UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549
                                   FORM 10-KSB

                      Annual Report Pursuant to Section 13
                 or 15(d) of the Securities Exchange Act of 1934
                      For the Year Ended December 31, 2004
                           Commission File No. 0-12968

                        INMEDICA DEVELOPMENT CORPORATION

                   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 Section  15(d) of the Exchange Act during the past 12 months,  and (2) has
been subject to such filing  require-ments  for the past 90 days. [X] yes [ ] no
Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation SB contained in this form, and no disclosures will be con-tained,  to
the best of  registrant's  knowledge,  in any  definitive  proxy or  information
statement  incorporated  by  reference  in Part III of this  Form  10-KSB or any
amendments to this Form 10-KSB [ ]

Issuer's  revenues for its most recent  fiscal year: $ 0. The  aggregate  market
value of voting stock held by  non-affiliates  of the registrant as of March 18,
2005 was approximately  $2,353,021.(1)  The number of shares  outstanding of the
issuer's  common stock,  $.001 par value, as of January 31, 2005 was 17,413,993.
Documents incorporated by reference: none

(1) Based on 7,843,402  non-affiliate  shares at $.30 per share, the average bid
and asked price on that date.


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                                     PART I

ITEM 1. BUSINESS.

GENERAL.  InMedica  Development  Corporation  ("InMedica") was incorporated as a
Utah  corporation  on June  16,  1983.  During  the  last  three  fiscal  years,
InMedica's  primary activity has been the operation of the business of MicroCor,
Inc.  ("MicroCor"),  a 68% owned  subsidiary.  MicroCor was  acquired  effective
December 31, 1985 and has engaged in the  development or sale of certain medical
technology products. During the last fiscal year, InMedica and MircoCor received
no revenues from operations. (See "Results of Operations").

         As of January  28,  2004,  InMedica  finalized  a letter of intent with
Wescor,  Inc.,  ("Wescor") a Logan, Utah based medical  technology  company (the
"Letter of  Intent")  and as of February 1, 2004,  a loan  agreement  (the "Loan
Agreement").  The Letter of Intent provided that InMedica would  discontinue the
search for  development  partners and other funding  sources for the  hematocrit
technology.  In exchange, Wescor agreed to loan monies under a Loan Agreement to
InMedica for three purposes: (1) administrative expenses up to $25,000 per month
for three months (later extended  through July,  2004) to be used to pay ongoing
salaries,  legal, accounting and other Company administrative expenses; the loan
was to be evidenced by a promissory note called the "Overhead  Note;" (2) Wescor
agreed to loan up to $20,011  to  InMedica  to pay  accrued  but unpaid  Company
expenses  evidenced by a promissory note called the "Accrued  Expense Note;" and
(3) Wescor agreed to loan up to $200,000 to InMedica for technology modification
expenses incurred by Wescor but only expenses incurred with the advance approval
of InMedica and to be evidenced by a note known as the "Technology Modifications
Note." The notes bear interest at the prime rate as announced  from time to time
by the Wall Street Journal. The Letter of Intent was a non-binding expression of
mutual intent to negotiate the terms of a possible  business venture between the
companies regarding the development of the hematocrit technology.  The Letter of
Intent  further  provided that if a definitive  agreement  was not reached,  the
amounts owing on the Overhead Note would be forgiven. Amounts advanced under the
Accrued Expense Note and the Technology  Modications Note,  however would not be
forgiven  and  were  secured  by a  security  interest  in 50% of the  Company's
revenues  from  commercialization  of the  hematrocrit  technology,  if and when
achieved.  Further,  unpaid balances of principal and accrued interest under any
of the notes is convertible  to restricted  common stock of InMedica at $.10 per
share at Wescor's discretion.

         Beginning  with  the  signing  of the  Letter  of  Intent  and the Loan
Agreement,  Wescor advanced $108,970 on the Overhead Note over a period of seven
months and $10,171 on the Accrued  Expenses  Note.  No advances were made on the
Technology  Modifications Note. InMedica subsequently repaid the advances on the
Accrued  Expenses Note which now has a zero  balance.  During  discussions  from
January to September,  2004, members of InMedica's board of directors and Wescor
principals negotiated the terms of a proposed sale of MicroCor stock pursuant to


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a Joint  Development  Agreement (the  "Agreement").  When the parties signed the
definitive  Agreement effective September 7, 2004 , the Company became obligated
to repay the  Overhead  Note  according  to its terms.  As of December 31, 2004,
$104,262 was owing on the Overhead Note including accrued interest. The Overhead
Note is due and payable April 1, 2005.  However  Wescor  deducts 20% ($3,000 per
month) of each stock  payment it makes to  InMedica  and  applies the payment to
retirement  of the  Overhead  Note. A conversion  of the  principal  and accrued
interest  owing on the Overhead Note as of December 31, 2004 would have resulted
in the  issuance  of  1,042,620  restricted  shares  or 5.6% of the  issued  and
outstanding  common  stock of InMedica  However,  to date,  Wescor has not given
notice of intent to convert the note.

         During the  negotiations,  InMedica also determined to permit Wescor to
assume  day to day  control  of the  development  of the  hematocrit  technology
because InMedica has only two part-time employees, a President and a CFO, and no
technical  staff.  The Company has principally  relied on contracts with outside
developers to advance the development of the hematocrit  technology.  Wescor, on
the other hand,  has the required  resources to manage the day to day operations
of a company  whose  focus is the  development  of  medical  products.  InMedica
retains  overall  control of  MicroCor  through  its  ownership  and  control of
MicroCor's  Board of  Directors.  In the event  Wescor  discontinued  efforts to
develop the hematocrit technology, InMedica would again pursue the business plan
described in Management's Discussion and Analysis.

         The sale of the MicroCor stock would be a sale of all or  substantially
all of the assets of InMedica, pursuant to the terms of the Agreement, if Wescor
is successful in completion of  development  of the  hematocrit  technology  and
successfully  exercises  its  option to  purchase  the  MicroCor  stock  held by
InMedica and Chi Lin. No opinion,  report or appraisal  relating to the fairness
of the sales of the MicroCor  stock to Wescor was  obtained by the Company.  The
shareholders of InMedica  approved the sale and potential  issuances of MicroCor
stock to Wescor at an InMedica  shareholder  meeting held January,  24, 2005. No
further  approvals of these sales will be sought from the  shareholders  (except
that if a merger  transaction  were agreed to by the parties,  then  approval of
such  transaction  would be submitted to the shareholders at a later date). As a
result,  the  Agreement  will  result in the  disposition  of part or all of the
ownership of MicroCor by InMedica,  depending on the stage when the Agreement is
either  terminated  or  concluded.  There is no  assurance  that  Wescor will be
successful in developing the hematrocrit technology or that it will continue the
development project to conclusion.

         Larry Clark  (Chairman  and  Director  of the  Company),  Ralph  Henson
(Director and CEO of the Company),  Richard  Bruggeman  (Director and CFO of the
Company),  and Chi Lin  (principal  shareholder of the Company) were required by
the  Agreement  to vote their  shares in favor of  approving  this  transaction.
Collectively   these  four  shareholders  own  a  majority  of  the  issued  and
outstanding  stock of InMedica (See  "Security  Ownership of Certain  Beneficial
Owners  and  Management  and  Related  Stockholder  Matters").   Clark,  Henson,
Bruggeman and Chi Lin are affiliates of the Company but have no affiliation with
Wescor or with one another,  other than their  service as officers and directors
of the Company.



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         As of September  7, 2004,  InMedica and Chi Lin sold, a total of 15% of
MicroCor  stock to  Wescor  (12%  sold by  InMedica  and 3% sold by Chi Lin) for
$375,000  pursuant to the  Agreement.  The purchase  price was paid $30,000 down
with the balance due in installments over 18 months.  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 Joint Development  Agreement,  InMedica will continue to appoint three of
five  members of the board of  directors of MicroCor and Chi Lin and Wescor will
each be 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 (See  "POTENTIAL  MICROCOR STOCK  ISSUANCES TO WESCOR") or if
Wescor  defaults  in  payments  to  InMedica  or Chi Lin.  In the  event of such
termination,  Wescor would remain  obligated to complete payment for the initial
15% of the stock of MicroCor  pursuant to the installments  described below (See
"DESCRIPTION  OF  AGREEMENT").   Through  potential  additional  MicroCor  stock
issuances  to Wescor,  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 selects the appraiser with the consent of InMedica and Chi Lin.
The  Company and Chi Lin will 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  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.")

         DESCRIPTION  OF AGREEMENT.  Effective  September 7, 2004,  InMedica and
MicroCor  entered into the 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 will initially


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hold 68%, Chi Lin will  initially hold 17% and Wescor will initially hold 15% of
the issued and outstanding  stock of MicroCor.  The purchase monies will be paid
$300,000  to  InMedica  and  $75,000 to Chi Lin,  payable  $30,000  down and the
balance in installments  over 18 months.  Twenty percent of each payment made to
InMedica  will be applied to  outstanding  debt owing from InMedica to Wescor in
the amount of $104,262 at December 31, 2004. The debt to Wescor is for repayment
of operating  expenses  advanced by Wescor to InMedica during the negotiation of
the Agreement.

         POTENTIAL  MICROCOR STOCK  ISSUANCES TO WESCOR.  In the event Wescor is
successful in producing a working  prototype  using the  hematocrit  technology,
capable of meeting FDA GMP requirements  suitable 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 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 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


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



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         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  superceded by the Agreement
with Wescor.

         WESCOR.  Wescor is a  privately  held  company  engaged in  developing,
manufacturing,  and  marketing  medical  instruments,  appliances,  and  related
products  for the  diagnostic  laboratory  market for more than  three  decades.
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.

         CONSULTING FEES.  Prior to the transaction  with Wescor,  Ralph Henson,
President of InMedica, was a full time employee of MicroCor. Beginning September
7, 2004, Wescor paid Ralph Henson a temporary consulting fee of $5,000 per month
for three  quarters of his working time.  The temporary  consulting  arrangement
with Mr.  Henson was first  discussed  with Wescor  after the Joint  Development
Agreement  was signed on  September  7, 2004.  Beginning  December 1, 2004,  the
consulting  fee was  discontinued  and Mr.  Henson became a  three-quarter  time
salaried  employee  of  MicroCor.  He will  continue  to serve as  President  of
InMedica and will be paid for one-quarter of his time by InMedica.

         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, Inc. ("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.



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         In  consideration  of the stock  issuances,  Chi Lin gave  InMedica its
Promissory  Notes  committing  to pay  InMedica and MicroCor a total of $500,000
each in a series of payments commencing May 31, 2001 and ending October 1, 2002.
As of December 31, 2002,  InMedica  and MicroCor had each  received  payments of
$500,000 from Chi Lin.

         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 agreement also provides that Chi Lin has
the right to nominate two of five directors on the board of directors.  InMedica
may not  increase  the size of the  board to more than  five  without  the prior
consent of Chi Lin.  Effective  December 21, 2001 the Company  appointed two new
directors  nominated by Chi Lin pursuant to the above  agreement.  See "Officers
and Directors."

         NOTE  RECEIVABLE.  In June 2000,  the Company  licensed its  hematocrit
technology to an unrelated entity in exchange for a note receivable of $150,000,
due June 19, 2001.  On June 19, 2001,  the entity  defaulted on the note and the
entity  subsequently  granted the Company a secured note receivable for $165,000
(the "Note") that represents the outstanding  principle and accrued  interest as
of December  19,  2001.  The Note bears  interest at 10% annually and was due on
June 19, 2002. The Note is secured by all tangible and intangible  assets of the
entity.  As collection of the Note is uncertain,  it has been fully  reserved in
the consolidated financial statements.  As of December 31, 2004, the full amount
of the Note plus accrued interest is unpaid and the entity is in default.

         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 15 years, the Company has conducted
research  or engaged in fund  raising  to  support  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 currently  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


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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 superceded by the Agreement with Wescor..

         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 the Company's
non-invasive  hematocrit technology is subject to prior approval and supervision
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.

         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. 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."
The Company filed for a  continuation  of the third patent in June,  2000 and 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.

         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
products in which  InMedica has an interest will be  successfully  developed and
able to compete  profitably in the marketplace.  Further,  there is no assurance
that the Company will be able to complete research, development and marketing of


                                       9
<PAGE>

its 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,  2004  and  2003,   were  $9,929  and  $24,723
respectively.  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, 2004.


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.

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

See discussion of the approval of the Wescor Agreement, above.

                                     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.




                                       10
<PAGE>


                                             Bid Price
     Quarter Ended                    High             Low
                                    --------          -------

     March 31, 2003                    .07               .06
     June 30, 2003                     .07               .07
     September 30, 2003                .08               .07
     December 31, 2003                 .10               .03

     March 31, 2004                   $.06             $ .03
     June 30, 2004                     .07               .04
     September 30, 2004                .11               .04
     December 31, 2004                 .20               .09


On March 15, 2005 there were  approximately  520 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.  Total aggregate  annual dividends  payable on
the outstanding preferred stock for the year 2004 was $26,480 as of December 31,
2004. See Note 7 to the Consolidated Financial Statements.

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

OVERVIEW.  Since 1989, the Company has engaged in research and  development of a
device to measure hematocrit non-invasively (the "Non-Invasive Hematocrit
Technology"  and/or the "Technology") and fund raising to finance the payment of
research, development and administrative expenses.. Hematocrit is the percentage
of red blood cells in a given volume of human blood.  Research,  development and
administrative  expenses of the Company  relating to the Technology  were funded
during  the  1990's by  borrowing  and by  royalty  revenues  from the sale of a
portable ECG monitor  which  incorporated  Company  technology.  The monitor was
marketed by  Critikon,  Inc.,  then a Johnson and  Johnson  subsidiary.  However
Critikon  discontinued  the  monitor  in 2001 and  InMedica  has not  since  had
revenues from Operations. During 2001 the Company and its subsidiary,  MicroCor,
Inc. sold restricted common stock to Chi Lin Technologies,  Ltd. of the Republic


                                       11
<PAGE>

of China  (Taiwan)  for  $1,000,000  and used the funds to  continue  funding of
research,  development  and  administrative  expenses.  Chi Lin  also  signed  a
development agreement under which it performed or financed the Company's primary
research and development  effort conducted  initially in Taiwan and later in the
United States.  When payments from the stock sale were expended during 2003, the
Company  began  searching  for  additional  funding  and/or a partner to conduct
additional  research and development.  The Company's  officers and Chairman also
agreed to accrual of their wages and consulting fees pending receipt of funds to
pay those obligations. In January 2005, the shareholders of the Company approved
an Agreement with Wescor which provides  additional  funding for  administrative
expenses and provides for research and development of the Hematocrit  Technology
by Wescor. Shareholders that did not vote in favor of the Agreement are entitled
to exercise dissenters' rights on or before February 23, 2005. Person's properly
exercising  dissenters'  rights will receive payment of the fair market value of
their shares prior to the approval of the Joint Development  Agreement.  Payment
is subject to their being funds legally available therefore and may be satisfied
by the issuance of promissory notes in the absence of legally available funds.

PLAN OF OPERATION.  During the 12 months beginning January,  2005, the Company's
plan of operation is to work  cooperatively  with Wescor in the  development and
possible  demonstration  of the Company's  portable  hematocrit  device to other
companies..   In  connection   with  this  effort,   the  Company  will  require
confidentiality  agreements  from parties to which  disclosure  is made and will
allow such parties to informally  evaluate the  technology in order to determine
their  interest.  During  2005,  Wescor is  expected  to fund the  research  and
development  efforts of MicroCor  pursuant to the Joint  Development  Agreement.
During  2004,  the  Company  borrowed  from  Wescor  in order to meet  operating
expenses and may need to rely on borrowning  in the future to meet  obligations.
While the Company has in the past borrowed from  affiliates,  such  borrowing is
not  expected  to be  available  in the  future  to meet  obligations  and  fund
continued research and development.  If necessary,  InMedica will look for other
funding sources.

LIQUIDITY AND CAPITAL RESOURCES. During the year 2004 liquidity was generated by
borrowings  from Wescor and from the  proceeds of the sale of MicroCor  stock to
Wescor and sales of  restricted  InMedica  stock to members of  management  (See
"Certain  Relationships and Related  Transactions") and other private investors.
During 2003,  liquidity was generated from the sale of stock by InMedica and its
subsidiary MicroCor pursuant to the Stock Purchase Agreement dated May 10, 2001,
with Chi Lin. The Company expects to fund its  administrative  operations during
2005 with funds from  installment  payments  from Wescor for the purchase of the
MicroCor stock and with additional  sales of restricted  common stock to Company
insiders and other private investors. Research and development efforts of Wescor
will be  compensated  by additional  issuances of MicroCor stock pursuant to the
Joint Development Agreement.

RESULTS  OF  OPERATIONS.  InMedica  incurred  net  losses in 2004 and 2003.  The
Company had an  accumulated  deficit of  $8,225,026  as of December 31, 2004. No
revenues  from  operations  were  received in 2004 and 2003.  No  revenues  from
operations  are expected  during 2005.  The Company had a net income of $183,301
for the year ended  December  31, 2004 as compared to a net loss of $169,152 for
2003.  The net income  resulted  primarily from the gain on sale of stock in the


                                       12
<PAGE>

subsidiary in the amount of $228,168.  However operating  expenses  increased in
2004 when compared to 2003 by $28,220  primarily as a result of increased  costs
incident to the special  shareholder  meeting to approve the Wescor transaction.
During  2004,  the Company  relied on Wescor for its  research  and  development
requirements.  During 2003,  research and development  expense was funded by Chi
Lin.






                                       13
<PAGE>



     ITEM 7.  FINANCIAL STATEMENTS

Independent Auditors' Report (Robison, Hill & Company)

Consolidated Balance Sheet as of December 31, 2004

Consolidated Statements of Operations for the years ended December 31, 2004
       and
2003

Consolidated Statements of Stockholders' Equity for the years ended
       December 31, 2004 and 2003

Consolidated Statements of Cash Flows for the years ended December 31, 2004
       and
2003

Notes to Consolidated Financial Statements


















                                       14
<PAGE>














                        INMEDICA DEVELOPMENT CORPORATION


                                       -:-

                          INDEPENDENT AUDITORS' REPORT


                           DECEMBER 31, 2004 AND 2003





















<PAGE>








                                    CONTENTS



                                                                         Page

Independent Auditors' Report .............................................F-1

Consolidated Balance Sheet as of December 31, 2004 and 2003...............F-3

Consolidated Statements of Operations for the
Years Ended December 31, 2004 and 2003....................................F-4

Consolidated Statements of Stockholders' Equity for the
Years Ended December 31, 2004 and 2003....................................F-5

Consolidated Statements of Cash Flows for the
Years Ended December 31, 2004 and 2003....................................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 AUDITORS' 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, 2004
and 2003, 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.  An  audit  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial  statements.  An audit also  includes  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, 2004
and 2003, 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, 2004 and 2003 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.

                                                    Sincerely,



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

Salt Lake City, Utah
January 25, 2005














                                      F - 2

<PAGE>




                 INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>
                                                                                 DECEMBER 31,        DECEMBER 31,
                                                                                     2004                2003
                                                                               -----------------   -----------------
ASSETS
Current Assets
<S>                                                                            <C>                 <C>
  Cash & Cash Equivalents                                                      $           3,600   $           1,226
   Securities Available For Sale                                                               -                   1
   Prepaid Expenses & Other                                                                  200                 200
   Notes Receivable Current                                                              173,726                   -
        Total Current Assets                                                             177,526               1,427
                                                                               -----------------   -----------------

Equipment & Furniture, at Cost,
   Less Accumulated Depreciation of $253,476
        and $253,299, respectively                                                           398                 575
                                                                               -----------------   -----------------

Other Assets
   Notes Receivable Non-Current, net of unamortized discount of $6,609                    44,665                   -
                                                                               -----------------   -----------------

TOTAL ASSETS                                                                             222,589               2,002
                                                                               =================   =================

LIABILITIES & STOCKHOLDER'S EQUITY
Current Liabilities
   Related Party Consulting Fees Payable                                                  50,000              66,000
   Accounts Payable                                                                       33,299              24,039
   Accrued Payroll and related taxes                                                      35,933              54,912
   Accrued Interest                                                                          379                   -
   Preferred Stock Dividends Payable                                                      26,480              18,914
   Short-Term Notes Payable                                                              104,262                   -
        Total Current Liabilities                                                        250,353             163,865
                                                                               -----------------   -----------------

Minority Interest                                                                         (1,554)            104,082
                                                                               -----------------   -----------------

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 $121,053)                                                  94,573              94,573
  Common Stock, $.001 par value: 40,000,000 shares authorized,
     15,982,993 share outstanding                                                         16,623              15,983
Additional Paid-in Capital                                                             8,087,620           8,024,260
Accumulated Deficit                                                                   (8,225,026)         (8,400,761)
        Total Stockholders' Equity                                                       (26,210)           (265,945)
                                                                               -----------------   -----------------

TOTAL LIABILITIES &  STOCKHOLDERS' EQUITY                                      $         222,589   $           2,002
                                                                               =================   =================
</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,
                                                                              -------------------------------------
                                                                                    2004                2003
                                                                              -----------------  ------------------

<S>                                                                           <C>                <C>
ROYALTY REVENUES                                                              $               -  $                -
                                                                              -----------------  ------------------

OPERATING EXPENSES
   General & Administrative                                                             217,217             174,203
   Research & Development                                                                 9,929              24,723
                                                                              -----------------  ------------------
        Total Operating Expense                                                         227,146             198,926
                                                                              -----------------  ------------------

LOSS FROM OPERATIONS                                                                   (227,146)           (198,926)
                                                                              -----------------  ------------------

OTHER INCOME (EXPENSE)
   Interest Income                                                                        2,774                  47
   Interest Expense                                                                      (4,670)                  0
   Gain on Sale of Subsidiary                                                           228,168                   0
   Other Income                                                                          11,202                   0
   Gain on Sale of Securities                                                             4,889                   0
                                                                              -----------------  ------------------
        Total Other Income (Expenses), Net                                              242,363                  47
                                                                              -----------------  ------------------

INCOME (LOSS) BEFORE MINORITY INTEREST                                                   15,217            (198,879)

MINORITY INTEREST                                                                       168,084              29,727
                                                                              -----------------  ------------------

NET INCOME (LOSS)                                                                       183,301            (169,152)

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

NET INCOME (LOSS) APPLICABLE TO COMMON STOCKHOLDERS                           $         175,735  $         (176,718)
                                                                              =================  ==================

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

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
   BASIC                                                                             16,068,472          15,982,993
                                                                              =================  ==================
   DILUTED                                                                           17,518,616          16,426,764
                                                                              =================  ==================
</TABLE>



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








                                      F - 4

<PAGE>



<TABLE>
<CAPTION>

                                                    INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY
                                                    CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                                                    FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003

                                                                                          STOCK       ADDITIONAL
                                    PREFERRED STOCK              COMMON STOCK         SUBSCRIPTION     PAID-IN     ACCUMULATED
                                  SHARES       AMOUNT        SHARES         AMOUNT     RECEIVABLE      CAPITAL      DEFICIT
                               -----------   -----------   -----------   -----------   -----------   -----------   -----------

<S>                            <C>           <C>           <C>           <C>           <C>           <C>           <C>
Balance, January 1, 2003            21,016   $    94,573    15,982,993   $    15,983   $      --     $ 8,024,260   $(8,224,043)

Preferred stock dividends             --            --            --            --            --            --          (7,566)
Net loss                              --            --            --            --            --            --        (169,152)
                               -----------   -----------   -----------   -----------   -----------   -----------   -----------

Balance, December 31, 2003          21,016        94,573    15,982,993        15,983          --       8,024,260    (8,400,761)

Common Stock issued for Cash          --            --         640,000           640          --          63,360          --
Preferred stock dividends             --            --            --            --            --            --          (7,566)
Net income                            --            --            --            --            --            --         183,301
                               -----------   -----------   -----------   -----------   -----------   -----------   -----------

Balance, December 31, 2004          21,016   $    94,573    16,622,993   $    16,623   $      --     $ 8,087,620   $(8,225,026)
                               ===========   ===========   ===========   ===========   ===========   ===========   ===========
</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,
                                                                                     2004                2003
                                                                               -----------------   -----------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                            <C>                 <C>
   Net Income (Loss)                                                           $         183,301   $        (169,152)
   Adjustments to reconcile net loss to net cash used in
      operating activities:
      Depreciation and amortization                                                          177                 177
      Gain on Sale of Subsidiary                                                        (228,168)                  -
      Gain on Sale of Securities                                                          (4,889)                  -
      Interest income from amortization or discount on notes receivable                   (2,774)                  -
      Minority interest in losses                                                       (168,084)            (29,727)
      Changes in assets and liabilities:
         Prepaid expenses and other                                                            -               1,250
         Related party consulting fees payable                                           (16,000)             24,000
         Accounts payable                                                                  9,260              22,335
         Accrued Interest                                                                    379                   -
         Accrued payroll and related taxes                                               (18,980)             54,912
                   Net cash used in operating activities                                (245,778)            (96,205)
                                                                               -----------------   -----------------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Proceeds from sale of securities                                                        4,890                   -
   Proceeds from sale of subsidiary stock                                                 30,000                   -
   Proceeds from note receivable                                                          45,000                   -
                   Net cash provided by (used in) investing activities                    79,890                   -
                                                                               -----------------   -----------------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds from notes payable                                                           114,970                   -
   Payments on notes payable                                                             (10,708)                  -
   Proceeds from sale of common stock                                                     64,000                   -
                   Net cash provided by (used in) financing activities                   168,262                   -
                                                                               -----------------   -----------------

NET INCREASE IN CASH                                                                       2,374             (96,205)
CASH AT BEGINNING OF THE YEAR                                                              1,226              97,431
                                                                               -----------------   -----------------
CASH AT END OF THE YEAR                                                        $           3,600   $           1,226
                                                                               =================   =================

SUPPLEMENTAL DISCLOSURE OF CASH FLOW
   Cash paid during the year for interest                                      $           4,292   $               -
                                                                               =================   =================
   Cash paid during the year for income taxes                                  $             200   $             200
                                                                               =================   =================

SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING & FINANCING
ACTIVITIES
   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, 2004 AND 2003

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.

         Effective  September  7,  2004,  the  Company  entered  into  an  Joint
Development  Agreement  (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  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 holds 68%, Chi Lin holds 17%
and Wescor holds 15% of the issued and outstanding stock of MicroCor. InMedica's
portion of the purchase monies,

                                      F - 7

<PAGE>



                 INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDING DECEMBER 31, 2004 AND 2003

NOTE 1 - NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations (Continued)

$300,000,  will be paid  $30,000  down and the balance in  installments  over 18
months pursuant to a note receivable (Note 2).

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 $227,146 and $198,926 in 2004
and 2003, respectively,  and negative cash flows from operations of $245,778 and
$96,205 in 2004 and 2003, respectively.  As of December 31, 2004 the Company had
an  accumulated  deficit of $8,225,026 and a  stockholders'  deficit of $26,210.
These conditions raise substantial doubt as to the Company's ability to continue
as a going  concern.  The Company's  continued  existence is dependent  upon its
ability to execute its operating  plan and to obtain  additional  debt or equity
financing. There can be no assurance 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 strategic alliances and
licensing agreements as well as preparation for the clinical trials that will be
required for FDA  approval for the medical  products  that are  currently  under
development,  pursuant to the Wescor development  agreement,  utilizing the Non-
Invasive Hematocrit Technology.

Patents

         The Company has four patents covering various aspects of its Technology
which expire from 2010 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

         Royalty  revenues are recognized as sales  information is received from
Johnson and Johnson and cash  receipts  are  assured.  In early 2001,  Johnson &
Johnson stopped  manufacturing and marketing the Dinamap PlusTM product line and
the Company no longer receives royalties from Johnson and Johnson.

                                      F - 8

<PAGE>



                 INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDING DECEMBER 31, 2004 AND 2003

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

Income Taxes

         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,
                                    -------------------------------------
                                          2004                2003
                                    ----------------- -------------------

Equipment                           $         242,686   $         242,686
Furniture                                      11,188              11,188
                                    -----------------   -----------------
                                              253,874             253,874
                                    -----------------   -----------------

Less accumulated depreciation                (253,476)           (253,299)
                                    -----------------   -----------------

Total                               $             398   $             575
                                    =================   =================

         Depreciation expense for the years ended December 31, 2004 and 2003 was
$177 and $177, 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, 2004 and 2003, respectively,  there
were 1,450,144 and 443,771  potentially  dilutive common stock equivalents.  The
computation of Diluted EPS does not assume  exercise or conversion of securities
that would have an antidilutive effect on net loss per common share.

                                      F - 9

<PAGE>



                 INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDING DECEMBER 31, 2004 AND 2003

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

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.

Stock Options

         The Company  accounts for its options issued to employees and directors
under Accounting Principles Board Opinion No. 25.

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.

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 short-term notes payable
at  December  31,  2004 and  2003  approximates  their  fair  values  due to the
short-term nature of these financial instruments.





                                     F - 10

<PAGE>



                 INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDING DECEMBER 31, 2004 AND 2003

NOTE 2 - NOTES RECEIVABLE

         Notes receivable consisted of the following:
<TABLE>
<CAPTION>
                                                                                December 31,        December 31,
                                                                                    2004                2003
                                                                             ------------------  ------------------
<S>                                                                          <C>                 <C>
WesCor, Inc. Sale of 12% interest in MicroCor (see note 9)
  Monthly payments of $15,000 through
  March 7, 2006                                                              $          225,000  $                -

Less Unamortized discount, effective rate 4.5%                                            6,609                   -

Less Current Portion                                                                    173,726                   -
                                                                             ------------------  ------------------

Notes Receivable Non-Current                                                 $           44,665  $                -
                                                                             ==================  ==================
</TABLE>

         The Company has  recorded  $2,774 in interest  income  during 2004 from
this note.

NOTE 3 - SHORT-TERM NOTES PAYABLE

         Notes payable consisted of the following:
<TABLE>
<CAPTION>

                                                                                December 31,        December 31,
                                                                                    2004                2003
                                                                             ------------------  ------------------
<S>                                                                          <C>                 <C>
WesCor, Inc. Overhead Note, (see note 9) Due April 1, 2005 including interest at
  prime (5.00% at December 31, 2004)
  unsecured convertible at $.10 per share                                    $          104,262  $                -
                                                                             ==================  ==================
</TABLE>

NOTE 4 - INCOME TAXES

         Deferred income tax assets consisted of the following:
<TABLE>
<CAPTION>
                                                                                           December 31,
                                                                                     2004                2003
                                                                               -----------------   -----------------

<S>                                                                            <C>                 <C>
Net operating loss carryforwards                                               $       1,280,115   $       1,215,091
Future deductions temporary differences related
  to compensation, reserves, and accruals                                                 25,936              34,076
Less valuation allowance                                                              (1,306,051)         (1,249,167)
Deferred income tax assets                                                     $               -   $               -
                                                                               =================   =================
</TABLE>

         The  valuation  allowance  increased  $ 56,884 and  $52,346 in 2004 and
2003,  respectively.  At December 31,  2004,  the Company has  consolidated  net
operating  loss  carryforwards  for federal  income tax purposes of  $3,738,034.
These net operating loss carryforwards expire at various dates beginning in 2005
through 2024. Due to the uncertainty with respect to ultimate  realization,  the
Company  has  established  a valuation  allowance  for all  deferred  income tax
assets.





                                     F - 11

<PAGE>



                 INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDING DECEMBER 31, 2004 AND 2003

NOTE 5 - COMMON STOCK TRANSACTIONS

         On  December  16,  2003,  at the annual  meeting of  shareholders,  the
shareholders  approved an increase in the authorized  shares from  20,000,000 to
40,000,000.  On  December  19,  2003,  the  Company  filed  amended  articles of
incorporation  with the state of Utah  authorizing  40,000,000  shares of common
stock.

         On September 29, 2004, at a special meeting of directors, the directors
authorized  the sale of shares of  restricted  common  stock of the  Company  as
follows:
         - 840,000 shares to Larry E. Clark, Chairman, for $84,000,
         - 240,000 shares to Ralph Henson, President and C.E.O., for $24,000,
         - 101,000 shares to Richard Bruggeman,  Secretary/Treasurer and C.F.O.,
           for $10,100.

         On October 14, 2004 the Company sold 400,000  shares of common stock to
the Company's Chairman of the Board, Larry E. Clark, for $40,000.

         On December 31, 2004 the Company sold 240,000 shares of common stock to
the Company's President and Chief Executive Officer, Ralph Henson, for $24,000.

         On January 21, 2005 the Company sold 440,000  shares of common stock to
the Company's Chairman of the Board, Larry E. Clark, for $44,000.

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 2004 and 2003 was as
follows:

                                                                 WEIGHTED
                                                                  AVERAGE
                                              OPTION             EXERCISE
                                              SHARES               PRICE
                                         -----------------   -----------------

Outstanding at January 1, 2003                     430,000   $            0.48
  Granted                                                -                   -
  Forfeited or expired                             (54,000)               0.73
                                         -----------------   -----------------

Outstanding at December 31, 2003                   376,000                0.44
  Granted                                                -                   -
  Forfeited or expired                                   -                   -
                                         -----------------   -----------------

Outstanding at December 31, 2004                   376,000   $            0.44
                                         =================   =================



                                     F - 12
<PAGE>

                 INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDING DECEMBER 31, 2004 AND 2003

NOTE 6 - STOCK OPTIONS (Continued)
----------------------


The  following  table  summarizes  information  about  stock  options  issued to
employees outstanding at December 31, 2004:
<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
------------------   -----------------   -----------------   -----------------   -----------------   -----------------

<C>                  <C>                 <C>                 <C>                 <C>                 <C>
$             0.30              75,000                0.80   $            0.30              75,000               $0.30
==================   =================   =================   =================   =================   =================
</TABLE>



The  following  table  summarizes  information  about  stock  options  issued to
non-employees outstanding at December 31, 2004:
<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>

     $0.30 - $0.39             263,500                0.90   $            0.36             263,500   $            0.36
             $1.22              37,500                1.30   $            1.22              37,500   $            1.22
------------------   -----------------   -----------------   -----------------   -----------------   -----------------

     $0.30 - $1.22             301,000                1.00   $            0.47             301,000   $            0.47
==================   =================   =================   =================   =================   =================
</TABLE>

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, 2004,  preferred stock dividends  payable in the amount of $26,480,
or $1.26  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.





                                     F - 13

<PAGE>



                 INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDING DECEMBER 31, 2004 AND 2003

NOTE 8 - 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 2004,  $40,000 in accrued consulting was paid under
this  agreement.  As of  December  31,  2004  and  2003,  $50,000  and  $66,000,
respectively, was owed under the arrangement.

NOTE 9 - JOINT DEVELOPMENT AGREEMENT

         Effective  September 7, 2004,  InMedica  and MicroCor  entered into the
Agreement pursuant to which Wescor, a Utah medical technology company ("Wescor")
has  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 will initially hold 68%, Chi
Lin will initially hold 17% and Wescor will initially hold 15% of the issued and
outstanding  stock of  MicroCor.  InMedica's  portion  of the  purchase  monies,
$300,000,  will be 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  will be applied to  outstanding  debt owing from  InMedica to
Wescor (the Overhead Note, see note 3) in the amount of $104,262 at December 31,
2004.

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

                                     F - 14

<PAGE>



                 INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDING DECEMBER 31, 2004 AND 2003

NOTE 9 - JOINT DEVELOPMENT AGREEMENT (Continued)
------------------------------------

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.

         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. In such case,  Wescor may chose 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 10 - 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

                                     F - 15

<PAGE>


                 INMEDICA DEVELOPMENT CORPORATION AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDING DECEMBER 31, 2004 AND 2003

NOTE 10 - ROYALTY RIGHTS (Continued)
------------------------

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.



                                     F - 16

<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 as to 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.

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.


                                       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                              83                     1995
Ralph Henson                                60                     1999
Richard Bruggeman                           50                     1995
Sheng Jung Chiang                           59                     2001
Mao-Song Lee                                57                     2002

         Certain  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  part time 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  allows Chi Lin to fill two  vacancies on the
board of  directors.  However  Chi Lin also agreed that for a period of five (5)
years  beginning  on the Closing Date (May 10, 2001) it will 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) exceeds forty percent (40%).

                                       17
<PAGE>

           Section  16(a) of the  Securities  Exchange Act of 1934  requires the
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, 2004, and thereafter, all
Section  16(a)  filing  requirements  applicable  to  officers,   directors  and
shareholders holding greater than ten percent were complied with.

                           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 were two
meetings of the Board of  Directors  held during the fiscal year ended  December
31,  2004.  Messrs.  Chiang  and Lee were  unable  to  attend  one of the  board
meetings. 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  our  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
is able to  fulfill  its  role  under  SEC  regulations  despite  not  having  a
designated "audit committee financial expert."



                                       18
<PAGE>

                              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 board members, 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 has 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


                                       19
<PAGE>

directors  may be  made by  mail  addressed  to the  director  care of  InMedica
Development Corporation at the Company's offices 825 North 300 West, 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, 2004:
<TABLE>
<CAPTION>

                     Annual Compensation           Long Term Compensation
                    ------------------------  ---------------------------------------
                                              Restricted Stock Common Stock
                                                   Awards       Underlying
Name                  Year   Salary   Bonus                       Options       Other
<S>                   <C>    <C>      <C>          <C>            <C>         <C>
Ralph Henson (CEO)     2004 $ 42,998    -            -               -        $46,664 (2)
Ralph Henson (CEO)     2003 $ 24,000    -            -               -            -
Ralph Henson (CEO)    2002 $ 96,000     -            -               -            -
</TABLE>

         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.
(However,  see "Management  Indebtedness and  Transactions" for a description of
recent payments to the Chairman which he used to purchase  additional  shares of
restricted common stock of the Company.)


                             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 by MicroCor, Inc.

                                       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 1, 2005:
<TABLE>
<CAPTION>

                                                      Nature of              Number of
     Name and Position                 Ownership      Shares Owned           Percent
     --------------------------------------------------------------------------------
<S>                                    <C>            <C>                    <C>
     Chi Lin Technologies              Direct          5,328,204 (3)          30.6%
     717 No. 71, Te Lun RD
     Jen Te Hsian
     Tainan County, Taiwan
     Principal Shareholder

     Larry E. Clark                    Direct             78,000
     Chairman                          Indirect        2,959,025 (4)
                                                       ---------
                                       Total           3,037,025              17.4%

     Ralph Henson                      Direct            465,000               2.7%
     President, Director
     Chief Executive Officer

     Richard Bruggeman                 Direct and        174,387 (5)           1.0%
     Director, Chief                   Indirect          565,975 (6)           3.3%
     Financial Officer                 Options            75,000               0.4%
                                                         -------               ----
                                       Total             815,362               4.7%

     Sheng Jung (Robert S.) Chiang     Indirect                * (7)
                                       Director


     Mao-Song Lee                      Indirect                * (8)
     Director

     Wescor, Inc.                      Options         1,042,620 (9)           5.6%

All Executive Officers                 Direct and
and Directors as a                     Indirect        9,670,591              55.5%
group (5 persons)                      Options            75,000               0.4%
                                                       ---------              -----
                                       Total           9,745,591              55.7%
</TABLE>

(3) Excludes  anti-dilution  rights to purchase 715,500 shares,  as to which Chi
Lin has given notice of exercise,  but which have not yet been issued. Chi Lin's
anti-dilution  rights  are  exercisable,  in its  discretion,  from time to time
during the five year  period  which  began May 10,  2001,  upon the  issuance of
shares of the common stock of the Company.
(4) Shares held by Larry Clark and Jacquelyn  Clark as Trustees of the Larry and
Jacquelyn Clark Family Trust.
(5) Includes 400 shares held in individual  retirement accounts and 4,620 shares
held in a family trust of which Mr. Bruggeman is Trustee.
(6) Shares held by Mr. Bruggeman's wife.
(7) Mr. Chiang is vice  president of Chi Lin  Technologies  Co. Ltd. which holds
5,328,204  shares and has given  notice of exercise of anti  dilution  rights to
acquire 715,500 additional shares.
(8) Dr. Lee is director of biomedical  research of Chi Lin Technologies Co. Ltd.
which holds  5,328,204  shares and has given notice of exercise of anti dilution
rights to acquire 715,500 additional shares.
(9)  Conversion  rights  based  on  $104,262  owing  to  Wescor  by the  Company
convertible to common stock at $.10 per share.

                                       21
<PAGE>

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 17,413,993  shares  outstanding
and assume the exercise of options,  to which the percentage  relates.  Rounding
causes differences in totals from percentage ownership shown.

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  September 27, 2004 Larry E. Clark,  Ralph Henson and Richard
Bruggeman  each  subscribed  to purchase  shares of the Company in the following
amounts  respectively:  840,000,  240,000,  and  101,000  at a price of $.10 per
share. The closing bid price on the date of subscription was $.10 per share. The
Subscription  exercise was  contingent  on the Company  paying each of the three
individuals  the amount of their accrued but unpaid wages or consulting  fees in
the amounts of $84,000, $34,998, and $16,002, respectively. The 1,181,000 shares
to be purchased will constitute approximately 7.6% of the issued and outstanding
stock of the  Company,  acquired  for total  consideration  of  $118,100.  As of
January 31, 2005, all wages had been paid and all  subscription  rights pursuant
to these agreements had been exercised.



                                       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)     Development,  Licensing and  Manufacturing  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.

                  (10)     Hematocrit  Development and Option Agreement  between
                           InMedica Development Corporation and Medical Physics,
                           dated  August 29, 1997  incorporated  by reference to
                           Exhibits  of  Form  10QSB  for  the   Quarter   ended
                           September 30, 1997.

                  (10)     First  Amendment to the  Hematocrit  Development  and
                           Option   Agreement   between   InMedica   Development
                           Corporation and Medical Physics, dated March 1, 1998.

                  (10)     Employment  Agreement,  effective  as of  December 1,
                           1999  between  Ralph  Henson and the  Registrant  and
                           Investment  letter of Ralph Henson,  incorporated  by
                           reference to the 8-K of the Registrant dated December
                           1, 1999.

                  (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)     Letter of  Intent  dated  January  28,  2004  between
                           Wescor, Inc. and InMedica,  incorporated by reference
                           to the  Company's  Form  10QSBA#1 for  September  30,
                           2004..

                  (10)     Loan Agreement dated February 1, 2004 between Wescor,
                           Inc. and InMedica.  incorporated  by reference to the
                           Company's Form 10QSBA#1 for September 30, 2004.



                                       24
<PAGE>

                  (10)     Assignment and Security  Agreement  dated February 1,
                           2004 between Wescor, Inc. and InMedica.  incorporated
                           by  reference  to the  Company's  Form  10QSBA#1  for
                           September 30, 2004. . (10)  Technology  Modifications
                           Note   of   InMedica   dated   February   19,   2004,
                           incorporated  by  reference  to  the  Company's  Form
                           10QSBA#1 for September 30, 2004.

                  (10)     Overhead  Note of InMedica  dated  February 19, 2004.
                           incorporated  by  reference  to  the  Company's  Form
                           10QSBA#1 for September 30, 2004..

                  (10)     Accrued  Expense Note of InMedica  dated February 19,
                           2004  incorporated by reference to the Company's Form
                           10QSBA#1 for September 30, 2004.

                  (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




                                       25
<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, 2004
and 2003:

           Service                      2004                    2003
-----------------------           ------------------     ------------------
Audit Fees                            $ 17,905                $ 12,100
Audit-Related Fees                           -                       -
Tax Fees                                   300                     300
All Other Fees                               -                       -
                                  ------------------     ------------------
Total                                 $ 18,205                $ 12,400
                                  ==================     ==================

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 and acquisitions.

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 2003 and 2004
audit fees,  audit-related  fees, tax fees, and all other fees to the extent the
services  occurred  after May 6, 2003,  the effective date of the Securities and
Exchange Commission's final pre-approval rules.



                                       26
<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 24, 2005                 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 24, 2005
LARRY E. CLARK, Director


/s/ Richard Bruggeman                             DATE:  March 24, 2005
RICHARD BRUGGEMAN, Director


/s/ Ralph Henson                                  DATE:  March 24, 2005
RALPH HENSON, Director

/s/ Sheng Jung Chiang                             DATE:  March 22, 2005
SHENG JUNG (ROBERT S.) CHIANG,
  Director

/s/ Mao-Song Lee                                  DATE:  March 24, 2005
Mao-Song Lee, Director




                                       27
<PAGE>




                EXHIBIT INDEX - INMEDICA DEVELOPMENT CORPORATION
              FORM 10KSB/A#1 - FOR THE YEAR ENDED DECEMBER 31, 2004

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