UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

(Mark One)

         [X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                  For the fiscal year ended December 31, 2006

         TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

               For the transition period from ________ to_________

                         Commission file number 0-12968

                        INMEDICA DEVELOPMENT CORPORATION
                 (Name of small business issuer in its charter)

                                 Utah 87-0397815
          (State of Incorporation) (I.R.S. Employer Identification No.)

                         825 North 300 West, Suite N132
                           Salt Lake City, Utah 84103
                                 (801) 521-9300

           Securities Registered Pursuant to Section 12(g) of the Act:
                              Name of Each Exchange
                     Title of Each Class on which Registered

                       Common Stock, $.001 par value None

         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. [X] Yes No

         Check if there is no  disclosure  of  delinquent  filers in response to
Item 405 of  Regulation  S-B contained in this form,  and no disclosure  will be
contained,  to the  best of  registrant's  knowledge,  in  definitive  proxy  or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [X]




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         Indicate by check mark whether the  registrant  is a shell  company (as
defined in Rule 12b-2 of the Exchange Act). Yes No [X] (1)

         State issuer's revenues for its most recent fiscal year.       $   0.00
                                                                            ----

         State the aggregate  market value of the voting and  non-voting  common
equity held by  non-affiliates  computed by  reference to the price at which the
common  equity  was sold,  or the  average  bid and asked  price of such  common
equity,  as of a specified  date within the past 60 days:  $1,738,680,  based on
8,693,402 non-affiliate shares outstanding at $.20 per share, the average of the
bid and asked price on March 9, 2007.

         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 common
stock, $.001 par value as of March 9, 2007

                       DOCUMENTS INCORPORATED BY REFERENCE

         If the following  documents  are  incorporated  by  reference,  briefly
describe them and identify the part of the Form 10-KSB  (e.g.,  Part I, Part II,
etc.) into which the document is incorporated: (1) any annual report to security
holders;  (2) any proxy or information  statement;  and (3) any prospectus filed
pursuant to Rule 424(b) or (c) of the Securities Act of 1933 ("Securities Act").
The listed documents  should be clearly  described for  identification  purposes
(e.g.,  annual  report to security  holders for fiscal year ended  December  24,
1990). None

   Transitional Small Business Disclosure Format (Check one): Yes [__] No [X]


------------------------------------
(1)      See discussion under "Government Regulation" 2

<PAGE>


                                     PART I

ITEM 1. BUSINESS.

GENERAL.  InMedica  Development  Corporation  ("InMedica"  or the "Company") was
incorporated  as a Utah  corporation  on June  16,  1983.  In 1985  the  Company
acquired  MicroCor,  Inc.,  a  Utah  corporation  ("MicroCor")  engaged  in  the
development of certain medical technology products. During the last three fiscal
years, InMedica's primary activity has been the operation of MicroCor, now a 57%
owned subsidiary of the Company, and the negotiation and finalization of a Joint
Development  Agreement (the "Agreement") with Wescor,  Inc., a Logan, Utah based
medical  technology  company  ("Wescor").  Pursuant  to  the  Agreement,  Wescor
purchased a minority position in MicroCor and undertook research and development
work on MicroCor's hematocrit technology.  During the last fiscal year, InMedica
and  MircoCor   received  no  revenues   from   operations.   (See  "Results  of
Operations").  See "PRODUCT  DEVELOPMENT" for a discussion of the current status
of development of Microcor's hematocrit technology by Wescor.

         As of September 7, 2004 and pursuant to the Agreement, InMedica and Chi
Lin sold, a total of 15% of MicroCor  stock to Wescor (12% from  InMedica and 3%
from Chi Lin) for  $375,000.  The purchase  price was paid $30,000 down with the
balance due in installments over 18 months. The purchase of the 15% interest has
now been completed.  Wescor also assumed day to day management of MicroCor as of
September  7, 2004 and agreed to use its best  efforts at its expense to develop
the  hematorcrit  technology."  During  the  term  of  the  Agreement,  InMedica
continues to appoint three of five members of the board of directors of MicroCor
and Chi Lin and Wescor are each entitled to appoint one board  member.  Wescor's
management of MicroCor and the Agreement may be terminated by InMedica if Wescor
fails to complete any development Phase.  Through potential  additional MicroCor
stock  issuances,  Wescor  may earn up to 49% total  ownership  of  MicroCor  by
funding and conducting additional  development of hematocrit technology in three
Phases  over 18  months.  The 18  month  period  may be  extended  in six  month
increments by the MicroCor  board of directors.  See  "POTENTIAL  MICROCOR STOCK
ISSUANCES TO WESCOR."

         Upon  successful  completion  of the second  phase (ie.  an FDA cleared
prototype)  and again upon  successful  completion of the third Phase (ie. first
production  of units for sale),  Wescor has an option to purchase the  remaining
MicroCor  shares from Chi Lin and InMedica for 90% of an appraised  value or 90%
of a value  suggested  by  Wescor,  subject to a fairness  opinion  obtained  by
InMedica.  Wescor is  entitled  to select  the  appraiser  with the  consent  of
InMedica  and Chi Lin.  The  Company  and Chi Lin then have a "trump  option" to
purchase  Wescor's  ownership  of  MicroCor  stock at an  increased  price.  See
"Options To Buy Remaining MicroCor Stock." MicroCor has granted InMedica and Chi
Lin an annual  royalty  of 4% of the  first  $5,000,000  of sales and  licensing
revenues  received  from the  hematocrit  technology,  3% of sales and licensing
revenues  exceeding  $5,000,000  but less than  $20,000,000  and 2% of sales and
licensing  revenues in excess of  $20,000,000.  The sellers are also entitled to
twenty  five  percent  (25%) of all  royalty  revenues  received  by MicroCor on
further  licensing of the hematocrit  technology.  A minimum royalty of $200,000


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per year is payable by MicroCor  commencing 18 months from September 7, 2004, to
be split 80%-20% between InMedica and Chi Lin. (See "ROYALTY RIGHTS.")

         During the third  quarter of 2005,  Wescor  advised the Company that it
had completed a prototype of the hematocrit  technology  suitable for conducting
clinical trials  necessary to prepare for a submission to the FDA for regulatory
review.  As a result,  the board of directors of MicroCor  approved  issuance of
500,000 shares of the restricted common stock of MircroCor to Wescor pursuant to
the Agreement.  Following the issuance of the MicroCor stock,  MicroCor is now a
57% owned subsidiary of the Company,  Wescor now owns 29% and Chi Lin Technology
Company,  Ltd.  owns 14% of MicroCor.  Further  development  and progress on the
hematocrit  technology is subject to continued risks. See "Risk Factors." During
April,  2006,  MicroCor extended the time for completion of FDA clearance of the
hematocrit  prototype by Wescor for an additional six months pursuant to Section
5.3 of the Joint Development Agreement.


         POTENTIAL  MICROCOR  STOCK  ISSUANCES  TO WESCOR.  In the event  Wescor
completes  clinical  trials  and  obtains  the FDA's  clearance  to market  such
products (Phase 2), 500,000 additional  restricted shares of MicroCor stock will
be  issued  to  Wescor  by  MicroCor.   Then,  upon  manufacturing  and  initial
introduction  into the US market of such products (Phase 3), MicroCor will issue
to Wescor an additional 700,000 restricted shares of its stock,  giving Wescor a
total of 49% of the issued and outstanding  stock of MicroCor.  These additional
shares  to be  issued  to  Wescor  will be in  consideration  of each  Phase  of
development  work by Wescor.  The  determination  of Wescor's  completion of the
three Phases will be made by  MicroCor's  board which is controlled by InMedica.
In the event of a  disagreement  between  the parties as to  fulfillment  of the
above  standards,  the parties  intend to negotiate in good faith to resolve the
matter.  The number of restricted  shares to be issued by MicroCor to Wescor for
services has been determined during a process of arms length negotiation between
InMedica  and  Wescor.  During  such  negotiations,  the board of  directors  of
InMedica  considered  the  need  for  funding  to  continue  development  of the
hematocrit  technology,  the Company's present financial  condition (ie. lack of
cash flow, limited capital assets and limited borrowing  capacity),  the lack of
interest  expressed by larger companies  contacted by the board of directors (in
the absence of an FDA cleared  prototype),  the lack of present  capacity of the
smaller companies  contacted by the board (other than Wescor) and the reputation
and experience of Wescor in development  of medical  technology.  Based on these
considerations,  the board concluded that, in its judgment, the Agreement should
be pursued.

         OPTIONS TO BUY REMAINING  MICROCOR  STOCK.  Upon completion of Phase 2,
and again upon  completion  of Phase 3,  Wescor will have the option to purchase
all (but not less than all) the  remaining  stock of MicroCor  from InMedica and
Chi Lin,  for 90 days.  The buyout  price to Wescor for the  remaining  MicroCor
shares  will be 90% of an  appraised  value or of a value  suggested  by Wescor.
Wescor will choose the appraiser subject to the right of InMedica and Chi Lin to


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object to the  selection.  In the case of an objection  Wescor will make another
selection  until the parties  are in  agreement.  Following  receipt of Wescor's
notice of appraised value or suggested value, InMedica and Chi Lin will have the
right to obtain a fairness  opinion at their expense,  before acting on Wescor's
offer.  The fairness opinion of the value of the MircoCor stock will be obtained
from a business  valuation  expert,  chosen by InMedica and Chi Lin, as to which
Wescor  has no  reasonable  objection.  If the  fairness  opinion  reports  that
Wescor's  appraised  or  suggested  value is not within a fair  range,  Wescor's
option to purchase the balance of the  MicroCor  stock from Chi Lin and InMedica
will terminate.

         However,  if Wescor's appraised or suggested value is determined by the
fairness opinion to be within a fair range, InMedica and Chi Lin will still have
the opportunity to acquire the complete  ownership of MicroCor through a "trump"
option allowing them to offer to purchase all of the shares of MicroCor owned by
Wescor at 110% of Wescor's  appraised  value or suggested  value.  In such case,
Wescor may choose to sell its  ownership  of MicroCor to InMedica and Chi Lin or
may revive its first option by a notice to InMedica and Chi Lin  increasing  the
purchase  price so as to be based on at least 110% of the valuation  used as the
trump option value by InMedica and Chi Lin. This option  procedure,  essentially
bidding for the right to  purchase  the balance of the  MicroCor  stock,  may be
repeated as many times as is necessary until a purchaser has been determined. If
Wescor is ultimately the purchaser,  the Agreement will terminate except for the
royalty rights of InMedica and Chi Lin.  Wescor has also been granted a right of
first refusal in the event of a bona fide third party offer to acquire MicroCor.

         ROYALTY RIGHTS.  MicroCor has granted certain revenue royalty rights to
InMedica and Chi Lin under the Agreement  based on future  annual  revenues from
the hematocrit technology,  if any, and calculated as follows:  Annual royalties
will equal the sum of four  percent  (4%) of the first  $5,000,000  in sales and
licensing  revenues,  three  percent  (3%) of sales and  licensing  revenues  in
amounts exceeding $5,000,000 but not exceeding $20,000,000, and two percent (2%)
of sales and  licensing  revenues in amounts  exceeding  $20,000,000;  plus (ii)
twenty five percent (25%) of all royalty  revenues  (revenues  from licensing of
the  hematocrit  technology  to others).  The total  royalties are split between
InMedica and Chi Lin with  InMedica  receiving a percentage  of total  royalties
equal to a fraction,  the  numerator of which is the total world  revenues  from
sales of the  hematocrit  technology,  less the revenues from sales in Asia; and
the  denominator  of which is the total world  revenues from sales.  The Chi Lin
royalty is a percentage of total royalties equal to a fraction, the numerator of
which is revenue from sales in Asia;  and the  denominator of which is the total
world revenues from sales.  Asia is defined to mean  Australia,  New Zealand and
the countries of Asia (including without limitation, Indonesia, Malaysia and the
island  countries of the Western Pacific Rim; but excluding  Russia,  Turkey and
the countries of the Middle East from Iran and to the west).  Further, a minimum
royalty of $200,000  per year begins 18 months after the  effective  date and is
payable by MicroCor to InMedica and Chi Lin on an 80%-20% basis  without  regard
to whether  actual  sales  have been  made.  However in the event that any party
(including Wescor) or a third party acquires eighty percent control of MicroCor,
the new control party has the right to buy out the royalty  rights from InMedica
and Chi Lin for $1,000,000 or 100% of five times the sum of the minimum  royalty


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<PAGE>

payments  for the  immediately  preceding 12 months,  whichever is greater.  The
buyout proceeds would be shared 80%-20% by InMedica and Chi Lin.

         As a part of the transaction, InMedica transferred all of its rights in
the  non-invasive  hematocrit  technology  to MicroCor  and Chi Lin  licensed to
MicroCor all rights relating to the non-invasive  technology owned by Chi Lin on
a royalty free basis (other than those  royalties  referred to in the  preceding
paragraph).  Further, Wescor assumed the responsibility to manage the day to day
affairs  of  MicroCor  and to  continue  the  development  of  the  non-invasive
hematocrit technology. However Wescor's management of MicroCor and the Agreement
may be terminated if no prototype has been developed in 12 months,  or if no FDA
clearance  is obtained  within 18 months,  or if no first  production  has begun
within 24 months or if Wescor has not fulfilled  payment  obligations  under the
contract.  The 24 month period may be extended in the  discretion  of InMedica's
board of directors. In connection with the Agreement, the Development, Licensing
and  Manufacturing  Agreement with Chi Lin has been  superseded by the Agreement
with Wescor.

         WESCOR.  Wescor is a privately held company engaged for more than three
decades  in  developing,   manufacturing,  and  marketing  medical  instruments,
appliances,  and related products for the diagnostic laboratory market. Wescor's
Biomedical  Products  Division has established a reputation for quality products
as well as quality technical support for its products. Wescor is a leader in the
laboratory  diagnosis of cystic fibrosis with its  Macroduct(R)  and Nanoduct(R)
Sweat   Testing   Systems.   The   Aerospray(R)   family  of   automatic   slide
stainer-cytocentrifuges of Wescor are widely used in hematology and microbiology
laboratories,  providing the newest  technology in microscope  slide staining as
well as  cytocentrifugation.  Wescor  is also a  leader  in  osmometry  with its
Vapro(R) Vapor Pressure Osmometer.  The Wescor Membrane Osmometer makes a direct
measurement  of Colloid  Osmotic  Pressure in whole blood or serum.  See CERTAIN
RELATIONSHIPS  AND  RELATED  TRANSACTIONS  for a  description  of a  transaction
affecting Wescor, then an affiliate of the Company.

         CHI LIN TECHNOLOGY CO. LTD. On May 10, 2001 the Company  entered into a
Stock Purchase Agreement and Development,  Licensing and Manufacturing Agreement
(the  "Agreement")  with Chi Lin Technology Co. Ltd. ("Chi Lin") of the Republic
of China  ("Taiwan").  Pursuant  to the Stock  Purchase  Agreement,  the Company
issued 5,328,204 shares of its restricted common stock to Chi Lin and caused its
subsidiary,  MicroCor to issue 29,420 shares of its  restricted  common stock to
Chi Lin. Following these  transactions,  Chi Lin owned 33.3% of InMedica and 20%
of MicroCor.  The Agreement also granted Chi Lin anti-dilution rights permitting
it to purchase additional shares to maintain its one third percentage  ownership
in the event InMedica issued  additional  shares.  Chi Lin also has the right to
receive additional shares to maintain its percentage  ownership in the event any
outstanding options are exercised. The anti-dilution right expired May 10, 2006.
The agreement also grants Chi Lin the right to nominate two of five directors on
the board of  directors  of the  Company and Chi Lin agreed to take no action to
increase the number of its  directors  to more than 40% of all  directors on the
board for a period of five years which ended May 10,  2006.  Effective  December


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21, 2001 the Company  appointed two new directors  nominated by Chi Lin pursuant
to the above agreement. See "Officers and Directors."

         PRINCIPAL PRODUCTS. During the years 1986 and 1987, MicroCor developed,
manufactured and marketed a portable  electrocardiograph  ("ECG") monitor. About
450 units were  manufactured and sold. In July 1989,  MicroCor signed a research
and  development  contract  with  Critikon (a  predecessor  to Johnson & Johnson
Medical,  Inc.) to develop a medical  instrument  which  would  incorporate  and
enhance the technologies  already developed in the MicroCor portable ECG monitor
and combine  them with  technologies  developed  by  Critikon.  The research and
development  portion of the contract was completed in July 1990, and resulted in
the design of a new product line. The product line was successfully  marketed by
Johnson & Johnson Medical,  Inc. during the 1990's,  providing royalty income to
InMedica.  The product  line has now been phased out and the royalty  income has
ceased.

         PRODUCT  DEVELOPMENT.  For the past 17 years, the Company has conducted
research or engaged in  fundraising  to support  research and  development  of a
method for measuring hematocrit  non-invasively  (without drawing blood) and has
applied for patents  covering this  technology.  Hematocrit is the percentage of
blood  volume  made  up by red  blood  cells  and is a  common  laboratory  test
performed  invasively  by drawing a blood  sample from the  patient.  During May
1997, the Company  employed Dr. Gail  Billings,  a bio-medical  researcher  and,
effective  August 29,  1997,  the  Company  engaged  Medical  Physics,  Inc.,  a
biomedical  research  company located in Salt Lake City, Utah to conduct further
research and development on the project.  The researchers  engaged in additional
research through 1998.  During 1999, the researchers  completed  production of a
transportable  prototype device for use in demonstrating the technology.  During
2001,  the Company  entered  into a  Development,  Licensing  and  Manufacturing
Agreement  with Chi Lin  Technologies  Co. Ltd. for further  development  of the
technology,  which has now been superseded by the Agreement with Wescor. To date
the research and development of MicroCor, its various engineers,  affiliates and
contractors has not completed a prototype  suitable for  commercialization.  The
Company  believes the Wescor prototype has been designed and constructed to meet
the regulatory  requirements for clinical trials which may be required to obtain
regulatory approval for marketing, however, the Company's view is that while the
design and construction may meet regulatory requirements,  there is no certainty
that the device  would  perform  with the  accuracy  needed for  approval.  As a
result,  Wescor  continues  development  work  to  improve  the  performance  of
MicroCor's device to within  parameters likely to result in regulatory  approval
for marketing.

         GOVERNMENT REGULATION. Medical products may be subject to regulation by
the Food and Drug  Administration (the "FDA") pursuant to the Federal Food, Drug
and  Cosmetic Act and other  federal and state laws  regarding  the  regulation,
manufacture  and  marketing of products in which  InMedica may be involved.  The
laws of foreign  nations may also apply to any  international  marketing of such
products.  To the extent  InMedica  has  acquired  or  developed  an interest in
medical  products  or the  companies  manufacturing  such  products,  InMedica's
business may be indirectly  affected by such  regulation.  Testing of MicroCor's
non-invasive  hematocrit technology is subject to prior approval and supervision


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of an  Internal  Review  Board of a medical  facility  overseeing  the  testing.
Marketing of any new product line that might be developed based on the Company's
non-invasive hematocrit device would be subject to prior approval by the FDA.

         The  disclosure on the facing sheet of this Form 10KSB 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.

         PATENTS.  As of December  12, 1995,  the  Company's  application  for a
patent   entitled   "Method  and   Apparatus  for   Non-Invasively   Determining
Hematocrit," was allowed by the U.S. Patent Office and the Patent issued on June
18, 1996 with a term of 17 years.  The  Company  was also  issued an  additional
patent  that claims  priority  from  October 4, 1990,  the date of filing of the
Company's "Method and Apparatus for Non-Invasively Determining Hematocrit".  The
patent  term  runs from  October  4, 1990 for a period of 17 years and will thus
expire  this year on October 4, 2007.  As of October 3, 2000,  the  Company  was
issued  a  third  patent  called  "System  and  Method  for  In-Vivo  Hematocrit
Measurement Using Impedance and Pressure  Plethysmography."  In December,  2003,
the Company  received a Notice of  Allowance  of Claim from the U.S.  Patent and
Trademark office.  On July 20, 2004 MicroCor was issued a fourth patent:  Patent
6,766,191 "System And Method For In-Vivo Hematocrit  Measurement Using Impedance
And Pressure  Plethysmography."  All of the  Company's  patents are now owned by
MicroCor, pursuant to the Agreement with Wescor.

         RAW  MATERIALS.   Materials  and  electronic  components  used  in  the
production and  development of a hematocrit  measuring  device and like products
are components readily available through various suppliers.



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         COMPETITION. InMedica is not presently a significant competitive factor
in the medical products industry.  The medical products industry is dominated by
large and well  established  corporations  with  vastly  greater  financial  and
personnel  resources than those of InMedica.  There can be no assurance that the
product in which  InMedica has an interest  will be  successfully  developed and
able to compete  profitably in the marketplace.  Further,  there is no assurance
that  MicroCor  and Wescor will be able to complete  research,  development  and
marketing of MicroCor's hematocrit technology in advance of any competitors that
may be developing competing technologies.

         RESEARCH AND DEVELOPMENT COSTS.  Research and development costs for the
two  years  ended  December  31,  2006 and  2005 and , were $ 0.00 and  $247,090
respectively.  The absence of research and  development  costs of the Company in
2006 was the result of the  assumption  of research  and  development  by Wescor
pursuant to the Joint Development Agreement.  None of the expenses were incurred
on  customer-sponsored  research  activities  relating to the development of new
products.

         EMPLOYEES.  InMedica  had two part time  employees  as of December  31,
2006.

                                  RISK FACTORS

         Ownership of stock in the Company  involves very high risk, as a result
of the following risk factors:

     1. Substantial  Operating Losses.  Since InMedica  commenced  operations in
1983, it has incurred  substantial  operating  losses and it has an  accumulated
deficit of  $(8,650,683)  as of December  31, 2006.  There is no assurance  that
profitable operations will be achieved in the future.

     2. Financing Necessary. To date the Company's cash flow from operations has
not been  sufficient  to provide  required  working  capital and the Company has
relied upon  borrowing and  contractual  arrangements  (including the sale of an
increasing  percentage  of  MicroCor  which  holds the rights to the  hematocrit
technology) to develop the hematocrit  device.  The Company's  limited  revenues
have been used to finance  operations and research and  development.  The future
success of the Company may depend entirely upon the additional fund raising from
third party sources (as to which there is no commitment).

     3. Competition and Technological  Change. The medical technology markets in
which the Company competes or proposes to compete are extremely  competitive and
characterized by major companies which are dominant in the various markets.  The
Company is not a competitive  factor in those  markets.  Further,  the Company's
proposed  product  areas are  characterized  by rapid  technological  change and
MicroCor's  original  patent  will expire this year,  leaving  MicroCor  without
protection  on the  matters  covered  by the  original  patent . There can be no
assurance  that research and  development  of products by others will not render


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the  Company's  products  or  processes  obsolete  or at a  serious  competitive
disadvantage.

     4. Dependence on Key Personnel. The Company's prospects to develop products
and successfully compete in the marketing of such products will be substantially
dependent upon the experience,  abilities and services of the present  officers,
employees  and  directors of the Company,  MicroCor and Wescor.  The loss of the
services  of one or more of these  persons  could have an adverse  effect on the
business of the Company.  There is no assurance  that the Company,  MicroCor and
Wescor  will  be  successful  in  retaining  existing  officers,  directors  and
employees or attracting additional qualified personnel as needs arise.

     5. Contractual Limitations. Wescor has the contractual right to discontinue
the hematocrit project, in its sole discretion, at any time.

     6. Government Regulation.  The Company's products are subject to regulation
by the Food and Drug  Administration  (the "FDA") both with respect to marketing
and the manner in which  products  are  manufactured.  There is no  assurance of
future  success in  meeting  regulatory  requirements  for FDA  approval  of the
hematocrit device.

     7. Possible Additional  Development.  Clinical trials or further evaluation
may result in the need to do  additional  development  work with  respect to the
hematocrit  device.  Such  development  may be expensive and time  consuming and
there is no assurance of success.

     8. No Dividends.  The Company has paid no dividends on its common stock and
does not intend to pay any dividends in the foreseeable future.

     9. Risks  Inherent  in Common  Stock  Ownership.  The  common  stock of the
Company is subject to fluctuations in market price due to market conditions, 144
sales and results of operations; in the event of liquidation of the Company, the
common  shareholders  would have last priority for  distribution  of any assets,
after creditors and preferred shareholders;  the market for the Company's common
stock is thinly  traded and there is no  assurance  that a market for the common
stock  will  exist  at a time  when a  shareholder  wishes  to  liquidate  stock
ownership.

ITEM 2. PROPERTIES

The Company  presently  leases office space on a month to month basis located at
825 North 300 West, Suite N132, in Salt Lake City, Utah.

ITEM 3. LEGAL PROCEEDINGS

There are no pending legal proceedings.




                                       10
<PAGE>

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None


                                     PART II

ITEM 5. MARKET FOR THE  REGISTRANT'S  COMMON STOCK AND RELATED  SECURITY  HOLDER
MATTERS.

     (a) Price Range of Common Stock.

     The Common Stock of InMedica is traded in the  over-the-counter  market and
     is quoted on the "NASD OTC Bulletin Board". The table on the following page
     sets forth, for the calendar quarters  indicated,  the high and low closing
     bid  prices  for the  InMedica  Common  Stock as  reported  by the NASD OTC
     Bulletin Board.  These quotations  represent prices between dealers without
     adjustment  for  retail  markups,  markdowns  or  commissions  and  may not
     represent actual transactions.

                                            Bid Price
     Quarter Ended                    High             Low
                                  --------          -------
     March 31, 2005                  $.40              $ .13
     June 30, 2005                    .27                .18
     September 30, 2005               .29                .17
     December 31, 2005                .29                .22

     March 31, 2006                   .26                .25
     June 30, 2006                    .25                .22
     September 30, 2006               .25                .15
     December 31, 2006                .21                .15



     On March 9,  2007  there  were  approximately  522  record  holders  of the
InMedica   Common  Stock.   Such  record  holders  do  not  include   individual
participants  in  securities  position  listings.  InMedica  has not  paid  cash
dividends on its Common Stock since  organization.  For the foreseeable  future,
InMedica expects that earnings, if any, will be retained for use in the business
or be used to retire obligations of the Company.

     Four stockholders own an aggregate of 21,016 shares of the Company's Series
A Preferred Stock, which is 8% convertible preferred.  There is no public market
for the Series A Preferred Stock. Aggregate accumulated annual dividends payable
on the preferred stock as of December 31, 2006 were $41,612.





                                       11
<PAGE>

ITEM 6. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.

PLAN OF OPERATION.  During the 12 months beginning January,  2007, the Company's
plan of operation is to continue to work  cooperatively with MicroCor and Wescor
in the development of the Company's  portable  hematocrit  device.  During 2007,
Wescor is expected to continue to fund the research and  development  efforts of
MicroCor pursuant to the Joint Development  Agreement.  During 2006, the Company
funded  administrative  operations with the proceeds of minimum royalty payments
from  MicroCor.  See  CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS  for  a
description of a loan  transaction from Wescor to MicroCor to enable MicroCor to
pay one half of the  minimum  royalty.  Payment of the  balance  of the  minimum
royalty  was  deferred  by the  Company.  During  2005  operations  were  funded
primarily by proceeds from the sale of MicroCor stock to Wescor. The Company has
in the past borrowed from affiliates, however, such borrowing is not expected to
be  available  in the  future  to  meet  obligations  or to  fund  research  and
development.  In past years, salaries of employees and consulting fees have been
accrued and later  settled by the issuance of  restricted  stock.  If necessary,
InMedica will also look for other funding sources.

LIQUIDITY AND CAPITAL  RESOURCES.  As of January 28, 2004, Wescor agreed to loan
monies under a Loan Agreement to InMedica for payment of administrative expenses
pursuant to an  "Overhead  Note." The Overhead  Note bore  interest at the prime
rate as announced from time to time by the Wall Street Journal.  Unpaid balances
of principal and accrued  interest  under the Overhead Note were  convertible to
restricted  common  stock of InMedica at $.10 per share in Wescor's  discretion.
Wescor advanced $108,970 on the Overhead Note over a period of seven months. See
CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS  for  a  description  of  the
subsequent  sale of the Overhead  Note by Wescor and  Wescor's  loan of the sale
proceeds to MicroCor to fund payment of part of the minimum  royalty  payable to
the Company. The minimum royalty payments in 2006 provided, and similar payments
in 2007 are expected to provide, minimum operating capital to the Company.

         During the years 2006 and 2005,  liquidity  was generated by borrowings
from Wescor and from the proceeds of the sale of MicroCor  stock to Wescor.  The
Company may need to engage in fund  raising  during 2007 in order to meet future
cash  needs.  Research  and  development  efforts  of  Wescor  will be funded by
additional  issuances of MicroCor  stock,  as earned by Wescor,  pursuant to the
Joint Development Agreement.

RESULTS OF OPERATIONS.  The Company had an accumulated  deficit of $8,650,683 as
of December 31, 2006.  No revenues  from  operations  were  received in 2006 and
2005. No revenues from  operations  are expected  during 2007. The Company had a
net loss from  operations  of $199,955  for the year ended  December 31, 2006 as
compared to a net loss from  operations of $407,837 for the year ended  December


                                       12
<PAGE>

31,  2005.  The  difference  was  primarily  due to the  shift of  research  and
development  expense from MicroCor to Wescor.  Operating  expenses  decreased in
2006 when  compared  to 2005 by  $207,882  primarily  due to the  assumption  of
research and development by Wescor..

                              (Intentionally blank)





                                       13
<PAGE>




     ITEM 7.  FINANCIAL STATEMENTS

Independent Registered Public Accountants' Report (Robison, Hill & Company)

Consolidated Balance Sheet as of December 31, 2006

Consolidated  Statements of Operations for the years ended December 31, 2006 and
2005

Consolidated Statements of Stockholders' Equity for the years ended December 31,
2006 and 2005

Consolidated  Statements of Cash Flows for the years ended December 31, 2006 and
2005

Notes to Consolidated Financial Statements


                                       14
<PAGE>





















                        INMEDICA DEVELOPMENT CORPORATION


                                       -:-

                INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS' REPORT


                           DECEMBER 31, 2006 AND 2005




















<PAGE>













                                    CONTENTS



                                                                           Page

Independent Registered Public Accountants' Report ..........................F-1

Consolidated Balance Sheet as of December 31, 2006 and 2005.................F-3

Consolidated Statements of Operations for the
Years Ended December 31, 2006 and 2005......................................F-4

Consolidated Statements of Stockholders' Equity for the
Years Ended December 31, 2006 and 2005......................................F-5

Consolidated Statements of Cash Flows for the
Years Ended December 31, 2006 and 2005......................................F-6

Notes to Consolidated Financial Statements..................................F-7















<PAGE>






ROBISON, HILL & CO.                              CERTIFIED PUBLIC ACCOUNTANTS
A PROFESSIONAL CORPORATION
                                                 Brent M. Davies, CPA
                                                 David O. Seal, CPA
                                                 W. Dale Westenskow, CPA
                                                 Barry D. Loveless, CPA




                INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS' REPORT



To the Board of Directors and Stockholders of
InMedica Development Corporation

         We have audited the accompanying consolidated balance sheet of InMedica
Development  Corporation  and subsidiary (the "Company") as of December 31, 2006
and 2005, and the related consolidated  statements of operations,  stockholders'
equity,  and cash  flows for the two years then  ended  (all  expressed  in U.S.
dollars).  These financial  statements are the  responsibility  of the Company's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audit.

         We conducted our audit in  accordance  with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain  reasonable  assurance about whether the
financial  statements  are free of  material  misstatement.  The  Company is not
required  to have,  nor were we engaged  to  perform,  an audit of its  internal
control over financial reporting.  Our audit included  consideration of internal
control over financial  reporting as a basis for designing audit procedures that
are appropriate in the  circumstances,  but not for the purpose of expressing an
opinion on the  effectiveness  of the company's  internal control over financial
reporting.  Accordingly,  we express  no such  opinion.  An audit also  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial   statements,   assessing  the  accounting  principles  used  and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audit  provides  a
reasonable basis for our opinion.

        In our  opinion,  such  financial  statements  present  fairly,  in all
material respects, the financial position of the Company as of December 31, 2006
and 2005, and the results of its operations and its cash flows for the two years
then ended in conformity with accounting  principles  generally  accepted in the
United States of America.


                                     F - 1
<PAGE>











         The accompanying  consolidated financial statements for the years ended
December  31, 2006 and 2005 have been  prepared  assuming  that the Company will
continue  as a  going  concern.  As  discussed  in  Note 1 to  the  consolidated
financial  statements,  the Company's  recurring  losses from  operations  raise
substantial doubt about its ability to continue as a going concern. Management's
plans  concerning  these matters are also described in Note 1. The  consolidated
financial  statements do not include any adjustments  that might result from the
outcome of this uncertainty.





                                                    /s/ Robison, Hill & Co.
                                                    ----------------------------
                                                    Certified Public Accountants

Salt Lake City, Utah
March  23, 2007













                                     F - 2
<PAGE>



                 INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>
                                                                 DECEMBER 31,         DECEMBER 31,
                                                                     2006                 2005
                                                               -----------------    ------------------
<S>                                                          <C>                  <C>
ASSETS
Current Assets
  Cash & Cash Equivalents                                    $           34,079   $            51,885
   Prepaid Expenses & Other                                                 200                   200
   Notes Receivable Current, net of
     unamortized discount of $0 and $335                                      -                44,665
                                                               -----------------    ------------------
        Total Current Assets                                             34,279                96,750
                                                               -----------------    ------------------

Equipment & Furniture, at Cost,
   Less Accumulated Depreciation of $254,363
        and $253,728, respectively                                          858                 1,493
                                                               -----------------    ------------------

TOTAL ASSETS                                                 $           35,137   $            98,243
                                                               =================    ==================

LIABILITIES & STOCKHOLDER'S EQUITY
Current Liabilities
   Related Party Consulting Fees Payable                     $           54,000   $            30,000
   Accounts Payable                                                           -                   477
   Accrued Payroll and related taxes                                          -                 5,553
   Accrued Interest                                                       2,910                   596
   Related Party Royalty Payable                                         33,333                     -
   Preferred Stock Dividends Payable                                     41,612                34,046
   Short-Term Notes Payable                                                   -                71,911
   Current Portion of Long-Term Debt                                          -                     -
                                                               -----------------    ------------------
        Total Current Liabilities                                       131,855               142,583

Long- Term Convertible Promissory Note                                  107,286                     -
                                                               -----------------    ------------------

        Total Liabilities                                               239,141               142,583
                                                               -----------------    ------------------

Minority Interest                                                       (93,362)               (7,668)
                                                               -----------------    ------------------

Stockholders' Equity
   Preferred  Stock, 10,000,000 shares authorized;
     Series A cumulative convertible preferred stock,
     8% cumulative, $4.50 par value, 1,000,000 shares
     designated, 21,016 shares outstanding (aggregate
     liquidation preference of $136,185)                                 94,573                94,573
  Common Stock, $.001 par value: 40,000,000 shares
     authorized,18,629,493 and 18,129,493.share outstanding              18,629                18,129
Additional Paid-in Capital                                            8,426,839             8,377,339
Accumulated Deficit                                                  (8,650,683)           (8,526,713)
                                                               -----------------    ------------------
        Total Stockholders' Equity                                     (110,642)              (36,672)
                                                               -----------------    ------------------

TOTAL LIABILITIES &  STOCKHOLDERS' EQUITY                    $           35,137   $            98,243
                                                               =================    ==================
</TABLE>


   The accompanying notes are an integral part of these financial statements.

                                     F - 3
<PAGE>



                 INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF OPERATIONS


<TABLE>
<CAPTION>
                                                                   FOR THE YEARS ENDED
                                                                      DECEMBER 31,
                                                         ----------------------------------------
                                                               2006                  2005
                                                         ------------------   -------------------
<S>                                                    <C>                  <C>
ROYALTY REVENUES                                       $                 -  $                  -
                                                         ------------------   -------------------

OPERATING EXPENSES
   General & Administrative                                        199,955               160,747
   Research & Development                                                -               247,090
                                                         ------------------   -------------------
        Total Operating Expense                                    199,955               407,837
                                                         ------------------   -------------------

LOSS FROM OPERATIONS                                             (199,955)             (407,837)
                                                         ------------------   -------------------

OTHER INCOME (EXPENSE)
   Interest Income                                                     335                 6,274
   Interest Expense                                                (2,478)               (5,315)
   Other Income                                                          -                   128
                                                         ------------------   -------------------
        Total Other Income (Expenses), Net                         (2,143)                 1,087
                                                         ------------------   -------------------

INCOME (LOSS) BEFORE MINORITY INTEREST                           (202,098)             (406,750)

MINORITY INTEREST                                                   85,694               112,629
                                                         ------------------   -------------------

NET INCOME (LOSS)                                                (116,404)             (294,121)

PREFERRED STOCK DIVIDENDS                                          (7,566)               (7,566)
                                                         ------------------   -------------------

NET INCOME (LOSS) APPLICABLE TO COMMON STOCKHOLDERS    $         (123,970)  $          (301,687)
                                                         ==================   ===================

NET INCOME (LOSS) PER COMMON SHARE (BASIC & DILUTED)   $            (0.01)  $             (0.02)
                                                         ==================   ===================

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
   BASIC                                                        18,278,808            17,854,630
                                                         ==================   ===================
   DILUTED                                                      18,310,332            18,512,764
                                                         ==================   ===================
</TABLE>



   The accompanying notes are an integral part of these financial statements.


                                     F - 4
<PAGE>



                 INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                 FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005

<TABLE>
<CAPTION>
                                                                                              ADDITIONAL
                             PREFERRED STOCK            COMMON STOCK                            PAID-IN            ACCUMULATED
                                 SHARES              AMOUNT      SHARES        AMOUNT           CAPITAL              DEFICIT
                             ----------------     ------------ -----------    ---------     ----------------     -----------------
<S>                          <C>                  <C>          <C>            <C>           <C>                  <C>
Balance, January 1, 2005              21,016    $      94,573  16,622,993   $   16,623    $       8,087,620    $      (8,225,026)
Common Stock issued for Cash               -                -   1,506,500        1,506              149,144                     -
Sale of Subsidiary Stock                   -                -           -            -              140,575                     -
Preferred stock dividends                  -                -           -            -                    -               (7,566)
Net loss                                   -                -           -            -                    -             (294,121)
                             ----------------     ------------ -----------    ---------     ----------------     -----------------

Balance, December 31, 2005            21,016           94,573  18,129,493       18,129            8,377,339           (8,526,713)
Common stock issued for                                                                                                         -
   Convertible promissory                  -                -     500,000          500               49,500                     -
notes
Preferred stock dividends                  -                -           -            -                    -               (7,566)
Net loss                                   -                -           -            -                    -             (116,404)
                             ----------------     ------------ -----------    ---------     ----------------     -----------------

Balance, December 31, 2006            21,016    $      94,573  18,629,493   $   18,629    $       8,426,839    $      (8,650,683)
                             ================     ============ ===========    =========     ================     =================
</TABLE>















   The accompanying notes are an integral part of these financial statements.

                                     F - 5
<PAGE>


                 INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                      FOR THE YEARS ENDED
                                                                                          DECEMBER 31,
                                                                             ---------------------------------------
                                                                                   2006                  2005
                                                                             ------------------    -----------------
<S>                                                                        <C>                   <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net Income (Loss)                                                       $         (116,404)   $        (294,121)
   Adjustments to reconcile net loss to net cash used in
      operating activities:
      Depreciation and amortization                                                        635                  252
      Subsidiary Shares issued in exchange for Research & Development Costs                  -              247,090
      Interest income from amortization or discount on notes receivable                  (335)              (6,274)
      Minority interest in losses                                                     (85,694)            (112,629)
      Changes in assets and liabilities:
        Related party consulting fees payable                                           24,000             (20,000)
         Accounts payable                                                                (477)             (32,822)
         Accrued Interest                                                                2,313                  217
         Related Party Royalty Payable                                                  33,333                    -
         Accrued payroll and related taxes                                             (5,553)             (30,380)
                                                                             ------------------    -----------------
                   Net cash used in operating activities                             (148,182)            (248,667)
                                                                             ------------------    -----------------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchase of Equipment                                                                     -              (1,347)
   Proceeds from note receivable                                                        45,000              180,000
                                                                             ------------------    -----------------
                   Net cash provided by (used in) investing activities                  45,000              178,653
                                                                             ------------------    -----------------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds from notes payable                                                          94,286               13,000
   Payments on notes payable                                                           (8,910)             (45,351)
   Proceeds from sale of common stock                                                        -              150,650
                                                                             ------------------    -----------------
                   Net cash provided by (used in) financing activities                  85,376              118,299
                                                                             ------------------    -----------------

NET INCREASE IN CASH                                                                  (17,806)               48,285
CASH AT BEGINNING OF THE YEAR                                                           51,885                3,600
                                                                             ------------------    -----------------
CASH AT END OF THE YEAR                                                    $            34,079   $           51,885
                                                                             ==================    =================

SUPPLEMENTAL DISCLOSURE OF CASH FLOW
   Cash paid during the year for interest                                  $             1,720   $            5,098
                                                                             ==================    =================
   Cash paid during the year for income taxes                              $               200   $              200
                                                                             ==================    =================

SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING & FINANCING ACTIVITIES
   Convertible promissory notes exchanged for 500,000 shares of common     $            50,000   $                -
stock
                                                                             ==================    =================
   Sale of Subsidiary stock for notes receivable                           $                 -   $          270,000
                                                                             ==================    =================
</TABLE>

   The accompanying notes are an integral part of these financial statements.


                                     F - 6
<PAGE>


                 INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDING DECEMBER 31, 2006 AND 2005

NOTE 1 - NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

         InMedica  Development  Corporation  ("InMedica") and its majority-owned
subsidiary,  MicroCor,  Inc.  ("MicroCor")  (collectively  referred  to  as  the
"Company"),  historically have engaged in the research,  development and sale of
medical technology and fund raising to support such activities. During the years
1986 and 1987,  MicroCor  developed  and marketed a portable  electrocardiograph
("ECG")  monitor  and  manufactured  and sold  about 450  units.  In July  1989,
MicroCor  signed a research and  development  contract  with Johnson and Johnson
Medical,  Inc.  ("Johnson  and  Johnson")  for  further  development  of the ECG
technology.  As a result of the agreement,  Johnson and Johnson manufactured and
marketed a product line under the name of Dinamap PlusTM which  incorporated the
Company's ECG technology.  Royalties  received from Johnson and Johnson were the
Company's  sole source of revenue  through the year 2000.  In 2001,  Johnson and
Johnson  stopped  manufacturing  and marketing the Dinamap  PlusTM product line;
therefore, MicroCor no longer receives royalties from Johnson and Johnson.

         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").  Hematocrit is the percentage of red blood
cells in a given volume of blood.  At the present time,  the test for hematocrit
is performed  invasively by drawing blood from the patient and testing the blood
sample in the laboratory.

         Commercialization   of  the  Non-Invasive   Hematocrit   Technology  is
dependent upon favorable testing, Food and Drug Administration ("FDA") approval,
financing of further  research and development  and, if warranted,  financing of
manufacturing  and marketing  activities.  During 1999,  the Company  produced a
transportable  prototype device for use in demonstrating  the technology.  Since
1999, the Company has continued to pursue further development of the technology.

         In May  2001,  the  Company  entered  into an  agreement  with  Chi Lin
Technology Co. Ltd. ("Chi Lin"), a subsidiary of Chi Mei Group, Taiwan,  R.O.C.,
to further develop, produce, and market the Technology. Under the agreement, Chi
Lin also  acquired  stock  in  InMedica  and  stock  in  InMedica's  subsidiary,
MicroCor.

                                     F - 7
<PAGE>



                 INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDING DECEMBER 31, 2006 AND 2005

NOTE 1 - NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations (Continued)

         Effective   September  7,  2004,  the  Company  entered  into  a  Joint
Development  Agreement (See Note 9) with Wescor, Inc., a Utah medical technology
company  ("Wescor"),  pursuant to which,  Wescor purchased 15% of the issued and
outstanding  common stock of MicroCor on a pro-rata basis from InMedica and from
Chi Lin for  $375,000.  The  purpose of the Joint  Development  Agreement  is to
further develop,  produce, and market the Technology.  Prior to the consummation
of the transaction  InMedica held 80% of the issued and outstanding common stock
of MicroCor and Chi Lin owned 20%. Following the transaction, InMedica held 68%,
Chi Lin held 17% and  Wescor  held 15% of the issued  and  outstanding  stock of
MicroCor.  InMedica's portion of the purchase monies, $300,000, was paid $30,000
down  and  the  balance  in  installments  over  18  months  pursuant  to a note
receivable (See Note 2). In the third quarter of 2005, Wescor,  Inc. advised the
Company  that it had,  through  MicroCor  Inc.,  completed  a  prototype  of the
hematocrit  device suitable for conducting  clinical trials necessary to prepare
for a submission to the FDA for  regulatory  review.  As a result,  the board of
directors of MicroCor  voted to issue  500,000  restricted  shares of the common
stock of MicroCor  to Wescor  pursuant to the Joint  Development  Agreement,  as
previously approved on January 24, 2005, at a meeting of Shareholders. Following
the issuance of the MicroCor  stock,  the Company owned 57% of MicroCor,  Wescor
owned 29% of MicroCor and Chi Lin  Technology  Company,  Ltd.  owned the balance
(14%) of MicroCor. To date the research and development of MicroCor, its various
engineers, affiliates and contractors has not completed a prototype suitable for
commercialization.  The Company  believes the Wescor prototype has been designed
and  constructed to meet the regulatory  requirements  for clinical trials which
may be  required to obtain  regulatory  approval  for  marketing,  however,  the
Company's  view is that while the design and  construction  may meet  regulatory
requirements,  there is no  certainty  that the device  would  perform  with the
accuracy needed for approval.  As a result, Wescor continues development work to
improve the  performance  of MicroCor's  device to within  parameters  likely to
result in regulatory approval for marketing.

Basis of Presentation

         The Company's consolidated financial statements have been prepared on a
going  concern  basis,   which   contemplates  the  realization  of  assets  and
satisfaction of liabilities in the normal course of business.  The  consolidated
financial  statements do not include any adjustment  relating to  recoverability
and  classification  of recorded amounts of assets and liabilities that might be
necessary  should the  Company be unable to  continue  as a going  concern.  The
Company  generated  net losses from  operations of $116,404 and $294,121 in 2006
and 2005, respectively,  and negative cash flows from operations of $148,182 and
$248,667 in 2006 and 2005, respectively. As of December 31, 2006 the Company had
an accumulated  deficit of $8,650,683 and a  stockholders'  deficit of $110,642.
These conditions raise substantial doubt as to the

                                     F - 8
<PAGE>



                 INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDING DECEMBER 31, 2006 AND 2005

NOTE 1 - NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation (Continued)

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  the
necessary debt or equity  financing  will be available,  or will be available on
terms acceptable to the Company.  Management's  operating plan includes pursuing
additional  fundraising as well as research and  development in preparation  for
the  clinical  trials that will be  required  for FDA  approval  for the medical
technology  that  is  currently  under   development,   pursuant  to  the  Joint
Development Agreement.

Patents

         The Company has four patents covering various aspects of its Technology
which expire from 2007 to 2013.

Principles of Consolidation

         The consolidated  financial statements include the accounts of InMedica
and MicroCor.  All material  inter-company  accounts and transactions  have been
eliminated.

Revenue Recognition

         The Company  accounts  for income  taxes using the asset and  liability
method.  Deferred income taxes are determined  based on the estimated future tax
effects of differences  between the financial  reporting and tax reporting bases
of assets and liabilities  given the provisions of currently enacted tax laws. A
valuation allowance is provided when it is more likely than not that all or some
portion of the deferred income tax assets will not be realized.

Equipment and Furniture

         Equipment and furniture are recorded at cost and depreciated  using the
straight-line  method over the estimated  useful lives of the assets which range
from three to five years.

Equipment and Furniture consist of the following:

                                                     December 31,
                                        ---------------------------------------
                                              2006                 2005
                                        -----------------    ------------------
 Equipment                            $          244,033   $           244,033
 Furniture                                        11,188                11,188
                                        -----------------    ------------------
                                                 255,221               255,221
 Less accumulated depreciation                 (254,363)             (253,728)
                                        -----------------    ------------------

 Total                                $              858   $             1,493
                                        =================    ==================

                                     F - 9
<PAGE>

                 INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDING DECEMBER 31, 2006 AND 2005

NOTE 1 - NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (Continued)
-----------------------------------------------------------------

Equipment and Furniture (Continued)

         Depreciation expense for the years ended December 31, 2006 and 2005 was
$635 and $252, respectively.

Research and Development

         Research and development costs are expensed as incurred.

Net Loss Per Common Share

         Basic net loss per common share is computed by dividing net loss by the
weighted average number of common shares  outstanding  during the year.  Diluted
net loss per common share ("Diluted  EPS") reflects the potential  dilution that
could occur if stock options or other common stock equivalents were exercised or
converted into common stock. At December 31, 2006 and 2005, respectively,  there
were 31,524 and 658,134  potentially  dilutive  common  stock  equivalents.  The
computation of Diluted EPS does not assume  exercise or conversion of securities
that would have an anti-dilutive effect on net loss per common share.

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.

Comprehensive Income

         There are no  components  of  comprehensive  income  other than the net
loss.

Cash Equivalents

         For the purpose of  reporting  cash flows,  the Company  considers  all
highly liquid debt  instruments  purchased with maturity of three months or less
to be cash equivalents to the extent the funds are not being held for investment
purposes.

                                     F - 10
<PAGE>



                 INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDING DECEMBER 31, 2006 AND 2005

NOTE 1 - NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (Continued)
-----------------------------------------------------------------

Concentration of Credit Risk

         The  Company has no  significant  off-balance-sheet  concentrations  of
credit  risk such as foreign  exchange  contracts,  options  contracts  or other
foreign  hedging  arrangements.  The Company  maintains the majority of its cash
balances with one financial institution, in the form of demand deposits.

Fair Value of Financial Instruments

         The carrying value of the Company's  financial  instruments,  including
receivables,  accounts  payable,  accrued  liabilities,  and  notes  payable  at
December 31, 2006 and 2005 approximates  their fair values due to the short-term
nature of these financial instruments.

Recent Accounting Standards

         In June,  2006 the FASB issued FIN 48,  "Accounting  for Uncertainty in
Income Taxes--an  interpretation of FASB Statement No. 109". This Interpretation
clarifies,  among other things,  the accounting for  uncertainty in income taxes
recognized in an  enterprise's  financial  statements  in  accordance  with FASB
Statement No. 109, Accounting for Income Taxes. This Interpretation prescribes a
recognition  threshold and  measurement  attribute  for the financial  statement
recognition and measurement of a tax position taken or expected to be taken in a
tax  return.  This  Interpretation  also  provides  guidance  on  derecognition,
classification,   interest  and  penalties,   accounting  in  interim   periods,
disclosure,  and  transition  is  effective  for fiscal  years  beginning  after
December 15, 2006.  Earlier  application is encouraged if the enterprise has not
yet issued financial statements,  including interim financial statements, in the
period the  Interpretation  is adopted.  FIN 48,  Accounting for  Uncertainty in
Income  Taxes--an  interpretation  of FASB  Statement  No. 109, is effective for
fiscal  years  beginning  after  December  15,  2006.  Earlier   application  is
encouraged if the enterprise has not yet issued financial statements,  including
interim  financial  statements,  in the period the  Interpretation  is  adopted.
Management is evaluating the financial impact of this pronouncement.

         In September  2006, the FASB issued SFAS No. 157,  "Accounting for Fair
Value  Measurements."  SFAS No.  157  defines  fair  value,  and  establishes  a
framework for measuring fair value in generally accepted  accounting  principles
and expands disclosure about fair value measurements.  SFAS No. 157 is effective
for the Company for financial statements issued subsequent to November 15, 2007.
The Company does not expect the new standard to have any material  impact on the
financial position and results of operations.

                                     F - 11
<PAGE>



                 INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDING DECEMBER 31, 2006 AND 2005

NOTE 1 - NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (Continued)
-----------------------------------------------------------------

Recent Accounting Standards (Continued)

         In September 2006, the staff of the Securities and Exchange  Commission
issued Staff Accounting Bulletin No. 108 ("SAB 108") which provides interpretive
guidance  on how  the  effects  of the  carryover  or  reversal  of  prior  year
misstatements  should be considered in quantifying a current year  misstatement.
SAB 108 becomes effective in fiscal 2007. Management is evaluating the financial
impact of this pronouncement.

NOTE 2 - NOTES RECEIVABLE

         Notes receivable consisted of the following:
<TABLE>
<CAPTION>
                                                                              December 31,          December 31,
                                                                                  2006                  2005
                                                                           -------------------   -------------------
<S>                                                                      <C>                   <C>
WesCor, Inc. Sale of 12% interest in MicroCor (see note 9)
   Monthly payments of $15,000 through
   March 7, 2006                                                         $                  -  $             45,000
Less Unamortized discount, effective rate 4.5%                                              -                   335
Less Current Portion                                                                        -                44,665
                                                                           -------------------   -------------------

Notes Receivable Non-Current                                             $                  -   $                 -
                                                                           ===================   ===================
</TABLE>

         The Company has  recorded  $6,274 in interest  income  during 2006 from
this note.

NOTE 3 - NOTES PAYABLE

         Notes payable consisted of the following:
<TABLE>
<CAPTION>
                                                                              December 31,          December 31,
                                                                                  2006                  2005
                                                                           -------------------   -------------------
<S>                                                                      <C>                   <C>
WesCor, Inc. Overhead Note,
  Due December 12, 2010 including interest
  at prime (8.25% at December 31, 2006)
  Unsecured convertible at $.10 per share                                $             47,284   $            71,911

WesCor, Inc.  Secured  Convertible  Promissory Note, Due March 6, 2008 including
  interest at prime plus 2 10.25% at December 31, 2006)
  Unsecured convertible at $.10 per share                                              60,002                     -
                                                                           -------------------   -------------------

Less Current Portion                                                                        -                71,911
                                                                           -------------------   -------------------

          Total Long-Term Convertible Promissory Notes                   $            107,286   $                 -
                                                                           ===================   ===================
</TABLE>



                                     F - 12
<PAGE>



                 INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDING DECEMBER 31, 2006 AND 2005

NOTE 4 - INCOME TAXES

         Deferred income tax assets consisted of the following:
<TABLE>
<CAPTION>
                                                                              December 31,          December 31,
                                                                                  2006                  2005
                                                                            ------------------    ------------------
<S>                                                                      <C>                   <C>
Net operating loss carryforwards                                          $           999,438   $         1,270,279
Future deductions temporary differences related
  to compensation, reserves, and accruals                                               8,169                16,978
Less valuation allowance                                                          (1,007,607)           (1,278,257)
                                                                            ------------------    ------------------
Deferred income tax assets                                                $                 -   $                 -
                                                                            ==================    ==================
</TABLE>

         The  valuation  allowance  decreased  $270,650 in 2006. At December 31,
2006, the Company has consolidated net operating loss  carryforwards for federal
income tax purposes of $3,094,234. These net operating loss carryforwards expire
at various dates  beginning in 2006 through 2026.  Due to the  uncertainty  with
respect to  ultimate  realization,  the  Company  has  established  a  valuation
allowance for all deferred income tax assets.

NOTE 5 - COMMON STOCK TRANSACTIONS

         During the last three years the  Company  made the  following  sales of
unregistered common stock in reliance upon Section 4(2) of the Securities Act of
1933:
<TABLE>
<CAPTION>
            Date                  Shares                       Shareholder                         Price
------------------------------ -------------- ---------------------------------------------- ------------------
<S>                            <C>            <C>                                            <C>
October 6, 2006                 150,000       Dean A. Clark, Trustee                         $          15,000
October 6, 2006                 150,000       David P. Martin                                $          15,000
October 6, 2006                  95,000       Julie P. Cheney                                $           9,500
October 6, 2006                  95,000       Lloyd A. Hardcastle                            $           9,500
October 6, 2006                  10,000       Michael L. Schwab                              $           1,000
May 2, 2005                     715,500       Chi Lin Technology Company, Ltd                $          71,550
January 24, 2005                440,000       Larry E. Clark                                 $          44,000
January 19, 2005                101,000       Richard Bruggeman                              $          10,100
January 11, 2005                125,000       Dean Clark                                     $          12,500
January 4, 2005                 125,000       Dave Martin                                    $          12,500
December 30, 2004               240,000       Ralph Henson                                   $          24,000
October 14, 2004                400,000       Larry E. Clark                                 $          40,000
</TABLE>


                                     F - 13
<PAGE>



                 INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDING DECEMBER 31, 2006 AND 2005

NOTE 6 - STOCK OPTIONS

Other Stock Options

         During  1995  through  2000,   non-qualified  options  were  issued  to
employees  and  consultants  for  services.  All  options are  exercisable  upon
granting.  A summary  of this  stock  option  activity  for 2006 and 2005 was as
follows:
                                                              WEIGHTED
                                                              AVERAGE
                                         OPTION               EXERCISE
                                         SHARES                PRICE
                                    ------------------    -----------------
Outstanding at January 1, 2005                376,000   $             0.44
  Granted                                           -                    -
  Forfeited or expired                      (338,500)                 0.44
                                    ------------------    -----------------

Outstanding at December 31, 2005               37,500                 1.22
  Granted                                           -                    -
  Forfeited or expired                       (37,500)                 1.22
                                    ------------------    -----------------

Outstanding at December 31, 2006                    -   $                -
                                    ==================    =================


The  following  table  summarizes  information  about  stock  options  issued to
employees outstanding at December 31, 2006:

<TABLE>
<CAPTION>
                            OPTIONS OUTSTANDING                                        OPTIONS EXERCISABLE
                                        WEIGHTED
                                        AVERAGE             WEIGHTED                               WEIGHTED
RANGE OF                                CONTRACTUAL         AVERAGE                                AVERAGE
EXERCISE             NUMBER             LIFE                EXERCISE           NUMBER              EXERCISE
PRICES               OUTSTANDING        (IN YEARS)          PRICE              EXERCISABLE         PRICE
-------------------  -----------------  ------------------  -----------------  -----------------   -----------------
<S>                  <C>                <C>                 <C>                <C>                 <C>
$               -                   -                   -   $              -                  -                   -
</TABLE>


The  following  table  summarizes  information  about  stock  options  issued to
non-employees outstanding at December 31, 2006:

<TABLE>
<CAPTION>
                            OPTIONS OUTSTANDING                                        OPTIONS EXERCISABLE
                                        WEIGHTED
                                        AVERAGE             WEIGHTED                               WEIGHTED
RANGE OF                                CONTRACTUAL         AVERAGE                                AVERAGE
EXERCISE             NUMBER             LIFE                EXERCISE           NUMBER              EXERCISE
PRICES               OUTSTANDING        (IN YEARS)          PRICE              EXERCISABLE         PRICE
-------------------  -----------------  ------------------  -----------------  -----------------   -----------------
<S>                  <C>                <C>                 <C>                <C>                 <C>
$               -                   -                   -   $              -                  -                   -
</TABLE>



                                     F - 14
<PAGE>



                 INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDING DECEMBER 31, 2006 AND 2005

NOTE 7 - PREFERRED STOCK

         The  Company is  authorized  to issue  10,000,000  shares of  preferred
stock.  The Company's  board of directors  designated  1,000,000  shares of this
preferred  stock as Series A Cumulative  Convertible  Preferred Stock ("Series A
Preferred")  with a par  value of  $4.50  per  share.  Holders  of the  Series A
Preferred  receive  annual  cumulative  dividends  of  eight  percent,   payable
quarterly, which dividends are required to be fully paid or set aside before any
other  dividend  on any class or series of stock of the  Company is paid.  As of
December 31, 2006,  preferred stock dividends  payable in the amount of $34,046,
or $1.62  per share  are due and  payable.  Holders  of the  Series A  Preferred
receive no voting  rights but do receive a  liquidation  preference of $4.50 per
share, plus accrued and unpaid dividends.  Series A Preferred  stockholders have
the right to convert  each share of Series A Preferred to the  Company's  common
stock at a rate of 1.5 common shares to 1 preferred share.

NOTE 8 - EARNINGS PER SHARE

         The  following  data show the amounts  used in  computing  earnings per
share and the  effect on income  and the  weighted  average  number of shares of
dilutive potential common stock
<TABLE>
<CAPTION>
                                                                                     FOR THE YEARS ENDED
                                                                                         DECEMBER 31,
                                                                           -----------------------------------------
                                                                                  2006                  2005
                                                                           -------------------   -------------------
<S>                                                                      <C>                   <C>
Net Income (Loss)                                                        $          (116,404)  $          (294,121)
Less: preferred dividends                                                             (7,566)               (7,566)
                                                                           -------------------   -------------------

Income (Loss) available to common stockholders used in basic EPS         $          (123,970)  $          (301,687)
                                                                           -------------------   -------------------

Convertible preferred stock                                                             7,566                 7,566
Convertible notes payable                                                                   -                 4,883
                                                                           -------------------   -------------------
Income (Loss) available to common stockholders after assumed
     Conversion of dilutive securities                                   $          (116,404)  $          (289,238)
                                                                           ===================   ===================

Weighted average number of common shares used in basic EPS                         18,278,808            17,854,630
Effect of dilutive securities:
     Convertible preferred stock                                                       31,524                31,524
     Convertible notes payable                                                              -               589,110
     Options                                                                                -                37,500
                                                                           -------------------   -------------------
Weighted average number of common shares and dilutive potential
     common stock used in diluted EPS                                              18,310,332            18,512,764
                                                                           ===================   ===================
</TABLE>



                                     F - 15
<PAGE>



                 INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDING DECEMBER 31, 2006 AND 2005

NOTE 9 - RELATED PARTY TRANSACTIONS

         The Company has a  consulting  arrangement  with an entity owned by the
Company's  chairman  whereby the Company agreed to pay $2,000 per month.  Either
party can  terminate  the  arrangement  at any time upon 30 days  prior  notice.
During 2000 and through May 31, 2001,  unpaid amounts  accrued  interest at 10%.
Beginning  April 1, 2001,  the  agreement  was modified to eliminate  any future
accrual of interest.  During 2006,  $44,000 in accrued consulting was paid under
this  agreement.  As of  December  31,  2006  and  2005,  $30,000  and  $50,000,
respectively, was owed under the arrangement.

            Effective  October 6, 2006,  the Company  issued  500,000  shares of
restricted common stock to five persons who exercised conversion rights pursuant
to a  promissory  note held by them with a total  outstanding  note  balance  of
$50,000.  The exchange  shares were issued  pursuant to Rule 506 of Regulation D
and other exemptions.  The foregoing shares were restricted  securities and were
issued to  accredited  investors  who acquired the  securities  based upon their
representations  that they were  purchasing  for their own  account  and not for
resale.  The note  converted  was  originally  issued  to Wescor in 2004 and was
acquired  by the five  purchasers  from Wescor in  September,  2006 in a private
purchase.  The  purpose of the note sale was to provide  cash to Wescor.  Wescor
then loaned to MicroCor  sufficient  funds to enable Microcor to pay one half of
the minimum  royalty owing to InMedica  under the Joint  Development  Agreement.
Funds from the minimum  royalty will be used by InMedica to fund  administrative
expenses of the Company.  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.

NOTE 10 - JOINT DEVELOPMENT AGREEMENT

         Effective  September 7, 2004,  InMedica  and MicroCor  entered into the
Joint Development  Agreement pursuant to which Wescor, a Utah medical technology
company  ("Wescor") agreed to purchase 15% of the issued and outstanding  common
stock of MicroCor on a pro-rata  basis from InMedica  (selling 12%) and from Chi
Lin Technology Co, Ltd of Tainan, Taiwan (selling 3%), ("Chi Lin") for $375,000.
Prior to the consummation of the transaction InMedica held 80% of the issued and
outstanding   common  stock  of  MicroCor  and  Chi  Lin  owned  20%.  Following
shareholder approval of the transaction, InMedica held 68%, Chi Lin held 17% and
Wescor  held 15% of the issued and  outstanding  stock of  MicroCor.  InMedica's
portion of the purchase monies,  $300,000, was paid $30,000 down and the balance
in installments  over 18 months  pursuant to a note receivable  (Note 2). Twenty
percent of each payment made to InMedica was applied to  outstanding  debt owing
from InMedica to Wescor (the Overhead Note, see note 3) in the amount of $71,911
at December 31, 2006.

         The  Agreement  provides  that in the  event  Wescor is  successful  in
producing  a working  prototype  using the  hematocrit  technology,  capable  of
meeting FDA GMP requirements suitable

                                     F - 16
<PAGE>



                 INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDING DECEMBER 31, 2006 AND 2005

NOTE 10 - JOINT DEVELOPMENT AGREEMENT (Continued)

for conducting clinical trials (Phase1),  MicroCor will issue 500,000 additional
restricted  shares of MicroCor stock to Wescor.  Thereafter if Wescor  completes
clinical  trials and obtains the FDA's  clearance to market such products (Phase
2),  500,000  additional  restricted  shares of MicroCor stock will be issued to
Wescor by MicroCor.  Then, upon manufacturing and initial  introduction into the
US  market  of such  products  (Phase  3),  MicroCor  will  issue to  Wescor  an
additional 700,000 restricted shares of its stock,  giving Wescor a total of 49%
of the issued and outstanding  stock of MicroCor.  These additional shares to be
issued to Wescor will be in  consideration  of each Phase of development work by
Wescor. The determination of Wescor's  completion of the above three Phases will
be made by MicroCor's  board which is controlled by InMedica.  In the event of a
disagreement  between the parties as to fulfillment of the above standards,  the
parties  intend to negotiate in good faith to resolve the matter.  The number of
shares to be issued by  MicroCor  to Wescor  for  services  has been  determined
during a process of arms length negotiation between InMedica and Wescor.  During
such  negotiations,  the board of directors of InMedica  considered the need for
funding to continue  development  of the  hematocrit  technology,  the Company's
present financial  condition (ie. lack of cash flow,  limited capital assets and
limited  borrowing  capacity),  the lack of  interest  expressed  by the  larger
companies  contacted by the board of directors (in the absence of an FDA cleared
prototype),  the lack of present capacity of the smaller companies  contacted by
the board (other than Wescor) and the  reputation  and  experience  of Wescor in
development  of medical  technology.  Based on these  considerations,  the board
concluded that, in its judgment,  the Agreement  should be pursued.  The initial
500,000  restricted  shares of MircroCor  were issued to Wescor during the third
quarter of 2005.

         Upon  completion  of Phase 2, and  again  upon  completion  of Phase 3,
Wescor  will  have the  option  to  purchase  all (but  not less  than  all) the
remaining  stock of MicroCor from InMedica and Chi Lin, for 90 days.  The buyout
price to Wescor for the  remaining  MicroCor  shares will be 90% of an appraised
value or a value suggested by Wescor.  Wescor will choose the appraiser  subject
to the right of InMedica and Chi Lin to object to the selection.  In the case of
an  objection  Wescor  will make  another  selection  until the  parties  are in
agreement.  Following receipt of Wescor's notice of appraised value or suggested
value,  InMedica and Chi Lin will have the right to obtain a fairness opinion at
their  expense,  before acting on Wescor's  offer.  The fairness  opinion of the
value of the MircoCor stock will be obtained from a business  valuation  expert,
chosen by InMedica and Chi Lin, as to which Wescor has no reasonable  objection.
If the fairness  opinion  reports that Wescor's  appraised or suggested value is
not within a fair range, Wescor's option to purchase the balance of the MicroCor
stock from Chi Lin and InMedica will terminate.  However,  if Wescor's appraised
or suggested  value is  determined  by the fairness  opinion to be within a fair
range,  InMedica  and Chi Lin will still  have the  opportunity  to acquire  the
complete  ownership of MicroCor  through a "trump" option allowing them to offer
to purchase  all of the shares of  MicroCor  owned by Wescor at 110% of Wescor's
appraised value or suggested value.

                                     F - 17
<PAGE>



                 INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDING DECEMBER 31, 2006 AND 2005

NOTE 10 - JOINT DEVELOPMENT AGREEMENT (Continued)

In such case,  Wescor may choose to sell its  ownership  of MicroCor to InMedica
and Chi Lin or may revive its first  option by a notice to InMedica  and Chi Lin
increasing  the  purchase  price  so as to be  based  on at  least  110%  of the
valuation  used as the trump option  value by InMedica and Chi Lin.  This option
procedure,  essentially  bidding for the right to purchase  all of the  MicroCor
stock,  may be repeated as many times as is necessary until a purchaser has been
determined.  If Wescor is ultimately the purchaser, the Agreement will terminate
except for the  royalty  rights of  InMedica  and Chi Lin.  Wescor has also been
granted a right of first  refusal in the event of a bona fide third  party offer
to acquire MicroCor.

NOTE 11 - ROYALTY RIGHTS

         In  connection  with the  Joint  Development  Agreement,  MicroCor  has
granted  certain  revenue  royalty  rights  to  InMedica  and Chi Lin  under the
Agreement  based on future annual  revenues from the  hematocrit  technology and
calculated as follows:  Annual royalties will equal the sum of four percent (4%)
of the first $5,000,000 in sales and licensing  revenues,  three percent (3%) of
sales and licensing  revenues in amounts exceeding  $5,000,000 but not exceeding
$20,000,000,  and two percent  (2%) of sales and  licensing  revenues in amounts
exceeding  $20,000,000;  plus (ii)  twenty  five  percent  (25%) of all  royalty
revenues (revenues from licensing of the hematocrit  technology to others).  The
total royalties are split between InMedica and Chi Lin with InMedica receiving a
percentage of total royalties equal to a fraction, the numerator of which is the
total world revenues from sales of the hematocrit technology,  less the revenues
from sales in Asia;  and the  denominator  of which is the total world  revenues
from sales.  The Chi Lin royalty is a percentage of total  royalties  equal to a
fraction,  the  numerator  of  which is  revenue  from  sales  in Asia;  and the
denominator of which is the total world revenues from sales.  Asia is defined to
mean  Australia,  New  Zealand  and the  countries  of Asia  (including  without
limitation,  Indonesia, Malaysia and the island countries of the Western Pacific
Rim; but excluding Russia, Turkey and the countries of the Middle East from Iran
and to the west).  Further,  a minimum  royalty of  $200,000  per year begins 18
months after the  effective  date and is payable by MicroCor to InMedica and Chi
Lin on an 80%-20% basis without  regard to whether  actual sales have been made.
However in the event that any party (including Wescor) or a third party acquires
eighty percent  control of MicroCor,  the new control party has the right to buy
out the royalty  rights from InMedica and Chi Lin for $1,000,000 or 100% of five
times the sum of the minimum royalty  payments for the immediately  preceding 12
months,  whichever is greater.  The buyout  proceeds  would be shared 80%-20% by
InMedica and Chi Lin. At the present time, MicroCor is paying 50% of the minimum
royalty to InMedica and Chi Lin is deferring its minimum royalty amounts.

                                     F - 18
<PAGE>



ITEM 8. DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES.

         During the registrant's two most recent fiscal years and any subsequent
interim period,  there were no  disagreements  with accountants on any matter of
accounting  principles or practices,  financial statement disclosure or auditing
scope or procedure, which disagreement(s) if not resolved to the satisfaction of
the former  accountants  would have caused them to make reference to the subject
matter of the  disagreement(s)  in  connection  with their  reports.  The former
accountants'  reports  for the  period of their  engagement  did not  contain an
adverse  opinion or  disclaimer  of  opinion.  However  the former  accountants'
reports were each modified for uncertainty whether the registrant would continue
as a going concern. There was no qualification or modification as to audit scope
or accounting principles

ITEM 8A.  CONTROLS AND PROCEDURES.
         Management is responsible for  establishing  and  maintaining  adequate
internal  control over financial  reporting for the small business  issuer.  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 Annual  Report on Form  10-KSB,  that the
Company's  disclosure  controls and procedures (as defined in Exchange Act Rules
13a - 15(e) 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

ITEM 8B.   OTHER INFORMATION.    None



                                       15
<PAGE>




                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(A) OF THE EXCHANGE ACT.

     DIRECTORS AND EXECUTIVE OFFICERS OF INMEDICA. The following table furnishes
     information concerning the executive officers and directors of InMedica and
     their business backgrounds for at least the last five years.

     Name                  Age              Director Since

Larry E. Clark             85                     1995
Ralph Henson               62                     1999
Richard Bruggeman          52                     1995
Sheng Jung Chiang          61                     2001
Mao-Song Lee               59                     2002

     Certain additional information follows regarding the executive officers and
directors of InMedica and their business  backgrounds for at least the last five
years.

LARRY E. CLARK - Chairman of the Board since April 1995. Mr. Clark was president
of Clark-Knoll & Associates, Inc., a Denver, Colorado management consulting firm
specializing  in  mergers  and  acquisitions  from  1963 to 1969.  He  served as
president of Petro-Silver, Inc., a small public company based in Salt Lake City,
Utah, which engaged in the oil and gas business from 1970 to 1975.  Beginning in
1975 and continuing to December,  2003, Mr. Clark was president of Larry Clark &
Associates,  a  private  company  which  engaged  in  a  corporate  mergers  and
acquisitions  business  or  business  consulting.  In  1981,  Mr.  Clark  formed
Hingeline-Overthrust  Oil & Gas, Inc., a Utah public company,  which merged with
Whiting  Petroleum  Corporation of Denver,  Colorado in December 1983. Mr. Clark
served as a director  of  Whiting  Petroleum  from 1983 until 1992 when  Whiting
Petroleum  merged  with IES  Industries  and Mr.  Clark  returned  to full  time
employment as president of Larry Clark & Associates.  Mr. Clark was President of
InMedica from April 1995 until December, 1999. Mr. Clark graduated from the U.S.
Merchant Marine Academy with a BS degree in Naval Science in 1943 and received a
degree in Business Administration from the University of Wyoming in 1948.

RALPH HENSON - Director,  President and Chief  Executive  Officer of the Company
since December 1999.  Prior to his employment  with InMedica,  Mr. Henson worked
from 1996  until  1999 as  Director  of Sales and acting  Director  of  Clinical
Programs of In-line  Diagnostics of Farmington,  Utah. He was also employed from
1987 to 1994  with  Mallinckrodt  Medical,  in sales  and  marketing,  including
service as Export Sales and Marketing Manager for Mallinckrodt Sensor Systems of
Hannef,  Germany.  From 1994 to 1995 he was national sales manager with HemoCue,
Inc. of Mission Viejo, California.



                                       16
<PAGE>

RICHARD BRUGGEMAN - Director and Secretary/Treasurer and Chief Financial Officer
of the Company since April,  1995 and full time  employee of the Company  during
2002. Since 2003, Mr. Bruggeman has been employed with Kitchen Resource, Inc., a
Utah based firm distributing  kitchen  appliances.  He was employed part time or
full time as  Controller  of Kitchen  Specialties,  Inc.  from 1993 to December,
2001, a Salt Lake City firm distributing kitchen appliances in the United States
and Canada.  From 1986 until 1993 he was employed by the  Company's  subsidiary,
MicroCor,  Inc. as financial manager. During the period 1983-1985, he was a sole
practitioner  in accounting  and from 1981-1983 he was employed by the Salt Lake
City  public  accounting  firm  of  Robison  Hill  & Co.  He  has  since  had no
affiliation  with that accounting firm. He graduated from the University of Utah
in 1981 with a B.S. degree in accounting.

SHENG JUNG  (ROBERT S.) CHIANG - Director of the Company  since May,  2001.  Mr.
Chiang was vice president and secretary  general of Onking Chain Store Co. Ltd.,
a  company  organized  in the  Republic  of China  (hereinafter  "Taiwan")  from
November,  1988 through June,  2000 when he became the Vice President of Chi Lin
Technology  Co.  Ltd, a Taiwanese  company.  He has been  employed  with Chi Lin
Technology  since June,  2000.  Mr.  Chiang has a BA from the National  Chen Chi
University and an MBA from the National Taiwan University.

MAO-SONG LEE - Director of the Company since  December,  2002.  Since  February,
2001 he has been employed full time by Chi Lin  Technology Co. Ltd. as Technical
Vice President.  From August,  1998 until January,  2001 he was General Manager,
Pilot Plants for Union Chemical  Laboratories,  Industrial  Technology  Research
Institute of the Republic of China (Taiwan).  During the period 1994-1997 he was
Director of the Engineering  Plastics Division for Union Chemical  Laboratories,
Industrial  Technology Research Institute.  From 1983 until 1991 he was Director
of the Polymer  Division,  Union Chemical  Laboratories,  Industrial  Technology
Research  Institute.  He received a B.S. and M.S.  from the National  Cheng Kung
University  of Taiwan in 1970 and 1972,  respectively.  He also received a Ph.D.
and an M.B.A.  from the National Tsing Hua University of Taiwan in 1987 and from
the National Cheng Chi University in 1994, respectively.

            Each director  serves until the next annual meeting of  shareholders
or until a successor is elected and qualified. Officers serve at the pleasure of
the board of directors.  No  arrangement  or  understanding  exists  between any
officer or director and any other person  pursuant to which he was  nominated or
elected as  director  or  selected  as an  officer,  except  the Stock  Purchase
Agreement with Chi Lin  Technologies  Co. Ltd. which allowed Chi Lin to fill two
vacancies  on the board of  directors.  Chi Lin also agreed that for a period of
five (5) years  beginning  on the Closing  Date (May 10, 2001) that it would not
take any action either directly or indirectly to increase its  representation on
the  Company's  Board of  Directors  such  that the  number of  members  thereof
appointed or elected by Chi Lin (as a percentage  of the total number of members
of the Board of Directors)  exceeded forty percent  (40%).  The five year period
has now expired.

           Section  16(a) of the  Securities  Exchange Act of 1934  requires the


                                       17
<PAGE>

Company's  directors and executive  officers,  and persons who own more than ten
percent of a registered  class of the Company's  equity  securities to file with
the Securities and Exchange  Commission initial reports of ownership and reports
of changes in ownership of equity securities of the Company. Officers, directors
and  shareholders  holding  greater than ten percent are required to furnish the
Company  with copies of all  Section  16(a)  forms they file.  To the  Company's
knowledge, based solely on review of the copies of any such reports furnished to
the Company, during the fiscal year ended December 31, 2006, and thereafter, all
Section  16(a)  filing  requirements  applicable  to  officers,   directors  and
shareholders holding greater than ten percent were timely met.

            CODE OF ETHICS.  The  Company  has  adopted a code of ethics for its
principal executive officer,  principal financial officer,  principal accounting
officer or controller,  and persons performing similar functions.  A copy of the
Code of Ethics will be furnished upon request without charge.

                           BOARD OF DIRECTORS MEETINGS
                     AND ATTENDANCE AT SHAREHOLDER MEETINGS

         The Company does not have nominating or audit  committees of the Board.
The full  board  conducts  the  function  of an audit  committee.  There was one
meeting of the Board of Directors held during the fiscal year ended December 31,
2006. All directors attended the meeting. All directors,  except Messrs.  Chiang
and Lee  attended  the last  annual  shareholder  meeting of the  Company,  held
January 25,  2005.  The Company  expects all  directors to be in  attendance  at
shareholder  meetings  and  attempts  to  schedule  meetings  at a time when all
directors will be able to attend,  however conflicting  schedules,  particularly
with the two directors from Taiwan may on occasion  preclude their attendance at
shareholder meetings which are held in the United States.

                        AUDIT COMMITTEE FINANCIAL EXPERT

         The  Company's  board of  directors  does not have an "audit  committee
financial   expert,"  within  the  meaning  of  such  phrase  under   applicable
regulations  of the  Securities  and Exchange  Commission,  serving on its audit
committee.  The  board of  directors  believes  that all  members  of its  audit
committee are financially literate and experienced in business matters, and that
one or more  members of the audit  committee  are  capable of (i)  understanding
generally accepted accounting principles ("GAAP") and financial statements, (ii)
assessing the general  application  of GAAP  principles  in connection  with our
accounting for estimates,  accruals and reserves, (iii) analyzing and evaluating
our financial statements, (iv) understanding the Company's internal controls and
procedures  for  financial  reporting;  and (v)  understanding  audit  committee
functions,  all of which are attributes of an audit committee  financial expert.
However,  the board of directors  believes that there is not any audit committee
member who has obtained these attributes through the experience specified in the
SEC's definition of "audit committee financial expert." Further, like many small
companies,  it is difficult  for the Company to attract and retain board members
who qualify as "audit  committee  financial  experts," and competition for these
individuals is significant.  The board believes that its current audit committee


                                       18
<PAGE>

is able to  fulfill  its  role  under  SEC  regulations  despite  not  having  a
designated "audit committee financial expert."

                              NOMINATING COMMITTEE

         The full board of  directors  of the Company  functions as a nominating
committee to select potential additional directors of the Company. The board has
not specifically  designated a separate  nominating  committee  because all five
members of the board of directors  desire to be involved in the selection of any
new director.  The board does not have a specific  charter to govern its actions
as a nominating committee,  nor are any members of the board "independent".  Due
to the relatively  small size of the Company,  the risks associated with service
on the board of a public  company  and the  limited or  negligible  compensation
available to such directors,  the Company considers it unlikely that a qualified
person would serve on the board that was truly independent. However, the board's
unwritten policy for  consideration of potential  members of the board nominated
by  shareholders  is to seriously  consider any potential  board member that has
personal  relationships  and/or  expertise  that  might  be  beneficial  to  the
Company's  business.  The Company has in the past and expects to continue in the
future to be interested in discussions with persons  interested in the Company's
business  and able to make a  significant  contribution  to the  success  of the
Company's  technology.  Shareholders  that  desire to  introduce  persons to the
Company's  board of directors  should  contact  Larry E. Clark,  Chairman of the
Board  or  Ralph  Henson,  Chief  Executive  Officer  of the  Company  with  any
suggestions  or  recommendations  for  director.  These  persons  may be reached
through the Company's  office  telephone  801-521-9300  during regular  business
hours.  A copy of the  resume of any  candidates  should be  submitted  with the
inquiry.  At the  present  time,  the  Company  is not  actively  searching  for
additional members of the board,  however members of the board are interested in
meeting qualified persons. Qualified persons normally would be persons that have
at least a college  education and  professional  or technical  experience in the
medical products industry.  The Company is especially interested in persons with
fund raising contacts or technology development contacts. Generally, shareholder
nominees would be evaluated in the same manner as any other nominee. The current
directors  were each  originally  nominated  by the  Company's  chief  executive
officer or by Chi Lin Technologies,  Co. Ltd, which had the contractual right to
nominate two directors.  Specifically, Larry E. Clark became a director upon the
nomination of Alan Kaminsky who was then CEO and a 5% plus  shareholder.  Messrs
Henson and  Bruggeman  were each  nominated  by Mr.  Clark  while Mr.  Clark was
serving as CEO and while Mr. Clark was a 10% plus  shareholder.  Messrs.  Chiang
and Lee were nominated by Chi Lin, a principal shareholder and control person of
the Company, owning approximately 33 1/3% of the stock of the Company.

                         SECURITY HOLDER COMMUNICATIONS

               Shareholders  of the Company may  communicate  directly  with the
board of directors by contacting the Company's  offices during regular  business
hours.  The  Company's  telephone  number  is  801-521-9300.  Communications  to
individual  directors  may be made by mail  addressed  to the  director  care of
InMedica  Development  Corporation at the Company's  offices 825 North 300 West,


                                       19
<PAGE>

Suite N132, Salt Lake City, Utah 84103.

     ITEM 10. EXECUTIVE COMPENSATION.

          The table below  discloses  the  compensation  of the chief  executive
officer of the Company during the three fiscal years ended December 31, 2006:

                       Annual Compensation     Long Term Compensation
                       ----------------------  ------------------------
                                               Restricted  Common Stock
                                                  Stock    Underlying
Name                   Year    Salary  Bonus      Awards   Options        Other
--------------------------------------------------------------------------------
Ralph Henson (CEO)     2006  $ 33,000     -         -        -        $56,000(2)
Ralph Henson (CEO)     2005  $ 24,000     -         -        -        $60,000(3)
Ralph Henson (CEO)     2004  $ 42,998     -         -        -        $50,000(4)

         Compensation  of officers and  employees is  determined by the Board of
Directors.  Officers, Ralph Henson and Richard Bruggeman are also members of the
Board of Directors.

         Since the  beginning of the last fiscal year,  there have been no stock
options or stock  appreciation  rights granted to or exercised by officers named
in the executive compensation table.

         The  Company  presently  has no plan for the  payment of any annuity or
pension  retirement  benefits to any of its officers or directors,  and no other
remuneration payments,  contingent or otherwise,  are proposed to be paid in the
future to any officer or director, directly or indirectly.

         The Company entered into a consulting contract with Larry E. Clark, its
Chairman, effective April 1, 2001, pursuant to which the Company compensates the
Chairman  $2,000 per month in  consulting  fees.  Fees under the  contract  have
historically  been  accrued  until the Company  was able to pay the  Chairman or
issued restricted stock in satisfaction of its obligations to the Chairman.

                             DIRECTORS' COMPENSATION

         Directors may be compensated at the rate of $100 for attendance at each
board meeting,  but did not receive  compensation  for meetings  during the last
three years.


-----------------------------------
(2)      Paid or reimbursed by Wescor.
(3)      Paid or reimbursed by Wescor.
(4)      Paid or reimbursed by Wescor


                                       20
<PAGE>



ITEM 11.  SECURITY  OWNERSHIP OF CERTAIN  BENEFICIAL  OWNERS AND  MANAGEMENT AND
RELATED  STOCKHOLDER   MATTERS.   The  following  table  furnishes   information
concerning  the common stock  ownership of  directors,  officers,  and principal
shareholders as of March 9, 2007:

                                                      Nature of        Number of
Name and Position                      Ownership      Shares Owned       Percent
--------------------------------------------------------------------------------
Chi Lin Technologies                   Direct         6,043,704            32.6%
717 No. 71, Te Lun RD
Jen Te Hsian, Taiwan
Principal Shareholder

Larry E. Clark                         Direct            78,000              .4%
Chairman                               Indirect       2,959,025 (5)        16.0%
                                                      ---------
                                       Total          3,037,025            16.4%

Ralph Henson                           Direct           315,000             1.7%
President, Director
Chief Executive Officer

Richard Bruggeman                      Direct             4,620 (6)         0.0%
Director, Chief                        Indirect         535,742 (7)         2.9%
                                                      ---------
                                       Total            540,362             2.9%

Sheng Jung Chiang                      Indirect               * (8)
Director

Mao-Song Lee                           Indirect               * (9)
Director

All Executive Officers                 Direct         6,441,324            34.8%
and Directors as a                     Indirect       3,494,767            18.9%
group (5 persons)                                     ---------
                                       Total          9,936,091            53.6%

Shares shown in the forgoing table as directly owned are owned  beneficially and
of  record,  and such  record  shareholder  has  sole  voting,  investment,  and
dispositive  power.  Calculations  of the  percentage  of  ownership  of  shares
outstanding in the foregoing  table are based on 18,629,493  shares  outstanding
and assume the exercise of options,  to which the percentage  relates.  Rounding
causes differences in totals from percentage ownership shown.


-----------------------------
(5)      Shares held by Larry Clark and Jacquelyn Clark as Trustees of the Larry
         and Jacquelyn Clark Family Trust.
(6)      Represents  4,620 shares held in a family trust of which Mr.  Bruggeman
         is Trustee.
(7)      Shares held by Mr. Bruggeman's wife.
(8)      Mr. Chiang is vice  president of Chi Lin  Technologies  Co. Ltd.  which
         holds 6,043,704 shares.
(9)      Dr. Lee is director of biomedical  research of Chi Lin Technologies Co.
         Ltd. which holds 6,043,704 shares.




                                       21
<PAGE>



ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

         No officer,  director,  nominee for director,  or associate of any such
officer,  director or nominee has been,  since the  beginning of the last fiscal
year, or is presently  indebted to the Company.  There have been no transactions
since  the  beginning  of the  Company's  last  fiscal  year,  nor are there any
proposed  transactions,  in which any  officer,  director,  nominee or principal
security holder has a direct or indirect material interest,  except as described
herein and in the disclosure below:

            Effective  October 6, 2006,  the Company  issued  500,000  shares of
restricted common stock to five persons who exercised conversion rights pursuant
to a  promissory  note held by them with a total  outstanding  note  balance  of
$50,000.  The exchange  shares were issued  pursuant to Rule 506 of Regulation D
and other exemptions.  The foregoing shares were restricted  securities and were
issued to  accredited  investors  who acquired the  securities  based upon their
representations  that they were  purchasing  for their own  account  and not for
resale.  The note  converted  was  originally  issued  to Wescor in 2004 and was
acquired  by the five  purchasers  from Wescor in  September,  2006 in a private
purchase.  The  purpose of the note sale was to provide  cash to Wescor.  Wescor
then loaned to MicroCor  sufficient  funds to enable Microcor to pay one half of
the minimum  royalty owing to InMedica  under the Joint  Development  Agreement.
Funds from the minimum  royalty will be used by InMedica to fund  administrative
expenses of the Company.  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.


                              (Intentionally blank)


                                       22
<PAGE>




                                     PART IV

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.

(a) Exhibits Exhibit No. S-K No. Description

                           (3)      Articles   of   Incorporation   and   Bylaws
                                    incorporated by reference to the exhibits to
                                    Form 10-K for the year  ended  December  31,
                                    1983

                           (3)      Articles  of  Amendment  to the  Articles of
                                    Incorporation  of the Company  changing  the
                                    Company's  name  to  "InMedica   Development
                                    Corporation"  incorporated  by  reference to
                                    Exhibit  1 to Form  10-K for the year  ended
                                    December 31, 1984

                           (3)      Articles of  Amendment,  dated June 16, 1995
                                    to  the  Articles  of  Incorporation  of the
                                    Company adopting a class of Preferred Stock,
                                    incorporated  by  reference  to Exhibit 1 to
                                    Form 10-QSB for the period  ended  September
                                    30, 1995

                           (3)      Articles of Amendment,  dated  September 25,
                                    1995 to the Articles of Incorporation of the
                                    Company adopting a Series A Preferred Stock,
                                    incorporated  by  reference  to Exhibit 2 to
                                    Form 10-QSB for the period  ended  September
                                    30, 1995

                           (3)      Articles of  Amendment,  dated  December 18,
                                    2002 to  Articles  of  Incorporation  of the
                                    Company  increasing the authorized shares of
                                    common stock from 20,000,000 to 40,000,000.

                           (10)     Consulting  agreement  with  Larry E.  Clark
                                    dated   April  1,  2001,   incorporated   by
                                    reference  to the Exhibits to Form 10KSB for
                                    the year 2002.

                           (10)     Stock Purchase  Agreement  between  InMedica
                                    Development    Corporation   and   Chi   Lin
                                    Technology  Co.  Ltd.  dated  May  10,  2001
                                    incorporated  by reference to Form 10QSB for
                                    the period ended 3/31/2001.


                                       23
<PAGE>

                           (10)     Joint  Development   Agreement  between  the
                                    Company and Wescor,  Inc. dated September 7,
                                    2004,   incorporated  by  reference  to  the
                                    Company's  Form  8- K  filed  September  14,
                                    2004.

                           (10)     Loan  Agreement  between  Wescor,  Inc.  and
                                    MicroCor,  Inc.  dated as of  March 6,  2006
                                    incorporated  by reference to the  Company's
                                    Form 10QSB filed November 13, 2006.

                           (10)     Security Agreement between Wescor,  Inc. and
                                    MicroCor,   Inc.   dated,   March  6,   2006
                                    incorporated  by reference to the  Company's
                                    Form 10QSB filed November 13, 2006.

                           (10)     Promissory  Note  of  MicroCor,  Inc.  dated
                                    March 6, 2006  incorporated  by reference to
                                    the Company's  Form 10QSB filed November 13,
                                    2006.

                           (21)     Subsidiaries of the Company (MicroCor, Inc.,
                                    a Utah corporation)

                           (31.1)   Sarbanes-Oxley  Section 302  Certification -
                                    Ralph Henson

                           (31.1)   Sarbanes-  Oxley Section 302  Certification-
                                    Richard Bruggeman

                           (32.1)   Sarbanes-Oxley Section 906 Certification


(b) Reports on Form 8-K. None




                                       24
<PAGE>




ITEM 14. Principal Accountant Fees and Services

         The following is a summary of the fees billed to us by Robison,  Hill &
Company for professional services rendered for the years ended December 31, 2006
and 2005:

           Service                  2006                   2005
------------------------------------------------    -------------------
Audit Fees                        $14,350                   $15,035
Audit-Related Fees                   -
Tax Fees                              596                      500
All Other Fees                       -
                             -------------------    -------------------
Total                             $14,946                   $15,535
                             ===================    ===================


AUDIT FEES.  Consists of fees billed for professional  services rendered for the
audits  of  our  consolidated  financial  statements,  reviews  of  our  interim
consolidated  financial  statements  included  in  quarterly  reports,  services
performed in connection  with filings with the Securities & Exchange  Commission
and related  comfort  letters and other  services that are normally  provided by
Robison,  Hill & Company in connection with statutory and regulatory  filings or
engagements.

TAX FEES. Consists of fees billed for professional  services for tax compliance,
tax  advice  and tax  planning.  These  services  include  assistance  regarding
federal,  state and local tax compliance  and  consultation  in connection  with
various transactions.

AUDIT  COMMITTEE  PRE-APPROVAL OF AUDIT AND  PERMISSIBLE  NON-AUDIT  SERVICES OF
INDEPENDENT  AUDITORS.  The Audit  Committee,  is to  pre-approve  all audit and
non-audit  services  provided by the  independent  auditors.  These services may
include audit services,  audit-related services, tax services and other services
as allowed by law or regulation.  Pre-approval  is generally  provided for up to
one year and any  pre-approval  is  detailed  as to the  particular  service  or
category of services and is generally subject to a specifically approved amount.
The independent  auditors and management are required to periodically  report to
the Audit Committee regarding the extent of services provided by the independent
auditors in accordance with this pre-approval and the fees incurred to date. The
Audit  Committee  may also  pre-approve  particular  services on a  case-by-case
basis.  The Audit  Committee  pre-approved  100% of the Company's  2005 and 2006
audit fees, audit-related fees, tax fees, and all other fees.



                                       25
<PAGE>




                                   SIGNATURES

In  accordance  with  Section 13 or 15(d) of the Exchange  Act,  the  Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                        INMEDICA DEVELOPMENT CORPORATION

  Date:  March 29,  2007                          By /s/ Ralph Henson
                                                  RALPH HENSON, President
                                                  & Chief Executive Officer

                                                  By /s/ Richard Bruggeman
                                                  RICHARD BRUGGEMAN
                                                  Chief Financial Officer



In  accordance  with the Exchange  Act, this report has been signed below by the
following  persons on behalf of the  Registrant and in the capacities and on the
dates indicated.


/s/ Larry E. Clark                                         DATE:  March 29, 2007
LARRY E. CLARK, Director


/s/ Richard Bruggeman                                      DATE:  March 29, 2007
RICHARD BRUGGEMAN, Director


/s/ Ralph Henson                                           DATE:  March 29, 2007
RALPH HENSON, Director


/s/ Sheng Jung Chiang                                      DATE:  March 29, 2007
SHENG JUNG CHIANG,  Director


/s/ Mao-Song Lee                                           DATE:  March 29, 2007
Mao-Song Lee, Director




                                       26
<PAGE>





                EXHIBIT INDEX - INMEDICA DEVELOPMENT CORPORATION
                FORM 10KSB - FOR THE YEAR ENDED DECEMBER 31, 2006

Exhibit 31.1  CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF
              2002 - Ralph Henson

Exhibit 31.2  CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF
              2002 - Richard Bruggeman

Exhibit 32.1  CERTIFICATE PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT
              TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002








                                       27
<PAGE>