initial
investigational  testing  during April,  1998.  If testing  proceeds to clinical
trials for FDA purposes,  InMedica  shall pay $30 per patient  tested and Nevada
Cancer Center agrees to waive the $250 per day fee. In addition, InMedica agrees
to pay each  patient  tested $20 cash whether in  investigational  trials or FDA
clinical  trials.  Nevada Cancer Center and Dr.  Bringhurst  agree to obtain all
necessary Nevada IRB approvals to conduct such testing.  Following  satisfactory
completion  of initial  investigational  trials  during  April,  1998,  InMedica
intends to  continue  use of the Nevada  Cancer  Center  facilities  to complete


                                       12
<PAGE>
 
clinical  trials for FDA purposes.  However  InMedica may conduct  additional or
other trials or studies at such times and places and for such purposes as it may
determine.


          6. Additional Options to be granted to Dr. Bringhurst. InMedica agrees
to grant to Dr. Bringhurst the following  additional  options which shall become
exercisable  at the times and prices shown  below:12,500  options  following the
successful  completion of initial  testing during April,  1998,  exercisable for
$.73 per share for a period of two years.

InMedica  further  agrees that if Clinical  trials are warranted and are held at
the Nevada Cancer Center, and if FDA approval of the hematocrit measuring device
is granted by the FDA,  that it will grant the following  additional  options to
Dr.  Bringhurst,  which  amount shall depend upon the time which was required to
complete clinical trials for FDA purposes:

   -25,000 options if clinical trials required 0-4 months to complete
   -10,000  additional  options if clinical trials required more than 4 but less
    than 6 months to complete (making 35,000 total options)
   -20,000  additional options if clincial trials required more than 6 months to
    complete (making 45,000 total options)

Any and all such options shall be exerciseable  for $1.22 per share for a period
of one year after FDA approval is obtained.

          In  consideration  of the obligation of InMedica to grant the forgoing
options,  Dr.  Bringhurst  agrees to use his best efforts  (consistent  with his
other  professional  commitments)  to assist  InMedica and consult with InMedica
researchers during initial testing and, if warranted,  follow up clinical trials
and FDA testing and approval. Dr. Bringhurst also agrees to assist InMedica with
the  submission of any federal  grant  applications  on InMedica's  non-invasive
hematocrit device and to allow the inclusion of his resume for such purposes.

          7.  General.

            (a) This agreement contains the entire agreement between the parties
on the  subject  matter  hereof and may only be changed or  modified  by written
agreement between the parties.

            (b) In the event any  provision or any part of any provision of this
agreement shall be held invalid,  illegal or  unenforceable,  such holding shall
not affect any other  provision or any part of the same  provision  which can be
given effect without the invalid provision or any part thereof.

            (c) This agreement may be executed in one or more  counterparts each
of which shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.

            (d) This  agreement  may not be assigned  without the prior  written
consent of the parties hereto.


                                       13
<PAGE>
 



            (e) This  agreement  shall  terminate upon the earliest to occur the
following: (1) by mutual agreement of InMedica and Dr. Bringhurst;  (2) December
31, 1998; (3) upon InMedica's  determination  that the results of testing at any
stage  are  sufficiently  unsatisfactory  to  require  additional  research  and
development expected to continue beyond December 31, 1998. This agreement may be
extended by mutual written agreement of the parties.

                                     IN WITNESS WHEREOF, the parties hereof have
executed this agreement this 16th  day of  April , 1998.
                             ----          -----

/s/ Larry E. Clark
------------------
Larry E. Clark, President


/s/ Chris B. Bringhurst
-----------------------
Chris B. Bringhurst, M.D.


Nevada Cancer Center


/s/ Fredrick P.  Waid
---------------------
By  Fredrick P. Waid
    -----------------
Its Executive Director, Counsel
    ---------------------------



/s/ David Wheeler
-----------------
David Wheeler







                                       14