**UNITED
        STATES**
 **SECURITIES
        AND EXCHANGE COMMISSION**
 Washington,
        D.C. 20549
 **FORM
        10-QSB**
 
 (Mark
        One)
 √QUARTERLY
        REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
        1934
 For
        the
        quarterly period ended:  September 30, 2007
 
 oTRANSITION
        REPORT
        UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
 For
        the
        transition period from to
 Commission
        file number:0-12968
 
 InMedica
        Development Corporation
 (Exact
        name of small business issuer as specified in its charter)
 
 UTAH
              87-0397815(State
                  or other jurisdiction of incorporation or organization)
              (IRS
                  Employer Identification No.)
 
 825
        North
        300 West, Suite N132
 Salt
        Lake
        City, Utah 84103
 (Address
        of principal executive offices)
 
 (801)
        521-9300
 (Issuer’s
        telephone number)
 
 Check
        whether the issuer (1) filed all
        reports required to be filed by Section 13 or 15(d) of the Exchange Act 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 √No o
 
 Indicate
        by check mark whether the
        registrant is a shell company (as defined in Rule 12b-2 of the Exchange
        Act).Yes oNo
√
 
 State
        the
        number of shares outstanding of each of the issuer’s classes of common equity,
        as of the latest practicable date:18,629,493 shares
        of $.001
        par value common stock as of November 9, 2007
 
  1
  PART
        I -
        FINANCIAL INFORMATION
 
 Item
        1.  Financial Statements
 
 INMEDICA
        DEVELOPMENT CORPORATION AND SUBSIDIARY
 CONSOLIDATED
        BALANCE SHEET
 
 
 ASSETSAs
                  ofSeptember
                  30,2007(Unaudited)CURRENT
                  ASSETS:Cash
                  & cash equivalents
              
              $
              5,834Accounts
                  receivable
              
              
              90Prepaid
                  expenses and other
              
              
              200Total
                  current assets
              
              
              6,124EQUIPMENT
                  AND FURNITURE,at
                  cost, less accumulated at cost, less accumulated
              
              
              488Total
                  assets
              
              $
              6,612
       
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 See
        notes
        to consolidated financial statements
  2
  INMEDICA
        DEVELOPMENT CORPORATION AND SUBSIDIARY
 CONSOLIDATED
        BALANCE SHEET (Continued)
 
 LIABILITIES
                  AND STOCKHOLDERS' EQUITYAs
                  ofSeptember
                  30,2007(Unaudited)CURRENT
                  LIABILITIES:Related
                  party consulting fees payable
              
              $
              72,000Accounts
                  payable
              
              
              2,538Note
                  payable
              
              
              177,784Accrued
                  interest
              
              
              12,020Related
                  party royalty payable
              
              
              63,333Preferred
                  stock dividend payable
              
              
              47,286Total
                  current liabilities
              
              
              374,961MINORITY
                  INTEREST
              
              
              (167,042
              )STOCKHOLDERS'
                  EQUITY:Preferred
                  stock, 10,000,000 shares authorized;Series
                  A preferred stock, cumulative andconvertible,
                  $4.50 par value, 1,000,000 sharesdesignated,
                  21,016 shares issued and outstanding
              
              
              94,573Common
                  stock, $.001 par value;40,000,000
                  shares authorized,18,629,493
                  issued and outstanding
              
              
              18,629Additional
                  paid-in capital
              
              
              8,426,839Accumulated
                  deficit
              
              
              (8,741,348
              )Total
                  stockholders equity
              
              
              (201,307
              )Total
                  liabilities and stockholders' equity
              
              $
              6,612
  
 
 
 
 
 See
        notes
        to consolidated financial statements
  3
  INMEDICA
        DEVELOPMENT CORPORATION AND SUBSIDIARY
 CONSOLIDATED
        STATEMENTS OF OPERATIONS
 
 
 For
                  the Three
              
              
              For
                  the NineMonths
                  Ended
              
              
              Months
                  EndedSeptember
                  30,
              
              
              September
                  30,2007
              
              
              2006
              
              
              2007
              
              
              2006(Unaudited)
              
              
              (Unaudited)TOTAL
                  ROYALTY REVENUES
              
              $
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              -OPERATING
                  EXPENSES:General
                  and
              
              
              61,183
              
              
              
              48,618
              
              
              
              148,551
              
              
              
              151,196administrativeResearch
                  and
              
              
              1,009
              
              
              
              -
              
              
              
              1,009
              
              
              
              -developmentTotal
                  operating expenses
              
              
              62,192
              
              
              
              48,618
              
              
              
              149,560
              
              
              
              151,196LOSS
                  FROM OPERATIONS
              
              
              (62,192
              )
              
              
              (48,618
              )
              
              
              (149,560
              )
              
              
              (151,196
              )OTHER
                  EXPENSE:other
                  expense, net
              
              
              (3,237
              )
              
              
              (480
              )
              
              
              (9,110
              )
              
              
              (817
              )Total
                  other expense, net
              
              
              (3,237
              )
              
              
              (480
              )
              
              
              (9,110
              )
              
              
              (817
              )LOSS
                  BEFORE MINORITY INTEREST
              
              
              (65,429
              )
              
              
              (49,098
              )
              
              
              (158,670
              )
              
              
              (152,013
              )MINORITY
                  INTEREST
              
              
              24,759
              
              
              
              25,428
              
              
              
              73,680
              
              
              
              62,340NET
                  LOSS
              
              
              (40,670
              )
              
              
              (23,670
              )
              
              
              (84,990
              )
              
              
              (89,673
              )PREFERRED
                  STOCK DIVIDENDS
              
              
              (1,891
              )
              
              
              (1,891
              )
              
              
              (5,674
              )
              
              
              (5,674
              )NET
                  LOSS APPLICABLE TOCOMMON
                  STOCKHOLDERS
              
              
              (42,561
              )
              
              
              (25,561
              )
              
              
              (90,664
              )
              
              
              (95,347
              )NET
                  LOSS PER COMMON SHARE(BASIC
                  AND DILUTED)
              
              $
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              -Weighed
                  average numberof
                  common sharesoutstanding
              
              
              18,629,493
              
              
              
              18,134,928
              
              
              
              18,629,493
              
              
              
              18,131,325
 
 
 See
        notes
        to consolidated financial statements.
  4
  
 INMEDICA
        DEVELOPMENT CORPORATION AND SUBSIDIARY
 CONSOLIDATED
        STATEMENTS OF CASH FLOWS
 
 For
                  the NineMonths
                  EndedSeptember
                  30,2007
              
              
              2006(Unaudited)CASH
                  FLOWS FROM OPERATING ACTIVITIES:Net
                  loss
              
              $
              (84,990
              )
              
              $
              (89,673
              )Adjustments
                  to reconcile netloss
                  to net cash used inoperating
                  activities-Depreciation
                  and amortization
              
              
              370
              
              
              
              470Interest
                  income from amortizationor
                  discount on notes receivable
              
              
              -
              
              
              
              (335
              )Minority
                  interest in losses
              
              
              (73,680
              )
              
              
              (62,340
              )Change
                  in assets and liabilitiesAccount
                  receivable
              
              
              (90
              )
              
              
              -Consulting
                  fee payable torelated
                  party
              
              
              18,000
              
              
              
              18,000Royalty
                  payable toRelated
                  party
              
              
              30,000
              
              
              
              23,333Accounts
                  payable
              
              
              2,538
              
              
              
              (477
              )Accrued
                  interest payable
              
              
              9,110
              
              
              
              988Accrued
                  payroll and related taxes
              
              
              -
              
              
              
              (5,553
              )Net
                  cash used inoperating
                  activities
              
              
              (98,742
              )
              
              
              (115,587
              )CASH
                  FLOWS FROM INVESTING ACTIVITIES:Proceeds
                  from note receivable
              
              
              -
              
              
              
              45,000Net
                  cash provided byinvesting
                  activities
              
              
              -
              
              
              
              45,000CASH
                  FLOWS FROM FINANCING ACTIVITIES:Proceeds
                  from notes payable
              
              
              70,497
              
              
              
              32,950Payments
                  on notes payable
              
              
              -
              
              
              
              (8,912
              )Net
                  cash provided byfinancing
                  activities
              
              
              70,497
              
              
              
              24,038
 
 
 
 
 See
        notes
        to consolidated financial statements.
  5
  
 INMEDICA
        DEVELOPMENT CORPORATION AND SUBSIDIARY
 CONSOLIDATED
        STATEMENTS OF CASH FLOWS (Continued)
 
 For
                  the NineMonths
                  EndedSeptember
                  30,2007
              
              
              2006(Unaudited)NET
                  DECREASE IN CASH
              
              
              (28,245
              )
              
              
              (46,549
              )CASH
                  AT BEGINNING OF PERIOD
              
              
              34,079
              
              
              
              51,885CASH
                  AT END OF PERIOD
              
              $
              5,834
              
              
              $
              5,336
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 See
        notes
        to consolidated financial statements.
  6
  INMEDICA
        DEVELOPMENT CORPORATION AND SUBSIDIARY
 NOTES
        TO
        CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 
 1.Basis
                  of
                  Presentation
 
 The
        accompanying unaudited consolidated financials statements of InMedica
        Development Corporation and its majority owned subsidiary, MicroCor, Inc.
        (collectively the Company) have been prepared on a going concern basis which
        contemplates the realization of assets and satisfaction of liabilities that
        might be necessary should the Company be unable to continue as a going
        concern.  The Company generated a net loss of $84,990 and $89,673 for
        the nine month periods ended September 30, 2007 and 2006, respectively, and
        negative cash flows from operations of $28,245 and $46,549 for the nine month
        periods ended September 30, 2007 and 2006, respectively.  As of
        September 30, 2007, the Company had an accumulated deficit of
        $8,741,348.  At September 30, 2007, the Company had a stockholder’s
        deficit of $201,307.  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 execute its operating
        plan
        and to obtain additional debt or equity financing.  There can be no
        assurance that the necessary debt or equity financing will be available,
        or will
        be available on terms acceptable to the Company.  Management’s
        operating plan includes working with Wescor to complete research, development
        and, if warranted, marketing of its hematocrit technology and/or pursuing
        other
        strategic alliances and licensing agreements such as the current
        Agreement  with Wescor, Inc.  See Item 2 – “Management’s
        Discussion and Analysis.”
 
 The
        accompanying consolidated financial statements of the Company are unaudited.
        However, in management’s opinion, all adjustments, consisting only of normal
        recurring adjustments necessary for fair presentation of results for the
        interim
        periods shown, have been made. Results for interim periods are not necessarily
        indicative of those to be expected for the full year.   These
        consolidated financial statements should be read in conjunction with the
        audited
        consolidated financial statements and notes to consolidated financial statements
        included in the Company’s annual report on form 10-KSB for the year ended
        December 31, 2006.
 
 
 2.Summary
                  of Significant Accounting Policies
 
 Principles
        of Consolidation - The consolidated financial statements include the accounts
        of
        InMedica and MicroCor.   All material inter-company accounts and
        transactions have been eliminated.
 
 Use
        of
        Estimates – The preparation of financial statements in conformity with
        accounting principles generally accepted in the United States of America
        requires management to make estimates and assumptions that affect the reported
        amounts of assets and liabilities and disclosure of contingent assets and
        liabilities at the date of the financial statements and the reported amounts
        of
        revenues and expenses during the reporting period.   Actual
        results could differ from those estimates.
  7
  **Item
        2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
        PLAN OF OPERATION**
 
 *Overview.*  Since
        1989, the Company has engaged in research and development  of a
        device  to  measure  hematocrit  non-invasively
        (the  "Non-Invasive  Hematocrit Technology" and/or the
        "Technology") and fund raising to finance the payment of research, development
        and administrative expenses.  Hematocrit is the percentage of red
        blood cells in a given volume of human blood.  Research, development
        and administrative expenses of the Company relating to the Technology were
        funded during the 1990’s by borrowing and by royalty revenues from the sale of a
        portable ECG monitor which incorporated Company technology.   The
        monitor was marketed by Critikon, Inc., then a Johnson and Johnson
        subsidiary.   However Critikon discontinued the monitor in 2001
        and InMedica has not since had revenues from operations.  During 2001
        the Company and its subsidiary, MicroCor, Inc. sold restricted common stock
        to
        Chi Lin Technologies, Ltd. of the Republic of China (Taiwan) for $1,000,000
        and
        used the funds to continue funding of research, development and administrative
        expenses.   Chi Lin also signed a development agreement under
        which it performed or financed the Company’s primary research and development
        effort conducted initially in Taiwan and later in the United States. When
        remaining funds from the stock sale were expended during 2003, the Company
        began
        searching for additional funding and/or a partner to conduct additional research
        and development. The Company’s officers and Chairman also agreed to the accrual
        of their wages and consulting fees pending receipt of funds to pay those
        obligations.  In January 2005, the shareholders of the Company
        approved an Agreement with Wescor which provided additional funding for
        administrative expenses and provides for research and development of the
        Hematocrit Technology by Wescor.
 
 *Plan
        of Operation*.    During the 12 months beginning
        January, 2007 the Company’s plan of operation is to work cooperatively with
        Wescor in the development and possible demonstration to other companies of
        the
        Company’s portable hematocrit device.  In connection with this effort,
        the Company will require confidentiality agreements from parties to which
        disclosure is made and will allow such parties to informally evaluate the
        technology in order to determine their interest.  During 2007, Wescor
        is expected to fund the research and development efforts of MicroCor pursuant
        to
        the Joint Development Agreement.  During 2004 and 2005, the Company
        borrowed from Wescor in order to meet operating expenses and may need to
        rely on
        borrowing in the future to meet obligations.  While the Company has in
        the past borrowed from affiliates, such borrowing may not be available in
        the
        future to meet obligations and fund continued research and
        development.  If necessary, InMedica will look for other funding
        sources.
 
  8
  **Liquidity
        and Capital Resources.**
 
 The
        funds
        generated from the sale of stock in 2001 were the sole source of the Company’s
        cash flow from May 10, 2001 until December 31, 2003 and were sufficient to
        meet
        the Company’s operating expenses through December 31, 2003. During the years
        2004 and 2005 liquidity was generated by borrowings from Wescor and from
        the
        proceeds of the sale of MicroCor stock to Wescor, Inc., a Utah based medical
        technology company that agreed to conduct additional research on and development
        of the Company’s hematocrit technology pursuant to the Joint Development
        Agreement dated September 7, 2004 (the “Agreement”).  Liquidity was
        also generated from sales of restricted stock to members of
        management.  The Company has funded the expenses of its administrative
        operations during 2006 and the first ten months of 2007 with funds from a
        partially deferred minimum royalty paid to InMedica by MicroCor.  The
        minimum royalty due InMedica is based upon terms of the Joint Development
        Agreement and is $160,000 per year.  However, under the reduced
        minimum royalty arrangement, MicroCor borrowed funds from Wescor to make
        one
        half of the minimum royalty payment and InMedica agreed to defer the balance
        of
        the minimum royalty payment.  Repayment of the loan to Wescor by
        MicroCor is secured by a 20% security interest in any future revenues from
        the
        sale of the hematocrit technology by MicroCor, until the loan is repaid in
        full.  MicroCor is presently discussing with Wescor an additional loan
        to pay one half the minimum royalty owing to InMedica during the balance
        of
        2007.  The Company will also seek additional sources of funding to pay
        administrative expenses for the balance of the year.
 
 During
        September, 2005, MicroCor issued 500,000 shares of restricted stock to Wescor
        pursuant to the Agreement in consideration of development of a prototype
        for the
        hematocrit technology.   Future research and development efforts
        of Wescor will continue to be compensated through additional issuances of
        MicroCor stock to Wescor pursuant to the Agreement. Among other things, the
        Agreement may result in the disposition of InMedica’s ownership of its remaining
        stock ownership of MicroCor, Inc., which holds all of the hematocrit patents,
        business and intellectual property.  However, if Wescor is successful
        in completing development, the regulatory approvals and product introduction
        into the marketplace, the Company will be entitled to a royalty on sales
        of the
        product.
 
 **Results
                  of Operations.**
 
 InMedica
        incurred net losses from operations during the three and nine month periods
        ended September 30, 2007 and 2006.  The Company had an accumulated
        deficit of $8,741,348 as of September 30, 2007 and no revenues from operations
        are expected in the foreseeable future.  The net loss from operations
        for the three and nine month periods ended September 30, 2007 was $40,670
        and
        $84,990, respectively, compared to the net loss of $23,670 and $89,673 for
        the
        same periods in  2006.  The increase in the net loss from
        operations for the three month period ended September 30, 2007, resulted
        from
        payment of prior unaccrued wages and travel related expenses.
 
  9
  **Item
                  3:   CONTROLS AND
                  PROCEDURES**
 
 The
        Company's Chief Executive Officer and Chief Financial Officer have concluded,
        based on an evaluation required by paragraph (b) of Section 240.13a-15 or
        240.15d-15 of the Rules of the Securities Exchange Act of 1934, conducted
        as of
        the end of the period covered by this Quarterly Report on Form 10-QSB, that
        the
        Company's disclosure controls and procedures (as defined in Exchange Act
        Rules
        13a – 15e or 240.15d-15(e)) have functioned effectively.   For
        purposes of this Item, the term *disclosure controls and procedures*
        means controls and other procedures of the Company that are designed to ensure
        that information required to be disclosed by the Company in the reports that
        it
        files or submits under the Securities Exchange Act (15 U.S.C. 78a *et
        seq.*) is recorded, processed, summarized and reported, within the time
        periods specified in the Commission's rules and forms. Disclosure controls
        and
        procedures include, without limitation, controls and procedures designed
        to
        ensure that information required to be disclosed by the Company in the reports
        that it files or submits under the Act is accumulated and communicated to
        the
        issuer's management, including its principal executive and principal financial
        officers, or persons performing similar functions, as appropriate to allow
        timely decisions regarding required disclosure.
 
 There
        have been no changes in the Company’s internal control over financial reporting
        identified in connection with the evaluation required by paragraph (d) of
        Section 240.13a-15 or 240.15d-15 of the Rules of the Securities Exchange
        Act of
        1934, that occurred during the Company’s last fiscal quarter (the Company’s
        fourth fiscal quarter in the case of an annual report) that have materially
        affected, or is reasonably likely to materially affect, the Company’s internal
        control over financial reporting.
 
  10
  PART
                  II - OTHER INFORMATION
 
 Item
        1.                      Legal
        Proceedings:  None
 
 Item
        2.                            Unregistered
        Sales of Equity Securities and Use of Proceeds:   None during the
        period covered by this report.
 
 Item
        3.  Defaults Upon Senior Securities: None
 
 Item
        4.   Submission of Matters to a Vote of Security
        Holders:  None
 
 Item
        5.   Other Information:
 The
        disclosure on the facing sheet of this Form 10QSB that the Company is not
        a
“shell company” as defined in Rule 12b-2 of the Rules of the Securities Exchange
        Act of 1934, is based on the Company’s conclusion that it has more than “nominal
        operations” as described in Rule 12b-2.   The Company’s
        operations consist of ongoing operating expenses reported in its statement
        of
        operations, paid employees, a stated business purpose of development of the
        hematocrit technology, a history of pursuing this purpose, a past history
        of
        revenues from operations and ongoing research and development conducted by
        its
        majority-owned subsidiary, MicroCor, Inc.    In the event
        the Company were determined to be a “shell company,” it would be precluded from
        using Form S-8 to register securities issued to employees and would be required
        to make certain disclosures on Form 8-K regarding any transaction that causes
        it
        to cease being a shell company.  Such disclosures consist of filings
        with the Securities and Exchange Commission of the same type of information
        that
        would be required to be filed in registering a class of securities under
        the
        Exchange Act.   Examples of transactions that could cause a
        company to cease to be a shell company include a “reverse acquisition” or “back
        door registration” of a “shell company” with an operating
        company.  The effect of such disclosure requirement is to increase the
        disclosure requirements for the non-reporting or non-registered company in
        a
“reverse acquisition” or “back door registration” as more fully described in SEC
        Release Nos. 33–8587 and 34–52038.  The Company has no present plans
        or commitments to engage in a “reverse acquisition,” “back door registration” or
        similar transaction or to register stock on Form S-8.
 
 Item
        6.   Exhibits:
 (31.1)
              Sarbanes-Oxley
                  Section 302 Certification – Ralph
                  Henson
 
 (31.2)
              Sarbanes-
                  Oxley Section 302 Certification- Richard
                  Bruggeman
 
 (32.1)
              Sarbanes-Oxley
                  Section 906 Certification
 
 Reports
        on Form 8-K: None
  11
  
 
 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
 
 
 /s/
        Ralph Henson
 By­­
        Ralph Henson, President
 
 
 /s/
        Richard Bruggeman
 By
        Richard Bruggeman, Treasurer
 
 
 Date:  November
        9, 2007
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  12
  
 EXHIBIT
        INDEX - INMEDICA DEVELOPMENT CORPORATION
 FORM
                  10QSB – SEPTEMBER 30, 2007
 
 EXHIBIT
                  NUMBER            DESCRIPTION
 
 31.1                                Section
                  302 Certifications of Ralph Henson 31.2                                Section
                302 Certifications of Richard Bruggeman 32.2                                Sarbanes-Oxley
                Section 906 Certification
 
 
 
 13