8-K

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

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) May 25, 2006

HIGHLAND CLAN CREATIONS CORP.
(Exact name of registrant as specified in its charter)

Nevada
(State or other jurisdiction of incorporation)

333-101133
(Commission File Number)

98-0379351
(IRS Employer Identification No.)

9 Commercial Blvd., Suite 200, Novato, California 94949
(Address of principal executive offices and Zip Code)

(415) 382-1390
Registrant’s telephone number, including area code

#17 - 936 Peace Portal Drive, Blaine, Washington 98230
(360) 306-5275
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a -12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d - -2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e - -4(c))

FORWARD LOOKING STATEMENTS

This current report contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements relate to future events or our future results of operation or future financial performance, including, but not limited to, the following: statement relating to our ability to raise sufficient capital to finance our planned operations, our ability to develop viable drug product candidates, our ability to obtain positive preclinical trial results, successful clinical trials of our drug product candidates, our ability to receive necessary marketing clearance approvals from the FDA, our ability to successfully commercialize our drug product candidates, market acceptance of our drug

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product candidates, our ability to successfully compete in the marketplace, our ability to develop a research and development laboratory, our ability to recruit necessary laboratory staff and other employees, our ability to establish collaborative research programs with other parties including university laboratories, our ability to secure additional complementary technologies and licenses, our ability to license our technology to other parties and estimates of our cash expenditures for the next 12 to 24 months. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “intends”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential”, or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled “Risk Factors” on page 5, which may cause our or our industry’s actual results, levels of activity or performance to be materially different from any future results, levels of activity or performance expressed or implied by these forward-looking statements.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity or performance. You should not place undue reliance on these statements, which speak only as of the date that they were made. These cautionary statements should be considered with any written or oral forward-looking statements that we may issue in the future. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to reflect actual results, later events or circumstances or to reflect the occurrence of unanticipated events.

In this report, unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to “common shares” refer to the common shares in our capital stock.

As used in this current report and unless otherwise indicated, the terms “we”, “us” and “our company” refer to Highland Clan Creations Corp. and our wholly-owned subsidiary, Raptor Pharmaceutical Inc.

Item 2.01 Completion of Acquisition or Disposition of Assets

On May 25, 2006, we completed the Share Purchase Agreement we entered into on March 9, 2006 with Dr. Christopher Starr, Erich Sager, Dr. Todd Zankel and Falcon Corporate Investments Ltd. and acquired all of the issued and outstanding shares of Raptor Pharmaceutical Inc.

Pursuant to the Share Purchase Agreement, we issued to each of Drs. Starr and Zankel 3,000,000 shares of our common stock and to each of Falcon Corporate Investments Ltd. and Erich Sager 1,000,000 shares of our common stock. As a result, Raptor Pharmaceutical Inc. became a wholly owned subsidiary of our company. Also effective May 25, 2006, Brent McMullin and Brett Stewart resigned as our directors and officers. Raymond W. Anderson, Dr. Starr and Erich Sager have been appointed as our directors.

As a condition to the completion of the Share Purchase Agreement, we raised $5,000,000 in a private placement offering of 8,333,333 units at a price of $0.60 per unit, with each unit comprising one share of our common stock and one stock purchase warrant with an exercise price of $0.60 per share for a period of 18 months. For further details on the private placement, please see Item 3.02 Unregistered Sale of Equity Securities beginning on page 38.

On May 2, 2006, we entered into a Share Purchase Agreement for the sale of our legal and beneficial interest in all of the issued and outstanding shares of our wholly owned subsidiary, Bodysentials Health and Beauty Inc., constituting a disposition of all or substantially all of our business assets prior to our acquisition of Raptor Pharmaceutical Inc. The transaction and the Share Purchase Agreement were approved by resolutions of our Board of Directors and stockholders holding a majority of our common stock on May 2, 2006. The Share Purchase Agreement provides that we shall transfer all of the issued and outstanding shares of Bodysentials Health and Beauty Inc. to Universal Financial Consulting Inc. in exchange for the release of liability of our convertible loan of $100,000 plus accrued interest of approximately $10,000 owed to Universal Financial Consulting Inc. On May 25, 2006, we completed the Share Purchase Agreement to sell the shares of Bodysentials Health and Beauty Inc. to Universal Financial Consulting Inc. in escrow and the closing documents will be released from escrow on June 9, 2006, being 20 calendars days after we filed and mailed a definitive Information Statement on Schedule 14C to our stockholders.

On May 15, 2006, our Board of Directors unanimously approved to change the state of incorporation of our company from Nevada to Delaware by merging our company into a wholly owned subsidiary of our company that is incorporated under

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the laws of Delaware. We thereafter received the consent of stockholders holding a majority of the outstanding shares of our common stock. We will complete the agreement and plan of merger between our company and our wholly owned Delaware subsidiary and file the Articles of Merger with the State of Nevada and the State of Delaware to be effective on June 9, 2006, being 20 calendars days after we filed and mailed a definitive Information Statement on Schedule 14C to our stockholders. For further details, please see our Schedule 14C we filed with the United States Securities and Exchange Commission on May 17, 2006. For the sake of clarity and conciseness, we will refer to the Securities and Exchange Commission as the SEC for the balance of this current report on Form 8-K.

Since we have discontinued our previous business of producing of selling nutritional products and have now acquired all of the issued and outstanding shares of Raptor Pharmaceutical Inc., we plan to focus our efforts on implementing the business of Raptor Pharmaceutical Inc. Accordingly, we include in this current report on Form 8-K information on the business of Raptor Pharmaceutical Inc. that would be required if we were filing a general form for registration of securities on Form 10-SB.

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TABLE OF CONTENTS
	Page
EXECUTIVE SUMMARY	5
RISK FACTORS	5
Risks Related to the Business of Raptor Pharmaceutical Inc	6
Risks Related to Our Common Stock	14
DESCRIPTION OF OUR BUSINESS	15
Corporate Overview and History	15
Our Current Business	16
The Market	19
Competition	19
Research and Development	20
Government Regulations of the Biotechnology Industry	21
Intellectual Property	23
Employees	26
DESCRIPTION OF PROPERTY	26
LEGAL PROCEEDINGS	26
PLAN OF OPERATIONS	27
Overview	27
Milestones	27
Capital Resource Requirements	29
Contractual Obligations with BioMarin Pharmaceutical Inc	30
Liquidity and Capital Resources	31
Going Concern	31
Off-Balance Sheet Arrangements	32
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT	32
DIRECTORS AND EXECUTIVE OFFICERS	33
Board Meetings and Committees	34
Scientific Advisors	35
Code of Ethics	35
Legal Proceedings	36
Certain Relationships and Related Transactions	36
Section 16(A) Beneficial Ownership Reporting Compliance	36
EXECUTIVE COMPENSATION	37
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER TRANSACTIONS	38
Item 9.01 Financial Statements and Exhibits	39

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EXECUTIVE SUMMARY

Raptor Pharmaceutical Inc. was incorporated in the State of Delaware on September 8, 2005. On January 27, 2006, Raptor Pharmaceutical Inc. purchased from BioMarin Pharmaceutical Inc. intellectual property owned by BioMarin Pharmaceutical Inc. for the research and development of the receptor-associated protein technologies, including three pending patent applications and two provisional patent applications. For further details on our intellectual property, please see the section on Intellectual Property beginning on page 23.

Raptor Pharmaceutical Inc. is an early stage, biotechnology research and development company involved in the development of novel drugs and drug-targeting platform, based on the use of receptor-associated protein. We believe that our receptor-associated protein technology may selectively target the delivery of engineered drugs to organs, tissues and cell types through the use of specific receptor systems. The brain delivery application of our receptor-associated protein technology, which we have named the NeuroTrans^TM, has demonstrated the potential to deliver therapeutic proteins to the brain in limited non-clinical studies.

Nearly 1,000 known genetic and neurodegenerative diseases affect the brain. Drug therapies often have difficulty reaching areas of the brain affected by diseases because the brain has evolved a protective barrier, commonly referred to as the blood-brain barrier, preventing the free passage of most blood components into the brain. This barrier is critical to the health of the brain as it excludes potentially harmful molecules circulating in the blood. A big part of the solution to the medical problem of brain and neurodegenerative diseases is the development of effective brain targeting and delivery technologies. The idea of delivering therapeutics into the brain in the least invasive way, using a natural receptor mediated transport mechanism of the blood-brain barrier, which is called transcytosis, is one of the goals of our scientific research. Transcytosis involves the selective receptor mediated transport of larger proteins and peptides across the specific layer of the blood-brain barrier. The subject of our research and development, the receptor-associated protein, is a natural human protein that can bind with receptors on the cell surfaces of endothelial cells on the blood side of the blood-brain barrier. A protein that binds to a receptor is referred to as a ligand for that receptor. When the receptor-associated protein binds with a receptor, they form a ligand receptor complex. This complex can then be transported across the endothelial cell and to the brain side of the blood-brain barrier. If we can fuse different protein drugs with the receptor-associated protein, we believe that the attached protein drugs can be transported across the blood-brain barrier as a part of ligand receptor complex and thereby may be able to reach the areas of the brain affected by diseases. For further details on our receptor-associated protein technology, please see the section on Our Current Business beginning on page 16.

Our management and scientific advisors have many years of experience in the drug delivery and protein therapeutic targeting and development areas. Our Chief Executive Officer, Dr. Christopher M. Starr, was a co-founder, Senior Vice President and Chief Scientific Officer of BioMarin Pharmaceutical Inc. Our Chief Scientific Officer, Dr. Todd Zankel, was the Senior Director of Research at BioMarin Pharmaceutical Inc. for eight years. Since its inception in 1997, BioMarin Pharmaceutical Inc. has developed and commercialized two enzyme replacement products based on the exploitation of receptor targeting to deliver therapeutic enzymes. For further details on our new management team, please see the section on Directors and Executive Officers beginning on page 33.

RISK FACTORS

Shares of our common stock are considered speculative during the development stage of our new business operations. We operate in a dynamic and rapidly changing industry that involves numerous risks and uncertainties. The risks and uncertainties described below are not the only ones we face. Other risks and uncertainties, including those that we do not currently consider material, may impair our business. If any of the risks discussed below actually occur, our business, financial condition, operating results or cash flows could be materially adversely affected. This could cause the trading price of our securities to decline, and you may lose all or part of your investment. Prospective investors should consider carefully the risk factors set out below.

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Risks Related to the Business of Raptor Pharmaceutical Inc.

If we fail to obtain the capital necessary to fund our operations, our financial results and financial condition will be adversely affected and we will have to delay or terminate some or all of our product development programs.

Our audited financial statements as of February 28, 2006 have been prepared assuming that we will continue as a going concern. As of February 28, 2006, we had an accumulated deficit of approximately $130.000. We expect to continue to incur losses for the foreseeable future and will have to raise substantial cash to fund our planned operations. Even though we raised approximately $5,000,000 of gross proceeds in a recent private placement offering of our securities, we expect to continue to spend substantial amounts of capital on our operations for the foreseeable future. The amount of additional capital we will need depends on many factors, including:

·    the progress, timing and scope of our non-clinical studies and clinical trials;

·    the time and cost necessary to obtain regulatory approvals;

·    the time and cost necessary to develop commercial manufacturing processes, including quality systems, and to build or acquire manufacturing capabilities;

·    the time and cost necessary to respond to technological and market developments; and

·    any changes made or new developments in our existing collaborative, licensing and other commercial relationships or any new collaborative, licensing and other commercial relationships that we may establish.

Moreover, our fixed expenses such as rent, license payments and other contractual commitments are substantial and will increase in the future. These fixed expenses will increase because we expect to enter into:

·    additional licenses and collaborative agreements;

·    additional contracts for consulting, maintenance and administrative services; and

·    additional financing facilities.

We believe that our cash and cash equivalents balances as of May 25, 2006 of approximately $4.8 million will be sufficient to meet our operating and capital requirements into the second quarter of 2008. These estimates are based on assumptions and estimates, including the availability of an anticipated $400,000 equipment loan from Square 1 Bank. These estimates do not consider the potential cash generated from the exercise of warrants issued in our May 2006 financing, which could generate up to an additional $5,000,000 in the next 18 months. These assumptions and estimates may prove to be wrong. We will need to sell equity or debt securities to raise additional funds in order to complete our research and development efforts. The sale of additional securities may result in additional dilution to our stockholders. Furthermore, additional financing may not be available in amounts or on terms satisfactory to us or at all. We may be unable to raise additional financing when needed due to a variety of factors, including our financial condition, the status of our research and development programs, and the general condition of the financial markets. If we fail to raise additional financing as we need such funds, we will have to delay or terminate some or all of our research and development programs, our financial condition and operating results will be adversely affected and we may have to cease our operations.

We are an early development stage biotechnology research and development company and may never be able to successfully develop marketable products.

We are an early development stage company and have not generated any revenues to date and have a limited operating history. All of our drug product candidates are in the concept stage and have not undergone significant testing in non-clinical studies or in clinical trials. Moreover, we cannot be certain that our research and development efforts will be successful or, if successful, that our drug product candidates will ever be approved for sales or generate commercial revenues. We have a limited relevant operating history upon which an evaluation of our performance and prospects can be made. We are subject to all of the business risks associated with a new enterprise, including, but not limited to, risks of

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unforeseen capital requirements, failure of drug product candidates either in non-clinical testing or in clinical trials, failure to establish business relationships, and competitive disadvantages as against larger and more established companies.

Even if we are able to develop our drug product candidates, we may not be able to receive regulatory approval, or if approved, we may not be able to generate significant revenues or successfully commercialize our products, which will adversely affect our financial results and financial condition and we will have to delay or terminate some or all of our research product development programs.

All of our drug product candidates are theoretical and will require extensive additional research and development, including non-clinical testing and clinical trials, as well as regulatory approvals, before we can market them. We cannot predict if or when any of the drug product candidates we intend to develop will be approved for marketing. There are many reasons that we may fail in our efforts to develop our drug product candidates. These include:

·    the possibility that non-clinical testing or clinical trials may show that our drug product candidates are ineffective and/or cause harmful side effects;

·    our drug product candidates may prove to be too expensive to manufacture or administer to patients;

·    our drug product candidates may fail to receive necessary regulatory approvals from the United States Food and Drug Administration or foreign regulatory authorities in a timely manner, or at all (For the sake of clarity and conciseness, we will refer to the United States Food and Drug Administration as the FDA for the balance of this current report on Form 8-K);

·    our drug product candidates, if approved, may not be produced in commercial quantities or at reasonable costs;

·    the drug product candidates, once approved, may not achieve commercial acceptance;

·    regulatory or governmental authorities may apply restrictions to our drug product candidates, which could adversely affect their commercial success; and

·    the proprietary rights of other parties may prevent us or our potential collaborative partners from marketing our drug product candidates.

If we fail to develop our drug product candidates, our financial results and financial condition will be adversely affected, we will have to delay or terminate some or all of our research product development programs and may be forced to cease operations.

If we are limited in our ability to utilize acquired or licensed technologies, we may be unable to develop, out-license, market and sell our products, which could cause delayed new product introductions, and/or adversely affect our reputation, any of which could have a material adverse effect on our business, prospects, financial condition, and operating results.

We have acquired certain proprietary technology and plan to further license various patents and proprietary technologies owned by third parties. These agreements are critical to our product development programs. These agreements may be terminated, and all rights to the technology and products will be lost, if we fail to perform our obligations under these agreements and licenses in accordance with their terms including, but not limited to, our ability to make all payments due under such agreements. Our inability to continue to maintain these technologies could materially adversely affect our business, prospects, financial condition, and operating results. In addition, our business strategy depends on the successful development of these licensed and acquired technologies into commercial products, and, therefore, any limitations on our ability to utilize these technologies may impair our ability to develop, out-license, market and sell our products, delay new product introductions, and/or adversely affect our reputation, any of which could have a material adverse effect on our business, prospects, financial condition, and operating results.

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If we fail to compete successfully with respect to acquisitions, joint venture and other collaboration opportunities, we may be limited in our ability to develop new products and to expand our product pipeline.

Our competitors compete with us to attract established biotechnology and pharmaceutical companies or organizations for acquisitions, joint ventures, licensing arrangements or other collaborations. Collaborations include licensing proprietary technology from, and other relationships with, academic research institutions. If our competitors successfully enter into partnering arrangements or license agreements with academic research institutions, we will then be precluded from pursuing those specific opportunities. Since each of these opportunities is unique, we may not be able to find a substitute. Other companies have already begun many drug development programs, which may target diseases that we are also targeting, and have already entered into partnering and licensing arrangements with academic research institutions, reducing the pool of available opportunities.

Universities and public and private research institutions also compete with us. While these organizations primarily have educational or basic research objectives, they may develop proprietary technology and acquire patents that we may need for the development of our drug product candidates. We will attempt to license this proprietary technology, if available. These licenses may not be available to us on acceptable terms, if at all. If we are unable to compete successfully with respect to acquisitions, joint venture and other collaboration opportunities, we may be limited in our ability to develop new products and to develop and expand our product pipeline.

If we do not achieve our projected development goals in the time frames we announce and expect, the credibility of our management and our technology may be adversely affected and, as a result, our stock price may decline.

For planning purposes, we estimate the timing of the accomplishment of various scientific, clinical, regulatory and other product development goals, which we sometimes refer to as milestones. These milestones may include the commencement or completion of scientific studies and clinical trials and the submission of regulatory filings. From time to time, we may publicly announce the expected timing of some of these milestones. All of these milestones will be based on a variety of assumptions. The actual timing of these milestones can vary dramatically compared to our estimates, in many cases for reasons beyond our control. If we do not meet these milestones as publicly announced, our stockholders may lose confidence in our ability to meet these milestones and, as a result, our stock price may decline.

Our product development programs will require substantial additional future funding which could impact our operational and financial condition

It will take several years before we are able to develop marketable drug product candidates, if at all. Our product development programs will require substantial additional capital to successfully complete them, arising from costs to:

·    conduct research, non-clinical testing and human studies;

·    establish pilot scale and commercial scale manufacturing processes and facilities; and

·    establish and develop quality control, regulatory, marketing, sales, finance and administrative capabilities to support these programs.

Our future operating and capital needs will depend on many factors, including:

·    the pace of scientific progress in our research and development programs and the magnitude of these programs;

·    the scope and results of preclinical testing and human studies;

·    the time and costs involved in obtaining regulatory approvals;

·    the time and costs involved in preparing, filing, prosecuting, maintaining and enforcing patent claims;

·    competing technological and market developments;

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·    our ability to establish additional collaborations;

·    changes in our existing collaborations;

·    the cost of manufacturing scale-up; and

·    the effectiveness of our commercialization activities.

We base our outlook regarding the need for funds on many uncertain variables. Such uncertainties include the success of our research initiatives, regulatory approvals, the timing of events outside our direct control such as negotiations with potential strategic partners and other factors. Any of these uncertain events can significantly change our cash requirements as they determine such one-time events as the receipt or payment of major milestones and other payments.

Additional funds will be required to support our operations and if we are unable to obtain them on favorable terms, we may be required to cease or reduce further development or commercialization of our drug product programs, to sell some or all of our technology or assets, to merge with another entity or cease operations.

If we fail to demonstrate efficacy in our non-clinical studies and clinical trials our future business prospects, financial condition and operating results will be materially adversely affected.

The success of our development and commercialization efforts will be greatly dependent upon our ability to demonstrate drug product candidate efficacy in non-clinical studies, as well as in clinical trials. Non-clinical studies involve testing drug product candidates in appropriate non-human disease models to demonstrate efficacy and safety. Regulatory agencies evaluate these data carefully before they will approve clinical testing in humans. If certain non-clinical data reveals potential safety issues or the results are inconsistent with an expectation of the drug product candidate’s efficacy in humans, the regulatory agencies may require additional more rigorous testing, before allowing human clinical trials. This additional testing will increase program expenses and extend timelines. We may decide to suspend further testing on our drug product candidates or technologies if, in the judgment of our management and advisors, the non-clinical test results do not support further development.

Moreover, success in non-clinical testing and early clinical trials does not ensure that later clinical trials will be successful, and we cannot be sure that the results of later clinical trials will replicate the results of prior clinical trials and non-clinical testing. The clinical trial process may fail to demonstrate that our drug product candidates are safe for humans and effective for indicated uses. This failure would cause us to abandon a drug candidate and may delay development of other drug product candidates. Any delay in, or termination of, our non-clinical testing or clinical trials will delay the filing of our Investigational New Drug application and New Drug Application with the FDA and, ultimately, our ability to commercialize our drug product candidates and generate product revenues. In addition, our clinical trials will involve small patient populations. Because of the small sample size, the results of these early clinical trials may not be indicative of future results. See page 21 for further discussion about government regulations of the biotechnology industry.

Following successful non-clinical testing, drug product candidates will need to be tested in a clinical development program to provide data on safety and efficacy prior to becoming eligible for product approval and licensure by regulatory agencies. From the first human trial through product approval can take many years and 10-12 years is not unusual.

If any of our future clinical development drug product candidates become the subject of problems, including those related to, among others:

·    efficacy or safety concerns with the drug product candidates, even if not justified;

·    unexpected side-effects;

·    regulatory proceedings subjecting the drug product candidates to potential recall;

·    publicity affecting doctor prescription or patient use of the drug product candidates;

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·    pressure from competitive products; or

·    introduction of more effective treatments;

our ability to sustain our development programs will become critically compromised. For example, efficacy or safety concerns may arise, whether or not justified, that could lead to the suspension or termination of our clinical programs.

Each clinical phase is designed to test attributes of the drug and problems that might result in the termination of the entire clinical plan can be revealed at any time throughout the overall clinical program. The failure to demonstrate efficacy in our clinical trials would have a material adverse effect on our future business prospects, financial condition and operating results.

If we do not obtain the support of key scientific collaborators, it may be difficult to establish products using our technologies as a standard of care for various indications, which may limit our revenue growth and profitability and could have a material adverse effect on our business, prospects, financial condition and operating results.

We will need to establish relationships with leading scientists and research institutions. We believe that such relationships are pivotal to establishing products using our technologies as a standard of care for various indications. We have not yet established a Scientific Advisory Board. Additionally, although in discussion, there is no assurance that our current research partners will continue to work with us or that we will be able to attract additional research partners. If we are not able to establish scientific relationships to assist in our research and development, we may not be able to successfully develop our drug product candidates. Our future success depends, in part, on the continued service of our management team.

Our success is dependent in part upon the availability of our senior executive officers, including our Chief Executive Officer, Dr. Starr, our Chief Scientific Officer, Dr. Zankel, and our Chief Financial Officer, Kim Tsuchimoto. The loss or unavailability to us of any of these individuals or key research, and development personnel, and particularly if lost to competitors, would have a material adverse effect on our business, prospects, financial condition, and operating results. We have no key-man insurance on any of our employees.

We may not be able to market or generate sales of our products to the extent anticipated.

Assuming that we are successful in developing our drug product candidates and receive regulatory clearances to market our products, our ability to successfully penetrate the market and generate sales of those products may be limited by a number of factors, including the following:

·    Certain of our competitors in the field have already received regulatory approvals for and have begun marketing similar products in the United States, the European Union, Japan and other territories, which may result in greater physician awareness of their products as compared to ours.

·    Information from our competitors or the academic community indicating that current products or new products are more effective than our future products could, if and when it is generated, impede our market penetration or decrease our future market share.

·    Physicians may be reluctant to switch from existing treatment methods, including traditional therapy agents, to our future products.

·    The price for our future products, as well as pricing decisions by our competitors, may have an effect on our revenues.

·    Our future revenues may diminish if third-party payers, including private health coverage insurers and health maintenance organizations, do not provide adequate coverage or reimbursement for our future products.

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There are many difficult challenges associated with developing proteins that can be used to transport therapeutics across the blood-brain barrier.

Our receptor-associated protein technology has a potential clinical use as a drug transporter through the blood-brain barrier. However, we do not know that our technology will work or work safely. Many groups and companies have attempted to solve the critical medical challenge of developing an efficient method of transporting therapeutic proteins from the blood stream into the brain. Unfortunately, these efforts to date have met with little success due in part to our lack of adequate understanding of the biology of the blood-brain barrier and to the enormous scientific complexity of the transport process itself.

In the research and development of our receptor-associated protein technology, we will certainly face many of the same issues that have caused these earlier attempts to fail. It is possible that:

·    we will not be able to produce enough fusion compounds for testing;

·    the pharmacokinetics, or where the drug distributes in the body, of the fusion compounds will preclude sufficient binding to the targeted receptors on the blood-brain barrier;

·    the targeted receptors are not transported across the blood-brain barrier;

·    other features of the barrier apart from the cells block access molecules to brain tissue after transport across the cells;

·    the targeted receptors are expressed on the blood-brain barrier at densities insufficient to allow adequate transport of fusion compounds into the brain;

·    targeting of the selected receptors induces deleterious side-effects which prevent their use as drugs, or

·    that our fusion compounds themselves cause unacceptable side-effects.

Any of these conditions may preclude the use of receptor-associated proteins or receptor-associated protein fusion compounds for treating the brain.

Although we have drug product candidates that we believe are promising at early stages of development and in non-clinical trials, none of our drug product candidates may reach the commercial market for a number of reasons.

Successful research and development of pharmaceutical products is high risk. Most products and development candidates fail to reach the market. Our success depends on the discovery of new drugs that we can commercialize. It is possible that our drug product candidates may never reach the market for a number of reasons. They may be found ineffective or may cause harmful side-effects during non-clinical testing or clinical trials or fail to receive necessary regulatory approvals. We may find that certain drug product candidates cannot be manufactured at a commercial scale and, therefore, they may not be economical to produce. Our drug product candidates could also fail to achieve market acceptance or be precluded from commercialization by proprietary rights of third parties. We do not expect our drug product candidates to be commercially available for a number of years, if at all.

If our competitors succeed in developing products and technologies that are more effective than our own, or if scientific developments change our understanding of the potential scope and utility of our drug product candidates, then our technologies and future drug product candidates may be rendered less competitive.

We face significant competition from industry participants that are pursuing similar technologies that we are pursuing and are developing pharmaceutical products that are competitive with our drug product candidates. Nearly all of our industry competitors have greater capital resources, larger overall research and development staffs and facilities, and a longer history in drug discovery and development, obtaining regulatory approval and pharmaceutical product manufacturing and marketing than we do. With these additional resources, our competitors may be able to respond to the rapid and significant technological changes in the biotechnology and pharmaceutical industries faster than we can. Our future success will

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depend in large part on our ability to maintain a competitive position with respect to these technologies. Rapid technological development, as well as new scientific developments, may result in our compounds, drug product candidates or processes becoming obsolete before we can recover any of the expenses incurred to develop them. For example, changes in our understanding of the appropriate population of patients who should be treated with a targeted therapy like we are developing may limit the drug’s market potential if it is subsequently demonstrated that only certain subsets of patients should be treated with the targeted therapy.

Our reliance on third parties, such as university laboratories, contract manufacturing organizations and contract or clinical research organizations, may result in delays in completing, or a failure to complete, non-clinical testing or clinical trials if they fail to perform under our agreements with them.

In the course of product development, we may engage university laboratories, other biotechnology companies or contract or clinical manufacturing organizations to manufacture drug material for us to be used in non-clinical and clinical testing and contract research organizations to conduct and manage non-clinical and clinical studies. If we engage these organizations to help us with our non-clinical and clinical programs, many important aspects of this process have been and will be out of our direct control. If any of these organizations we may engage in the future fail to perform their obligations under our agreements with them or fail to perform non-clinical testing and/or clinical trials in a satisfactory manner, we may face delays in completing our clinical trials, as well as commercialization of any of our drug product candidates. Furthermore, any loss or delay in obtaining contracts with such entities may also delay the completion of our clinical trials, regulatory filings and the potential market approval of our drug product candidates.

The use of any of our drug product candidates in clinical trials may expose us to liability claims.

The nature of our business exposes us to potential liability risks inherent in the testing, manufacturing and marketing of our drug product candidates. We currently do not have any drug product candidates in clinical trials, however, when any of our drug product candidates enter into clinical trials or become marketed products they could potentially harm people or allegedly harm people and we may be subject to costly and damaging product liability claims. Some of the patients who participate in clinical trials are already critically ill when they enter a trial. The waivers we obtain may not be enforceable and may not protect us from liability or the costs of product liability litigation. Although we intend to obtain product liability insurance that we believe is adequate, we are subject to the risk that our insurance will not be sufficient to cover claims.

If we are unable to protect our proprietary technology, we may not be able to compete as effectively.

Where appropriate, we seek patent protection for certain aspects of our technology. Patent protection may not be available for some of the drug product candidates we are developing. If we must spend significant time and money protecting our patents, designing around patents held by others or licensing, potentially for large fees, patents or other proprietary rights held by others, our business and financial prospects may be harmed.

The patent positions of biopharmaceutical products are complex and uncertain.

We own or license patent applications related to certain of our drug product candidates. However, these patent applications do not ensure the protection of our intellectual property for a number of reasons, including the following:

·    We do not know whether our patent applications will result in issued patents. For example, we may not have developed a method for treating a disease before others developed similar methods.

·    Competitors may interfere with our patent process in a variety of ways. Competitors may claim that they invented the claimed invention prior to us. Competitors may also claim that we are infringing on their patents and therefore cannot practice our technology as claimed under our patent, if issued. Competitors may also contest our patents, if issued, by showing the patent examiner that the invention was not original, was not novel or was obvious. In litigation, a competitor could claim that our patents, if issued, are not valid for a number of reasons. If a court agrees, we would lose that patent. As a company, we have no meaningful experience with competitors interfering with our patents or patent applications.

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·    Enforcing patents is expensive and may absorb significant time of our management. Management would spend less time and resources on developing drug product candidates, which could increase our operating expenses and delay product programs.

·    Receipt of a patent may not provide much practical protection. If we receive a patent with a narrow scope, then it will be easier for competitors to design products that do not infringe on our patent.

·    In addition, competitors also seek patent protection for their technology. Due to the number of patents in our field of technology, we cannot be certain that we do not infringe on those patents or that we will not infringe on patents granted in the future. If a patent holder believes our drug product candidate infringes on their patent, the patent holder may sue us even if we have received patent protection for our technology. If someone else claims we infringe on their technology, we would face a number of issues, including the following:

·    Defending a lawsuit takes significant time and can be very expensive.

·    If the court decides that our drug product candidate infringes on the competitor’s patent, we may have to pay substantial damages for past infringement.

·    The court may prohibit us from selling or licensing the drug product candidate unless the patent holder licenses the patent to us. The patent holder is not required to grant us a license. If a license is available, we may have to pay substantial royalties or grant cross licenses to our patents.

·    Redesigning our drug product candidates so it does not infringe may not be possible or could require substantial funds and time.

It is also unclear whether our trade secrets are adequately protected. While we use reasonable efforts to protect our trade secrets, our employees or consultants may unintentionally or willfully disclose our information to competitors. Enforcing a claim that someone else illegally obtained and is using our trade secrets, like patent litigation, is expensive and time consuming, and the outcome is unpredictable. In addition, courts outside the United States are sometimes less willing to protect trade secrets. Our competitors may independently develop equivalent knowledge, methods and know-how.

We may also support and collaborate in research conducted by government organizations, hospitals, universities or other educational institutions. These research partners may be unwilling to grant us any exclusive rights to technology or products derived from these collaborations prior to entering into the relationship.

If we do not obtain required licenses or rights, we could encounter delays in our product development efforts while we attempt to design around other patents or even be prohibited from developing, manufacturing or selling drug product candidates requiring these licenses. There is also a risk that disputes may arise as to the rights to technology or drug product candidates developed in collaboration with other parties.

Our executive offices and laboratory facility is located near known earthquake fault zones, and the occurrence of an earthquake or other catastrophic disaster could cause damage to our facility and equipment, or that of our third-party manufacturers or single-source suppliers, which could materially impair our ability to continue our product development programs.

Our executive offices and laboratory facility are located in the San Francisco Bay Area near known earthquake fault zones and is vulnerable to significant damage from earthquakes. We and the third-party manufacturers with whom we contract and our single-source suppliers of raw materials are also vulnerable to damage from other types of disasters, including fires, floods, power loss and similar events. If any disaster were to occur, our ability to continue our product development programs, could be seriously, or potentially completely impaired. The insurance we maintain may not be adequate to cover our losses resulting from disasters or other business interruptions.

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We will incur increased costs as a result of recently enacted and proposed changes in laws and regulations.

We face burdens relating to the recent trend toward stricter corporate governance and financial reporting standards. New legislation or regulations such as Section 404 of the Sarbane-Oxley Act of 2002 follow the trend of imposing stricter corporate governance and financial reporting standards have led to an increase in our costs of compliance including increases in consulting, auditing and legal fees. The new rules could make it more difficult or more costly for us to obtain certain types of insurance, including directors’ and officers’ liability insurance, and we may be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. The impact of these events could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our board committees or as executive officers. A failure to comply with these new laws and regulations may impact market perception of our financial condition and could materially harm our business. Additionally, it is unclear what additional laws or regulations may develop, and we cannot predict the ultimate impact of any future changes in law.

Risks Related to Our Common Stock

There is no active trading market for our common stock and if a market for our common stock does not develop, our investors will be unable to sell their shares.

There is currently no active trading market for our common stock and such a market may not develop or be sustained. Shares of our common stock are eligible for quotation on the National Association of Securities Dealers Inc.’s Over-the-Counter Bulletin Board but there has been no trading of our common stock. For the sake of clarity and conciseness, we will refer to the National Association of Securities Dealers Inc. as the NASD, and to the Over-the-Counter Bulletin Board as the OTC Bulletin Board for the balance of this current report on Form 8-K. We cannot provide our investors with any assurance that a public market will materialize. Further, the OTC Bulletin Board is not a listing service or exchange, but is instead a dealer quotation service for subscribing members. If our common stock is not quoted on the OTC Bulletin Board or if a public market for our common stock does not develop, then investors may not be able to resell the shares of our common stock that they have purchased and may lose all of their investment. If we establish a trading market for our common stock, the market price of our common stock may be significantly affected by factors such as actual or anticipated fluctuations in our operating results, our ability or perceived ability to reach corporate milestones, general market conditions and other factors. In addition, the stock market has from time to time experienced significant price and volume fluctuations that have particularly affected the market prices for the shares of developmental stage companies. As we are a development stage company such fluctuations may negatively affect the market price of our common stock.

Because we do not intend to pay any dividends on our common stock, investors seeking dividend income or liquidity should not purchase shares of our common stock.

We have not declared or paid any dividends on our common stock since our inception, and we do not anticipate paying any such dividends for the foreseeable future. Investors seeking dividend income or liquidity should not invest in our common stock.

Our stock is a penny stock. Trading of our stock may be restricted by the SEC’s penny stock regulations and the NASD’s sales practice requirements, which may limit a stockholder’s ability to buy and sell our stock.

Our stock is a penny stock. The SEC has adopted Rule 15g-9 which generally defines “penny stock” to be any equity security that has a market price less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and “accredited investors”. The term “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the SEC which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer’s account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s

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confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our common stock.

In addition to the “penny stock” rules promulgated by the SEC, the NASD has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, the NASD believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. The NASD requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock.

Our stock price may be volatile, and an investment in our stock could suffer a decline in value.

The market price of our common stock will fluctuate due to factors including:

·    progress of our drug product candidates through the regulatory process;

·    results of non-clinical studies and clinical trials, announcements of technological innovations or new products by us or our competitors;

·    government regulatory action affecting our drug product candidates or our competitors’ drug products in both the United States and foreign countries;

·    developments or disputes concerning patent or proprietary rights;

·    general market conditions and fluctuations for the emerging growth biotechnology and pharmaceutical market sectors;

·    economic conditions and broad market fluctuations in the United States or abroad; and

·    actual or anticipated fluctuations in our operating results.

DESCRIPTION OF OUR BUSINESS

Corporate Overview and History

Our company was incorporated in the State of Nevada on April 1, 2002. Our principal executive and head offices are currently located at 9 Commercial Blvd., Suite 200, Novato, California 94949.

We incorporated a wholly-owned subsidiary called Bodysentials Health & Beauty Inc. on April 27, 2004 and since that time we have been involved in the business of producing and selling a nutritional beverage for youth in the form of an orange drink and a milk shake. Although we originally intended to market and sell our products in stores, we determined it was more cost effective to offer our products through our e-commerce website at www.bodysentials.com and, specifically, through Internet and network marketing. We have had sales of our products but have generated only very limited revenues.

We ran out of substantially all of our funds shortly after the six month period ended February 28, 2006 and were unable to secure additional financing to support and continue our nutritional beverage business. To better protect our stockholder interests and provide future appreciation, our management has conducted an in-depth analysis of our business and decided to pursue an opportunity in the biotechnology industry.

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Accordingly, on March 9, 2006, we entered into a Share Purchase Agreement with Dr. Starr, Erich Sager, Dr. Zankel and Falcon Corporate Investments Ltd. for the purchase by our company of all of the issued and outstanding shares of Raptor Pharmaceutical Inc.

On May 2, 2006, our Board of Directors unanimously approved the disposition of our wholly-owned subsidiary, Bodysentials Health & Beauty Inc., which has carried on all or substantially all of our business up to May 2, 2006, to Universal Financial Consulting Inc. in satisfaction of the loan and interest amount due to Universal Financial Consulting Inc. pursuant to a Convertible Loan Agreement dated May 20, 2005. We thereafter received the consent of stockholders holding a majority of the outstanding shares of our common stock. We have filed and mailed out an Information Statement describing our sale of Bodysentials Health & Beauty Inc. on Schedule 14C on or about May 17, 2006. We will complete the disposition of Bodysentials Health & Beauty Inc. on June 9, 2006, which is after the twenty-day (20) period mandated by Rule 14c.

Our Current Business

With the completion of the Share Purchase Agreement to acquire Raptor Pharmaceutical Inc., we changed our business model to the research and development of a novel drug and drug-targeting platform to initially treat a variety of brain disorders, neurodegenerative diseases, genetic disorders and cancer, through the proprietary use of a natural human protein known as the receptor-associated protein. We believe that our receptor-associated protein technology may selectively target the delivery of engineered drugs to organs, tissues and cell types through the use of specific receptor systems. The brain delivery application of our receptor-associated protein technology, which we have named the NeuroTrans^TM, has demonstrated the potential to deliver therapeutic proteins to the brain in limited non-clinical studies.

Brief Introduction to Receptor-Associated Protein Technology

Nearly 1,000 known genetic and neurodegenerative diseases affect the human brain. The mode of treatment of these diseases is dependent on whether the disease is localized or widespread within the brain. If a disease only affects a localized section of the brain, such as brain tumors, removing the affected tissues or administering drugs as capsules or wafers directly to the affected site through the use of drug treated wafers can be effective ways of treating the disease. Genetic and neurodegenerative brain disorders, in contrast, are not localized to one area of the brain. In these cases, drugs need to be delivered throughout the entire brain and often into regions surrounding the brain.

The Blood-brain Barrier

Despite the thorough infiltration of brain tissue with blood capillaries, most therapeutic molecules are not able to pass from the blood into the brain. The brain has evolved a protective barrier, commonly referred to as the blood-brain barrier, which prevents the free passage of most blood components into the brain. The barrier exists because the endothelial cells lining brain capillaries are sealed tightly together, forming continuous tubes that do not leak. This barrier is critical to the health of the brain as it excludes potentially harmful molecules circulating in the blood. Fortunately, the concept of blood being completely sealed off from brain tissue is misleading, as a large number of molecules do move across the capillary endothelial cells. It is more useful to consider the brain vasculature as a type of molecular sieve allowing certain molecules to enter the brain, while excluding others.

Large molecules, such as growth factors, enzymes and other therapeutic proteins, cannot pass through the blood-brain barrier and there are constraints on small molecules that severely limit the types of drugs that can be delivered. Small molecules that freely diffuse across the blood-brain barrier do not need special transport systems but must be small and fat soluble. Small molecules that require the use of special small molecule transporters do not need to be fat soluble but most drugs need to be specifically modified to make use of these transporters. Engineering molecules that are both large and water soluble so that they are able to cross the blood-brain barrier is an even greater challenge. As most brain diseases are not adequately treated using small molecule drugs alone, developers of protein therapeutics have to devise ways of delivering their drugs to the brain. One method is to take advantage of a mechanism used by existing protein transport systems within the blood-brain barrier. This mechanism is called transcytosis.

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Transcytosis

Transcytosis involves the selective receptor mediated transport of peptides and large proteins across endothelial membrane in the blood-brain barrier. Transcytosis is responsible for delivering a wide variety of natural blood proteins such as cytokines, lipoproteins, transferrin and hormones like insulin to the brain because these proteins are needed by brain tissue for normal brain function. The endothelial cells of the blood-brain barrier operate a number of specific transcytosis transport systems to satisfy this need.

Each of these transcytosis transport systems is defined by a specific pair of receptor and ligand. Ligand is a blood protein such as cytokines, lipoproteins, transferrin or insulin that is to be transported into the brain; and the receptor is a cell surface membrane protein residing on the blood side of the brain capillary endothelial cells that make up the blood-brain barrier. As the blood circulates through the brain capillaries, the ligand comes into contact with the receptor and the two form a complex. The receptor-ligand complex is then transported across the endothelial cell, through a series of intracellular compartments, finally arriving at the brain side of the blood-brain barrier. The receptor then releases the ligand, which is free to diffuse into the brain tissue.

Transcytosis has been widely studied as a potential means of delivering intravenously administered therapeutic proteins to the brain. In theory, transcytosis might be used as a method of drug delivery by fusing a drug to a transcytosed ligand. The premise of this approach is that both the drug and ligand retain their functionality within the context of the fusion; the ligand dictates transport behavior and the drug dictates pharmacology.

At least two types of ligands, natural ligands and antibodies that are engineered to bind to the receptor, can be chosen to take advantage of the transcytosis transport systems. Proteins like transferrin, insulin and receptor-associated protein (which is the subject of our research), can be classified as natural ligands. Natural ligands have a number of advantages, including proven transport behavior and minimal immunogenicity. However, the normal, saturating serum levels of naturally present transferrin in the blood have been shown to inhibit binding of transferrin fusions to the transferrin receptor and the powerful physiological effects of insulin itself makes it also an unsuitable choice as a fusion partner intended only to direct transport.

As an alternative to natural ligands, antibodies have been used to bind to receptors that undergo transcytosis. Antibodies can be engineered that are able to bind to receptors even in the face of high concentrations of endogenous natural receptor ligand and which do not have their own pharmacological activity. However, these antibodies have been demonstrated to be transcytosed far less efficiently than natural ligands. Antibodies themselves are also quite difficult to fuse to drugs in a consistent, scalable manner.

The Advantage of the Receptor-Associated Protein

In contrast to the transferrin and insulin transcytosis systems, which are the two most extensively studied candidates as the therapeutic transporters and have been shown to have the shortcomings described above, we believe receptor-associated protein represents a potential alternative because receptor-associated protein concentration in circulation is negligible and receptor-associated protein has no known direct physiological effects on its own.

Receptor-associated protein has some additional features that we believe make it suitable as a mediator of transcytosis. These attributes stem from some unique aspects of the binding of receptor-associated protein to the low density lipoprotein receptor family of receptors. Cell surface receptors, including low density lipoprotein receptors, are initially synthesized as membrane bound proteins in the endoplasmic reticulum of the cell. The receptors are then modified and transported through a sequence of intracellular compartments and vesicles on their way to the cell surface. The cell has evolved a system of proteins, called “chaperones”, which bind to nascent receptors, preventing binding to any natural ligands that might also be within the secretory pathway of the receptors and allowing the receptors to efficiently achieve their final folded state and move efficiently to the cell surface.

Receptor-associated protein functions as a chaperone for the low density and very low density lipoprotein receptor family of receptors, both of which are represented on the blood-brain barrier. In order to fulfill its role as a chaperone, we believe receptor-associated protein has evolved to be able to out compete all other ligands for binding to the low density lipoprotein receptors. Upon binding with receptor-associated protein, other ligands are prevented from binding with the low density

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lipoprotein receptor. This allows the receptor to be transported to the cell surface free of other ligands. Receptor-associated protein is able to bind even in the presence of high concentrations of competing ligands. Finally, the receptor-ligand complex created by receptor-associated protein has been demonstrated to be more stable than other receptor-ligand complexes within the cell. This stability may aid in the efficiency of transcytosis by keeping receptor-associated protein from falling off of the receptor during the traverse from the blood side to the brain side of the endothelial cell.

Finally, an important strength of the receptor-associated protein technology lies in the receptor family upon which it depends. The low density lipoprotein receptor family of receptors is one of the most widely distributed and intensively utilitized receptor systems characterized to date. Many low density lipoprotein receptor family members are transport receptors, ferrying a variety of ligands both into and across cells throughout the body. Some receptors, including megalin and very low density lipoprotein receptor, are expressed on tissue barriers, including the blood-brain barrier, the blood-muscle-barrier and the air-blood barrier. The cumulative effect of using a ligand like receptor-associated protein, which binds to all of these receptors, is to increase the distribution and uptake of fusion compounds throughout the body. Another feature of receptor-associated protein technology is the differential behavior of low density lipoprotein receptor family members on different cell types. On polarized cells, like those making up tissue barriers, low density lipoprotein receptor can mediate transport of ligands through the cell layer. On non-polarized cells, like those making up the bulk of most organs, low density lipoprotein receptor mediate the efficient transport of ligands into the cell.

NeuroTrans^TM and Preliminary Demonstration of Our Receptor-Associated Protein Technology

In practice, attached drugs to ligands can interfere with the binding of ligands to receptors and attached ligands can diminish the binding of a drug to its target. However, we have demonstrated in our non-clinical studies that fusion between receptor-associated protein and a variety of protein drugs, including enzymes and growth factors, satisfy the requirement that the ligands and drugs do not interfere with each other. Peer reviewed research papers have shown that receptor-associated protein is efficiently transcytosed and fusions between receptor-associated protein and therapeutic proteins have been manufactured using standard methods.

We have named our proprietary receptor-associated protein technology, developed as a means of transporting therapeutic proteins from the blood to the brain, our NeuroTrans^TM platform. We believe that if we are successful in our research and development, our receptor-associated protein platform provides therapies that will be safer, less intrusive, and more effective than current approaches in treating a wide variety of brain disorders including neurodegenerative diseases, genetic disorders and cancer.

Other Clinical Development Opportunities

In addition to being a potential transport carrier to deliver therapeutics to the brain and the central nervous system, we believe receptor-associated protein is also potentially capable of transporting therapeutics selectively to muscle, vascular tissue sites, bone, liver, and retina, and could also be used to remove unwanted compounds and proteins from the blood stream. Initially, because of the unmet clinical need, we will focus our resources on targeting the delivery of growth factors for the brain such as Glial Derived Neurotrophic Factor, Nerve Growth Factor and Brain Derived Neurotrophic Factor to the brain for the treatment of neurodegenerative diseases, as well as the development of a novel, proprietary drug for the treatment of Alzheimer’s disease. Neurotrophic factors have already demonstrated their potential in treating neurodegenerative diseases in clinical settings, but have not as yet been made commercially available primarily because of the lack of an effective intravenous therapeutic brain delivery system.

In addition to its potential for delivering therapeutics to the brain, we believe there may be a wide range of other applications and conditions that our receptor-associated protein technology may be applied to, including vascular disease, cancer, and bone disease. These additional applications are based on the assumptions that our receptor-associated protein targeting molecule can be genetically engineered to bind to a selective subset of receptors with restricted tissue distribution. We believe these selective tissue distributions can be used to deliver drugs to the brain as described, or to deliver drugs to other tissues based on known restricted receptor subtype distribution. In addition to selectively transporting drugs to specific tissues, selective receptor binding constitutes a means by which receptor function might be specifically controlled, either through modulating its binding capacity or its prevalence on the cell surface.

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Vascular Disease

The receptors targeted by our receptor-associated protein technology are known to mediate transport of lipoprotein lipase across the endothelium of the aorta. These receptors have been implicated in foam cell formation by mediating uptake of excess free fatty acids into vascular macrophages. Foam cells are believed to be involved in the deposition of arthroscopic plaques and peripheral coronary artery disease. We believe our receptor-associated protein compound alone or as drug fusions directed at these receptors may be used to selectively bind these receptors and effectively increase drug concentrations at the site or block association of lipoprotein particles with macrophages and inhibit foam cell formation. We believe our receptor-associated protein compound may also limit transfer of free fatty acid from circulating lipoprotein into adipocytes, slowing the progression toward obesity in susceptible subjects.

Cancer

Based on the current scientific literature, a potential opportunity exits for the use of receptor-associated protein in the treatment of a wide variety of epithelial cancers, such as breast, prostate and cervical cancers. The therapeutic target for receptor-associated protein is a cell surface enzyme which has recently been shown to be important in the outgrowth and spread of solid tumors. A modified version of the receptor-associated protein molecule has been engineered and we intend to test this molecule for its ability to limit the growth of these tumors.

Bone disease

Maintaining bone health is a finely coordinated balance between active bone depletion and bone creation. The normal process of bone remodeling continues throughout life. When bone creation lags behind bone depletion net loss in bone density occurs resulting in osteoporosis. Signal transductions through known cell surface receptors control the balance between bone creation and bone depletion. The receptors targeted by our receptor-associated protein compound have been shown to regulate bone cell differentiation in animal models. These receptors bind inhibitor molecules in the blood that are known to decrease bone creation. We believe our receptor-associated protein compound that interferes with inhibitor binding, or which enhances receptor signaling may result in enhanced bone density.

The Market

Caregiver.org estimates that between 13.3 and 16.1 million individuals are affected by adult onset common brain diseases in the United States alone. According to the Visiongain Report on Neurodegenerative Disorder: World Markets 2002-2007, the annual cost to the United States economy to treat common brain diseases is estimated to be greater than $600 billion in direct medical and related expenses. There is currently no cure and limited treatment to slow the progression of neurodegenerative diseases. The best current drugs work only for a short time resulting in some transient benefit before the disease progression resumes. We believe that as the population ages, the prevalence of these diseases will increase significantly. According to IMS Health World Review, it is estimated that by 2010, 40 million Americans will be age 65 or older and that greater than 1% of those 65 or older will have some symptoms of Parkinson’s disease and nearly half of individuals 85 or over will have clinically recognizable Alzheimer’s disease. Cambridge Health Advisors estimates that by the middle of this century, nearly 14 million Americans will be affected by Alzheimer’s disease. .

Competition

We believe we will be competing with other pharmaceutical and biotechnology companies that provide remedies and treatments for brain and neurodegenerative diseases. Three approaches are primarily used to solve the problem of reaching the brain with therapeutic compounds:

·    Neurosurgery or invasive techniques.

·    Pharmacological techniques, which include less than 2% of currently available drugs.

·    Physiologically based techniques, such as transcytosis.

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Invasive techniques include bone marrow transplants or implants of polymers with drugs imbedded in the material for slow release. These implants extend from the skull surface to deep into brain tissue sites and use a permeation enhancer. Mannitol induced osmotic shock that creates leaks in the blood-brain barrier allowing intravenous administered chemotherapeutics into the brain is used in the treatment of brain tumors, but is not appropriate for administration of drugs for chronic therapies. Companies active in developing treatments based on these invasive technologies include Alza Corporation, Ethypharm, Guilford Pharmaceuticals, Medtronic Inc., Neurotech, and Sumitomo Pharmaceutical.

Other invasive procedures utilize catheter-based delivery of the drug directly into the brain. This technique has proven useful in the treatment of brain tumors, but is not successful in distributing drugs throughout the entire brain. Amgen, Inc. recently had clinical trials for the treatment of Parkinson’s Disease using intrathecal delivery through the use of various catheter/pump techniques. In the trials conducted by Amgen, Inc., improvements were found in cells at various distances from the end of the catheter, but improvements were not seen uniformly throughout the brain.

The physiological route is a popular approach to cross the blood-brain barrier via lipid mediated free diffusion or by facilitated transport. This is the most common strategy used for the development of new neuropharmaceuticals, but has experienced limited success as it requires that the drug have sufficient lipophilic or fat-soluble properties so that it can pass through lipid membranes. Unfortunately, the current method of delivery by this route is nonspecific to the brain and side effects are common since most organs are exposed to the drug. Furthermore, many of the potential lipophilic therapeutic molecules are substrates for the blood-brain barrier’s multi-drug resistant proteins, which actively transport the therapeutic agent back into the blood. Consequently, large doses need to be used so that sufficient amounts of the drug reach the brain. These high doses can result in significant side effects as the drug is delivered to essentially all tissues of the body, which is extremely inefficient as seen with most anticancer drugs and many of the new central nervous system medications. Companies and organizations that are developing treatments based on various physiological approaches include Angiochem, Axonyx, AramaGen Technology, Synt:em, to-BBB, Xenoport Inc., Oregon Health and Science University Neuro-oncology, Xenova Group Ltd., d-Pharm, Neurochem Inc., and Vasogen Inc.

We believe our receptor-associated protein based NeuroTrans^TM technology is one of the emerging physiological delivery platforms that utilize receptor mediated transcytosis to deliver therapeutics to the brain. These technologies all have in common a carrier or transport ligand that is conjugated or fused to a therapeutic and, when administered intravenously the complex binds to a receptor in the blood side of the blood-brain barrier.

We believe that as these technologies are developed and to the extent they are approved, the brain and central nervous system drug market will expand, as new therapeutics become available for currently unmet needs. Each of these brain delivery technology platforms will likely find advantages and disadvantages for specific clinical applications. One method may have advantages for acute administration of therapeutics while another may be better tolerated, and thus more suitable for longer-term chronic drug administration.

We want to caution our investors that nearly all of our competitors have greater capital resources, larger overall research and development staffs and facilities, and a longer history in drug discovery and development, obtaining regulatory approval, and pharmaceutical product manufacturing and marketing than we do. With these additional resources, our competitors will be able to respond to the rapid and significant technological changes in the biotechnology and pharmaceutical industries faster than we can. Our future success will depend in large part on our ability to maintain a competitive position with respect to these technologies. Rapid technological development, as well as new scientific developments, may result in our compounds, drug product candidates or processes becoming obsolete before we can recover any of the expenses incurred to develop them. For example, changes in our understanding of the appropriate population of patients who should be treated with a targeted therapy like we are developing may limit the drug’s market potential if it is subsequently demonstrated that only certain subsets of patients should be treated with the targeted therapy.

Research and Development

We are a research and development company and we plan to focus our efforts in the research and development of our receptor-associated protein based platform and complementary technologies to provide therapies that we believe will be safer, less intrusive, and more effective than current approaches in treating a wide variety of brain disorders and neurodegenerative diseases, genetic disorders and cancer. Please see the Plan of Operations section beginning on page 27 for our planned research and development activities in the next twelve months.

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Government Regulations of the Biotechnology Industry

Regulation by governmental authorities in the United States and foreign countries is a significant factor in the development, manufacture, and expected marketing of our drug product candidates and in our ongoing research and development activities. The nature and extent to which such regulation will apply to us will vary depending on the nature of any drug product candidates developed. We anticipate that all of our drug product candidates will require regulatory approval by governmental agencies prior to commercialization.

In particular, human therapeutic products are subject to rigorous non-clinical and clinical testing and other approval procedures of the FDA and similar regulatory authorities in other countries. Various federal statutes and regulations also govern or influence testing, manufacturing, safety, labeling, storage, and record-keeping related to such products and their marketing. The process of obtaining these approvals and the subsequent compliance with the appropriate federal statutes and regulations requires substantial time and financial resources. Any failure by us or our collaborators to obtain, or any delay in obtaining, regulatory approval could adversely affect the marketing of any drug product candidates developed by us, our ability to receive product revenues, and our liquidity and capital resources.

The steps ordinarily required before a new drug may be marketed in the United States, which are similar to steps required in most other countries, include:

·    non-clinical laboratory tests, non-clinical studies in animals, formulation studies and the submission to the FDA of an investigational new drug application;

·    adequate and well-controlled clinical trials to establish the safety and efficacy of the drug;

·    the submission of a new drug application or biologic license application to the FDA; and

·    FDA review and approval of the new drug application or biologics license application.

Non-clinical tests include laboratory evaluation of drug product candidate chemistry, formulation and toxicity, as well as animal studies. The results of non-clinical testing are submitted to the FDA as part of an investigational new drug application. A 30-day waiting period after the filing of each investigational new drug application is required prior to commencement of clinical testing in humans. At any time during the 30-day period or at any time thereafter, the FDA may halt proposed or ongoing clinical trials until the FDA authorizes trials under specified terms. The investigational new drug application process may be extremely costly and substantially delay the development of our drug product candidates. Moreover, positive results of non-clinical tests will not necessarily indicate positive results in subsequent clinical trials. The FDA may require additional animal testing after an initial investigational new drug application is approved and prior to Phase III trials.

Clinical trials to support new drug applications are typically conducted in three sequential phases, although the phases may overlap. During Phase I, clinical trials are conducted with a small number of subjects to assess metabolism, pharmacokinetics, and pharmacological actions and safety, including side effects associated with increasing doses. Phase II usually involves studies in a limited patient population to assess the efficacy of the drug in specific, targeted indications; assess dosage tolerance and optimal dosage; and identify possible adverse effects and safety risks.

If a compound is found to be potentially effective and to have an acceptable safety profile in Phase II evaluations, Phase III trials are undertaken to further demonstrate clinical efficacy and to further test for safety within an expanded patient population at geographically dispersed clinical trial sites.

After successful completion of the required clinical trials, a new drug application is generally submitted. The FDA may request additional information before accepting the new drug application for filing, in which case the new drug application must be resubmitted with the additional information. Once the submission has been accepted for filing, the FDA reviews the new drug application and responds to the applicant. The FDA’s requests for additional information or clarification often significantly extend the review process. The FDA may refer the new drug application to an appropriate advisory committee for review, evaluation, and recommendation as to whether the new drug application should be approved, although the FDA is not bound by the recommendation of an advisory committee.

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If the FDA evaluations of the application and the manufacturing facilities are favorable, the FDA may issue an approval letter or an “approvable” letter. An approvable letter will usually contain a number of conditions that must be met in order to secure final approval of the new drug application and authorization of commercial marketing of the drug for certain indications. The FDA may also refuse to approve the new drug application or issue a “not approvable” letter outlining the deficiencies in the submission and often requiring additional testing or information.

The Food and Drug Administration’s Modernization Act codified the FDA’s policy of granting “fast track” review of certain therapies targeting “orphan” indications and other therapies intended to treat severe or life threatening diseases and having potential to address unmet medical needs. Orphan indications are defined by the FDA as having a prevalence of less than 200,000 patients in the United States. We anticipate that certain neurodegenerative diseases which could potentially be treated using our technology could qualify for fast track review under these revised guidelines.

Previously, the FDA approved cancer therapies primarily based on patient survival rates or data on improved quality of life. The FDA considered evidence of partial tumor shrinkage, while often part of the data relied on for approval was insufficient by itself to warrant approval of a cancer therapy, except in limited situations. Under the FDA’s revised policy, which became effective in 1998, the FDA has broadened authority to consider evidence of partial tumor shrinkage or other clinical outcomes for approval. This revised policy is intended to facilitate the study of solid tumor therapies and shorten the total time for marketing approvals. We intend to take advantage of this policy; however, it is too early to tell what effect, if any, these provisions may have on the approval of our drug product candidates.

Sales outside the United States of drug product candidates we develop will also be subject to foreign regulatory requirements governing human clinical trials and marketing for drugs. The requirements vary widely from country to country, but typically the registration and approval process takes several years and requires significant resources. In most cases, if the FDA has not approved a drug product candidate for sale in the United States, the drug product candidate may be exported for sale outside of the United States, only if it has been approved in any one of the following: the European Union, Canada, Australia, New Zealand, Japan, Israel, Switzerland and South Africa. There are specific FDA regulations that govern this process.

We are also subject to various federal, state and local laws, regulations and recommendations relating to safe working conditions, laboratory and manufacturing practices, and the use and disposal of hazardous or potentially hazardous substances, including radioactive compounds and infectious disease agents, used in connection with our research work. We cannot accurately predict the extent of government regulation that might result from future legislation or administrative action.

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Intellectual Property

On January 27, 2006, we purchased from BioMarin Pharmaceutical Inc. the intellectual property owned by BioMarin Pharmaceutical Inc. for the research and development of the receptor-associated protein technologies, including three pending patent applications and two provisional patent applications. Specifically, patent applications, trademarks and licenses acquired from BioMarin Pharmaceutical Inc. consist of:

PATENTS  Title of Application/  Patent No./Jurisdiction	Filing/  Issue/  Expiration	Claims
Compositions & Methods for  Modulating Blood-Brain  Barrier Transport		- Method for identifying a compound that modulates the transcytosis or endocytosis of melanotransferrin or a melanotransferrin conjugate with an active agent  - Method of treating a neurological disorder in a patient… wherein the MTf-R is LRP or LRP1B  - Method for increasing/reducing the uptake of a melanotransferrin conjugated therapeutic agent into the brain of a patient  - Modulator of MTf-R biological activity - Method of identifying a compound that modulates melanotransferrin-mediated (MTf-mediated) iron uptake conjugate of an LRP1B receptor ligand with an active agent, wherein the ligand is not selected from the group comprising p97, lactoferrin, transferrin RAP, or fragments thereof
10/206448/ United States	07/25/02/ Pending/ 07/25/22	See above
2003-515208/  Japan	07/25/02/  Pending/  07/25/22	See above
02756731.2/  Europe	07/25/02/  Pending/  07/25/22	See above
Canada/  2,450,073	07/25/02/  Pending/  07/25/22	See above
2002322720/  Australia	07/25/02/  Pending/  07/25/22	See above

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PATENTS  Title of Application/  Patent No./Jurisdiction	Filing/  Issue/  Expiration	Claims
Use of Chaperone-Receptor-  Associated Protein (RAP) for  the Delivery of Therapeutic  Compounds to the Brain and  Other Tissues		- Compound comprising Receptor-Associated Protein (RAP) or RAP polypeptide conjugated to an agent of interest.    - Method of delivering a therapeutic or diagnostic investigational agent into the central nervous system by increasing transport across the blood-brain barrier (BBB)  - Method of treating a disease or condition  - Method of diagnosing a disease  - Method of delivering a therapeutic enzyme to a lysosome in a cell  - Method of treating lysosomal storage diseases
10/600,862/  United States	06/20/03/  Pending/  07/26/22
Delivery of Therapeutic  Compounds to the Brain and  Other Tissues		Claims of both RAP and Megalin applications
PCT/US2004/019153/  Megalin-Based Delivery of  Therapeutic Compounds to the  Brain and Other Tissues	06/17/04/	- Compound comprising a megalin-binding moiety conjugated to agent  - Chimeric molecule for transcytotic delivery into the brain across the BBB  - Pharmaceutical composition  - Method of delivering agent into CNS …administering agent conjugated to a megalin binding moiety  - Method of increasing transcytosis of an agent  - Method of treating a disorder…administering agent conjugated to a megalin binding moiety  - Method of delivering a therapeutic enzyme to a lysosomal compartment - Method of treating lysosomal storage disease  - Method of promoting the breakdown of glycosaminoglycan in brain cell
United States/  10/812,849	03/30/2004/  Pending/  03/30/2024

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PATENTS  Title of Application/  Patent No./Jurisdiction	Filing/  Issue/  Expiration	Claims
Compositions Comprising  Receptor-Associated Protein  (RAP) Variants and Uses  Thereof
Provisional Application Number  US60/690,480  United States	Filed 6-14-05
Compositions Comprising  Receptor-Associated Protein  (RAP) Variants and Uses  Thereof
Provisional Application Number  US60/717,776  United States	Filed 9-16-05

REGISTERED TRADEMARKS
Mark	Jurisdiction	Application No.	Status
NEUROTRANS	US	76,408,227	FD 05/15/02 Pending
NEUROTRANS R	US	78/343,545	FD 12/19/03 Pending

We regard patents and other proprietary technology rights a key element in building a successful biotechnology company. Accordingly, we plan to protect all of our key technology, inventions and improvements to our inventions by filing patent applications in a timely fashion. We plan to seek patent protection first in the United States, then in Canada, Japan, the Western European countries and additional countries on a selective basis in order to protect inventions we regard as important to the development of our business. However, we note that filing and prosecuting patent applications are expensive processes and we have very limited financial resources.

Our proprietary technology is protected by a group of patent applications some of which are owned exclusively by us, and others that have been licensed exclusively to us by the University of British Columbia.

We also rely on trade secrets and unpatentable know-how that we seek to protect, in part, by confidentiality agreements. It has not been, but is now our intended policy to require our employees, consultants, contractors, manufacturers, outside scientific collaborators and sponsored researchers, board of directors, scientific advisory board and other advisors to execute confidentiality agreements upon the commencement of employment, advisory, or consulting relationships with us. These agreements will provide that all confidential information developed or made known to the individual during the course of the individual’s relationship with us is to be kept confidential and not disclosed to third parties except in specific limited circumstances.

We also will commence to require signed confidentiality or material transfer agreements from any company that is to receive our confidential information. In the case of employees, consultants and contractors, the agreements will generally

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provide that all inventions conceived by the individual while rendering services to us shall be assigned to us as our exclusive property. There can be no assurance, however, that all persons who we desire to sign such agreements will sign, or if they do, that these agreements will not be breached, that we would have adequate remedies for any breach, or that our trade secrets or unpatentable know-how will not otherwise become known or be independently developed by competitors.

Our patent position, like that of many pharmaceutical companies, is uncertain and involves complex legal and technical questions for which important legal principles are unresolved. Much of our intellectual property is still in review by the United States Patent and Trademark Office and we plan to file additional patent applications. We may not be successful in obtaining critical claims or in protecting our drug product candidates or processes. Even if we do obtain patents, they may not adequately protect the technology we own or have licensed. In addition, others may challenge, seek to invalidate, infringe or circumvent any patents we own or license, and rights we receive under those patents may not provide competitive advantages to us. Further, the manufacture, use or sale of our drug product candidates may infringe the patent rights of others.

Our success will also depend in part on our ability to commercialize our drug product candidate technology without infringing the proprietary rights of others. We have not conducted extensive freedom of use patent searches and no assurance can be given that patents do not exist or could not be filed which would have an adverse affect on our ability to market our technology or maintain our competitive position with respect to our technology. If our drug product candidate technology or other subject matter are claimed under other existing United States or foreign patents or are otherwise protected by third party proprietary rights, we may be subject to infringement actions. In such event, we may challenge the validity of such patents or other proprietary rights or we may be required to obtain licenses from such companies in order to develop, manufacture or market our technology. There can be no assurances that we would be able to obtain such licenses or that such licenses, if available, could be obtained on commercially reasonable terms. Furthermore, the failure to either develop a commercially viable alternative or obtain such licenses could result in delays in marketing all of our drug product candidates based on our drug technology or the inability to proceed with the development, manufacture or sale of drug product candidates requiring such licenses, which could have a material adverse affect on our business, financial condition and results of operations. If we are required to defend ourselves against charges of patent infringement or to protect our proprietary rights against third parties, substantial costs will be incurred regardless of whether we are successful. Such proceedings are typically protracted with no certainty of success. An adverse outcome could subject us to significant liabilities to third parties and force us to curtail or cease our development and commercialization of our technology.

Employees

We presently have five full time employees, including one in our executive department, three in our research and development department and one in our finance department. We may hire up to four additional employees over the next 12 month period, including three in the research and development department and one in our finance department. We also plan to supplement our human resources needs through consultants and contractors as needed.

DESCRIPTION OF PROPERTY

Effective April 1, 2005 we entered into a three year lease for 2,892 square feet of combined laboratory and office space with an additional three year option. Our monthly rent is $5,206. The facility is located in an industrial park at 9 Commercial Blvd, Suite 200, Novato, California 94949. Once completely built out the laboratory and associated storage space will occupy approximately 1,200 square feet leaving the remaining space for three offices, a break room and a conference room. The laboratory will contain casework and a combination of new and used equipment. Critical reagents, DNA plasmids, and cell lines will be stored in alarmed freezers. Cell line back ups are also stored off site in a commercial facility licensed for such purpose. Our current facility is expected to be adequate for the foreseeable future.

We have phased out the use of our former executive office at #17 - 936 Peace Portal Drive, Blaine, Washington 98230 and moved all of our operations to the facility located in Novato, California in May of 2006.

LEGAL PROCEEDINGS

We are not a party to, or the subject of, any pending legal proceeding. We are not aware of any proceeding being contemplated by a governmental authority.

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PLAN OF OPERATIONS

Overview

You should read the following discussion of our plan of operations together with the audited financial statements of Raptor Pharmaceutical Inc. and the notes to audited financial statements included elsewhere in this current report prepared in accordance with accounting principles generally accepted in the United States. This discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those anticipated in these forward-looking statements.

Our management has decided to abandon the business of producing and selling health and nutritional products and plans to become engaged in the business of the research and development of our receptor-associated protein based platform to provide therapies that we believe will be safer, less intrusive, and more effective than current approaches in treating a wide variety of brain disorders, neurodegenerative diseases, genetic disorders and cancer. On May 25, 2006, we completed the acquisition of all of the issued and outstanding shares of Raptor Pharmaceutical Inc. pursuant to a Share Purchase Agreement we entered into with Dr. Christopher Starr, Erich Sager, Dr. Todd Zankel and Falcon Corporate Investments Ltd. Pursuant to the Share Purchase Agreement, we issued to each of Drs. Starr and Zankel 3,000,000 shares of our common stock and to each of Falcon Corporate Investments Ltd. and Erich Sager 1,000,000 shares of our common stock.

Milestones

Over the next twelve months, we plan to conduct research and development activities on our receptor-associated protein based platform. Accordingly, we summarize our primary objectives in the next twelve months in this section. In our management’s opinion, we will also need to achieve the following research events or milestones within the time period in order for our company to continue as a going concern:

1. Completion of an 800 Square Feet Research and Development Laboratory

We plan to acquire sufficient equipment and supplies to establish a lab for a minimum of five scientists. We anticipate our lab will be self-sufficient in experiments related to molecular biology, protein biochemistry, mammalian cell-culture and protein purification. Space has been leased and quotes obtained for the renovation, furnishing and equipping of the lab. Total costs are not expected to exceed $500,000, including sufficient materials to sustain experiments for the period of one year following initiation of work. We expect that the lab will be running by the end of July 2006. The lab is being constructed in space previously used for other purposes. It is possible that equipment necessary for some experimental work, particularly scaled-up mammalian cell-culture and protein purification, will not be adequately accommodated in the selected space. Outsourcing of such activities would then be necessary.

2. Recruitment of Laboratory Staff

We plan to hire additional laboratory staff to satisfy the needs of our research and development activities. We have already hired three of the five total staff required. Two additional scientific staff members are required to service scaled-up mammalian cell-culture and protein purification tasks. Competition for personnel qualified in the required areas is intense and it is not certain that we will be able to quickly fill the positions. Assuming that there are qualified candidates available, we anticipate that hiring of the two additional staff members will be completed by the end of August 2006.

3. Further Development of the Blood-brain Barrier Therapeutic Delivery Technology

We intend to develop and test receptor-associated protein based peptides that selectively bind to transport receptors reported to reside on the blood side of the blood-brain barrier in humans. Such receptors have been identified as a potential means of transporting therapeutic molecules into the brain. At least two such receptors have been identified which appear to be expressed on the blood-brain barrier. We believe these receptors can transport blood borne ligands into or across the barrier, and might be amenable to targeting.

We plan to test the efficacy of fusions between the human receptor-associated protein and a growth factor previously shown to be efficacious in the treatment of Huntington’s disease. Our goal over the next twelve months will be to create an

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expression construct for a fusion between full length human receptor-associated protein and such growth factor, transfect the construct into an appropriate human cell line and express the fusion in quantities sufficient for purification. We must purify the receptor-associated protein-growth factor fusion using affinity chromatography with anti-receptor-associated protein monoclonal antibodies, or by means of conventional chromatography matrices.

We plan to establish a collaboration with a contract research lab to test the receptor-associated protein-growth factor fusion in an appropriate animal model. Specifically, the system must be chosen so as to allow reliable intracarotid infusions. Distribution of radiolabeled fusion to the brain of each treated subject will be assessed. It is possible that no appropriate models are available to test the fusion.

We also plan to express and purify a fusion between full-length human receptor-associated protein and a nerve growth factor, which is an important neurotrophic factor that could potentially treat a number of neurodegenerative diseases. We plan to set up a research collaboration with a university laboratory with expertise in the study of this nerve growth factor. We plan to produce sufficient fusions of receptor-associated protein and the nerve growth factor for testing. This will require the same methods used to express and purify the fusions of receptor-associated protein and growth factor.

4. Development of Receptor Associated Protein Peptides for the Treatment of Cancer.

The application of our receptor-associated protein based technology is the development of potential inhibitors of a cell surface protease found in a variety of tissues. Inappropriate expression of this protein has been linked to tumor development in a wide variety of cancer types. Inhibition of the enzymatic activity of this protein may slow or halt tumor development. The ability of our inhibitors to specifically block the activation or function of its target has yet to be tested. We recently produced our first inhibitory peptide to this enzyme and plan to begin cell culture binding experiments as soon as the laboratory is operational. Collaborations with academic researchers may be necessary to fully test this molecule and secure materials needed for this testing. The first experiments will use cells in culture. If these cell culture experiments are positive, then the molecule will be tested in non-clinical cancer models.

We will test our potential anti-cancer peptides using a tumor xenograft model in nude mice. A variety of tumor lines routinely used by contract testing labs overexpress the therapeutic target of our peptide and we plan to exploit their use prior to commencing non-clinical testing in cancer models. We plan to have a contract research organization test the efficacy of our peptides in tumor growth inhibition studies. It is possible that our inhibitors will fail to slow or halt tumor development or that these inhibitors will have serious side-effects precluding their use as therapeutic compounds.

5. Securing Additional and Complementary Technology Licenses from Others

We intend to extend our development of natural chaperone protein variants to include other potential therapeutic proteins. We plan on establishing research collaborations with prominent universities currently working on the development of potential molecules. We plan to establish collaborations with these university laboratories, and to secure licenses from these universities for technology resulting from the collaboration. Specifically we will be focused on technologies that support bone deposition and which could be used to treat low-bone density conditions in humans. Although, no assurances can be made regarding our ability to establish such collaborations over the next twelve months, our goal will be to establish such relationships on an on going basis.

Our in-licensing activities will focus on identifying complementary therapeutics and therapeutic platforms that offer a number of therapeutic targets. We have experience with such platform technologies and will be able to apply our experience and knowledge to identifying the most promising technology.

6. Out-licensing activities

As part of our ongoing business development activities, we will actively seek out industry partners interested in our potential clinical applications. In the brain delivery program, we plan to contact institutions and companies that have experience and expertise using therapeutic receptor-associated protein fusion as partners. In the cancer area, we plan to contact institutions and companies with expressed interested in developing therapeutics to our potential anti-cancer targets. Out-licensing arrangements with these companies may include technology transfer, partnerships, or joint ventures. Joint

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activities may include drug product candidate development, drug product candidate manufacturing, non-clinical testing or clinical research studies.

Capital Resource Requirements

For the next 12 months we plan to expend a total of approximately $2.9 million in implementing our operation plan of researching and developing our receptor-associated protein based platform to provide therapies that we believe will be safer, less intrusive, and more effective than current approaches in treating a wide variety of brain disorders, neurodegenerative diseases, genetic diseases and cancer. Specifically, we estimate our operating expenses and working capital requirements for the next twelve months to be as follows:

Estimated Expenses for the Next Twelve Months
Laboratory Construction and Purchase of Equipment	$	500,000
Research and Development Activities	$	900,000
Officer and Employee Compensation	$	1,200,000
Sales and Marketing	$	0
General and Administrative	$	200,000
Equipment Loan Repayment	$	100,000*
Total	$	2,900,000

*assumes that we obtain a $400,000 equipment loan in May 2006.

Laboratory Construction and Purchase of Equipment

We plan to acquire sufficient equipment and supplies to establish our research and development laboratory for a minimum of five scientists. Total costs are not expected to exceed $500,000. Approximately $16,000 of these expenditures will be reimbursed by our landlord as tenant improvement allowances. We are currently negotiating a $400,000 equipment loan to pay for the majority of these capital expenditures.

Research and Development Activities

We plan to conduct further research and development to improve upon our receptor-associated protein based technology in the next 12 months. We plan to conduct research and development activities through our own laboratory staff and also by engaging contract research organizations and contract manufacturing organizations. We will also incur costs for patent legal fees and consulting and collaborating fees. We anticipate our research and development costs excluding in-house research and development compensation for the next 12 months will be approximately $900,000.

Officer and Employee Compensation

We have hired three executive officers including a Chief Executive Officer, a Chief Financial Officer and a Chief Scientific Officer. We also have hired two scientific staff members and plan to hire up to three additional scientists to service scaled-up mammalian cell-culture and protein purification tasks within the next twelve month period. We may add up to one additional staff member in finance and administration. We anticipate we may spend up to approximately $1,200,000 in officer and employee compensation during the next 12 months.

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General Administration

We anticipate spending approximately $200,000 on general and administration costs in the next twelve months. These costs will consist primarily of legal and auditing fees, rent and facility support expenses excluding finance and administrative compensation.

Contractual Obligations with BioMarin Pharmaceutical Inc.

Under the asset purchase agreement we entered into with BioMarin Pharmaceutical Inc. for the purchase of intellectual property related to our receptor-associated protein based technology, we are obligated to make certain milestone payments for achievement of each applicable event:

·    within 30 days after we receive total aggregate debt or equity financing of at least $2,500,000, we will need to pay BioMarin Pharmaceutical Inc. $50,000;

·    within 30 days after we receive total aggregate debt or equity financing of at least $5,000,000, we will need to pay BioMarin Pharmaceutical Inc. $100,000;

·    upon our filing and acceptance of an Investigational New Drug Application for a drug product candidate based on our NeuroTrans product candidate, we will need to pay BioMarin Pharmaceutical Inc. $500,000;

·    upon our successful completion of a Phase II human clinical trial for a drug product candidate based on our NeuroTrans product candidate, we will need to pay BioMarin Pharmaceutical Inc. $2,500,000;

·    upon our successful completion of a Phase III human clinical trial for a drug product candidate based on our NeuroTrans product candidate, we will need to pay BioMarin Pharmaceutical Inc. $5,000,000;

·    within 90 days of our obtaining marketing approval from the FDA or other similar regulatory agencies for a drug product candidate based on our NeuroTrans product candidate, we will need to pay BioMarin Pharmaceutical Inc. $12,000,000;

·    within 90 days of our obtaining marketing approval from the FDA or other similar regulatory agencies for a second drug product candidate based on our NeuroTrans product candidate, we will need to pay BioMarin Pharmaceutical Inc. $5,000,000;

·    within 60 days after the end of the first calendar year in which our aggregated revenues derived from drug product candidates based on our NeuroTrans product candidate exceed $100,000,000, we will need to pay BioMarin Pharmaceutical Inc. $5,000,000; and

·    within 60 days after the end of the first calendar year in which our aggregated revenues derived from drug product candidates based on our NeuroTrans product candidate exceed $500,000,000, we will need to pay BioMarin Pharmaceutical Inc. $20,000,000.

In addition to these milestone payments, we are also obligated to pay BioMarin Pharmaceutical Inc. a royalty at a percentage of our aggregated revenues derived from drug product candidates based on our NeuroTrans product candidate.

For further details of our contractual obligations under the asset purchase agreement we entered into with BioMarin Pharmaceutical Inc., please see the Asset Purchase Agreement between Raptor Pharmaceutical Inc. and BioMarin Pharmaceutical Inc. dated January 27, 2006, attached to this current report as Exhibit 10.2.

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Liquidity and Capital Resources

Overview

As of February 28, 2006, we had approximately $224,000 in cash, approximately $251,000 in current liabilities and approximately $19,000 of net working capital deficit.

We anticipate that we will not be able to generate revenues until we further develop our drug product candidates and obtain the necessary regulatory approval to market our future drug product candidates, which could take several years or more. Accordingly, our cash flow projections are subject to numerous contingencies and risk factors beyond our control, including market acceptance of our product, competition from well-funded competitors, and our ability to manage our expected growth. We can offer no assurance that our company will generate cash flow sufficient to meet our capital expenditure requirements. If we do not generate significant cash flow from sales of our drug product candidates or from the exercise of our common stock purchase warrants, we will require additional monies during the next 24 month period to execute our business plan.

There are no assurances that we will be able to obtain funds required for our continued operation. There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, we will not be able to meet our other obligations as they become due and we will be forced to scale down or perhaps even cease the operation of our business.

There is substantial doubt about our ability to continue as a going concern as the continuation of our business is dependent upon obtaining further long-term financing, successful and sufficient market acceptance of any product offerings that we may introduce, the continuing successful development of our product offerings and related technologies, and, finally, achieving a profitable level of operations. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.

Recent Private Placements

On May 25, 2006, we closed a private placement consisting of 8,333,333 units of our securities at a price of $0.60 per unit, with each unit comprising one share of our common stock and one stock purchase warrant with an exercise price of $0.60 per share for a period of 18 months. As a result, we received gross proceeds of $5,000,000.

On March 23, 2006, our board of directors approved a fourteen (14) for one (1) forward stock split of our authorized, issued and outstanding shares of common stock. We amended our Articles of Incorporation by filing a Certificate of Change with the Nevada Secretary of State wherein we stated that we will issue fourteen (14) shares for every one (1) share of common stock issued and outstanding immediately prior to the effective date of the forward stock split. The change in our Articles of Incorporation was filed with the Nevada Secretary of State effective April 4, 2006. As a result, our authorized capital increased from 25,000,000 shares of common stock with a par value of $0.001 per share to 350,000,000 shares of common stock with a par value of $0.001 per share. This increased our issued and outstanding share capital from 2,807,500 shares of common stock to 39,305,000 shares of common stock.

Based on our current plan of operations, we have sufficient funds for the next 24 months, after which time we will require additional funds to continue our business plan. In the event that we are unable to raise additional financing in the next 24 months, and fail to generate any cash flow, we may modify our operations plan accordingly. These funds may be raised through equity financing, debt financing, or other sources, which may result in further dilution in the equity ownership of our shares. There is still no assurance that we will be able to maintain operations at a level sufficient for an investor to obtain a return on his investment in our common stock. Further, we may continue to be unprofitable.

Going Concern

Due to the uncertainty of our ability to meet our current operating and capital expenses, in their report on our audited financial statements for the period September 8, 2005 to February 28, 2006, our independent registered accountants

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included an explanatory paragraph regarding substantial doubt about our ability to continue as a going concern. Our financial statements contain additional note disclosures describing the circumstances that lead to this disclosure by our independent auditors.

Off-Balance Sheet Arrangements

Our company has no outstanding derivative financial instruments, off-balance sheet guarantees, interest rate swap transactions or foreign currency contracts. Our company does not engage in trading activities involving non-exchange traded contracts.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information concerning the number of shares of our common stock known by us to be owned beneficially as of May 25, 2006 and the date hereof by: (i) each person (including any group) that owns more than 5% of any class of the voting securities of our company; (ii) each director and officer of our company; and (iii) directors and officers as a group. Unless otherwise indicated, the stockholders listed possess sole voting and investment power with respect to the shares shown. The address for all directors and officers, unless otherwise indicated, is c/o Raptor Pharmaceutical Inc., 9 Commercial Blvd., Suite 200, Novato, CA 94949.

Name and Address  of Beneficial Owner (1)	Title of Class	Amount and Nature  of Beneficial Owner	Percent  of Class (1)(2)
Christopher M. Starr, Ph.D.  Chief Executive Officer	Common Stock	3,000,000	10.4%
Todd Zankel, Ph.D.  Chief Scientific Officer	Common Stock	3,000,000	10.4%
Erich Sager  Director	Common Stock	1,000,000	3.5%
Kim Tsuchimoto, C.P.A.  Chief Financial Officer	Common Stock	-	*
Raymond W. Anderson  Director	Common Stock	-	*
Directors and Officers  (as a group; five individuals)	Common Stock	7,000,000	24.3%

⁽¹⁾ Regulation S-B under the Exchange Act, defines a beneficial owner of a security as any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise, has or shares: (i) voting power, which includes the power to vote, or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the amount of shares beneficially owned by such person (and only such person) by reason of these acquisition rights. As a result, the percentage of outstanding shares of any person as shown in this table does not necessarily reflect the person’s actual ownership or voting power with respect to the number of shares of common stock actually outstanding on May 25, 2006, and the date of this Current Report.

(2) Based upon 28,833,333 issued and outstanding shares of common stock as of May 25, 2006 and as of the date of this Current Report.

* Represents less than 1%

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DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth information regarding our current executive officers and directors:

Name	Age	Position with Our Company	Served as a  Director and Officer Since
Raymond W. Anderson	63	Director	May 25, 2006
Christopher M. Starr, Ph.D.	53	Chief Executive Officer and Director	May 25, 2006
Erich Sager	48	Director	May 25, 2006
Todd Zankel, Ph.D.	43	Chief Scientific Officer	May 25, 2006
Kim Tsuchimoto, C.P.A.	43	Chief Financial Officer, Treasurer and Secretary	May 25, 2006

Christopher M. Starr, Ph.D.

Dr. Starr is a co-founder, Chief Executive Officer and director of Raptor Pharmaceutical Inc. since its inception in 2006. Dr. Starr co-founded BioMarin Pharmaceutical Inc. in 1997 where he last served as Senior Vice President and Chief Scientific Officer. As Senior Vice President at BioMarin Pharmaceutical Inc., Dr. Starr was responsible for managing a Scientific Operations team of 181 research, process development, manufacturing and quality personnel through the successful development of commercial manufacturing processes for its enzyme replacement products, and supervised the cGMP design, construction and licensing of a manufacturing facility.

From 1991 to 1998, Dr. Starr supervised research and commercial programs at BioMarin Pharmaceutical Inc.’s predecessor company, Glyko, Inc., where he served as Vice President of Research and Development. At Glyko, Inc., Dr. Starr directed the research and development and commercial operations of the organization. Prior to his tenure at Glyko, Inc., Dr. Starr was a National Research Council Associate at the National Institute of Health studying nuclear membrane transport, cell surface receptor function and protein intracellular trafficking. Dr. Starr earned a B.S. from Syracuse University and a Ph.D. in Biochemistry and Molecular Biology from the State University of New York Health Science Center, in Syracuse, New York.

Raymond W. Anderson

Mr. Anderson currently serves as a director of Raptor Pharmaceutical Inc. since its inception in 2006 and is the

Chief Financial Officer and Vice President, Finance & Administration of Dow Pharmaceutical Inc. Mr. Anderson has more than 30 years of healthcare industry experience, primarily focused in financial management within the biopharmaceutical sector. Prior to joining Dow in 2003, he was Chief Financial Officer for Transurgical, Inc., a private medical technology company. Prior to that, Mr. Anderson served as Chief Operating Officer and Chief Financial Officer at BioMarin Pharmaceutical Inc. from June 1998 to December 2001. Prior to June 1998, Mr. Anderson has held similar executive-level positions with other biopharmaceutical companies including Syntex, Chiron, Glycomed and Fusion Medical Technologies.

Mr. Anderson holds an M.B.A. from Harvard University; an M.S. in Administration from George Washington University; and a B.S. in Engineering from the United States Military Academy.

Erich Sager

Mr. Sager is a director of Raptor Pharmaceutical Inc. since May 2006 and has acted as Chairman of Calltrade Carrier Services AG, a European wholesale phone operator since 2004. From September 1996 until August 2004, Mr. Sager served as the Chairman of LaMont Asset Management SA, a private investment management firm. From April 1994 to August

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1996, Mr. Sager served as Senior Vice President, head of Private Banking for Dresdner Bank (Switzerland) Ltd. From September 1991 to March 1994, Mr. Sager served as Vice President, Private Banking-Head German Desk for Deutsche Bank (Switzerland) Ltd. From 1981 to 1989, Mr. Sager held various positions at a number of banks in Switzerland. Mr. Sager served on the BioMarin Pharmaceutical Inc. board of directors from November 1997 to March 2006 and currently serves as a director of Calltrade Carrier Services AG and Zecotek Medical Systems Inc. Mr. Sager received a business degree from the School of Economics and Business Administration in Zurich, Switzerland.

Todd Zankel Ph.D.

Dr. Zankel is a co-founder and Chief Scientific Officer of Raptor Pharmaceutical Inc. since its inception in 2006. From 1997 to 2005, Dr. Zankel served as a Senior Director of Research at BioMarin Pharmaceutical Inc. In this capacity, Dr. Zankel had been responsible for managing a research team of 12 scientists. Dr. Zankel’s research team had developed highly productive manufacturing cell lines for BioMarin’s enzyme replacement drugs and protein drug candidates, utilizing both bacterial and mammalian expression systems. Dr. Zankel’s team also supported the regulatory group at BioMarin Pharmaceutical Inc. by characterizing these cell lines and developing documentation for two biologics license applications with the FDA. Dr. Zankel’s research team has created novel and proprietary drugs and drug delivery technologies using both protein engineering and chemical approaches. Additionally, Dr. Zankel coordinated the activities of the process development and analytical groups for the NeuroTrans program, which was purchased by us and which we are continuing to develop.

Prior to 1997, Dr. Zankel was a fellow for the National Institutes of Health at the Plant Gene Expression Center in Berkeley, California and at the Swiss Institute of Technology in Zurich, Switzerland. Dr. Zankel has been the author of a number of peer-reviewed articles in a variety of scientific areas. Dr. Zankel earned a B.A. from Reed College in Portland, Oregon and a Ph.D. from Columbia University.

Kim Tsuchimoto, C.P.A.

Ms. Tsuchimoto is the Chief Financial Officer, Treasurer and Secretary of Raptor Pharmaceutical Inc. since its inception in 2006. Prior to this, Ms. Tsuchimoto served Interim Controller at International Microcomputer Software, Inc. (OTCBB: IMSI), a software and Internet content company, from October 2005 to March 2006. From June 2005 to August 2005, Ms. Tsuchimoto served as Assistant Vice President, Controller at SpatiaLight Inc. (NASDAQ: HDTV), a high technology company. From February 1997 to June 2005, Ms. Tsuchimoto served at BioMarin Pharmaceutical Inc. and its predecessor company, Glyko, Inc., most recently as Vice President, Treasurer for two years, Vice President, Controller for two years and prior to that, as Controller. Ms. Tsuchimoto was responsible for BioMarin Pharmaceutical Inc.’s and Glyko, Inc.’s SEC and Canadian public company filings, respectively, corporate compliance, corporate governance, cash management and financial reporting. Prior to her employment at BioMarin Pharmaceutical Inc., Ms. Tsuchimoto served as Controller of a marketing consulting firm and an international venture capital firm and worked as a staff accountant in a local public accounting firm. Ms. Tsuchimoto is an inactive licensed California Certified Public Accountant and holds a B.S. in Business Administration with an emphasis in Accounting from San Francisco State University.

Board Meetings and Committees

Our board of directors held no formal meetings during the year ended August 31, 2005. All proceedings of the board of directors were conducted by resolutions consented to in writing by all the directors and filed with the minutes of the proceedings of the directors. Such resolutions consented to in writing by the directors entitled to vote on that resolution at a meeting of the directors are, according to the Nevada General Corporation Law and the by-laws of our company, as valid and effective as if they had been passed at a meeting of the directors duly called and held.

We currently do not have standing audit, nominating or compensation committees, or committees performing similar functions. The board believes that it is not necessary to have a standing audit or compensation committees at this time because the functions of such committees are adequately performed by the entire board.

The board also is of the view that it is appropriate for us not to have a standing nominating committee because our current directors on the board have performed and will perform adequately the functions of a nominating committee. The directors on the board, who perform the functions of a nominating committee, are not independent because they are also officers of

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our company. The determination of independence of directors has been made using the definition of “independent director” contained under Rule 4200(a)(15) of the Rules of National Association of Securities Dealers. We have not adopted a charter for the nomination committee. There has not been any defined policy or procedure requirements for shareholders to submit recommendations or nomination for directors. We do not believe that a defined policy with regard to the consideration of candidates recommended by shareholders is necessary at this time because we believe that, given the early stages of our development, a specific nominating policy would be premature and of little assistance until its business operations are at a more advanced level. There are no specific, minimum qualifications that the board believes must be met by a candidate recommended by the board. The process of identifying and evaluating nominees for director typically begins with the board soliciting professional firms with whom we have an existing business relationship, such as law firms, accounting firms or financial advisory firms, for suitable candidates to serve as directors. It is followed by the Board’s review of the candidates’ resumes and interview of candidates. Based on the information gathered, the Board then makes a decision on whether to recommend the candidates as nominees for director. We do not pay any fee to any third party or parties to identify or evaluate or assist in identifying or evaluating potential nominees.

Scientific Advisors

We will arrange consulting agreements with a number of leading academic scientists and clinicians. These individuals will serve as key consultants with respect to our product development programs and strategies. They will be distinguished scientists and clinicians with expertise in numerous scientific fields, including neurology, receptor biology and clinical drug testing. They also serve as important contacts for us throughout the broader scientific community.

We will retain each consultant according to the terms of a consulting agreement. Under such agreements, we will pay them a consulting fee and we also plan to issue options to some consultants under future stock option plan to be adopted by our company. Our consultants are employed by institutions other than ours, and therefore may have commitments to, or consulting or advisory agreements with, other entities or academic institutions that may limit their availability to us.

Code of Ethics

Effective May 23, 2006, our company’s board of directors adopted a Code of Business Conduct and Ethics and Compliance Program that applies to all of our officers, directors and employees. As adopted, our Code of Business Conduct and Ethics and Compliance Program sets forth written standards that are designed to deter wrongdoing and to promote: (1) honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; (2) full, fair, accurate, timely, and understandable disclosure in reports and documents that we file with, or submit to, the SEC and in other public communications made by us; (3) compliance with applicable governmental laws, rules and regulations; (4) the prompt internal reporting of violations of the Code of Business Conduct and Ethics and Compliance Program to an appropriate person or persons identified in the Code of Business Conduct and Ethics and Compliance Program; and (5) accountability for adherence to the Code of Business Conduct and Ethics and Compliance Program. Our Code of Business Conduct and Ethics and Compliance Program requires, among other things, that all of our company’s personnel shall be accorded full access to our Chief Financial Officer with respect to any matter which may arise relating to the Code of Business Conduct and Ethics and Compliance Program. Further, all of our company’s personnel are to be accorded full access to our company’s board of directors if any such matter involves an alleged breach of the Code of Business Conduct and Ethics and Compliance Program by our Chief Financial Officer. In addition, our Code of Business Conduct and Ethics and Compliance Program emphasizes that all employees, and particularly managers and/or supervisors, have a responsibility for maintaining financial integrity within our company, consistent with generally accepted accounting principles, and federal and state securities laws. Any employee who becomes aware of any incidents involving financial or accounting manipulation or other irregularities, whether by witnessing the incident or being told of it, must report it to his or her immediate supervisor or to our Chief Financial Officer. If the incident involves an alleged breach of the Code of Business Conduct and Ethics and Compliance Program by our Chief Financial Officer, the incident must be reported to any member of our board of directors. Any failure to report such inappropriate or irregular conduct of others is to be treated as a severe disciplinary matter. It is against our company policy to retaliate against any individual who reports in good faith the violation or potential violation of our company’s Code of Business Conduct and Ethics and Compliance Program by another. We will provide a copy of the Code of Business Conduct and Ethics and Compliance Program to any person without charge, upon request. Requests can be sent to: Raptor Pharmaceutical Inc., 9 Commercial Blvd., Suite 200, Novato, CA 94949. Within the four weeks following the date of this filing, our Code of Conduct will be available on the investor relations section of our company’s website currently under construction. We also will be implementing a whistle blower hotline for our employees that will allow our employees to report suspected illegal accounting, environmental or

35

employment practices directly to our board of directors. This hotline will be in place in approximately four weeks from the date of this filing.

Legal Proceedings

We are not aware of any legal proceedings in which any director or officer, any proposed director or officer or any owner of record or beneficial owner of more than 5% of any class of voting securities of our company, or any affiliate of any such director or officer, proposed director or officer or security holder, is a party adverse to our company or has a material interest adverse to our company.

Certain Relationships and Related Transactions

During the last two years and except as disclosed below, none of the following persons has had any direct or indirect material interest in any transaction to which our company was or is a party, or in any proposed transaction to which our company proposes to be a party:

(a)	any director or officer of our company;
(b)	any proposed director of officer of our company;
(c)	any person who beneficially owns, directly or indirectly, shares carrying more than 5% of the voting rights attached to our common stock; or
(d)	any member of the immediate family of any of the foregoing persons (including a spouse, parents, children, siblings, and in-laws):
	·	Mr. Brent McMullin, a previous director and officer of our company, is the father of Mrs. Brett Stewart, also a previous director and officer of our company.
	·	Pursuant to the terms of the Share Purchase Agreement, we issued to each of Drs. Starr and Zankel (our Chief Executive Officer and our Chief Scientific Officer, respectively) 3,000,000 shares of our common stock and to Erich Sager (one of our directors) 1,000,000 shares of our common stock. However, Drs. Starr and Zankel and Mr. Sager did not own any shares of our common stock at the time when the Share Purchase Agreement was first approved and executed by our company.
	·	In the ordinary course of setting up the Raptor Pharmaceutical Inc. business, Drs. Starr and Zankel have both loaned money to our company by paying travel expenses and equipment and other costs from their personal funds on behalf of our company. We have promptly reimbursed Drs. Starr and Zankel upon the closing of our private equity financing in May 2006.

Section 16(A) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires our executive officers and directors and persons who own more than 10% of a registered class of our equity securities to file with the SEC initial statements of beneficial ownership, reports of changes in ownership and annual reports concerning their ownership of our common stock and other equity securities, on Forms 3, 4 and 5 respectively. Executive officers, directors and greater than 10% stockholders are required by the SEC regulations to furnish us with copies of all Section 16(a) reports that they file.

To the best of our knowledge, all executive officers, directors and greater than 10% stockholders filed the required reports in a timely manner.

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EXECUTIVE COMPENSATION

The following table sets forth certain compensation paid or accrued to former officers during the fiscal years ended August 31, 2005, 2004 and 2003. Our current officers were not employed by us during the years ended August 31, 2005, 2004 and 2003, therefore no compensation for our current officers is reported in the table below.

SUMMARY COMPENSATION TABLE
Name And PrincipalPosition	Year	Annual Compensation			Long-Term Compensation
		Salary ($)	Bonus ($)	OtherAnnual Compensation  Awards ($)	Awards		Payouts	All Other Compensation  ($)
					Restricted  Stock  ($)	SecuritiesUnderlying Options/ SARs  (#)	LTIP  Payouts  ($)
Brent McMullin(1)  Former President and  Director	2005	30,000	Nil	Nil	Nil	Nil	Nil	Nil
	2004	Nil	Nil	Nil	Nil	Nil	Nil	Nil
	2003	Nil	Nil	Nil	Nil	Nil	Nil	Nil
Brett Stewart(2)  Former President and  Director	2005	Nil	Nil	Nil	Nil	Nil	Nil	Nil
	2004	Nil	Nil	Nil	Nil	Nil	Nil	Nil
	2003	Nil	Nil	Nil	Nil	Nil	Nil	Nil

⁽¹⁾ Mr. McMullin became President of our company on April 27, 2004 and resigned as President and director of our company on May 25, 2006.

⁽²⁾ Mrs. Stewart became President of our company on April 1, 2002 and resigned as President and became our Secretary and Treasurer on April 27, 2004. Mrs. Stewart resigned as an officer and a director of our company on May 25, 2006.

Option Grants in Last Fiscal Year

We have not granted any stock options since inception.

Compensation of Directors

None of our directors received director’s fees or other compensation in the fiscal year ended August 31, 2005. However, we have agreed to compensate our current directors as follows:

- As outside directors both Mr. Sager and Mr. Anderson will receive compensation and are eligible to receive stock options to be granted by our company pursuant to a stock option plan to be adopted by our company. As chairman of the board, Mr. Sager will receive an annual compensation of $40,000 plus an annual travel allowance of up to $18,000 and options to purchase 1,000,000 shares of our common stock upon board approval. Mr. Anderson will receive an annual compensation of $20,000 and options to purchase 500,000 shares of our common stock upon board approval.

Employment Contracts

Drs. Starr and Zankel and Ms. Tsuchimoto entered into employment agreements with Raptor Pharmaceutical Inc. in May 2006. As a result of our acquisition of Raptor Pharmaceutical Inc., we will receive the benefit and assume the obligations under these employment agreements. Each employment agreement has an initial term of three years commencing on May 1, 2006 in the case of Dr. Starr and Ms. Tsuchimoto and May 15, 2006 in the case of Dr. Zankel, and will automatically renew for additional one year periods unless either party under such agreement notifies the other that the term will not be extended. Under their agreements, each officer is entitled to an annual salary ($150,000 each for Drs. Starr and Zankel and $160,000 for Ms. Tsuchimoto), subject to annual review and potential increase by our board of directors. In addition, they are each eligible to receive annual bonuses in cash or stock options as awarded by our board in its discretion.

If any officer’s employment is terminated by us without cause, then the officer will be entitled to continue to receive his or her base salary, bonuses and other benefits for a period of 12 months.

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MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER TRANSACTIONS

Our shares of common stock were initially approved for quotation on the OTC Bulletin Board under the symbol HCCC on October 5, 2004. On April 4, 2006, we effected a 14 for 1 forward split and as a result our trading symbol was changed to HCLN.

There is currently no active trading in our common stock and there is no assurance that an active trading market will ever develop. Accordingly, there is no current public market for our common stock.

There are no outstanding options or warrants to purchase, or securities convertible into, any of our common equity.

Outstanding Shares and Shareholders of Record

At May 25, 2006, there were 28,833,333 shares of our common stock issued and outstanding. These shares were held by approximately ninety (90) shareholders of record.

Dividends

We have not paid any cash dividends on our common stock and we do not anticipate paying any cash dividends in the foreseeable future. Our current policy is to retain earnings, if any, to fund the development and growth of our business. Any future determination to pay cash dividends will be at the discretion of the board of directors and will be dependent upon our financial condition, operating results, capital requirements, applicable contractual restrictions and any other factors that our board of directors deems relevant.

Securities Authorized For Issuance under Equity Compensation Plans

On May 15, 2006, we adopted our 2006 Equity Incentive Plan. You may find the details of our 2006 Equity Incentive Plan from our Schedule 14C filed with the SEC on May 17, 2006.

Item 3.02 Unregistered Sale of Equity Securities

On May 25, 2006, we closed a private placement consisting of 8,333,333 units of our securities at a price of $0.60 per unit, with each unit comprising one share of our common stock and one stock purchase warrant with an exercise price of $0.60 per share for a period of 18 months. As a result, we received gross proceeds of $5,000,000.

We issued the securities to 31 subscribers, including 30 non-United States persons (as that term is defined in Regulation S of the Securities Act of 1933) in an offshore transaction relying on Regulation S and/or Section 4(2) of the Securities Act of 1933 and 1 United States person who is an accredited investors (as that term is defined in Regulation D of the Securities Act of 1933) in a transaction relying on Rule 506 of Regulation D and/or Section 4(2) of the Securities Act of 1933.

Item 5.06 Change in Shell Company Status

Because we entered into an agreement with Universal Financial Consulting Inc. to sell our wholly-owned subsidiary, Bodysentials Health & Beauty Inc., which has carried on all or substantially all of our business so far, to Universal Financial Consulting Inc. in satisfaction of the loan and interest amount due to them, we met the definition of a “shell company” as defined in Rule 12b-2 of the Exchange Act.

However, upon the completion of the Share Purchase Agreement we entered into with Dr. Christopher Starr, Erich Sager, Dr. Todd Zankel and Falcon Corporate Investments Ltd. on May 25, 2006, we acquired all of the issued and outstanding shares of Raptor Pharmaceutical Inc. Effective May 25, 2006, we commenced operations in the research and development of the receptor-associated protein technologies of Raptor Pharmaceutical Inc. Accordingly, on May 25, 2006, we ceased to be a “shell company” as defined in Rule 12b-2 of the Exchange Act because we now have more than a nominal business operation. You can find further details on the terms of our Share Purchase Agreement with Dr. Christopher Starr, Erich Sager, Dr. Todd Zankel and Falcon Corporate Investments Ltd. for our acquisition of Raptor Pharmaceutical Inc. in our current report on Form 8-K filed on March 14, 2006 and also in Item 2.01 of this current report on Form 8-K.

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Item 9.01 Financial Statements and Exhibits

Our financial statements are stated in United States dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles.

The following financial statements are included in this current report:

Audited Financial Statements of Raptor Pharmaceutical Inc. for the period from September 8, 2005 (inception) to February 28, 2006

     Report of Independent Registered Public Accounting Firm

     Balance Sheet as at February 28, 2006

     Statement of Operations for the period from September 8, 2005 (inception) to February 28, 2006

     Statement of Changes in Stockholders’ Equity for the period from September 8, 2005 (inception) to February 28, 2006

    Statement of Cash Flows for the period from September 8, 2005 (inception) to February 28, 2006 Notes to the Financial Statements

Unaudited Pro Forma Combined Condensed Consolidated Financial Information

      Pro Forma Combined Condensed Consolidated Balance Sheet as at February 28, 2006

      Pro Forma Combined Condensed Consolidated Statement of Operations for the period from September 8, 2005 (inception) to February 28, 2006 of Raptor Pharmaceutical Inc. and from September 8, 2005 to February 28, 2006 of Highland Clan Creations Corp.

      Notes to the Pro Forma Combined Condensed Consolidated Financial Information

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Audited Financial Statements of
Raptor Pharmaceutical Inc.
as of February 28, 2006 and

For the period from September 8, 2005 (inception)
to February 28, 2006

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders

Raptor Pharmaceutical Inc.

We have audited the accompanying balance sheet of Raptor Pharmaceutical Inc. (a development stage enterprise) as of February 28, 2006 and the related statements of operations, stockholders’ equity and cash flows for the period from September 8, 2005 (inception) through February 28, 2006. 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, the financial statements referred to above present fairly, in all material respects, the financial position of Raptor Pharmaceutical Inc. as of February 28, 2006 and the results of its operations and its cash flows for the period from September 8, 2005 (inception) through February 28, 2006 in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has a significant accumulated deficit and has sustained negative cash flows from operations since its inception. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should the Company be unable to continue as a going concern.

/s/ Burr, Pilger & Mayer LLP

San Francisco, California

March 16, 2006

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Raptor Pharmaceutical Inc.
(A Development Stage Company)
Balance Sheet
February 28, 2006
ASSETS
Current assets:
Cash	$	223,697
Prepaid expenses		8,000
Total current assets		231,697
Intangible assets, net		149,375
Total assets	$	381,072
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accrued liabilities	$	227,958
Due to stockholders		22,992
Total liabilities		250,950
Commitments and contingencies (Note 7)
Stockholders' equity:
Common stock, $0.001 par value, 10,000,000 shares authorized,
issued and outstanding		10,000
Common stock subscribed, 2,060,000 shares		2,060
Additional paid-in capital		298,000
Stockholder and subscriptions receivable		(50,274)
Deficit accumulated during development stage		(129,664)
Total stockholders' equity		130,122
Total liabilities and stockholders' equity	$	381,072

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

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Raptor Pharmaceutical Inc.
(A Development Stage Company)
Statement of Operations
For the Period from September 8, 2005 (Inception) to
February 28, 2006
Revenues	$	-
Operating expenses:
General and administrative		128,326
Research and development		1,612
Total operating expenses		129,938
Loss from operations		(129,938)
Interest income		274
Net loss	$	(129,664)
Basic and diluted net loss per share	$	(0.01)
Weighted average shares outstanding		10,000,000

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

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Raptor Pharmaceutical Inc.                         (A Development Stage Company)                       Statement of Stockholders' Equity                For the Period from September 8, 2005 (Inception) to February 28, 2006
									Stockholder and subscriptions receivable		Deficit  accumulated  during the  development   stage
	Common stock			Common stock subscribed			Additional paid-in
	Shares		Amount	Shares		Amount		Capital					Total
Balance at September 8, 2005 issuance of common stock to founders at $0.001per share	10,000,000	$	10,000	-	$	-	$	-	$	(10,000)	$	-	$                   -
Common stock subscribed at $0.001 per share pursuant to a consulting agreementdated September 2005	-		-	60,000		60		-		-		-	60
Common stock subscribed at $0.10 pershare pursuant to a subscription				1,000,000
agreement dated February 2006						1,000		99,000		(50,000)		-	50,000
Common stock subscribed at $0.20 pershare pursuant to a subscription				1,000,000
agreement dated February 2006						1,000		199,000		-		-	200,000
Interest accrued on stockholder and subscriptions receivable	-		-	-		-		-		(274)		-	(274)
Repayment of stockholder and subscriptions receivable	-		-	-		-		-		10,000		-	10,000
Net loss	-		-	-		-		-		-	(129,664)		(129,664)
Balance at February 28, 2006	10,000,000	$	10,000	2,060,000	$	2,060	$	298,000	$	(50,274)	$              (129,664)		$         130,122

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

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Raptor Pharmaceutical Inc.
(A Development Stage Company)
Statement of Cash Flows

For the Period from September 8, 2005 (Inception) to February 28, 2006

Cash flows from operating activities:
Net loss	$	(129,664)
Adjustments to reconcile net loss to net cash
used in operating activities:
Common stock subscribed pursuant to a consulting agreement		60
Amortization of intangible assets		625
Interest accrued on stockholder and subscriptions receivable		(274)
Changes in assets and liabilities:
Prepaid expenses		(8,000)
Intangible assets		(150,000)
Accrued liabilities		227,958
Net cash used in operating activities		(59,295)
Cash flows from financing activities:
Proceeds from sale of common stock		10,000
Proceeds from common stock subscribed		250,000
Cash advances from stockholders		22,992
Net cash from financing activities		282,992
Net increase in cash and cash equivalents		223,697
Cash and cash equivalents, beginning of period		-
Cash and cash equivalents, end of period	$	223,697
Supplemental cashflow information:
Interest paid	$	-
Income taxes paid	$	-
Supplemental disclosure of non-cash financing activities:
Notes receivable issued in exchange for common stock	$	50,000

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

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RAPTOR PHARMACEUTICAL INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS

(1) NATURE OF OPERATIONS AND BUSINESS RISKS

     Raptor Pharmaceutical Inc. (the Company or Raptor) is developing a promising novel drug-targeting platform, based on the use of Receptor-Associated-Protein (“RAP”). Raptor's RAP-based delivery technology may selectively target the delivery of engineered drugs to organs, tissues and cell types through the use of specific receptor systems. The Company was incorporated in the state of Delaware on September 8, 2005 (date of inception). The Company’s fiscal year end is August 31.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of Presentation

     The Company’s financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. Through February 28, 2006, the Company had an accumulated deficit of approximately $130,000. Management expects to incur further losses for the foreseeable future. The Company expects to finance future cash needs primarily through proceeds from equity or debt financings, loans, collaborative agreements with corporate partners, or through a business combination with a company that has such financing in order to be able to sustain its operations until the Company can achieve profitability and positive cash flows, if ever.

     Management plans to seek additional debt and/or equity financing for the Company through private or public offerings or through a business combination, but it cannot assure that such financing will be available on acceptable terms, or at all. These matters raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

     The Company is subject to a number of risks, including: the need for financings; the uncertainty of the Company’s research and development efforts resulting in successful commercial products; competition from larger organizations; reliance on the proprietary technology of others; dependence on key personnel; uncertain patent protection; and dependence on corporate partners and collaborators.

(b) Use of Estimates

     The preparation of financial statements in conformity with United States GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

(c) Fair Value of Financial Instruments

     The carrying amounts of certain of the Company's financial instruments including cash and cash equivalents, prepaid expenses, accounts payable and accrued liabilities approximate fair value due to their short maturities.

(d) Cash and cash equivalents

     The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents.

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RAPTOR PHARMACEUTICAL INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS

(e) Intangible Assets

     Intangible assets include the intellectual property and other rights relating to the RAP technology. The intangible assets are amortized using the straight-line method over the estimated useful life of 20 years, which is the life of the intellectual property patents.

(f) Impairment of Long-Lived Assets

     The Company evaluates its long-lived assets for indicators of possible impairment by comparison of the carrying amounts to future net undiscounted cash flows expected to be generated by such assets when events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Should an impairment exist, the impairment loss would be measured based on the excess carrying value of the asset over the asset's fair value or discounted estimates of future cash flows. The Company has not identified any such impairment losses to date.

(g) Income Taxes

     Income taxes are recorded under the liability method, under which deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assts to the amount expected to be realized.

(h) Research and Development

Research and development costs are charged to expense as incurred.

(i) Net Loss Per Share

     Net loss per share is calculated by dividing net loss by the weighted average shares of common stock outstanding during the period. Diluted net income per share is calculated by dividing net income by the weighted average shares of common stock outstanding and potential shares of common stock during the period. As of February 28, 2006, the Company had 2,060,000 potential shares of common stock subscribed as discussed below in note 6. Potentially dilutive securities of 2,060,000 are excluded from the computation if their effect is anti-dilutive.

(j) Recent Accounting Pronouncements

     In May 2005, the FASB issued Statement of Financial Accounting Standards No. 154, Accounting Changes and Error Corrections—A Replacement of APB Opinion No. 20 and FASB Statement No. 3 (SFAS 154). SFAS 154 requires retrospective application to prior periods’ financial statements for changes in accounting principle, unless it is impracticable to determine either the period-specific effects or the cumulative effect of the change. SFAS 154 also requires that a change in depreciation, amortization, or depletion method for long-lived non-financial assets be accounted for as a change in accounting estimate affected by a change in accounting principle. The Company is required to adopt the provisions of SFAS 154, as applicable, beginning in the first fiscal quarter beginning September 1, 2006.

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RAPTOR PHARMACEUTICAL INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS

     In December 2004, FASB issued Statement of Financial Accounting Standards SFAS No. 123 (Revised 2004), Share-Based Payments. The new pronouncement replaces the existing requirements under SFAS No.123 and APB 25. According to SFAS No. 123 (R), all forms of share-based payments to employees, including employee stock options and employee stock purchase plans, would be treated the same as any other form of compensation by recognizing the related cost in the Statement of Operations. This pronouncement eliminates the ability to account for stock-based compensation transactions using APB No. 25 and generally would require instead that such transactions be accounted for using a fair-value based method. FASB concluded that, for small business issuers, SFAS No. 123 (R) is effective for awards and stock options granted, modified or settled in cash in annual periods beginning after December 15, 2005. SFAS No. 123 (R) provides transition alternatives for public companies to restate prior interim periods or prior years. We are in the process of evaluating the impact of this standard on our Statement of Operations.

     In March 2005, the SEC issued Staff Accounting Bulletin (“SAB”) No. 107, providing supplemental implementation guidance for SFAS 123(R). In April 2005, the Securities and Exchange Commission approved a rule that delayed the effective date of SFAS 123(R) to the first annual reporting period beginning after December 15, 2005 for companies that file as small business issuers. The Company is evaluating the requirements under SFAS 123(R) and SAB 107 and expects the adoption to have a significant adverse impact on the Company’s statements of operations and net loss per share. SFAS 123(R) will be effective for the Company beginning with the first fiscal quarter beginning September 1, 2006.

(3)  INTANGIBLE ASSETS

     On January 27, 2006, BioMarin Pharmaceutical Inc. (“BioMarin”) assigned the intellectual property and other rights relating to the RAP technology to the Company. As compensation for the assignment of the RAP technology, BioMarin will receive milestone payments based on certain financing and regulatory triggering events. Other than milestone payments, no other consideration was paid for this assignment. The Company has recorded $150,000 of intangible assets and current liabilities on the balance sheet as of February 28, 2006 based on the estimated fair value of its agreement with BioMarin. The intangible asset is being amortized monthly over twenty years, which is the life of the intellectual property patents. During the period ended February 28, 2006, the Company amortized $625 of intangible assets to research and development expense.

     The following table summarizes the actual and estimated amortization expense for our intangible assets for the periods indicated:

Amortization period	Amortization expense
September 8, 2005 (inception) to February 28, 2006 - Actual	$	625
September 8, 2005 (inception) to August 31, 2006 - Estimate		4,375
Fiscal year ending August 31, 2007 – Estimate		7,500
Fiscal year ending August 31, 2008 – Estimate		7,500
Fiscal year ending August 31, 2009 – Estimate		7,500
Fiscal year ending August 31, 2010 – Estimate		7,500

48

RAPTOR PHARMACEUTICAL INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS

(4)  INCOME TAXES

     There is no provision for income taxes because the Company has incurred operating losses. Deferred income taxes reflect the net tax effects of net operating loss and tax credit carryovers and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company's deferred tax assets are as follows:

		February 28,
		2006
Deferred tax assets (liabilities):
Federal and state net operating losses	$	13,000
Purchased intangibles		(60,000)
Accrued expenses		65,000
Total deferred tax assets		18,000
Valuation allowance		(18,000)
Net deferred tax assets	$	-

     As of February 28, 2006, the Company had net operating loss carryforwards for federal and state income tax purposes of approximately $32,000 which expire beginning after the year 2025 and 2015, respectively.

The valuation allowance increased $18,000 during the period ending February 28, 2006.

     Utilization of the Company’s net operating loss may be subject to substantial annual limitation due to the ownership change limitations provided by the Internal Revenue Code and similar state provisions. Such an annual limitation could result in the expiration of the net operating loss before utilization.

(5)  ISSUANCE OF COMMON STOCK

FOUNDERS’ SHARES

     Upon incorporation on September 8, 2005, the Company issued 5,000,000 shares of common stock to each of its founders for an aggregate issuance of 10,000,000 shares. The founders, Christopher M. Starr, Ph.D., and Todd Zankel, Ph.D., are the President and Chief Scientific Officer, respectively. The founders paid par value or $0.001 per share for an aggregate $10,000 to the Company in January 2006.

49

RAPTOR PHARMACEUTICAL INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS

(6) COMMON STOCK SUBSCRIBED

     On February 3, 2006, the Company received a subscription agreement for 1,000,000 shares of common stock at $0.10 per share for an aggregate $100,000 to a third party in exchange for a promissory note. $50,000 of the promissory note was due and paid on February 7, 2006 and $50,000 plus accrued interest at 8% per annum was due on March 15, 2006 and was paid on March 9, 2006. The $50,000 note plus interest accrued through February 28, 2006 is reflected in the equity section of the balance sheet. The common stock was issued in May 2006.

     On February 23, 2006, the Company received a subscription agreement for 1,000,000 shares of common stock at $0.20 per share for an aggregate $200,000 to a third party. The common stock was issued in May 2006.

     On September 14, 2005, the Company entered into an agreement with its legal counsel which allows the Company to defer the payment of legal fees until the Company obtains significant financing. Under this agreement the Company is obligated to issue 0.5% of its outstanding common stock to its legal counsel prior to a significant financing. As of February 28, 2006, the Company has not issued such stock and has recorded $60 of legal expense and additional paid-in capital based on the market value of the 60,000 shares of common stock subscribed. Common stock subscribed to non-employees are accounted for in accordance with SFAS 123 and the Emerging Issues Task Force Consensus No. 96-18, “Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling Goods or Services,” which are recorded at fair value of the consideration received or the fair value of the equity investments issued. The fair value of the common stock subscribed was measured as of the performance commitment date in September 2005. Since there is no specified service period in the agreement, the fair value of $60 was expensed as of the agreement date.

(7) COMMITMENTS AND CONTINGENCIES

OFFICE LEASE

     In March 2006, the Company entered into a new lease for the Company’s executive offices and research laboratory in Novato, California. Base monthly payments are $5,206 per month subject to annual rent increase of between 3% to 5%, based on the Consumer Price Index (CPI). During the period September 8, 2005 (inception) to February 28, 2006, the Company paid $0 in rent. In March 2006, the Company paid $20,206 as a security deposit on this lease, which expires in March 2009. The lease allows for one three-year extension at the market rate. The lease allows for up to $16,643 in reimbursement for tenant improvements.

     The minimum future lease payments under these operating leases assuming a 3% CPI increase per year are as follows:

Period		Amount
September 8, 2005 (inception) to February 28, 2006	$	0
September 8, 2005 (inception) to August 31, 2006		26,032
Fiscal year ending August 31, 2007		63,258
Fiscal year ending August 31, 2008		65,155
September 1, 2008 to March 31, 2009		38,664

(8) SUBSEQUENT EVENT

     On March 8, 2006, the Company executed a binding agreement to sell 100% of its issued and outstanding common stock to Highland Clan Creations Corp. (“HCCC”) as part of a $3.5 million financing. The existing stockholders of the Company will receive shares in HCCC, a public shell company. The financing represents 7 million units at $0.50 per unit, each unit consisting of one share of common stock and one stock purchase warrant exercisable for one share of common stock at $ 0.50 per share. The warrants are exercisable for 18 months. HCCC has an option to sell an additional $0.5 million of units on the same terms. The closing of the financing is subject to customary closing conditions. As part of the binding agreement, HCCC has provided the Company a loan of $0.2 million to be repaid with accrued interest the earlier of six months or upon closing of the financing.

50

Unaudited Pro Forma Combined
Condensed Consolidated Financial Information

51

PRO FORMA FINANCIAL INFORMATION

     Unaudited Pro Forma Combined Condensed Consolidated Financial Statements of Raptor
Pharmaceutical Inc. (“Raptor”) and Highland Clan Creations Corp. (“HCCC”) as of
February 28, 2006 and for the period from September 8, 2005 (Inception)

to February 28, 2006

On May 25, 2006, Highland Clan Creations Corp. (“HCCC”) completed a Share Purchase Agreement with the stockholders of Raptor Pharmaceutical Inc. (Raptor), a privately-held Delaware corporation, to acquired all of the issued and outstanding capital stock of Raptor. As a result, Raptor became a wholly owned subsidiary of HCCC and stockholders of Raptor now own approximately 27.8% of HCCC taking into account the common stock issued in connection with a $5,000,000 financing which closed concurrently with the Share Purchase Agreement. The $5,000,000 financing resulted from the sale of HCCC of 8,333,333 units at $0.60 per unit. Each unit consisted of one share of common stock of HCCC and one common stock warrant to purchase HCCC stock, exercisable at $0.60 per share for 18 months. For accounting purposes, the Share Purchase Agreement between HCCC and Raptor is considered a capital transaction accompanied by a recapitalization of Raptor rather than a business combination since HCCC had only a minor amount of net assets and no operations.

The unaudited pro forma combined condensed consolidated financial statements reflect the closing of the reverse merger transaction as of February 28, 2006 for balance sheet purposes and as of September 8, 2005 (inception) for statement of operations purposes, as if the Closing had occurred as of such date. The unaudited pro forma financial data and the notes thereto should be read in conjunction with each of Raptor’s and HCCC’s historical financial statements. The unaudited pro forma financial data is based upon certain assumptions and estimates of management that are subject to change. The unaudited pro forma financial data is presented for illustrative purposes only and is not necessarily indicative of any future results of operations or the results that might have occurred if the reverse merger transaction had actually occurred on the indicated date.

52

Unaudited Pro Forma Combined Condensed Consolidated Balance Sheet

	Raptor Pharmaceutical Inc. February 28,  2006	HCCC February 28, 2006	Pro Forma Adjustments			Pro Forma Balance Sheet  February 28, 2006
Current assets:
Cash and cash equivalents	$              223,697	$                  1,798	$                  (1,798)	(A)	$	4,793,697
			4,570,000	(B)
Deposits and other current assets	8,000					8,000
Total current assets	231,697	1,798	4,568,202			4,801,697
Intangible assets, net	149,375					149,375
Assets held for sale		18,915	(18,915)	(A)		-
Total assets	$              381,072	$                20,713	$            4,549,287		$	4,951,072
Current liabilities
Accounts payable and accrued liabilities	227,958	29,045	(29,045)	(A)		227,958
Accounts payable - related parties	-	59,282	(59,282)	(A)		-
Convertible notes payable, net	-	97,223	(97,223)	(A)		-
Due to stockholders	22,992	16,062	(16,062)	(A)		22,992
Total liabilities	250,950	201,612	(201,612)			250,950
Stockholders' equity:
Common stock	10,000	39,305	8,333	(B)		28,833
			(28,805)	(C)
Common stock subscribed	2,060	-	-			2,060
Additional paid-in capital	298,000	134,606	4,561,667	(B)		5,023,078
			28,805	(C)
Stockholder and subscriptions receivable	(50,274)	-	-			(50,274)
Accumulated other comprehensive income		2,168	-			2,168
Deficit accumulated during development stage	(129,664)	(356,978)	180,899	(A)		(305,743)
Total stockholders' equity	130,122	(180,899)	4,750,899			4,700,122
Total liabilities and stockholders' equity	$              381,072	$                 20,713	$            4,549,287		$	4,951,072

53

Unaudited Pro Forma Combined Condensed Consolidated Statement of Operations
		RaptorPharmaceuticalInc. For the Period from September 8, 2005 (Inception) to February 28, 2006		HCCC  For the Period from September 8, 2005 to February 28, 2006	Pro Forma Adjustments			From the Period from September 8, 2005 to February 28, 2006
Sales	$	-	$	10,392			$	10,392
Cost of goods sold		-		(4,878)				(4,878)
Gross profit		-		5,514	-			5,514
Operating expenses:
General and administrative		128,326		82,555				210,881
Research and development		1,612		-				1,612
Total operating expenses		129,938		82,555	-			212,493
Loss from operations		(129,938)		(77,041)	-			(206,979)
Interest income		274						274
Interest expense				(10,406)				(10,406)
Gain on forgiveness of debt					180,899	(A)		180,899
Net loss		(129,664)		(87,447)	180,899			(36,212)
Foreign currency translations		-		89	-			89
Net comprehensive loss	$	(129,664)	$	(87,358)	$                    180,899		$	(36,123)
Net loss per share:
Basic and diluted	$	(0.01)	$	(0.00)	$                        (0.01)		$	(0.00)
Weighted average shares
outstanding used to compute:
Basic and diluted		10,000,000		39,305,000	(22,298,256)	(C)		27,006,744

54

NOTES TO THE PRO FORMA COMBINED
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The combined condensed consolidated balance sheet and combined condensed consolidated statement of operations includes the accounts of the Raptor and HCCC. This acquisition will be accounted for as a reverse merger (recapitalization) with Raptor deemed to be the accounting acquirer, and HCCC deemed to be the legal acquirer.

(A) Concurrent with the reverse merger, HCCC is required to sell its pre-merger assets and liabilities. This adjustment reflects the sale of HCCC’s pre-merger assets and forgiveness of net liabilities including the recognition of a gain on the forgiveness of the net liabilities.

(B) Concurrent with the reverse merger, HCCC is required to raise additional working capital for the Raptor operations. This adjustment assumes that 8,333,333 units (comprising of one share of common stock and one common stock warrant) of HCCC is sold at $0.60 per share for gross proceeds of $5,000,000. The 8,333,333 common stock warrants were valued at $2,400,000 and recorded as additional paid in capital on the pro forma combined condensed consolidated balance sheet. The value of the warrants was calculated using the Black-Scholes model with a strike price of $0.60 per share, a risk-free interest rate of 4.9%, an 18 month term, a zero dividend rate and 100% volatility. The amount allocated to the common stock portion of the units was approximately $2,600,000 and was also recorded as additional paid in capital and common stock. Estimated legal, accounting and other closing costs of $430,000 is reflected as a reduction of the proceeds received by HCCC.

(C) Concurrent with the reverse merger, former officers of HCCC have agreed to retire an aggregate of 26,805,000 post-split shares of HCCC’s common stock without remuneration. Additionally, as part of the reverse merger, officers of Raptor have agreed to retire 4,000,000 of the 10,000,000 shares of Raptor’s common stock held by them prior to the closing of the reverse merger and upon closing will receive 6,000,000 shares of HCCC’s common stock. The total outstanding shares are 28,833,333 on a pro forma basis as of February 28, 2006, with existing HCCC stockholders holding approximately 43%; Raptor stockholders holding approximately 28%; and new outside investors holding approximately 29% of the post reverse merger entity.

55

Exhibits

10.1	Share Purchase Agreement between Highland Clan Creations Corp. and Dr. Christopher Starr, Erich Sager, Dr. Todd Zankel and Falcon Corporate Investments Ltd. dated March 9, 2006. (Incorporated by reference from our current report on Form 8-K filed on March 14, 2006).
10.2	Asset Purchase Agreement between Raptor Pharmaceutical Inc. and BioMarin Pharmaceutical Inc. dated January 27, 2006.*
10.3	Assignment and Assumption Agreement between Raptor Pharmaceutical Inc. and BioMarin Pharmaceutical Inc. dated January 27, 2006.
10.4	Security Agreement between Raptor Pharmaceutical Inc. and BioMarin Pharmaceutical Inc. dated January 27, 2006.
10.5	Employment Agreement between Raptor Pharmaceutical Inc. and Dr. Christopher Starr dated May 1, 2006.
10.6	Employment Agreement between Raptor Pharmaceutical Inc. and Dr. Todd Zankel dated May 15, 2006.
10.7	Employment Agreement between Raptor Pharmaceutical Inc. and Ms. Kim Tsuchimoto dated May 1, 2006.
4.1	Code of Ethics.
21.1	Raptor Pharmaceutical Inc., a Delaware corporation.
23.1	Consent of Burr, Pilger, & Mayer LLP, Independent Registered Accounting Firm.
*Certain parts of this document have not been disclosed and have been filed separately with the Secretary of the Securities and Exchange Commission, and is subject to a confidential treatment request pursuant to Rule 24b-2 of the United States Securities Exchange Act of 1934, as amended.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

HIGHLAND CLAN CREATIONS CORP.

By: /s/ Dr. Christopher Starr

Dr. Christopher Starr
Chief Executive Officer and Director

Date: May 25, 2006

56

EX-10

Exhibit 10.2

***Denotes certain parts that have not been disclosed and have been filed separately with the Secretary, Securities and Exchange Commission, and is subject to a confidential treatment request pursuant to Rule 24b-2 of the Securities Exchange Act of 1934.

ASSET PURCHASE AGREEMENT

This ASSET PURCHASE AGREEMENT (this “Agreement”) is entered into as of January 27, 2006 (the “Effective Date”), by and between Raptor Pharmaceutical Inc., a Delaware corporation (“Raptor”), and BioMarin Pharmaceutical Inc., a Delaware corporation (“BioMarin”). BioMarin and Raptor are each referred to herein individually as a “Party” and collectively as the “Parties.”

RECITALS

WHEREAS, BioMarin is the owner of the Business (as defined below) as operated prior to the Effective Date and of the Transferred Technology (as defined below); and

WHEREAS, Raptor desires to acquire from BioMarin, and BioMarin desires to assign to Raptor, the Transferred Technology on the terms and conditions set forth in this Agreement.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual promises contained herein and intending to be legally bound, the Parties agree as follows:

1. Definitions.

1.1Construction. For all purposes of this Agreement, except as otherwise expressly provided:

(a) the terms defined in this Agreement include the plural as well as the singular,

(b) all references in this Agreement to designated “Articles,” “Sections,” and other subdivisions are to the designated Articles, Sections and other subdivisions of the body of this Agreement, and all references to “Exhibits” and “Schedules” are to the Exhibits and Schedules attached to this Agreement,

(c) pronouns of either gender or neuter shall include, as appropriate, the other pronoun forms,

(d) the words “include” and “including” when used herein are not exclusive and mean “include, without limitation” and “including, without limitation,” respectively, and

(e) the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or other subdivision.

1.2Defined Terms. As used in this Agreement and the Exhibits and Schedules, the following definitions shall apply:

(a) “Action” means with respect to any specified person any action, complaint, petition, investigation, suit, arbitration or other proceeding, whether civil or criminal, in law or in equity, or before any arbitrator or Governmental Entity.

(b) “Affiliate” means with respect to any specified Person, a Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with the Person specified.

(c) “Alternate Milestone Payment Schedule” shall mean payment of one-fourth of the applicable Milestone Fee within 15 days of the milestone event, another one-fourth within 90 days of the event, another one-fourth within 180 days of the event and the final one-fourth of the applicable Milestone Fee within 270 days of the applicable milestone event.

(d) “Approval” means any approval, authorization, assignment or consent, qualification or registration, or any waiver of any of the foregoing, required to be obtained from, or any notice, statement or other communication required to be filed with or delivered to, any Person, the receipt of which is necessary to approve the Transactions or to the transfer of and continued operation of the Business by Raptor as it has been operated prior to the Effective Date.

(e) “Business” means (i) the research and development activities of, or under authority of, BioMarin, Raptor or their Affiliates, which activities directly and specifically relate to the use of a receptor associated protein, or any similar or related protein, as a drug or drug delivery platform, including the Technology necessary for such research and development activities and (ii) the further research and development concerning such use beyond the research and development activities described in clause (i) and the commercial exploitation of all of the foregoing research and development; including all further research, development, making, use, license, import and sale of products that involve or use such a protein.

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(f) “Business Copyrights” shall mean the Copyrights listed on Section1.2(g) of the Disclosure Schedule.

(g) “Business Patents” shall mean the Patents listed on Section1.2(h) of the Disclosure Schedule and all patents, utility models, certificates of invention, patents of addition or substitution, and other governmental grants for the protection of inventions anywhere in the world, including any reissue, renewal, re-examination, or extension thereof, and all applications for any of the foregoing, including any international, regional, national, provisional, divisional, continuation, continuation in part, continued prosecution, and petty patent application, in each case that correspond or that claim priority to the Patents listed on Section1.2(h) of the Business Disclosure Schedule.

(h) “Business Trademarks” shall mean the Trademarks listed on Section1.2(i) of the Disclosure Schedule and all goodwill associated with such Trademarks.

(i) “Copyrights” shall mean U.S. and foreign registered and unregistered copyrights (including those in computer software and databases), rights of publicity and all registrations and applications to register the same.

(j) “Disclosure Schedule” shall mean the disclosure schedule of even date herewith prepared and signed by BioMarin and delivered to Raptor simultaneously with the execution hereof.

(k) “Dispute” has the meanings specified in Section12.3(a).

(l) “EMEA” means the European Medicines Agency or any successor agency.

(m) “Encumbrance” means any claim, charge, easement, encumbrance, lease, covenant, security interest, lien, option, pledge, rights of others (including, but not limited to, licenses, exclusivity, options and rights of first refusal, of discussion, or negotiation), or restriction (whether on sale, transfer, disposition or otherwise), whether imposed by agreement, understanding, law, equity or otherwise.

(n) “Escalation Notice” has the meaning specified in Section12.3(a).

(o) “FDA” means the United States Food and Drug Administration or any successor agency vested with administrative and regulatory authority to approve testing and marketing of human pharmaceutical or biological therapeutic or diagnostic products in the United States.

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(p) “Governmental Entity” means any government or any agency, bureau, board, commission, court, department, official, political subdivision, tribunal or other instrumentality of any government, whether federal, state or local, domestic or foreign.

(q) “Improvement” means any carrier protein that has at least seventy five percent (75%) homology with the Receptor Associated Protein. As used herein, “at least seventy five percent (75%) homology” means the nucleotide or amino acid residue sequence is at least seventy five percent (75%) identical to the amino acid sequence of the Receptor Associated Protein.

(r) “Intellectual Property” shall mean all rights in, to and under any and all of the following: Trademarks, Patents, Copyrights, Trade Secrets, Technology and other intellectual property and proprietary rights anywhere in the world.

(s) “Investigational New Drug Application” shall mean an investigational new drug application, as defined in 21 C.F.R. Section 312.3, obtained for purposes of conducting clinical trials in accordance with the requirements of the United States Federal Food, Drug and Cosmetic Act and the regulations promulgated thereunder, including all supplements and amendments thereto.

(t) “Law” means any constitutional provision, statute or other law, rule, regulation, or interpretation of any Governmental Entity and any Order.

(u) “Transferred Know-How” shall mean all Technology in the possession or control of BioMarin or its Affiliates necessary for the Business, which shall include all Technology listed in Section1.2(v) of the Disclosure Schedule.

(v) “Transferred Technology” shall mean all Intellectual Property which is owned by BioMarin or its Affiliates and which is reasonably necessary for the operation of the Business, or the making, use, sale, offer for sale, or import of any Products, which shall include: (i) the Business Patents; (ii) the Business Trademarks; (iii) the Business Copyrights, (iv) the Transferred Know-How, and (v) all Products.

(w) “Major Market” shall mean the United States of America, Germany, France, Italy, Spain, the United Kingdom, Japan, Australia, or the European Union (but only for clinical trials submitted to, and Marketing Approvals from, the EMEA for the centralized procedure in which the Marketing Approval from the EMEA is for all countries in the European Union).

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(x) “Marketing Approval” shall mean, with respect to a particular NeuroTrans Product and country, approval by the applicable Regulatory Agencies in such country of a Marketing Approval Application filed in such country, permitting the NeuroTrans Product to be marketed and sold in that country for the indications for which approval is sought, including, if applicable, approval of pricing or reimbursement.

(y) “Marketing Approval Application” shall mean, with respect to a particular NeuroTrans Product and country, a marketing authorization application (including and equivalent to an NDA in the United States), including all supporting documentation and data submitted for such application to be accepted for review or approval, filed with the requisite Regulatory Agency of such country and requesting approval for marketing and/or commercialization of such NeuroTrans Product for a particular indication in such country.

(z) “Milestone Fee” shall have the meaning set forth in Section3 below.

(aa) “NDA” shall mean a new drug application to permit commercial marketing of a NeuroTrans Product in the United States, pursuant to section 505 of the United States Federal Food, Drug and Cosmetic Act, and the regulations promulgated thereunder, as amended from time to time, as submitted to the FDA.

(bb) “Net Sales” shall mean the total payments actually received by Raptor or its Affiliate (the “Seller”) from a non-Affiliate third party on sales of a NeuroTrans Product by the Seller to such non-Affiliate third party, less the following: (i) all trade, cash and quantity credits, discounts, refunds or rebates given by the Seller; (ii) amounts for claims, allowances or credits for returns, retroactive price reductions, charge-backs, recalls or destroyed goods, given by Seller; (iii) packaging, handling fees and prepaid freight, sales taxes, duties and other governmental charges (including value added and other tax) paid to the Seller; and (iv) quality assurance and quality control costs relating to the NeuroTrans Product or its preparation paid by the Seller. For purposes of the foregoing, it is understood that Net Sales shall not include charges related to services performed in connection with the sale of such NeuroTrans Products. For the removal of doubt, Net Sales shall not include transfers among Raptor and its Affiliates.

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(cc) “NeuroTrans Net Revenue” shall mean the sum of the Net Sales and Sublicensing Revenue received by Raptor and its Affiliates for NeuroTrans Products.

(dd) “NeuroTrans Product” means a therapeutic product that is delivered across a blood brain barrier using a carrier protein that facilitates transport of such therapeutic product across such barrier, but only if (a) the manufacture, sale, import, offer to sell, use, or other activities with respect to such product would, but for the assignment to Raptor in Section2.1 below, infringe in the country for which such product is sold, a Valid Claim; (b) the manufacture, sale, import, offer to sell, use, or other activities with respect to such product would, but for the assignment to Raptor in Section2.1 below, infringe upon some or all of the Transferred Know-How, provided that the carrier protein is the Receptor Associated Protein or an Improvement; or (c) such product is otherwise based upon the Transferred Technology and the carrier protein is the Receptor Associated Protein or an Improvement.

(ee) “Order” means any decree, injunction, judgment, order, ruling, assessment or writ of a Governmental Entity.

(ff) “Patents” shall mean all patents, utility models, certificates of invention, patents of addition or substitution, and other governmental grants for the protection of inventions anywhere in the world, including any reissue, renewal, re-examination, or extension thereof, and all applications for any of the foregoing, including any international, regional, national, provisional, divisional, continuation, continuation in part, continued prosecution, and petty patent applications.

(gg) “Person” means an association, a corporation, an individual, a partnership, a trust (or trustee thereof, as applicable), or any other entity or organization, including a Governmental Entity.

(hh) “Products” means all products, Technology and services of BioMarin or its Affiliates, along with collateral materials of BioMarin and its Affiliates, researched, developed, sold, licensed, used, or otherwise exploited or commercialized by BioMarin or any of its Affiliates in the Business, whether commercially available or in the development stage (including any pre-clinical and clinical research or development).

(ii) “Receptor Associated Protein” means the receptor associated protein, as disclosed in and having the sequence disclosed in U.S. Patent No. 5,474,766.

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(jj) “Regulatory Agency” means (a) the FDA, (b) the EMEA, or (c) any other Governmental Entity with regulatory authority comparable to the FDA or the EMEA in any other jurisdiction anywhere in the world.

(kk) “Licensing Revenue” means the net license issuance fees; license maintenance fees; and milestone payments paid upon completion of a regulatory milestone, commercial launch, or similar milestone; royalties; and all other similar revenue; in each case actually received by Raptor and its Affiliates from a Licensee as consideration for the grant to such Licensee of a license under a Valid Claim, or otherwise under the Transferred Technology, to make and sell NeuroTrans Products, excluding (i) all amounts paid to Raptor and its Affiliates for purchases of any products, services, equity, other securities, or other items; (ii) any cost sharing or reimbursements; (iii) amounts paid for facilities or equipment; (iv) loans; dividends; profit distributions and amounts that are creditable by the Licensee against other payments; (v) payments for rights or licenses under Technology or Intellectual Property, other than the Transferred Technology, (such as payments for any other Intellectual Property or Technology owned by Raptor or its Affiliates) and payments based upon products other than NeuroTrans Products; (vi) all amounts paid in connection with a sale of all or substantially all of the business or assets of Raptor or its Affiliates related to this Agreement; and (vii) non-cash consideration. Notwithstanding the foregoing, Licensing Revenue (A) shall be reduced by the amount of any cash payments to third parties in respect of the amounts received by Raptor and its Affiliates (including, without limitation, royalties on the same products paid to third parties under technology in-licenses); and (B) shall be net of any applicable taxes and other amounts credited or deducted against the amounts actually paid to Raptor and its Affiliates.

(ll) “Licensee” means an entity to which Raptor has granted a license under a Valid Claim to make and sell NeuroTrans Products.

(mm) “Security Agreement” means that certain “Security Agreement” entered into by and between the Parties on even date herewith, to secure the payments to BioMarin that become due and payable under this Agreement.

(nn) “Successful Completion” shall mean, with respect to a phase II or phase III clinical study, (i) completion of the final clinical trial report for the clinical study provided that the data from the clinical study demonstrates that the primary endpoints in the study protocol have been met; or (ii) the initiation of the next phase of

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development (i.e. the initiation of a phase III trial for the same therapeutic for which the phase II study has been conducted, and in the case of completion of a phase II trial or phase III trial, the filing of a Marketing Approval Application to obtain Marketing Approval for the same product.

(oo) “Tax” means any United States federal, state, local, or foreign taxes, and assessments of a similar nature (whether imposed directly or through withholding), including any interest, penalty, or addition thereto.

(pp) “Technology” means any and all technology, and technical and other information, and tangible embodiments thereof, including Trade Secrets, know-how, research, processes, formulations, techniques, diagnostics, models, concepts, ideas, knowledge, developments, samples, methods, invention and other disclosures, recipes, specifications, materials, instructions, compositions, designs, results, assays, reagents, systems, descriptions, analyses, opinions, works of authorship, plans, procedures, manuals, depictions, inventions, discoveries, methods, data, reports, market information, projections, and any other written, printed or electronically stored information and materials of any nature whatsoever.

(qq) “Term” shall have the meaning set forth in Section11.1.

(rr) “Territory” shall mean all countries, territories, and other regions of the world.

(ss) “Trademarks” shall mean U.S. and foreign registered and unregistered trademarks, trade dress, service marks, logos, trade names, corporate names and all registrations and applications to register the same and all goodwill associated with any of the foregoing.

(tt) “Trade Secrets” shall mean all categories of trade secrets as defined in the Uniform Trade Secrets Act, including trade secrets that are business information, inventions, know-how, or confidential information.

(uu) “Transactions” shall mean the transactions and activities provided for or contemplated by this Agreement.

(vv) “Valid Claim” means (i) an issued, unexpired, and enforceable claim in the Business Patents, or any other Patent assigned to Raptor in the Transferred Technology, that has an effective filing date (as defined in 35 USC §119 or §120, or equivalent in a country outside the United States) that precedes the Effective Date

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or (ii) an issued, unexpired, and enforceable claim in another Patent owned by Raptor that claims, and is primarily directed to, an Improvement (and not any protein more generally); in each case provided that the claim has not been held invalid or unenforceable, and has not been abandoned, disclaimed, waived, or terminated.

2. Assignment.

2.1Assignment. Subject to the terms and conditions of this Agreement, BioMarin hereby assigns, transfers, conveys, and delivers to Raptor, and Raptor hereby accepts and acquires from BioMarin, all right, title and interest in, to and under the Transferred Technology.

2.2Licensees. Raptor shall promptly advise BioMarin of any license of the Transferred Technology to any Licensee. Raptor’s grant of any license shall not relieve Raptor of its obligations under this Agreement.

2.3Exclusivity. Without limiting the assignment in Section2.1, BioMarin and its Affiliates shall not, directly or indirectly (and shall not authorize any other party to), market, develop, make, have made, use, sell, offer to sell, or distribute any product, component or service that is Transferred Technology or is covered by the Transferred Technology, including any product, component or service in a non-Patent country that would infringe a Patent in the Transferred Technology if made, used, sold, or imported in a country in which a Patent in the Transferred Technology exists, or otherwise use, disclose or exploit the Transferred Technology, anywhere in the world.

2.4Liabilities Assumed and Not Assumed. Raptor does not assume, shall not take subject to and shall not be liable for, any liabilities or obligations of any kind or nature, whether absolute, contingent, accrued, known or unknown, of BioMarin or any Affiliate of BioMarin regardless of when incurred. Raptor does not assume any liability for failure of BioMarin to obtain a required consent or approval for the Transactions. BioMarin shall remain liable for all payments to all suppliers to the Business, and for all accounts payable relating to the Business, as of the Effective Date.

2.5No Implied Rights or Obligations. Neither Party shall have any implied rights or implied obligations in connection with this Agreement. Rather, each Party’s rights and obligations shall be solely as expressly set forth in this Agreement.

3.Milestone Payments. As partial consideration for the assignment to Raptor in Section2.1, Raptor shall pay to BioMarin the following amounts (the “Milestone Fees”) for the achievement of each applicable event:

3.1Within thirty (30) days after Raptor receives total aggregate debt or equity financing of at least two million five hundred thousand dollars ($2,500,000), Raptor shall pay BioMarin fifty thousand dollars ($50,000);

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3.2Within thirty (30) days after Raptor receives total aggregate debt or equity financing of at least five million dollars ($5,000,000), Raptor shall pay BioMarin one hundred thousand dollars ($100,000);

3.3Upon the filing and acceptance by any Regulatory Agency of an Investigational New Drug Application for a NeuroTrans Product of Raptor, its Affiliate or a Sublicensee, Raptor shall pay BioMarin five hundred thousand dollars ($500,000) in accordance with the Alternate Milestone Payment Schedule;

3.4Upon Successful Completion by Raptor or its Sublicensee of a (i) phase II human clinical trial for a NeuroTrans Product for the purposes of collecting data on dosages, evaluating safety and/or collecting preliminary information regarding efficacy as such trial is more fully defined in 21 C.F.R. § 312.21(b), Raptor shall pay BioMarin two million five hundred thousand dollars ($2,500,000) in accordance with the Alternate Milestone Payment Schedule;

3.5Upon Successful Completion by Raptor or its Sublicensee of (i) a phase III human clinical trial for a NeuroTrans Product which clinical trial, when considered either alone or together with one or more clinical trials of comparable design and end-points that have been completed, has generated efficacy data sufficient to obtain Marketing Approval by the FDA or an equivalent agency in a Major Market for the therapeutic, as such clinical trial is more fully defined in 21 C.F.R. § 312.21(c), Raptor shall pay BioMarin five million dollars ($5,000,000) in accordance with the Alternate Milestone Payment Schedule;

3.6Within ninety (90) days after Raptor or its Affiliate or Sublicensee obtains Marketing Approval from a Regulatory Agency of a Marketing Approval Application in a Major Market for a NeuroTrans Product, Raptor shall pay BioMarin twelve million dollars ($12,000,000);

3.7Within ninety (90) days after Raptor or its Affiliate or Sublicensee obtains Marketing Approval from a Regulatory Agency of a Marketing Approval Application in a Major Market for any NeuroTrans Product(other than the NeuroTrans Product for which a payment is made under Section3.6), it being understood that filings in different countries for the same NeuroTrans Product shall not trigger the milestone under this Section3.7, Raptor shall pay BioMarin five million dollars ($5,000,000);

3.8Within sixty (60) days after the end of the first calendar year in which Raptor’s aggregate NeuroTrans Net Revenue actually received by Raptor and its Affiliates in such calendar year for all NeuroTrans Products exceeds one hundred million dollars ($100,000,000), Raptor shall pay BioMarin five million dollars ($5,000,000); and

3.9Within sixty (60) days after the end of the first calendar year in which Raptor’s aggregate NeuroTrans Net Revenue actually received by Raptor and its Affiliates in such calendar year for all NeuroTrans Products exceeds five hundred million dollars ($500,000,000), Raptor shall pay BioMarin twenty million dollars ($20,000,000).

For the avoidance of doubt, with the exception of the milestone provided for in Section3.7, which may be earned multiple times, none of the above Milestone Fees may be earned more than once. In particular, if a Milestone Fee is paid under any of Sections3.1, 3.2, 3.3, 3.4, 3.5, 3.6,

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3.8, or 3.9 for any NeuroTrans Product, no further fee shall be payable at any time under the applicable section, regardless of the product, indication, or country. Additionally, only one fee shall be payable under Section3.7 for each NeuroTrans Product, regardless of the number of countries in which approval is obtained.

Raptor shall provide full disclosure to BioMarin of each of the events described in this Section3 prior to, concurrently with, or immediately after the occurrence of each event, whichever is possible to do using Raptor’s reasonable commercial efforts.

4. Royalties.

4.1Subject to the terms and conditions of this Agreement, as additional consideration for the assignment to Raptor in Section2.1, during the Term (defined below) of this Agreement Raptor agrees to pay to BioMarin a royalty at the percentages of NeuroTrans Net Revenue actually received by Raptor and its Affiliates as set forth in this Section4.1:

(a) *** percent (***%) of NeuroTrans Net Revenue received by Raptor or its Affiliates for NeuroTrans Product, if the sale or use of the NeuroTrans Product would, but for the assignment to Raptor in Section2.1, infringe one or more Valid Claims in the country for which the NeuroTrans Product is sold; and

(b) *** percent (***%) of NeuroTrans Net Revenue received by Raptor or its Affiliates for other NeuroTrans Products.

For clarity, if Licensing Revenue is based upon activities (e.g. a license, clinical trials, regulatory filings or approvals, or the like) for a NeuroTrans Product for a particular country, the rate in Section4.1(a) shall apply only if the sale or use of such NeuroTrans Product would, absent the assignment to Raptor in Section2.1, infringe a Valid Claim in that country.

4.2Notwithstanding the foregoing, no payments shall be due or payable under Section4.1 unless the NeuroTrans Net Revenue is received after the earlier of: (i) the third anniversary of the Effective Date; or (ii) Raptor and its Affiliates having received after the Effective Date a total aggregate amount of five million US dollars ($5,000,000) of NeuroTrans Net Revenue. For clarity, if (ii) is the earlier to occur, no amounts shall be due or payable under Section4.1 based upon the initial five million US dollars ($5,000,000) of NeuroTrans Net Revenue that were received by Raptor and its Affiliates. No more than one royalty shall be due or payable to BioMarin for any NeuroTrans Product pursuant to Section4.1. Section4.1 shall terminate, and have no further force or effect, on the twentieth (20th) anniversary of the Effective Date.

4.3So long as BioMarin, or any successor or assign under this Agreement, is domiciled in the United States or any other country that has entered into a tax treaty with the United States such that Raptor is not required to withhold or pay Taxes on the amounts payable by Raptor under this Agreement, such payments will be made without deduction or offset for Taxes or Tax withholding. If BioMarin, or its successor or assign under this Agreement, is domiciled in any other country, Raptor, in its reasonable discretion, if required by such country, shall be entitled to make any deduction or withholding payment for or on account of Taxes or

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other governmental charges imposed by a jurisdiction in connection with the payments under this Agreement and shall be entitled to reduce its payment under this Agreement by the amount of such Taxes.

4.4Within ninety (90) days after the end of each calendar quarter during the Term, Raptor shall provide written reports to BioMarin describing in reasonable detail any NeuroTrans Net Revenues received by Raptor and its Affiliates during the preceding calendar quarter. Raptor shall not be required to provide a report if there are no NeuroTrans Net Revenues to report. The amounts payable by Raptor under Section4.1 shall be paid concurrent with such reports. All amounts set forth in this Agreement, or in any Exhibit, are in U.S. Dollars. If any currency conversion shall be required in connection with the calculation of royalties hereunder, such conversion shall be made using the average of the buying and selling exchange rate for the foreign currency, in U.S. Dollars, quoted for current transactions reported the Chase Manhattan Bank for the last business day of the calendar quarter to which such payment pertains.

4.5For clarity, no payments shall be due to BioMarin under this Agreement for the sale of any inventory of NeuroTrans Products as part of the sale of all or substantially all of Raptor’s and/or its Affiliates business or assets related to this Agreement, whether by way of merger, acquisition of assets, operation of the law, or otherwise, provided that this Section4.5 shall not relieve any such asset purchaser, successor or assign under this Agreement, in any such transaction, from otherwise being obligated to make payments to BioMarin as a result of its subsequent sale or distribution of such NeuroTrans Products pursuant to this Agreement.

5.Representations And Warranties Of BioMarin. Except as specifically set forth in the Disclosure Schedule prepared by BioMarin and delivered to Raptor simultaneously with the execution hereof, BioMarin represents and warrants to Raptor as of the Effective Date as follows:

5.1Organization and Related Matters. BioMarin is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. BioMarin has all necessary corporate power and authority to own its properties and assets and to carry on the Business and the other businesses of BioMarin as now conducted.

5.2Authorization; Binding Agreement. BioMarin has full corporate power and authority to execute and deliver this Agreement and to consummate the Transactions. The execution, delivery and performance by BioMarin of this Agreement and the consummation by it of the Transactions have been duly authorized by BioMarin’s Board of Directors, and no other corporate action on the part of BioMarin is necessary to authorize the execution and delivery by BioMarin of this Agreement or the consummation by it of the Transactions. This Agreement has been duly executed and delivered by BioMarin and, assuming due and valid authorization, execution and delivery thereof by Raptor, this Agreement is the valid and binding obligation of BioMarin enforceable against BioMarin in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other similar laws of general application affecting enforcement of creditors’ rights generally and (ii) the availability of the remedy of specific performance or injunctive or other forms of equitable relief may be subject to equitable defenses and would be subject to the discretion of the court before which any proceeding therefor may be brought.

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5.3Conflicts. The execution, delivery and performance of this Agreement by BioMarin and the consummation by it of the Transactions will not conflict with or result in a breach or violation of any term or provision of, or (with or without notice or passage of time, or both) constitute a breach or default under, the charter or bylaws of BioMarin or agreement to which BioMarin or its Affiliate is a party, or to BioMarin’s knowledge, violate any Law or Order of any Governmental Entity or any arbitrator, having jurisdiction over BioMarin or the Business or result in any Encumbrance on any Transferred Technology. The execution, delivery and performance of this Agreement by BioMarin and the consummation by it of the Transactions will not require filing or registration with, or the issuance of any permit or Approval by, any other third party or Governmental Entity under the terms of any applicable Laws or contracts to which BioMarin is a party.

5.4Rights to Transferred Technology. BioMarin has all right, power and authority to enter into this Agreement and make the assignments to Raptor in accordance with the terms of this Agreement, and BioMarin and its Affiliates have not entered into any inconsistent or conflicting agreements, or granted any inconsistent or conflicting rights or exclusivity.

5.5Legal Proceedings. To the knowledge of BioMarin, there is no Order or Action pending, or threatened, against or affecting BioMarin or related to any aspect of the Business, the Transferred Technology, or the use or operation thereof, or BioMarin’s ability to perform this Agreement or any aspect of the Transactions.

5.6Restrictions on Business Activities. To BioMarin’s knowledge, there is no agreement (not to compete or otherwise), commitment, judgment, injunction, order or decree to which BioMarin or its Affiliate is a party relating to the Business or Products or otherwise binding upon BioMarin or its Affiliate or the Business or Products which has or may have the effect of prohibiting or impairing the transactions contemplated by this Agreement or any activities of the Business, or any licensing or sublicensing of the Transferred Technology. BioMarin and its Affiliates have not entered into any agreement under which the operations of the Business are restricted or which places any restrictions upon BioMarin or its Affiliates with respect to using, selling, licensing or otherwise distributing the Transferred Technology or Business.

5.7 Intellectual Property.

(a) BioMarin or its Affiliates are the sole owners of, and have good title to, all of the Patents, Copyrights and Trademarks listed in Sections1.2(g), 1.2(h), or 1.2(i) of the Disclosure Schedule. All such Intellectual Property has been assigned to BioMarin and its Affiliates, and all such assignments have been properly recorded at least ninety (90) days prior to the Effective Date. Each item of Transferred Technology is free and clear of all Encumbrances. Without limiting the foregoing, BioMarin exclusively owns, and has good title to, all Transferred Technology; no other Person has any rights, title or interests therein or thereto (other than the rights granted to Raptor under this Agreement). All Transferred

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Technology shall be fully sublicensable by Raptor upon the Effective Date.

(b) BioMarin and its Affiliates have not transferred ownership of, or granted any license of or right to use, or authorized the retention of any rights to use or other Encumbrance in, any Transferred Technology, or other Technology or Intellectual Property that is necessary for the Business, to any Person (other than the right, title and interest assigned to Raptor under this Agreement).

(c) To BioMarin’s knowledge, BioMarin and its Affiliates have not received any notice, written or otherwise, from any other Person pertaining to or challenging any right, title, or interest of BioMarin or its Affiliates with respect to any of the Transferred Technology. BioMarin has not made any claim of a violation or infringement by others of its rights to or in connection with the Transferred Technology which are still pending and is not aware of any infringement of the Transferred Technology.

(d) To BioMarin’s knowledge, BioMarin and its Affiliates have and enforce a policy requiring each employee and consultant of BioMarin and its Affiliates to execute a proprietary rights and confidentiality agreement, and all current and former employees and consultants of BioMarin and its Affiliates who have created or modified any of the Transferred Technology have executed such an agreement assigning all of such employees’ and consultants’ rights in and to the Transferred Technology to BioMarin. BioMarin is not aware of any unauthorized use or disclosure of any Trade Secrets that have been used in, or were generated in or for, the Business.

(e) To BioMarin’s knowledge, no Transferred Technology is subject to any proceeding or outstanding decree, order, judgment, agreement, or stipulation that restricts in any manner the use, transfer or licenses thereof, or may affect the validity, use, or enforceability of the Transferred Technology.

(f) Neither this Agreement, nor the Transactions, will result in Raptor or its Affiliates being obligated to pay any royalties or other amounts to any third party (other than the amounts expressly due hereunder to an assignee or successor to this Agreement).

5.8Accuracy of Information. To BioMarin’s knowledge, all information provided by BioMarin in this Agreement and the Disclosure Schedule is true and complete in all material respects and does not contain any untrue statement of a material fact or omit to state a material fact necessary to make any statement therein not misleading.

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5.9Powers of Attorney. BioMarin has not given any power of attorney (irrevocable or otherwise) to any Person for any purpose relating to the Business or the Transferred Technology, other than powers of attorney given to regulatory authorities in routine qualifications to do business.

6.Representations And Warranties Of Raptor. Raptor hereby represents and warrants to BioMarin as of the Effective Date as follows:

6.1Organization and Related Matters. Raptor is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. Raptor has all necessary power and authority to own its properties and assets and to carry on its business as now conducted. Raptor is presently qualified to do business as a foreign corporation in each jurisdiction where the failure to be so qualified could reasonably be expected to have a material adverse effect on Raptor’s financial condition or business as now conducted.

6.2Authorization; Binding Agreement. Raptor has full power and authority to execute and deliver this Agreement and to consummate the Transactions. The execution, delivery and performance of this Agreement by Raptor and the consummation by it of the Transactions has been duly authorized by Raptor, and no other action on the part of Raptor is necessary to authorize the execution and delivery by Raptor of this Agreement or the consummation by it of the Transactions. This Agreement has been duly executed and delivered by Raptor, and assuming due and valid authorization, execution and delivery thereby by BioMarin, this Agreement constitutes a valid and binding obligation of Raptor, enforceable against Raptor in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other similar laws of general application affecting enforcement of creditors’ rights generally and (ii) the availability of the remedy of specific performance or injunctive or other forms of equitable relief may be subject to equitable defenses and would be subject to the discretion of the court before which any proceeding therefor may be brought.

6.3No Conflicts. The execution, delivery and performance of this Agreement by Raptor and the consummation by it of the Transactions will not conflict with or result in a breach or violation of any term or provision of, or (with or without notice or passage of time, or both) constitute a breach or default under, the charter documents of Raptor, or any material contract of Raptor, or violate any Law or Order of any Governmental Entity or any arbitrator, having jurisdiction over Raptor.

7.LIMITED WARRANTY. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE TRANSFERRED TECHNOLOGY IS PROVIDED TO RAPTOR ON AN “AS IS” BASIS, AND BIOMARIN MAKES NO EXPRESS OR IMPLIED REPRESENTATIONS OR WARRANTIES TO RAPTOR REGARDING THE USABILITY, CONDITION, OR OPERATION OF THE TRANSFERRED TECHNOLOGY. SIMILARLY, EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, RAPTOR MAKES NO REPRESENTATIONS OR WARRANTIES. NEITHER PARTY WARRANTS THAT USE OF THE TRANSFERRED TECHNOLOGY WILL MEET ANY PARTICULAR CRITERIA OF PERFORMANCE OR QUALITY. EACH PARTY HEREBY EXPRESSLY DISCLAIMS ANY AND ALL IMPLIED WARRANTIES, INCLUDING, WITHOUT LIMITATION,

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WARRANTIES OF MERCHANTABILITY, TITLE, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT, COMPATIBILITY, SECURITY, OR ACCURACY. EXCEPT AS OTHERWISE SET FORTH IN THIS AGREEMENT, USE OF THE TRANSFERRED TECHNOLOGY IS ENTIRELY AT RAPTOR’S OWN RISK.

8. Covenants.

8.1Use of Trademarks; Quality Control. For clarity, all goodwill arising after the Effective Date in connection with the use of the Business Trademarks shall inure solely to the benefit of Raptor. Additionally, Raptor shall have the exclusive right to register, defend and enforce the Business Trademarks and enter settlements for infringement thereof, including for past infringements.

8.2Right to Audit. Raptor shall for a period of three (3) years after the calendar quarter to which the records pertain, maintain accurate and timely records relating to (i) all milestone events described in Section3 and (ii) the royalties payable to BioMarin under this Agreement. All such records maintained by Raptor shall be made available for inspection throughout such three (3) year period by BioMarin (or its designated auditing or accounting professional or employee reasonably acceptable to Raptor) for such purposes. Such inspections may be made no more than once each calendar year during the normal business hours of Raptor upon thirty (30) days advance notice, provided that if a non-compliance is identified by an audit, then an additional audit may be conducted during such calendar year. The auditor selected by BioMarin will be obliged to execute a reasonable confidentiality agreement prior to commencing any such inspection. In addition, Raptor may, at its expense, have a representative or agent familiar with its record keeping systems be present at the audit to assist BioMarin’s auditor in using such internal record management system. BioMarin shall bear the costs and expenses of inspections conducted under this Section8.2.

8.3Expenses and Taxes. All costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the Party incurring such expense.

8.4Technology Transfer; Access. To the extent that any Transferred Technology has not been delivered to Raptor prior to the Effective Date, BioMarin agrees to provide Raptor and its representatives with reasonable access to the Transferred Technology sufficient to enable Raptor to obtain the Transferred Technology promptly following the Effective Date.

8.5Further Assurances. BioMarin will execute and deliver all such further and additional instruments, notices, releases, undertakings, consents, certifications and agreements and other documents, and will do all such other reasonable acts and things, as may be reasonably requested by Raptor to assure to and vest in Raptor all the right, title and interest assigned to, or to be assigned to, Raptor under this Agreement. Similarly, in the event of any termination of this Agreement, Raptor will execute and deliver all such instruments, notices, releases, undertakings, consents, certifications, and agreements and other documents, and will do all such other reasonable acts and things, as may be reasonably requested by BioMarin to

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acknowledge the assignment of the Transferred Technology to BioMarin to the extent set forth in Section 11.3(b).

8.6No Corporate Manipulation. Raptor agrees that it and its Affiliates will not establish a corporate structure (i.e. ownership of capital stock) or corporate relationship (i.e. ownership of capital stock) between Raptor, its Affiliates or any third party in bad faith for the purpose of enabling Raptor, its Affiliates or any third party to commercialize the Transferred Technology without being obligated to make, or for the purpose of reducing in bad faith, the payments to BioMarin required by this Agreement.

9.	Prosecution Enforcement.
		9.1	Prosecution.

(a) Raptor shall have the first right, but not the obligation, to prepare, file, prosecute, and maintain Patents in the Transferred Technology and Raptor shall have the exclusive right to control and make decisions with respect to such activities, subject to BioMarin’s right under Section9.1(b) to assume such activities should Raptor desire to discontinue them. BioMarin agrees to use commercially reasonable efforts to cooperate fully with Raptor in this regard.

(b) If Raptor desires to discontinue prosecution of any Patent in the Transferred Technology under Section9.1, then it shall notify BioMarin at least sixty (60) days (or such shorter period as is reasonably practicable for deadlines not extendable beyond ninety (90) days) prior to the date the next action or filing is due to be taken with respect to the applicable Patent. If requested by BioMarin in writing within thirty (30) days after such notice, the Patent shall be assigned to BioMarin, and the prosecution and maintenance of the applicable Patent shall be transitioned to BioMarin, promptly; provided that Raptor hereby retains a non-exclusive, worldwide, royalty free (except for the payments in this Agreement, fully paid (except for the payments in this Agreement) right and license, with the right to grant and authorize sublicenses, to make, have made, use, sell, offer to sell, import, and otherwise exploit and commercialize all products, components, services, and other subject matter under the Patent assigned back to BioMarin. Notwithstanding the foregoing, BioMarin shall have no right to assume the prosecution or maintenance, and Raptor shall not be required to assign to BioMarin, any Patent claims that are not entitled to an effective filing date of one of the Patents in the Transferred Technology prior to the Effective Date (even if the claim is for an Improvement).

(c) The prosecuting Party shall keep the other reasonably informed as to the status of patent matters pertaining to the Transferred

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Technology, including providing to the other party copies of any significant documents that such Party receives from or sends to patent offices, such as notices of interferences, re-examinations, oppositions or requests for patent term extensions, all as reasonably requested by the other Party.

(d) The non-prosecuting Party shall, without demanding any further consideration therefor, cooperate with the prosecuting Party and provide any assistance requested by the prosecuting Party that is reasonably necessary, proper or advisable to carry out or make effective the foregoing and the assignments in this Agreement, including, without limitation, executing and filing applications, registrations, powers of attorney and other appropriate documents (including confirmatory assignments for Patents owned by Raptor), providing appropriate consents and/or authorizations, and joining in any administrative or judicial action relating to the prosecution or maintenance of any applications, registrations or other rights within the Transferred Technology.

9.2Enforcement. For clarity, the assignment to Raptor under this Agreement includes the exclusive right, but not the obligation, for Raptor to enforce and defend the Patents in the Transferred Technology. BioMarin shall cooperate as reasonably requested by Raptor in such enforcement and defense, including by taking such actions as necessary for satisfying the legal requirements to file or maintain the action. Raptor shall retain all recoveries for infringement of the Patents in the Transferred Technology, subject (after reduction for costs and expenses of the litigation, attorneys and expert fees, and the like, in each case that are not recovered by Raptor in the action) to any payments to BioMarin required in this Agreement. In particular, after Raptor deducts such costs and expenses of the litigation, attorneys and expert fees, and the like, that are not recovered in the action, if Raptor recovered a royalty, license fee, or other non-labeled damages for such infringement, such royalty shall be considered Licensing Revenue on which a payment is due to BioMarin, and if Raptor recovered its lost profits, such amounts shall be considered Net Sales of Raptor on which a payment is due to BioMarin. Raptor’s rights of enforcement under this Section 9.2 shall not apply with respect to any Patents in the Transferred Technology to the extent they have been assigned back to BioMarin.

10.	Indemnification.
	10.1	Indemnification.

(a) Raptor agrees to indemnify and hold BioMarin and its respective directors, officers, employees, agents and affiliates, (the “BioMarin Indemnified Parties”), harmless against all claims, losses, liabilities, damages, deficiencies, costs and expenses, including reasonable attorneys’ fees and expenses of investigation and defense and diminution in value (hereinafter individually a “Loss” and collectively “Losses”) incurred or sustained by any of BioMarin Indemnified Parties, directly or indirectly, as a result of

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any breach or inaccuracy of a representation or warranty of Raptor contained in this Agreement.

(b) BioMarin agrees to indemnify and hold Raptor and its respective directors, officers, employees, agents and affiliates, (the “Raptor Indemnified Parties”), harmless against all Losses incurred or sustained by any of Raptor Indemnified Parties, directly or indirectly, as a result of (i) any breach or inaccuracy of a representation or warranty of BioMarin contained in this Agreement.

10.2Indemnification Deductible. Notwithstanding any provision of this Agreement to the contrary, neither Raptor Indemnified Parties nor BioMarin Indemnified Parties may recover any Losses from an indemnifying Party under Section10.1 unless and until one or more such Losses exceed $50,000 in the aggregate (the “Deductible Amount”) and provided further that such Raptor Indemnified Party or BioMarin Indemnified Party, as the case may be, shall not be entitled to indemnification for the Deductible Amount.

10.3Procedure. A Party that intends to claim indemnification under this Article10 (the “Indemnitee”) shall promptly notify the other Party (the “Indemnitor”) in writing of any Losses in respect of which the Indemnitee intends to claim such indemnification, and the Indemnitor shall have sole control of the defense and settlement thereof. The indemnity arrangement in this Article10 shall not apply to amounts paid in settlement of any action with respect to a Loss, if such settlement is effected without the consent of the Indemnitor, which consent shall not be withheld unreasonably. The failure to deliver written notice to the Indemnitor within a reasonable time after the commencement of any claim or action with respect to a Loss, if prejudicial to its ability to defend such action, shall relieve such Indemnitor of any liability to the Indemnitee under this Article10 but the omission so to deliver written notice to the Indemnitor shall not relieve the Indemnitor of any liability that it may have to any Indemnitee otherwise than under this Article10. The Indemnitee under this Article10 shall cooperate fully with the Indemnitor and its legal representatives in the investigation of any action with respect to a Claim covered by this indemnification, at the Indemnitor’s expense. Notwithstanding the foregoing, the Indemnitor shall not be responsible for any costs or expenses incurred without the prior written consent of the Indemnitor.

10.4       Limitation of Liability. The provisions of this Article10 shall be the sole and exclusive remedy of (i) Raptor or any Raptor Indemnified Party (and corresponding liability of Raptor) and (ii) BioMarin or any BioMarin Indemnified Party (and corresponding liability to Raptor) for any damage, claim, cause of action or right of any nature arising out of or relating to any breach of its representations and warranties in Sections5 and 6 of this Agreement. The maximum amount BioMarin Indemnified Parties may recover from Raptor pursuant to the indemnity set forth in Section10.1 for Losses shall be limited to, $1,000,000. The maximum amount Raptor Indemnified Parties may recover from BioMarin pursuant to the indemnity set forth in Section10.1 for Losses shall be limited to $1,000,000. Notwithstanding the foregoing, nothing in this Agreement will be deemed to limit any right or remedy for fraud or for willful breaches of any representation, warranty or covenant set forth in this Agreement or any certificate or instrument delivered pursuant to this Agreement.

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11. Termination.

11.1Term. This Agreement shall become effective as of the Effective Date and shall continue in full force and effect until the later of (i) the expiration of the last claim under the Patents in the Transferred Technology or (ii) twenty (20) years after the Effective Date, unless terminated in accordance with the terms of this Article11 below (such period, the “Term”).

11.2 Rights of Termination.

(a) By Raptor. Raptor may terminate this Agreement at any time by giving at least ninety (90) days prior written notice.

(b) By BioMarin.

i. The right, title and interest in and to the Transferred Technology that has been assigned to Raptor under this Agreement shall be assigned by Raptor back to BioMarin if (i) on or before the six month anniversary of the Effective Date, Raptor has not received total aggregate debt or equity financing of at least two million five hundred thousand dollars ($2,500,000) or (ii) Raptor (a) files in any court pursuant to any statute, a petition in bankruptcy or for reorganization in bankruptcy or for an equivalent arrangement or equivalent appointment of a receiver or trustee of all or substantially all of its business or assets; (b) is served with an involuntary petition against it, filed in any bankruptcy proceeding, and in the case of each of (a) and (b), such petition has not been dismissed within ninety (90) days after the filing thereof.

ii. BioMarin shall have the right to terminate this Agreement in the event that Raptor materially breaches its obligations to make payments to BioMarin and such breach is not remedied within a period of ninety (90) days after Raptor receives notice of the breach from BioMarin or ninety (90) days after resolution against Raptor of a dispute regarding payment as contemplated in Sectioniii below.

iii. Notwithstanding anything to the contrary, in the event of any dispute in connection with any termination or notice of termination under this Section 11.2(b) or any obligation to assign Transferred Technology back to BioMarin, the Agreement shall not be considered terminated, an Raptor shall not be required to assign the Transferred Technology back to BioMarin, unless the dispute is resolved against Raptor, and in the case of a termination under Section 11.2(b)(ii) Raptor does not make the payment within thirty (30) days after resolution of the dispute against Raptor.

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11.3 Effect of Termination.

(a) Unless this Agreement is previously terminated pursuant to Section11.2, upon expiration of the Term, all payment obligations under Articles 3 and 4 hereunder shall terminate and have no further force or effect; provided that all obligations accruing prior to the expiration of the Term have been satisfied.

(b) Upon any termination of this Agreement under Section 11.2, Raptor shall assign back to BioMarin all of Raptor’s right, title and interest in and to the Transferred Technology and any assignment back to BioMarin shall not occur until resolution of any dispute as contemplated in Section 11.2(b)(iii) above.

(c) Upon assignment of the Transferred Technology back to BioMarin, Raptor shall have no further right to use or exploit the Patents, Copyrights, or Trademarks in the Transferred Technology to the extent assigned to BioMarin, but Raptor shall retain a worldwide, non-exclusive, fully paid, royalty free, perpetual, non-terminable right and license, with the right to grant and authorize sublicenses, under all other Intellectual Property in the Transferred Technology to make, have made, use, sell, offer to sell, import, disclose, reproduce, produce derivatives of, distribute, transmit, publicly perform and display, and otherwise exploit any and all products, components, services and other subject matter, provided that, with respect to amounts that have become due and payable to BioMarin hereunder prior to such termination, Raptor pays such amounts to BioMarin. Notwithstanding the foregoing, in the event that Raptor obtains BioMarin’s prior written consent, such consent not to be unreasonably withheld, to a license of the Transferred Technology, as part of such consent, BioMarin will agree that, in the event of an assignment of the Transferred Technology back to BioMarin pursuant this Section 11, conditioned on the Licensee paying BioMarin the amounts that would otherwise be due to it under this Agreement, following such assignment and continuing for as long as the Licensee continues to make such payments, BioMarin will automatically, without further action or the requirement for further payments, grant a license to the Transferred Technology to the Licensee with the same scope and rights as the license between Raptor and the Licensee.

(d) Accrued Rights. Expiration or termination of this Agreement shall not affect the Parties’ liability that has accrued as of the expiration or termination date, including with respect to royalties or Milestone Fees hereunder that have accrued prior to the effectiveness of the expiration or termination. Any right to terminate this Agreement shall be in addition to and not in lieu of

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all other rights or remedies that the Party giving notice of termination may have at law, in equity or otherwise.

(e) Survival. In the event of any termination or expiration of this Agreement, Articles and Sections 2.4, 2.5, 7, 8.1, 8.2, 8.3, 10, 11.3, and 12 shall survive. Additionally, in the event of any expiration of this Agreement, Articles and Sections 2.1, 2.2, 2.3, 7, 8.4, 8.5, and 9 shall also survive. Except as set forth in this Section11.3 above, all terms and conditions of this Agreement shall terminate upon any expiration or termination of this Agreement.

12. General.

12.1Amendments; Waivers. This Agreement and any Schedule or Exhibit may be amended only by an agreement in writing signed by both Parties. No waiver of any provision nor consent to any exception to the terms of this Agreement or any agreement contemplated hereby shall be effective unless in writing and signed by the Party to be bound and then only to the specific purpose, extent and instance so provided.

12.2Entire Agreement. This Agreement, and that certain “Security Agreement” entered into between the Parties on even date herewith, constitutes and contains the entire agreement and final understanding between the Parties concerning the Transactions and all other subject matters addressed herein or pertaining thereto. This Agreement, and such “Security Agreement”,” are intended by the Parties as a final expression of their agreement with respect to such terms as are included herein and therein and, further, are intended by the Parties as a complete and exclusive statement of the terms of their agreement. This Agreement, and such “Security Agreement”,” supersede and replace all prior negotiations and all prior or contemporaneous representations, promises or agreements, proposed or otherwise, whether written or oral, concerning all subject matters addressed herein or pertaining hereto. Any representation, promise or agreement not specifically included in this Agreement, or such “Security Agreement” shall not be binding upon or enforceable against any Party to this Agreement. This is a fully integrated agreement.

12.3 Dispute Resolution and Governing Law.

(a) Escalation. Raptor and BioMarin will attempt in good faith to resolve expeditiously any dispute, claim or controversy arising out of or relating to this Agreement (the “Dispute”) promptly by negotiations between executives who have authority to settle the controversy. Either Party may give the other Party written notice (the “Escalation Notice”) of any Dispute that has not been resolved. Within 15 days after delivery of the Escalation Notice, the receiving Party shall submit to the other a written response. The Escalation Notice and the response thereto shall include (a) a statement of each Party’s position and a summary of arguments supporting that position, and (b) the name and title of the executive

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who will represent that Party and of any other person who will accompany the executive. Within 30 days after delivery of the Escalation Notice, the executives of both Parties shall meet at a mutually acceptable time and place, and thereafter as often as they reasonably deem necessary, to attempt to resolve the Dispute. All negotiations pursuant to this clause including the Escalation Notice and the information contained therein are confidential and shall be treated as compromise and settlement negotiations for purposes of applicable rules of evidence. The Parties shall attempt to resolve any Dispute pursuant to the procedure set forth in this Section12.3(a) for a period up to 60 days from the date of delivery of the Escalation Notice before resorting to other available remedies.

(b) Arbitration. Any Dispute which has not been resolved by the specified non-binding procedure set forth in Section12.3(a) within 60 days of the date of delivery of the Escalation Notice shall be settled by binding arbitration in accordance with the CPR Non-Administered Arbitration Rules in effect on the date of this Agreement, by three independent and impartial arbitrators, none of whom shall be appointed by either Party, provided that claims for less than $200,000 shall be settled by one independent and impartial arbitrator. The arbitration shall be governed by the United States Arbitration Act, 9 U.S.C. §§ 1-16, as the same may be amended from time to time, and judgment upon the award rendered by the arbitrators may be entered by any court having jurisdiction thereof. The place of the arbitration shall be San Francisco, California. The arbitrators shall award damages equal to actual and compensatory damages, and shall award attorneys’ fees to the prevailing Party. The arbitrators are not empowered to award consequential, special, incidental, exemplary or punitive damages.

(c) Injunctive Relief. Nothing contained in this Section12.3 shall prevent either Party from resorting to judicial process if injunctive or other equitable relief from a court is necessary to prevent serious and irreparable injury to one Party or to others. The use of arbitration procedures will not be construed under the doctrine of laches, waiver or estoppel to affect adversely either Party’s right to assert any claim or defense.

(d) Governing Law. This Agreement shall be governed by, interpreted under, and construed in accordance with the internal laws of the State of California applicable to contracts made and performed in such State and without regard to conflicts of law doctrines, except to the extent that certain matters are preempted by Federal law.

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(e) Jurisdiction and Consent to Service. Parties seeking injunctive relief pursuant to Section12.3(c) or enforcement of Section12.3(b) shall do so in accordance with the laws of the State of California, and without limiting the jurisdiction or venue of any other court, the Parties (a) agree that any suit, action or proceeding arising out of or relating to this Agreement shall be brought in the state or federal courts of California; (b) consent to the exclusive jurisdiction of each such court in any suit, action or proceeding relating to or arising out of this Agreement; (c) waive any objection which any of them may have to the laying of venue in any such suit, action or proceeding in any such court; and (d) agree that service of any court paper in any such suit, action or proceeding may be made in any manner as may be provided under the applicable laws or court rules governing service of process in such court.

(f) Attorneys’ Fees. In any dispute arising between the Parties, the prevailing Party shall be paid by the non-prevailing Party all reasonable attorneys’ fees and costs incurred by the prevailing Party in connection with such dispute.

12.4Headings. The descriptive headings of the Articles, Sections and Subsections of this Agreement are for convenience only and do not constitute a part of this Agreement.

12.5Counterparts. This Agreement and any amendment hereto or any other agreement (or document) delivered pursuant hereto may be executed in one or more counterparts (and may be exchanged via fax) and by different Parties in separate counterparts. All of such counterparts shall constitute one and the same agreement (or other document) and shall become effective (unless otherwise therein provided) when one or more counterparts have been signed by each Party and delivered to the other Parties.

12.6Publicity and Reports. Neither Party shall issue any press release, publicity statement or other public notice relating to this Agreement, or the Transactions, without the prior written approval of the other Party (such approval not to be unreasonably withheld or delayed), except to the extent that a particular action may be required by applicable law, in which event the Party taking the particular action will give reasonable notice to the other Parties and will consult with such other Parties regarding such action.

12.7Parties in Interest. This Agreement will be binding upon and inure to the benefit of each Party, and nothing in this Agreement, express or implied, shall confer upon any other person any rights or remedies of any nature whatsoever under or by reason of this Agreement.

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12.8Relationship. The relationship of Raptor and BioMarin established by this Agreement is of independent contractors and not agents, and nothing in this Agreement shall be construed:

(a) To give either Party the power to direct or control the daily activities of the other Party beyond the obligations imposed on Raptor and BioMarin, respectively, by this Agreement;

(b) To constitute the Parties as partners, joint ventures, fiduciaries, co owners or otherwise as participants in joint undertaking; or

(c) To allow either Party to create or assume any obligation on behalf of the other Party for any purpose whatsoever.

12.9Notices. All notices, demands, requests, consents, approvals or other communications required or permitted to be given hereunder or which are given with respect to this Agreement shall be in writing and shall be delivered (charges prepaid, receipt confirmed or return receipt requested (if available)) by hand, by nationally recognized courier service, by certified mail or facsimile, addressed as set forth below or to such other address as such Party shall have specified most recently by written notice. Notice shall be deemed given and effective (i) if delivered by hand or by nationally recognized courier service, when delivered at the address specified in this Section12.9 (or in accordance with the latest unrevoked written direction from such Party), (ii) if by certified mail, upon mailing or (iii) if given by facsimile when such facsimile is transmitted to the fax number specified in this Section12.9 (or in accordance with the latest unrevoked written direction from such Party), provided the appropriate confirmation is received.

To BioMarin: BioMarin Pharmaceutical Inc.

105 Digital Drive

Novato, CA 94949

Attention: G. Eric Davis

Fax: (415) 382-7889

To Raptor: Raptor Pharmaceutical, Inc.

PO Box 226

Sonoma, CA 95476

Attention: Christopher M. Starr, Ph.D.

Fax: 707-939-1143

with a copy (which shall not constitute notice) to:

Wilson Sonsini Goodrich & Rosati

650 Page Mill Road

Palo Alto, CA 94304

Attention: Kenneth A. Clark

Fax: 650-493-6811

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12.10Expenses. Each Party shall each pay its own expenses incident to the negotiation, preparation and performance of this Agreement and the transactions contemplated hereby, including, but not limited to, the fees, expenses and disbursements of its respective investment bankers, accountants and counsel.

12.11No Assignment. This Agreement may not be assigned by either of the Parties hereto without the prior written consent of the other Party hereto, provided, however, either Party may assign this Agreement and all rights, duties or obligations hereunder to its affiliates or in connection with a sale of more than 50% of the outstanding capital stock or equity interests of such Party, in one or more transactions, a merger, by operation of the law, or the sale or other transfer of all or substantially all of the assets to which this Agreement relates. Any attempted assignment or delegation of rights, duties or obligations hereunder in contravention hereof shall be void and of no effect. For clarity, nothing in this Section12.11 shall be construed to limit the rights or licenses of Raptor, including the rights to grant and authorize licenses, in this Agreement, and Raptor shall not be required to obtain any consent to grant or authorize any license. Nothing in this Section shall limit BioMarin’s rights under Section 8.6.

12.12Remedies; Waiver. Except as otherwise set forth in this Agreement, all rights and remedies existing under this Agreement are cumulative to, and not exclusive of, any rights or remedies otherwise available under applicable law. No failure on the part of any party to exercise or delay in exercising any right hereunder shall be deemed a waiver thereof, nor shall any single or partial exercise preclude any further or other exercise of such or any other right.

12.13Knowledge Convention. Whenever any statement herein or in any schedule, exhibit, certificate or other document delivered to any Party pursuant to this Agreement is made by any Party or its representative “to its knowledge,” shall mean the actual knowledge of the officers of each Party directly associated with this Agreement and the Transactions without any investigation; provided that, as to BioMarin, knowledge does not include the knowledge of Dr. Christopher Starr.

12.14 Confidentiality.

(a) All information disclosed by any Party (or its representatives) to the other Party (or its representatives) in connection with this Agreement shall be kept confidential by such other Party and its representatives and shall not be used by any such persons other than as contemplated by this Agreement, except to the extent that such information (i) was known by the recipient when received, (ii) is or hereafter becomes lawfully obtainable from other sources, (iii) is necessary or appropriate to disclose to a governmental entity having jurisdiction over the Parties, (iv) as may otherwise be required by law, or (v) to the extent such duty as to confidentiality is waived in writing by the other Party. Notwithstanding anything to the contrary, the Trade Secrets and confidential information that is included in the Transferred Technology shall be considered the Confidential Information of Raptor and not BioMarin, except to the extent such Trade Secrets and confidential information have

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been assigned back to BioMarin. Notwithstanding anything to the contrary, the Transferred Know-How includes all ideas, concepts and information that are necessary to the Business and are retained in the memories of individuals that were previously employed by BioMarin in connection with the Business and that commence employment or other work with Raptor within six (6) months after the Effective Date; provided that in the event of any assignment back to BioMarin, such ideas, concepts and information shall be licensed to Raptor to the extent set forth in Section 11.3 above. BioMarin agrees that it shall not make any assertion or claim against any such individuals as a result of the use, disclosure, or other exploitation of such ideas, concepts and information, whether based upon any of their agreements with BioMarin or otherwise. The Parties agree that such individuals are third party beneficiaries, with the power to enforce, this Section.

(b) Confidentiality of Agreement. Notwithstanding anything to the contrary, each Party may disclose the terms and conditions of this Agreement without consent (i) to advisors, investors and others on a need-to-know basis under conditions which reasonably ensure the confidentiality thereof, (ii) as required by any court or other governmental body; (iii) as otherwise required by law; (iv) in confidence to legal counsel of such parties; (v) in confidence, in connection with the enforcement of this Agreement or rights under this Agreement; (vi) in confidence, in connection with a merger, acquisition of stock or assets, proposed merger or acquisition, or the like; or (vii) as advisable or required in connection with any government or regulatory filings, including without limitation filings with the SEC.

12.15Representation By Counsel; Interpretation. BioMarin and Raptor each acknowledge that each Party to this Agreement has been represented by counsel in connection with this Agreement and the transactions contemplated by this Agreement. Accordingly, any rule of Law, or any legal decision that would require interpretation of any claimed ambiguities in this Agreement against the Party that drafted it has no application and is expressly waived. The provisions of this Agreement shall be interpreted in a reasonable manner to effect the intent of Raptor and BioMarin.

12.16Severability. If any provision of this Agreement is determined to be invalid, illegal or unenforceable by any court or governmental entity, the remaining provisions of this Agreement shall remain in full force and effect. In the event of any such determination, the Parties agree to negotiate in good faith to modify this Agreement to fulfill as closely as possible the original intents and purposes hereof. To the extent permitted by law, the Parties hereby to the same extent waive any provision of law that renders any provision hereof prohibited or unenforceable in any respect.

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[Signature Page Follows]

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IN WITNESS WHEREOF, each of the Parties hereto has caused this Agreement to be executed by a duly authorized officer as of the day and year first above written.

RAPTOR PHARMACEUTICAL INC.

By:
		Name: Christopher Starr
	Title: CEO

BIOMARIN PHARMACEUTICAL INC.

By:
	Name: G. Eric Davis
	Title: Vice President, Corporate Counsel

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EX-10

Exhibit 10.3

ASSIGNMENT AND ASSUMPTION AGREEMENT

     This ASSIGNMENT AND ASSUMPTION AGREEMENT (this “Agreement”) is entered into as of January 27, 2006 (the “Effective Date”), by and between Raptor Pharmaceutical Inc., a Delaware corporation (“Raptor”), and BioMarin Pharmaceutical Inc., a Delaware corporation (“BioMarin”). BioMarin and Raptor are each referred to herein individually as a “Party” and collectively as the “Parties.”

RECITALS

     WHEREAS, BioMarin assigned certain technology and intellectual property to Raptor under that certain “Asset Purchase Agreement” entered into on even date herewith (the “Asset Purchase Agreement”); and

     WHEREAS, in connection with the Asset Purchase Agreement, Raptor desires to have BioMarin transfer to Raptor, and BioMarin is willing to assign to Raptor, the agreements attached hereto as Exhibits A-F (the “Assigned Contracts”) on the terms and conditions set forth in this Agreement.

     NOW, THEREFORE, in consideration of the mutual promises contained herein and intending to be legally bound, the Parties agree as follows:

     1. ASSIGNMENT. BioMarin does hereby unconditionally and irrevocably sell, assign, transfer and convey to Raptor, its successors and assigns, all of BioMarin’s legal, beneficial and other right, title and interest in and to the Assigned Contracts free and clear of any Encumbrances. Capitalized terms not otherwise defined herein shall have the meaning assigned to such terms in the Asset Purchase Agreement.

     2. ASSUMPTION. Raptor shall assume all executory obligations under the Assigned Contracts but only to the extent accrued after the Effective Date and subject to the following. Raptor does not assume any indemnification obligations or responsibilities based upon any activities occurring prior to the Effective Date and does not assume any obligation or responsibility for any breach occurring prior to the Effective Date. Raptor shall not assume, shall not take subject to and shall not be liable for, any liabilities or obligations of any kind or nature, whether absolute, contingent, accrued, known or unknown, of BioMarin or any Affiliate of BioMarin regardless of when incurred, other than obligations under the Assigned Contracts that accrued after, and are not based upon activities occurring prior to, the Effective Date. Raptor does not assume any liability for failure of BioMarin to obtain a required consent or approval for the assignments. BioMarin shall remain liable for all payments that become due or payable under the Assigned Contracts prior to the Effective Date. Raptor’s assumption of liabilities as stated above shall control over any statement to the contrary in the Asset Purchase Agreement. Raptor agrees and acknowledges that each of the Assigned Contracts have expired and that the rights transferred hereby are only the residual rights that survive termination.

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     3. AGREEMENT. The terms of Sections 7, 8.5 (except it shall apply with respect to the Assigned Contracts in the same manner as it applies with respect to the Transferred Technology), and 12 (excluding 12.11, 12.13, and 12.14) of the Asset Purchase Agreement are incorporated herein by reference and shall apply with respect to this Agreement in the same manner as they apply with respect to the Asset Purchase Agreement. Raptor acknowledges and agrees that BioMarin makes no representations about the enforceability, assignability or worth of the Assigned Contracts other than to note that some or all of the Assigned Contracts (i) may have expired or terminated and (ii) may not be assignable without the written consent of the counterparties thereto, which consent BioMarin has not obtained.

     4. FURTHER ASSURANCES. The parties hereto shall execute and deliver all such other and further documents and perform all further acts that may be reasonably necessary to effectuate the terms and provisions of this Agreement.

     5. COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

     IN WITNESS WHEREOF, the parties have caused this Assignment and Assumption Agreement to be executed as of January 27, 2006.

BIOMARIN PHARMACEUTICAL INC.

By:

Name: G. Eric Davis
Title: Vice President, Corporate Counsel

RAPTOR PHARMACEUTICAL INC.

By:

Name: Christopher Starr
Title: CEO

EX-10

Exhibit 10.4

SECURITY AGREEMENT

     This SECURITY AGREEMENT (this “Agreement”) is entered into as of January 27, 2006 (the “Effective Date”), by and between Raptor Pharmaceutical Inc., a Delaware corporation (“Raptor”), and BioMarin Pharmaceutical Inc., a Delaware corporation (“BioMarin”). BioMarin and Raptor are each referred to herein individually as a “Party” and collectively as the “Parties.”

RECITALS

     WHEREAS, BioMarin assigned certain technology and intellectual property to Raptor under that certain “Asset Purchase Agreement” entered into on even date herewith (the “Asset Purchase Agreement”); and

     WHEREAS, BioMarin desires to retain, and Raptor is willing to grant to BioMarin, a security interest in and to the Transferred Technology (as defined in the Asset Purchase Agreement), and certain Improvements (as defined in the Asset Purchase Agreement), on the terms and conditions set forth in this Agreement.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual promises contained herein and intending to be legally bound, the Parties agree as follows:

1.	Security Interest.
(a)	Raptor hereby assigns, transfers and grants to BioMarin, and there is hereby created in favor of BioMarin, a security interest under the California (Uniform) Commercial Code in and to the Collateral described on Exhibit A hereto.
(b)	Concurrently with the execution of this Agreement, Raptor shall deliver to BioMarin a UCC-1 Financing Statement which Raptor hereby authorizes to be filed with respect to the Collateral.
(c)	The security interest granted to BioMarin (the “Security Interest”) hereunder shall secure:
	(1)	the payments to BioMarin that have become due and payable to BioMarin under Articles 3 and 4 of the Asset Purchase Agreement;
	(2)	the obligations to assign the Transferred Technology back to BioMarin under Section 11.3 of the Asset Purchase Agreement; and
	(3)	the indemnity obligations in Section 10.1 of the Asset Purchase Agreement; and
	(4)	all of Raptor’s other obligations under the Asset Purchase Agreement.

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2.   No Other Payments. Other than Section 8 hereof, nothing in this Agreement shall be construed to require, and the Security Interest does not secure, additional payments to BioMarin that are not required by the terms and conditions of the Asset Purchase Agreement.

3.   Restrictions on Transfer of Collateral.

Subject to any such activities being expressly subordinate to the Security Interest, Raptor shall retain all right and license to (i) grant, authorize, and otherwise transfer rights and licenses with respect to the Collateral; (ii) use, sell, transfer, and otherwise dispose of and exploit the Collateral; and (iii) sell and otherwise transfer its business or assets and such activities may be taken without any requirements to obtain the consent, approval, acceptance, or other authorization of BioMarin, or to notify BioMarin, in order to engage in any such activities with respect to the Collateral, and BioMarin hereby waives any provisions of applicable law that would require any such consent, approval, acceptance, authorization, or notice. Notwithstanding the foregoing, in the event that Raptor obtains BioMarin’s prior written consent, such consent not to be unreasonably withheld, to a license of the Collateral, as part of such consent, BioMarin will agree that, in the event BioMarin enforces the Security Interest, conditioned on the licensee paying BioMarin the amounts that would otherwise be due to it under the Asset Purchase Agreement, following enforcement of the Security Interest and continuing for as long as the licensee continues to make such payments, BioMarin will automatically, without further action or the requirement for further payments, grant a license to the Collateral to the licensee with the same scope and rights as the license between Raptor and the licensee.

Nothing in this Agreement shall be construed to require Raptor to file, prosecute, maintain, or enforce any of the Collateral, and Raptor shall have the right to abandon, disclaim and terminate the Collateral, except subject to BioMarin’s rights to prosecute and maintain the Patents in the Transferred Technology under Section 9.1(b) of the Asset Purchase Agreement if Raptor elects to not do so.

RAPTOR SHALL HAVE NO LIABILITY TO BIOMARIN, INCLUDING UNDER THIS AGREEMENT, AS A RESULT OF ANY INVALIDATION OR UNENFORCEABILITY OF THE COLLATERAL OR ANY NARROWING, ABANDONMENT, DISCLAIMER, TERMINATION, OR OTHER LOSS OF THE COLLATERAL. NOTWITHSTANDING THE FOREGOING, NOTHING IN THIS SECTION 3 SHALL BE CONSTRUED TO LIMIT EITHER PARTY’S RIGHTS OR REMEDIES, OR EITHER PARTY’S OBLIGATIONS, UNDER THE ASSET PURCHASE AGREEMENT.

4.	Intentionally Omitted
5.	Representations And Warranties. EXCEPT AS EXPRESSLY SET FORTH IN THE ASSET PURCHASE AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATIONS OR WARRANTIES IN CONNECTION WITH THIS AGREEMENT, WHETHER EXPRESS OR IMPLIED, STATUTORY, OR OTHERWISE, AND EACH PARTY HEREBY EXPRESSLY DISCLAIMS ANY AND ALL IMPLIED WARRANTIES, INCLUDING, WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY, TITLE,

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           FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT, COMPATIBILITY, SECURITY, OR ACCURACY.

6. Modification of Asset Purchase Agreement by BioMarin. Without affecting the liability of Raptor or of any other person who is or shall become bound by the terms of this Agreement or who is or shall become liable for the performance of any obligation secured hereby, BioMarin may, in such manner, upon such terms and at such times as BioMarin deems best and without notice or demand, (i) release any party now or hereafter liable for the performance of any such obligation, (ii) extend the time for such performance, (iii) accept additional security therefore, (iv) consent to substitute or release any property securing such performance, or (v) enter into any agreement with Raptor modifying in any way whatsoever the terms and provisions of the Asset Purchase Agreement. No exercise or non-exercise by BioMarin of any of its rights under this Agreement, no dealing by BioMarin with any person, firm or corporation and no change, impairment, loss or suspension of any right or remedy of BioMarin shall in any way affect any of the obligations of Raptor hereunder or any security furnished by Raptor, or give Raptor any recourse against BioMarin.

7. Further Acts of Raptor. Raptor shall, at the reasonable request of BioMarin, execute (either alone or with BioMarin, as BioMarin may require) and deliver to BioMarin any financing statements, financing statement changes and any and all additional instruments and documents, and Raptor shall perform all actions, which from time to time may be necessary to carry into effect the provisions of this Agreement or to establish or maintain a perfected security interest in the Collateral, including, without limitation, any filing or notice with the United States Patent and Trademark Office or comparable office of any jurisdiction. BioMarin shall be responsible for the costs of filing, renewing and terminating UCC-1 financing statements and similar documents.

8. Additional Security. If the performance of any obligation secured hereby shall at any time be secured by any other instrument or instruments, the exercise by BioMarin, in the event of a default in the performance of any such obligation, of any right or remedy under such instrument or instruments shall not be construed as or deemed to be a waiver of or limitation upon the right of BioMarin to exercise, at any time and from time to time thereafter, any right or remedy under this Agreement or under any such other instrument or instruments.

9. Default. Upon the occurrence of an uncured breach of sections 3, 4, or 10 of the Asset Purchase Agreement, or termination of the Asset Purchase Agreement under Section 11.2 of the Asset Purchase Agreement (any such occurrence, an “Event of Default”), and in addition to all other rights and remedies under the Asset Purchase Agreement, at law or in equity, BioMarin shall have the rights and remedies of a secured party under the California (Uniform) Commercial Code, or under any other applicable law, together with any and all of the rights and remedies provided in this Agreement. Expenses of retaking, holding, preparing for sale, selling or the like shall include BioMarin’s reasonable attorneys’ fees and legal expenses, including without limitation those attorneys’ fees and legal expenses incurred by BioMarin in connection with any insolvency, bankruptcy, reorganization, arrangement or other similar proceedings involving Raptor which in any way affect the exercise by BioMarin of its rights and remedies hereunder.

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     10. No Implied Waivers. The several rights and remedies of BioMarin hereunder or herein referred to shall, to the full extent permitted by law, be construed as cumulative, and none of said rights and remedies is exclusive of the others. No delay or omission on the part of BioMarin in exercising any right or remedy created by, connected with or provided for in this Agreement or arising from any default by Raptor or by any other person the performance of whose obligations is secured hereby, shall be construed as or be deemed to be an acquiescence in or a waiver of such default or a waiver of or limitation upon the right of BioMarin to exercise, at any time and from time to time thereafter, any right or remedy under this Agreement. No waiver of any breach of any of the covenants or conditions in this Agreement shall be deemed to be a waiver of or acquiescence in or consent to any previous or subsequent breach of the same or any other covenant or condition.

     11. Successive Actions. In the event of any Event of Default, BioMarin may maintain an action therefore and may maintain successive actions for each Event of Default. BioMarin’s rights hereunder shall not be exhausted by its exercise of any of its rights or remedies or by any such action or by any number of successive actions until and unless each obligation secured hereby has been fully performed or paid.

     12. Transfer of Indebtedness. Upon the transfer by BioMarin of all or any portion of the Asset Purchase Agreement or any of the obligations secured hereby, BioMarin may transfer therewith all or any portion of the security interest created hereunder, but BioMarin shall retain all of its rights hereunder with respect to any part of such obligations and any part of its security interest hereunder not so transferred.

     13. Term; Binding Effect. This Agreement shall be and remain in full force and effect until the earlier of the obligations secured hereby have been fully performed or paid or upon termination or expiration of the Asset Purchase Agreement, in which case this Agreement shall automatically terminate and BioMarin shall promptly return possession of the remaining Collateral, if any, to Raptor, and shall promptly file termination statements where appropriate.

     14. Rules of Construction. When the identity of the parties hereto or the circumstances make it appropriate, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural. The headings of each Section are for information and convenience only and do not limit or construe the contents of any provision hereof.

     15. Counterparts. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute but one (1) and the same instrument.

     16. Entire Agreement. This Agreement, and the Asset Purchase Agreement, entered into between the Parties on even date herewith, constitutes and contains the entire agreement and final understanding between the Parties concerning the Transactions and all other subject matters addressed herein or pertaining thereto. This Agreement, and such Asset Purchase Agreement are intended by the Parties as a final expression of their agreement with respect to such terms as are included herein and therein and, further, are intended by the Parties as a complete and exclusive

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statement of the terms of their agreement. This Agreement, and such Asset Purchase Agreement supersede and replace all prior negotiations and all prior or contemporaneous representations, promises or agreements, proposed or otherwise, whether written or oral, concerning all subject matters addressed herein or pertaining hereto. Any representation, promise or agreement not specifically included in this Agreement, or such Asset Purchase Agreement shall not be binding upon or enforceable against any Party to this Agreement. This is a fully integrated agreement.

     17. Governing Law. This Agreement shall be governed by, interpreted under, and construed in accordance with the internal laws of the State of California applicable to contracts made and performed in such State and without regard to conflicts of law doctrines, except to the extent that certain matters are preempted by Federal law.

     IN WITNESS WHEREOF, each of the Parties hereto has caused this Agreement to be executed by a duly authorized officer as of the day and year first above written.

RAPTOR PHARMACEUTICAL INC.

By:

Name: Christopher Starr
Title: CEO

BIOMARIN PHARMACEUTICAL INC.

By:

Name: G. Eric Davis
Title: Vice President, Corporate Counsel

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EXHIBIT A

DESCRIPTION OF THE COLLATERAL

     The term “Collateral” shall mean (i) the Transferred Technology; and (ii) claims in Patents owned by Raptor that claim and are primarily directed to an Improvement in a NeuroTrans Product. The term “Collateral” shall not include (i) any Technology or Intellectual Property, other than the Transferred Technology and other than the Patents owned by Raptor that are described in clause (ii) of the preceding sentence, or (ii) any Patent claims that extend to any protein other than the Receptor Associated Protein or an Improvement or that extend to any product other than a NeuroTrans Product.

In addition, the word “Collateral” also includes all the following, whether now owned or hereafter acquired, whether now existing or hereafter arising, and wherever located: all proceeds (including insurance proceeds) or sums due from a third party who has infringed the Collateral or from that party’s insurer, whether due to judgment, settlement or other process.

The following definitions are referenced in the above description of “Collateral”:

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     “Business” means (i) the research and development activities of, or under authority of, BioMarin, Raptor or their Affiliates, which activities directly and specifically relate to the use of a receptor associated protein, or any similar or related protein, as a drug or drug delivery platform, including the Technology necessary for such research and development activities and (ii) the further research and development concerning such use beyond the research and development activities described in clause (i) and the commercial exploitation of all of the foregoing research and development; including all further research, development, making, use, license, import and sale of products that involve or use such a protein.

     “Business Copyrights” shall mean the Copyrights listed on Section 1.2(g) of the Disclosure Schedule.

     “Business Patents” shall mean the Patents listed on Section 1.2(h) of the Disclosure Schedule and all patents, utility models, certificates of invention, patents of addition or substitution, and other governmental grants for the protection of inventions anywhere in the world, including any reissue, renewal, re-examination, or extension thereof, and all applications for any of the foregoing, including any international, regional, national, provisional, divisional, continuation, continuation in part, continued prosecution, and petty patent application, in each case that correspond or that claim priority to the Patents listed on Section 1.2(h) of the Business Disclosure Schedule.

     “Business Trademarks” shall mean the Trademarks listed on Section 1.2(i) of the Disclosure Schedule and all goodwill associated with such Trademarks.

     “Copyrights” shall mean U.S. and foreign registered and unregistered copyrights (including those in computer software and databases), rights of publicity and all registrations and applications to register the same.

     “Disclosure Schedule” shall mean the disclosure schedule of even date herewith prepared and signed by BioMarin and delivered to Raptor simultaneously with the execution of the Asset Purchase Agreement.

      “Improvement” means any carrier protein that has at least seventy five percent (75%) homology with the Receptor Associated Protein. As used herein, “at least seventy five percent (75%) homology” means the nucleotide or amino acid residue sequence is at least seventy five percent (75%) identical to the amino acid sequence of the Receptor Associated Protein.

     “Intellectual Property” shall mean all rights in, to and under any and all of the following: Trademarks, Patents, Copyrights, Trade Secrets, Technology and other intellectual property and proprietary rights anywhere in the world.

      “Transferred Know-How” shall mean all Technology in the possession or control of BioMarin or its Affiliates necessary for the Business, which shall include all Technology listed in Section 1.2(v) of the Disclosure Schedule.

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     “Transferred Technology” shall mean all Intellectual Property which is owned by BioMarin or its Affiliates and which is reasonably necessary for the operation of the Business, or the making, use, sale, offer for sale, or import of any Products, which shall include: (i) the Business Patents; (ii) the Business Trademarks; (iii) the Business Copyrights, (iv) the Transferred Know-How, and (v) all Products.

      “NeuroTrans Product” means a therapeutic product that is delivered across a blood brain barrier using a carrier protein that facilitates transport of such therapeutic product across such barrier, but only if (a) the manufacture, sale, import, offer to sell, use, or other activities with respect to such product would, but for the assignment to Raptor in Section 2.1 below, infringe in the country for which such product is sold, a Valid Claim; (b) the manufacture, sale, import, offer to sell, use, or other activities with respect to such product would, but for the assignment to Raptor in Section 2.1 below, infringe upon some or all of the Transferred Know-How, provided that the carrier protein is the Receptor Associated Protein or an Improvement; or (c) such product is otherwise based upon the Transferred Technology and the carrier protein is the Receptor Associated Protein or an Improvement.

     “Patents” shall mean all patents, utility models, certificates of invention, patents of addition or substitution, and other governmental grants for the protection of inventions anywhere in the world, including any reissue, renewal, re-examination, or extension thereof, and all applications for any of the foregoing, including any international, regional, national, provisional, divisional, continuation, continuation in part, continued prosecution, and petty patent applications.

     “Products” means all products, Technology and services of BioMarin or its Affiliates, along with collateral materials of BioMarin and its Affiliates, researched, developed, sold, licensed, used, or otherwise exploited or commercialized by BioMarin or any of its Affiliates in the Business, whether commercially available or in the development stage (including any pre-clinical and clinical research or development).

     “Receptor Associated Protein” means the receptor associated protein, as disclosed in and having the sequence disclosed in U.S. Patent No. 5,474,766.

     “Technology” means any and all technology, and technical and other information, and tangible embodiments thereof, including Trade Secrets, know-how, research, processes, formulations, techniques, diagnostics, models, concepts, ideas, knowledge, developments, samples, methods, invention and other disclosures, recipes, specifications, materials, instructions, compositions, designs, results, assays, reagents, systems, descriptions, analyses, opinions, works of authorship, plans, procedures, manuals, depictions, inventions, discoveries, methods, data, reports, market information, projections, and any other written, printed or electronically stored information and materials of any nature whatsoever.

      “Trademarks” shall mean U.S. and foreign registered and unregistered trademarks, trade dress, service marks, logos, trade names, corporate names and all registrations and applications to register the same and all goodwill associated with any of the foregoing.

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     “Trade Secrets” shall mean all categories of trade secrets as defined in the Uniform Trade Secrets Act, including trade secrets that are business information, inventions, know-how, or confidential information.

     “Valid Claim” means (i) an issued, unexpired, and enforceable claim in the Business Patents, or any other Patent assigned to Raptor in the Transferred Technology, that has an effective filing date (as defined in 35 USC §119 or §120, or equivalent in a country outside the United States) that precedes the Effective Date or (ii) an issued, unexpired, and enforceable claim in another Patent owned by Raptor that claims, and is primarily directed to, an Improvement (and not any protein more generally); in each case provided that the claim has not been held invalid or unenforceable, and has not been abandoned, disclaimed, waived, or terminated.

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EX-10

Exhibit 10.5

EMPLOYMENT AGREEMENT

This Employment Agreement (the “Agreement”) is entered into as of May 1, 2006 (the “Effective Date”) between Raptor Pharmaceutical Inc., a Delaware corporation with its principal offices located at 9 Commercial Blvd., Suite 200, Novato, CA 94949 (the “Company”), and Christopher M. Starr, Ph.D., a resident of Sonoma, California (the “Employee”).

In consideration of the promises and the terms and conditions set forth in this Agreement, the parties agree as follows:

1.Position. During the term of this Agreement, Company will employ Employee, and Employee will serve Company in the capacity of Chief Executive Officer and as a member of the Board of Directors. Employee will report directly to the Company's Board of Directors.

2.Duties. Employee will perform duties that are executive in nature, consistent with his title; provided, however, that the Company shall not, without Employee's express written consent, require Employee to be based anywhere other than in Marin or Sonoma County, except for required travel on the Company's business to an extent substantially consistent with travel required of persons who hold similar positions or have similar duties with the Company.

3.Exclusive Service. Employee will devote substantially all his working time and efforts to the business and affairs of the Company. The foregoing shall not, however, preclude Employee (a) from engaging in appropriate civic, charitable or religious activities, (b) from devoting a reasonable amount of time to private investments and business interests, (c) from serving on the boards of directors or advisors of, or as a consultant to, other entities, or (d) from providing incidental assistance to family members on matters of family business, so long as the foregoing activities and service do not conflict with Employee's responsibilities to the Company.

4. Term of Employment.

4.1Initial Term. The Company agrees to continue Employee's employment, and Employee agrees to remain in the employ of the Company, for a period of three (3) years after the Effective Date unless Employee's employment is earlier terminated pursuant to the provisions of this Agreement.

4.2Renewal. The term of Employee's employment shall be extended automatically, without further action of either party, as of thirty three (33) months after the Effective Date and on each succeeding anniversary of that date, for terms of one (1) year, unless on or before ninety (90) days prior to the last day of the term of Employee's employment or any extension thereof, the Company or Employee shall notify the other in writing of its intention not to renew Employee's employment, in which case Employee's employment shall terminate at the end of the original term or any extension thereof. If either party notifies the other of its intention not to renew Employee's employment less than ninety (90) days prior to the end of the term of this Agreement or any extension thereof, then such termination shall be effective ninety (90) days from such notice. No notice of non-renewalmay be given by either party after a renewal term has commenced. Any such renewal shall be upon such terms and conditions set forthherein, unless otherwise agreed between the Company and Employee. The notice of non-renewal by either party shall in no way constitute a breach of this Agreement.

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4.3Termination of Agreement. This Agreement shall terminate on the date on which all obligations of the parties hereto have been satisfied.

5. Compensation and Benefits.

5.1Base Salary. The Company agrees to pay Employee a minimum annual salary of one hundred fifty thousand ($150,000), or in the event of any portion of a year, a pro rata amount of such annual salary. Employee's base salary shall be reviewed by the Board of Directors or for possible increases prior to the start of each fiscal year, effective at the beginning of such fiscal year. Employee's salary will be payable as earned in accordance with Company's customary payroll practice.

5.2Cash Bonus. Employee will be eligible to receive annual and discretionary cash bonuses as determined by the Board of Directors.

5.3Additional Benefits. Employee will be eligible to participate in Company's employee benefit plans of general application, including without limitation pension and profit-sharing plans, deferred compensation, supplemental retirement or excess-benefit plans, stock option, incentive or other bonus plans, life, health, disability, accident and dental insurance programs, 401(k) plan, paid vacations and sabbatical leave plans, and similar plans or programs, in accordance with the rules established for individual participation in any such plan. Employee shall be entitled each year to four (4) weeks leave for vacation at full pay, provided, that at the end of each year, Employee may accrue and carry over to the next succeeding year a maximum of two (2) weeks of unused vacation. Employee shall also be entitled to reasonable holidays and illness days with full pay in accordance with the Company's policy from time to time in effect.

5.4Stock Options. Upon approval by the Board of Directors, Employee will be granted options to purchase 250,000 of the Company’s or the Company’s parent’s common stock at the closing price on the date of grant. Such stock options will vest 6/36ths on the six month anniversary of the grant date and 1/36^th per month thereafter and will expire ten (10) years from date of grant. Employee will be eligible to receive future stock grants and stock option awards in the discretion of the Board of Directors.

5.5Expenses. The Company will reimburse Employee for all reasonable and necessary expenses incurred by Employee in connection with the Company's business, provided that such expenses are in accordance with applicable policy set by the Board from time to time and are properly documented and accounted for in accordance with the policy of the Company and with the requirements of the Internal Revenue Service.

6.Proprietary Rights. Employee hereby agrees to execute an Employee Invention Assignment and Confidentiality Agreement with the Company in substantially the form attached hereto as Exhibit A.

7. Termination.

7.1Events of Termination. Employee's employment with the Company shall terminate upon any one of the following:

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(a)Ninety (90) days after the effective date of a written notice sent to Employee stating the Company's determination made in good faith that it is terminating Employee for “Cause” as defined under Section 7.2 below (“Termination for Cause”), provided, that if the “Cause” for termination is a curable failure by Employee to properly perform his assigned duties, then the Company will give Employee written notice of such failure (a “Cause Notice”), and if Employee failure to cure such failure to the reasonable satisfaction of the Board of Directors within sixty (60) days after the Company gives the Cause Notice, then the Company may immediately terminate Employee's employment, and such termination will be conclusively deemed to be for “cause” hereunder; or

(b)thirty (30) days after the effective date of a written notice sent to Employee stating the Company's determination made in good faith that, due to a mental or physical incapacity, Employee has been unable to perform his duties under this Agreement for a period of not less than six (6) consecutive months or 180 days in the aggregate in any 12-month period unless Employee has been on a leave approved by the Company’s Board of Directors (“Termination for Disability”); or

(c) Employee's death (“Termination Upon Death”); or

(d)the effective date of a written notice sent to the Company stating Employee's determination made in good faith of “Constructive Termination” by the Company, as defined under Section 7.3 below (“Constructive Termination”); or

(e)thirty (30) days after the effective date of a notice sent to Employee stating that the Company is terminating his employment, without cause, which notice can be given by the Company at any time after the Effective Date at the Company's sole discretion, for any reason or for no reason (“Termination Without Cause”); or

(f)the effective date of a notice sent to the Company from Employee stating that Employee is electing to terminate his employment with the Company (“Voluntary Termination”).

7.2“Cause” Defined. For purposes of this Agreement, “cause” for Employee's termination means Employee's conviction of a felony involving moral turpitude and will exist at any time after the happening of one or more of the following events:

(a)any willful act or acts of dishonesty undertaken by Employee and intended to result in substantial gain or personal enrichment of Employee at the expense of the Company; or

(b)any willful act of gross misconduct which is materially and demonstrably injurious to the Company.

No act, or failure to act, by Employee shall be considered “willful” if done, or omitted to be done, by him in good faith and in the reasonable belief that his act or omission was in the best interest of the Company and/or required by applicable law.

7.3“Constructive Termination” Defined. “Constructive Termination” shall mean:

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(a)a material reduction in Employee's salary or benefits not agreed to by Employee; or

(b)a material change in Employee's responsibilities not agreed to by Employee; or

(c)the Company's failure to comply in any material respect with any material term of this Agreement; or

(d)a requirement that Employee relocate to an office that would increase Employee's one-way commute distance by more than fifty (50) miles; or

(e)a “Change in Control” of the Company, as defined herein. A “Change in Control” means the occurrence of any of the following events: (i) any sale or exchange of the capital stock by the stockholders of the Company in one transaction or series of related transactions where more than fifty percent (50%) of the outstanding voting power of the Company is acquired by a person or entity or group of related persons or entities; or (ii) any reorganization, consolidation or merger of the Company where the outstanding voting securities of the Company immediately before the transaction represent or are converted into less than fifty percent (50%) of the outstanding voting power of the surviving entity (or its parent corporation) immediately after the transaction; or (iii) the consummation of any transaction or series of related transactions that results in the sale of all or substantially all of the assets of the Company;or (iv) any “person” or “group” (as defined in the Securities Exchange Act of 1934, as amended (the “Exchange Act”) becoming the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act) directly or indirectly of securities representing more than fifty percent (50%) of the voting power of the Company then outstanding; or (v) less than a majority of the Board of Directors are persons who were either nominated for election by the Board of Directors or were elected by the Board of Directors. A “change of control” will specifically exclude the Company’s initial stock for stock exchange with Highland Clan Creations Corp. expected to occur in May 2006.

8. Effect of Termination.

8.1Termination for Cause or Voluntary Termination. In the event of any termination of Employee's employment pursuant to Section 7.1(a) or Section 7.1(f), the Company shall immediately pay to Employee the compensation and benefits otherwise payable to Employee under Section 5 through the date of termination. Employee's rights under the Company's benefit plans of general application shall be determined under the provisions of those plans.

8.2Termination for Disability. In the event of termination of employment pursuant to Section 7.1(b):

(a)the Company shall immediately pay to Employee the compensation and benefits otherwise payable to Employee under Section 5 through the date of termination,

(b)for three (3) months after the termination of Employee's employment, the Company shall continue to pay Employee (A) his salary under Section 5.1

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above at Employee's then-current salary, less applicable withholding taxes, payable on the Company's normal payroll dates during that period, (B) his annual cash bonus pro rata for three (3) months under Section 5.2 above, (C) shall continue his benefits under Section 5.3 above, and (D) Employee’s options under section 5.4 shall continue to vest for three months after termination, and

(c)Employee shall receive other severance and disability payments as provided in the Company's standard benefit plans.

Within thirty (30) days of the Effective Date, the Company will procure disability insurance sufficient to fund its obligations to Employee hereunder, naming the Employee as payee. The Company shall maintain such insurance in force at all times that Employee is employed pursuant to this Agreement.

8.3Termination Upon Death. In the event of termination of employment pursuant to Section 7.1(c), all obligations of the Company and Employee shall cease, except the Company shall immediately pay to Employee (or to Employee's estate) the compensation and benefits otherwise payable to Employee under Section 5 through the date of termination.

8.4Constructive Termination or Termination Without Cause. In the event of any termination of this Agreement pursuant to Section 7.1(d) or Section 7.1(e),

(a)the Company shall immediately pay to Employee the compensation and benefits otherwise payable to Employee under Section 5 through the date of termination, and

(b)for twelve (12) months after the termination of Employee's employment, the Company shall continue to pay Employee (A) his salary under Section 5.1 above at Employee's then-current salary, less applicable withholding taxes, payable on the Company's normal payroll dates during that period, (B) his annual cash bonus under Section 5.2 above, and (C) shall continue his benefits under Section 5.3 above, and

(c)If the termination occurs after a Change in Control, then in addition to the foregoing benefits, all of Employee's vested and unvested options to purchase the Company's or the Company’s parent’s Common Stock shall, as of the date of employment termination, be immediately exercisable in full and shall remain exercisable for the periods specified in such options or the plans governing such options, and all shares of the Company's or the Company’s parent’s Common Stock owned by Employee shall immediately be released from any and all vesting restrictions, and Company shall pay Employee in a lump sum, in cash, on or before the fifth business day following the effective date of termination, an amount equal to Employee's salary for one year at the time of termination; provided, that if the total amount of the benefits available to Employee under this Section 8.4, either alone or together with other payments which Employee has the right to receive from the Company, would constitute a “parachute payment” as defined in Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), then the Company shall pay to Employee at the time of termination an additional amount such that the net amount retained by Employee, after deduction of the excise tax imposed by Section 4999 of the Code and any federal, state and local income tax and excise tax imposed on such additional amount, shall be equal to the amount payable to the Employee under this Section 8.4 as originally determined prior to the deduction of the excise tax.

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9.	Miscellaneous.
	9.1	Dispute Resolution.

(a)Arbitration of Disputes. Any dispute under this Agreement shall be resolved by arbitration in the State of California, Sonoma County, and, except as herein specifically stated, in accordance with the National Rules for the Resolution of Employment Disputes of the American Arbitration Association (“AAA Rules”) then in effect. However, in all events, these arbitration provisions shall govern over any conflicting rules which may now or hereafter be contained in the AAA Rules. Any judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction over the subject matter thereof. The arbitrator shall have the authority to grant any equitable and legal remedies that would be available in any judicial proceeding instituted to resolve such dispute; provided, however, that the parties retain their right to, and shall not be prohibited, limited or in any other way restricted from, seeking or obtaining equitable relief from a court having jurisdiction over the parties.

(b)Compensation of Arbitrator. Any such arbitration will be conducted before a single neutral arbitrator who will be compensated for his or his services at a rate to be determined by the parties or by the American Arbitration Association, but based upon reasonable hourly or daily consulting rates for the arbitrator in the event the parties are not able to agree upon his or his rate of compensation.

(c)Selection of Arbitrator. The American Arbitration Association will have the authority to select an arbitrator from a list of arbitrators who are partners in a nationally recognized firm of independent certified public accountants from the management advisory services department (or comparable department or group) of such firm; provided, however, that such firm cannot be the firm of certified public accountants then auditing the books and records of either party or providing management or advisory services for either party.

(d)Payment of Costs. Employee shall bear only those costs of arbitration he or she would otherwise bear had he or she brought a claim covered by this Agreement in court.

(e)Burden of Proof. For any dispute submitted to arbitration, the burden of proof will be as it would be if the claim were litigated in a judicial proceeding.

(f)Award. Upon the conclusion of any arbitration proceedings hereunder, the arbitrator will render findings of fact and conclusions of law and a written opinion setting forth the basis and reasons for any decision reached and will deliver such documents to each party to this Agreement along with a signed copy of the award.

(g)Terms of Arbitration. The arbitrator chosen in accordance with these provisions will not have the power to alter, amend or otherwise affect the terms of these arbitration provisions or the provisions of this Agreement.

(h)Exclusive Remedy. Except as specifically otherwise provided in this Agreement, arbitration will be the sole and exclusive remedy of the parties for any dispute arising out of this Agreement.

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9.2Severability. If any provision of this Agreement shall be found by any arbitrator or court of competent jurisdiction to be invalid or unenforceable, then the parties hereby waive such provision to the extent that it is found to be invalid or unenforceable and to the extent that to do so would not deprive one of the parties of the substantial benefit of its bargain. Such provision shall, to the extent allowable by law and the preceding sentence, be modified by such arbitrator or court so that it becomes enforceable and, as modified, shall be enforced as any other provision hereof, all the other provisions continuing in full force and effect.

9.3No Waiver. The failure by either party at any time to require performance or compliance by the other of any of its obligations or agreements shall in no way affect the right to require such performance or compliance at any time thereafter. The waiver by either party of a breach of any provision hereof shall not be taken or held to be a waiver of any preceding or succeeding breach of such provision or as a waiver of the provision itself. No waiver of any kind shall be effective or binding, unless it is in writing and is signed by the party against whom such waiver is sought to be enforced.

9.4Assignment. This Agreement and all rights hereunder are personal to Employee and may not be transferred or assigned by Employee at any time. The Company may assign its rights, together with its obligations hereunder, to any parent, subsidiary, affiliate or successor, or in connection with any sale, transfer or other disposition of all or substantially all of its business and assets, provided, however, that any such assignee assumes the Company's obligations hereunder.

9.5Withholding. All sums payable to Employee hereunder shall be reduced by all federal, state, local and other withholding and similar taxes and payments required by applicable law.

9.6Entire Agreement. This Agreement constitutes the entire and only agreement and understanding between the parties relating to employment of Employee with Company and this Agreement supersedes and cancels any and all previous contracts, arrangements or understandings with respect to Employee's employment; exceptthatthe Employee Invention Assignment and Confidentiality Agreement shall remain as an independent contract and shall remain in full force and effect according to its terms.

9.7Amendment. This Agreement may be amended, modified, superseded, cancelled, renewed or extended only by an agreement in writing executed by both parties hereto.

9.8Notices. All notices and other communications required or permitted under this Agreement shall be in writing and hand delivered, sent by telecopier, sent by registered first class mail, postage pre-paid, or sent by nationally recognized express courier service. Such notices and other communications shall be effective upon receipt if hand delivered or sent by telecopier, five (5) days after mailing if sent by mail, and one (l) day after dispatch if sent by express courier, to the following addresses, or such other addresses as any party shall notify the other parties:

If to the Company: Raptor Pharmaceutical Inc.

9 Commercial Blvd., Suite 200

Novato, CA 94949

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Telecopier: 415-382-1368

Attention: Board of Directors

If to Employee: Christopher M. Starr, Ph.D.

P. O. Box 226

Sonoma, CA 95476

Telecopier: 707-939-1143

9.9Binding Nature. This Agreement shall be binding upon, and inure to the benefit of, the successors and personal representatives of the respective parties hereto.

9.10Headings. The headings contained in this Agreement are for reference purposes only and shall in no way affect the meaning or interpretation of this Agreement. In this Agreement, the singular includes the plural, the plural included the singular, the masculine gender includes both male and female referents and the word “or” is used in the inclusive sense.

9.11Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original but all of which, taken together, constitute one and the same agreement.

9.12Governing Law. This Agreement and the rights and obligations of the parties hereto shall be construed in accordance with the laws of the State of California, without giving effect to the principles of conflict of laws.

9.13Attorneys' Fees. In the event of any claim, demand or suit arising out of or with respect to this Agreement, the prevailing party shall be entitled to reasonable costs and attorneys' fees, including any such costs and fees upon appeal.

IN WITNESS WHEREOF, the Company and Employee have executed this Agreement as of the date first above written.

Raptor Pharmaceutical Inc.		Christopher M. Starr, Ph.D.
By: Raymond W. Anderson
	Director

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455772

EX-10

Exhibit 10.6

EMPLOYMENT AGREEMENT

This Employment Agreement (the “Agreement”) is entered into as of May 15, 2006 (the “Effective Date”) between Raptor Pharmaceutical Inc., a Delaware corporation with its principal offices located at 9 Commercial Blvd., Suite 200, Novato, CA 94949 (the “Company”), and Todd C. Zankel., a resident of San Francisco, California (the “Employee”).

In consideration of the promises and the terms and conditions set forth in this Agreement, the parties agree as follows:

1.Position. During the term of this Agreement, Company will employ Employee, and Employee will serve Company in the capacity of Chief Scientific Officer. Employee will report directly to the Company's Chief Executive Officer.

2.Duties. Employee will perform duties that are executive in nature, consistent with his title; provided, however, that the Company shall not, without Employee's express written consent, require Employee to be based anywhere other than in Marin or Sonoma County, except for required travel on the Company's business to an extent substantially consistent with travel required of persons who hold similar positions or have similar duties with the Company.

3.Exclusive Service. Employee will devote substantially all his working time and efforts to the business and affairs of the Company. The foregoing shall not, however, preclude Employee (a) from engaging in appropriate civic, charitable or religious activities, (b) from devoting a reasonable amount of time to private investments and business interests, (c) from serving on the boards of directors or advisors of, or as a consultant to, other entities, or (d) from providing incidental assistance to family members on matters of family business, so long as the foregoing activities and service do not conflict with Employee's responsibilities to the Company.

4. Term of Employment.

4.1Initial Term. The Company agrees to continue Employee's employment, and Employee agrees to remain in the employ of the Company, for a period of three (3) years after the Effective Date unless Employee's employment is earlier terminated pursuant to the provisions of this Agreement.

4.2Renewal. The term of Employee's employment shall be extended automatically, without further action of either party, as of thirty three (33) months after the Effective Date and on each succeeding anniversary of that date, for terms of one (1) year, unless on or before ninety (90) days prior to the last day of the term of Employee's employment or any extension thereof, the Company or Employee shall notify the other in writing of its intention not to renew Employee's employment, in which case Employee's employment shall terminate at the end of the original term or any extension thereof. If either party notifies the other of its intention not to renew Employee's employment less than ninety (90) days prior to the end of the term of this Agreement or any extension thereof, then such termination shall be effective ninety (90) days from such notice. No notice of non-renewalmay be given by either party after a renewal term has commenced. Any such renewal shall be upon such terms and conditions set forth

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herein, unless otherwise agreed between the Company and Employee. The notice of non-renewal by either party shall in no way constitute a breach of this Agreement.

4.3Termination of Agreement. This Agreement shall terminate on the date on which all obligations of the parties hereto have been satisfied.

5. Compensation and Benefits.

5.1Base Salary. The Company agrees to pay Employee a minimum annual salary of One hundred fifty thousand ($150,000), or in the event of any portion of a year, a pro rata amount of such annual salary. Employee's base salary shall be reviewed by the Board of Directors or for possible increases prior to the start of each fiscal year, effective at the beginning of such fiscal year. Employee's salary will be payable as earned in accordance with Company's customary payroll practice.

5.2Cash Bonus. Employee will be eligible to receive annual and discretionary cash bonuses as determined by the Board of Directors.

5.3Additional Benefits. Employee will be eligible to participate in Company's employee benefit plans of general application, including without limitation pension and profit-sharing plans, deferred compensation, supplemental retirement or excess-benefit plans, stock option, incentive or other bonus plans, life, health, disability, accident and dental insurance programs, 401(k) plan, paid vacations and sabbatical leave plans, and similar plans or programs, in accordance with the rules established for individual participation in any such plan. Employee shall be entitled each year to four (4) weeks leave for vacation at full pay, provided, that at the end of each year, Employee may accrue and carry over to the next succeeding year a maximum of two (2) weeks of unused vacation. Employee shall also be entitled to reasonable holidays and illness days with full pay in accordance with the Company's policy from time to time in effect.

5.4Stock Options. Upon approval by the Board of Directors, Employee will be granted options to purchase 250,000 of the Company’s or the Company’s parent’s common stock at the closing price on the date of grant. Such stock options will vest 6/36ths on the six month anniversary of the grant date and 1/36^th per month thereafter and will expire ten (10) years from date of grant. Employee will be eligible to receive future stock grants and stock option awards in the discretion of the Board of Directors.

5.5Expenses. The Company will reimburse Employee for all reasonable and necessary expenses incurred by Employee in connection with the Company's business, provided that such expenses are in accordance with applicable policy set by the Board from time to time and are properly documented and accounted for in accordance with the policy of the Company and with the requirements of the Internal Revenue Service.

6.Proprietary Rights. Employee hereby agrees to execute an Employee Invention Assignment and Confidentiality Agreement with the Company in substantially the form attached hereto as Exhibit A.

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7. Termination.

7.1Events of Termination. Employee's employment with the Company shall terminate upon any one of the following:

(a)Ninety (90) days after the effective date of a written notice sent to Employee stating the Company's determination made in good faith that it is terminating Employee for “Cause” as defined under Section 7.2 below (“Termination for Cause”), provided, that if the “Cause” for termination is a curable failure by Employee to properly perform his assigned duties, then the Company will give Employee written notice of such failure (a “Cause Notice”), and if Employee failure to cure such failure to the reasonable satisfaction of the Chief Executive Officer within sixty (60) days after the Company gives the Cause Notice, then the Company may immediately terminate Employee's employment, and such termination will be conclusively deemed to be for “cause” hereunder; or

(b)thirty (30) days after the effective date of a written notice sent to Employee stating the Company's determination made in good faith that, due to a mental or physical incapacity, Employee has been unable to perform his duties under this Agreement for a period of not less than six (6) consecutive months or 180 days in the aggregate in any 12-month period unless Employee has been on a leave approved by the Company’s Chief Executive Officer (“Termination for Disability”); or

(c) Employee's death (“Termination Upon Death”); or

(d)the effective date of a written notice sent to the Company stating Employee's determination made in good faith of “Constructive Termination” by the Company, as defined under Section 7.3 below (“Constructive Termination”); or

(e)thirty (30) days after the effective date of a notice sent to Employee stating that the Company is terminating his employment, without cause, which notice can be given by the Company at any time after the Effective Date at the Company's sole discretion, for any reason or for no reason (“Termination Without Cause”); or

(f)the effective date of a notice sent to the Company from Employee stating that Employee is electing to terminate his employment with the Company (“Voluntary Termination”).

7.2“Cause” Defined. For purposes of this Agreement, “cause” for Employee's termination means Employee's conviction of a felony involving moral turpitude and will exist at any time after the happening of one or more of the following events:

(a)any willful act or acts of dishonesty undertaken by Employee and intended to result in substantial gain or personal enrichment of Employee at the expense of the Company; or

(b)any willful act of gross misconduct which is materially and demonstrably injurious to the Company.

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No act, or failure to act, by Employee shall be considered “willful” if done, or omitted to be done, by him in good faith and in the reasonable belief that his act or omission was in the best interest of the Company and/or required by applicable law.

7.3“Constructive Termination” Defined. “Constructive Termination” shall mean:

(a)a material reduction in Employee's salary or benefits not agreed to by Employee; or

(b)a material change in Employee's responsibilities not agreed to by Employee; or

(c)the Company's failure to comply in any material respect with any material term of this Agreement; or

(d)a requirement that Employee relocate to an office that would increase Employee's one-way commute distance by more than fifty (50) miles; or

(e)a “Change in Control” of the Company, as defined herein. A “Change in Control” means the occurrence of any of the following events: (i) any sale or exchange of the capital stock by the stockholders of the Company in one transaction or series of related transactions where more than fifty percent (50%) of the outstanding voting power of the Company is acquired by a person or entity or group of related persons or entities; or (ii) any reorganization, consolidation or merger of the Company where the outstanding voting securities of the Company immediately before the transaction represent or are converted into less than fifty percent (50%) of the outstanding voting power of the surviving entity (or its parent corporation) immediately after the transaction; or (iii) the consummation of any transaction or series of related transactions that results in the sale of all or substantially all of the assets of the Company;or (iv) any “person” or “group” (as defined in the Securities Exchange Act of 1934, as amended (the “Exchange Act”) becoming the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act) directly or indirectly of securities representing more than fifty percent (50%) of the voting power of the Company then outstanding; or (v) less than a majority of the Board of Directors are persons who were either nominated for election by the Board of Directors or were elected by the Board of Directors. A “change of control” will specifically exclude the Company’s initial stock for stock exchange with Highland Clan Creations Corp. expected to occur in May 2006.

8. Effect of Termination.

8.1Termination for Cause or Voluntary Termination. In the event of any termination of Employee's employment pursuant to Section 7.1(a) or Section 7.1(f), the Company shall immediately pay to Employee the compensation and benefits otherwise payable to Employee under Section 5 through the date of termination. Employee's rights under the Company's benefit plans of general application shall be determined under the provisions of those plans.

8.2Termination for Disability. In the event of termination of employment pursuant to Section 7.1(b):

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(a)the Company shall immediately pay to Employee the compensation and benefits otherwise payable to Employee under Section 5 through the date of termination,

(b)for three (3) months after the termination of Employee's employment, the Company shall continue to pay Employee (A) his salary under Section 5.1 above at Employee's then-current salary, less applicable withholding taxes, payable on the Company's normal payroll dates during that period, (B) his annual cash bonus pro rata for three (3) months under Section 5.2 above, (C) shall continue his benefits under Section 5.3 above, and (D) Employee’s options under section 5.4 shall continue to vest for three months after termination, and

(c)Employee shall receive other severance and disability payments as provided in the Company's standard benefit plans.

Within thirty (30) days of the Effective Date, the Company will procure disability insurance sufficient to fund its obligations to Employee hereunder, naming the Employee as payee. The Company shall maintain such insurance in force at all times that Employee is employed pursuant to this Agreement.

8.3Termination Upon Death. In the event of termination of employment pursuant to Section 7.1(c), all obligations of the Company and Employee shall cease, except the Company shall immediately pay to Employee (or to Employee's estate) the compensation and benefits otherwise payable to Employee under Section 5 through the date of termination.

8.4Constructive Termination or Termination Without Cause. In the event of any termination of this Agreement pursuant to Section 7.1(d) or Section 7.1(e),

(a)the Company shall immediately pay to Employee the compensation and benefits otherwise payable to Employee under Section 5 through the date of termination, and

(b)for twelve (12) months after the termination of Employee's employment, the Company shall continue to pay Employee (A) his salary under Section 5.1 above at Employee's then-current salary, less applicable withholding taxes, payable on the Company's normal payroll dates during that period, (B) his annual cash bonus under Section 5.2 above, and (C) shall continue his benefits under Section 5.3 above, and

(c)If the termination occurs after a Change in Control, then in addition to the foregoing benefits, all of Employee's vested and unvested options to purchase the Company's or the Company’s parent’s Common Stock shall, as of the date of employment termination, be immediately exercisable in full and shall remain exercisable for the periods specified in such options or the plans governing such options, and all shares of the Company's or the Company’s parent’s Common Stock owned by Employee shall immediately be released from any and all vesting restrictions, and Company shall pay Employee in a lump sum, in cash, on or before the fifth business day following the effective date of termination, an amount equal to Employee's salary for one year at the time of termination; provided, that if the total amount of the benefits available to Employee under this Section 8.4, either alone or together with other payments which Employee has the right to receive from the Company, would constitute a

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“parachute payment” as defined in Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), then the Company shall pay to Employee at the time of termination an additional amount such that the net amount retained by Employee, after deduction of the excise tax imposed by Section 4999 of the Code and any federal, state and local income tax and excise tax imposed on such additional amount, shall be equal to the amount payable to the Employee under this Section 8.4 as originally determined prior to the deduction of the excise tax.

9.	Miscellaneous.
	9.1	Dispute Resolution.

(a)Arbitration of Disputes. Any dispute under this Agreement shall be resolved by arbitration in the State of California, Sonoma County, and, except as herein specifically stated, in accordance with the National Rules for the Resolution of Employment Disputes of the American Arbitration Association (“AAA Rules”) then in effect. However, in all events, these arbitration provisions shall govern over any conflicting rules which may now or hereafter be contained in the AAA Rules. Any judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction over the subject matter thereof. The arbitrator shall have the authority to grant any equitable and legal remedies that would be available in any judicial proceeding instituted to resolve such dispute; provided, however, that the parties retain their right to, and shall not be prohibited, limited or in any other way restricted from, seeking or obtaining equitable relief from a court having jurisdiction over the parties.

(b)Compensation of Arbitrator. Any such arbitration will be conducted before a single neutral arbitrator who will be compensated for his or his services at a rate to be determined by the parties or by the American Arbitration Association, but based upon reasonable hourly or daily consulting rates for the arbitrator in the event the parties are not able to agree upon his or his rate of compensation.

(c)Selection of Arbitrator. The American Arbitration Association will have the authority to select an arbitrator from a list of arbitrators who are partners in a nationally recognized firm of independent certified public accountants from the management advisory services department (or comparable department or group) of such firm; provided, however, that such firm cannot be the firm of certified public accountants then auditing the books and records of either party or providing management or advisory services for either party.

(d)Payment of Costs. Employee shall bear only those costs of arbitration he or she would otherwise bear had he or she brought a claim covered by this Agreement in court.

(e)Burden of Proof. For any dispute submitted to arbitration, the burden of proof will be as it would be if the claim were litigated in a judicial proceeding.

(f)Award. Upon the conclusion of any arbitration proceedings hereunder, the arbitrator will render findings of fact and conclusions of law and a written opinion setting forth the basis and reasons for any decision reached and will deliver such documents to each party to this Agreement along with a signed copy of the award.

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(g)Terms of Arbitration. The arbitrator chosen in accordance with these provisions will not have the power to alter, amend or otherwise affect the terms of these arbitration provisions or the provisions of this Agreement.

(h)Exclusive Remedy. Except as specifically otherwise provided in this Agreement, arbitration will be the sole and exclusive remedy of the parties for any dispute arising out of this Agreement.

9.2Severability. If any provision of this Agreement shall be found by any arbitrator or court of competent jurisdiction to be invalid or unenforceable, then the parties hereby waive such provision to the extent that it is found to be invalid or unenforceable and to the extent that to do so would not deprive one of the parties of the substantial benefit of its bargain. Such provision shall, to the extent allowable by law and the preceding sentence, be modified by such arbitrator or court so that it becomes enforceable and, as modified, shall be enforced as any other provision hereof, all the other provisions continuing in full force and effect.

9.3No Waiver. The failure by either party at any time to require performance or compliance by the other of any of its obligations or agreements shall in no way affect the right to require such performance or compliance at any time thereafter. The waiver by either party of a breach of any provision hereof shall not be taken or held to be a waiver of any preceding or succeeding breach of such provision or as a waiver of the provision itself. No waiver of any kind shall be effective or binding, unless it is in writing and is signed by the party against whom such waiver is sought to be enforced.

9.4Assignment. This Agreement and all rights hereunder are personal to Employee and may not be transferred or assigned by Employee at any time. The Company may assign its rights, together with its obligations hereunder, to any parent, subsidiary, affiliate or successor, or in connection with any sale, transfer or other disposition of all or substantially all of its business and assets, provided, however, that any such assignee assumes the Company's obligations hereunder.

9.5Withholding. All sums payable to Employee hereunder shall be reduced by all federal, state, local and other withholding and similar taxes and payments required by applicable law.

9.6Entire Agreement. This Agreement constitutes the entire and only agreement and understanding between the parties relating to employment of Employee with Company and this Agreement supersedes and cancels any and all previous contracts, arrangements or understandings with respect to Employee's employment; exceptthatthe Employee Invention Assignment and Confidentiality Agreement shall remain as an independent contract and shall remain in full force and effect according to its terms.

9.7Amendment. This Agreement may be amended, modified, superseded, cancelled, renewed or extended only by an agreement in writing executed by both parties hereto.

9.8Notices. All notices and other communications required or permitted under this Agreement shall be in writing and hand delivered, sent by telecopier, sent by registered first class mail, postage pre-paid, or sent by nationally recognized express courier

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service. Such notices and other communications shall be effective upon receipt if hand delivered or sent by telecopier, five (5) days after mailing if sent by mail, and one (l) day after dispatch if sent by express courier, to the following addresses, or such other addresses as any party shall notify the other parties:

If to the Company: Raptor Pharmaceutical Inc.

9 Commercial Blvd., Suite 200

Novato, CA 94949

Telecopier: 415-382-1368

Attention: Christopher M. Starr, Ph.D.

Chief Executive Officer

If to Employee: Todd C. Zankel, Ph.D.

6930 California Street

San Francisco, CA 94121

Telecopier: N/A

9.9Binding Nature. This Agreement shall be binding upon, and inure to the benefit of, the successors and personal representatives of the respective parties hereto.

9.10Headings. The headings contained in this Agreement are for reference purposes only and shall in no way affect the meaning or interpretation of this Agreement. In this Agreement, the singular includes the plural, the plural included the singular, the masculine gender includes both male and female referents and the word “or” is used in the inclusive sense.

9.11Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original but all of which, taken together, constitute one and the same agreement.

9.12Governing Law. This Agreement and the rights and obligations of the parties hereto shall be construed in accordance with the laws of the State of California, without giving effect to the principles of conflict of laws.

9.13Attorneys' Fees. In the event of any claim, demand or suit arising out of or with respect to this Agreement, the prevailing party shall be entitled to reasonable costs and attorneys' fees, including any such costs and fees upon appeal.

IN WITNESS WHEREOF, the Company and Employee have executed this Agreement as of the date first above written.

Raptor Pharmaceutical Inc.		Todd C. Zankel, Ph.D.
By: Christopher M. Starr, Ph.D.
	Chief Executive Officer

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EX-10

Exhibit 10.7

EMPLOYMENT AGREEMENT

This Employment Agreement (the “Agreement”) is entered into as of May 1, 2006 (the “Effective Date”) between Raptor Pharmaceutical Inc., a Delaware corporation with its principal offices located at 9 Commercial Blvd., Suite 200, Novato, CA 94949 (the “Company”), and Kim R. Tsuchimoto, a resident of Novato, California (the “Employee”).

In consideration of the promises and the terms and conditions set forth in this Agreement, the parties agree as follows:

1.Position. During the term of this Agreement, Company will employ Employee, and Employee will serve Company in the capacity of Chief Financial Officer, Treasurer and Secretary. Employee will report directly to the Company's Chief Executive Officer.

2.Duties. Employee will perform duties that are executive in nature, consistent with her title; provided, however, that the Company shall not, without Employee's express written consent, require Employee to be based anywhere other than in Marin or Sonoma County, except for required travel on the Company's business to an extent substantially consistent with travel required of persons who hold similar positions or have similar duties with the Company.

3.Exclusive Service. Employee will devote substantially all her working time and efforts to the business and affairs of the Company. The foregoing shall not, however, preclude Employee (a) from engaging in appropriate civic, charitable or religious activities, (b) from devoting a reasonable amount of time to private investments and business interests, (c) from serving on the boards of directors or advisors of, or as a consultant to, other entities, or (d) from providing incidental assistance to family members on matters of family business, so long as the foregoing activities and service do not conflict with Employee's responsibilities to the Company.

4. Term of Employment.

4.1Initial Term. The Company agrees to continue Employee's employment, and Employee agrees to remain in the employ of the Company, for a period of three (3) years after the Effective Date unless Employee's employment is earlier terminated pursuant to the provisions of this Agreement.

4.2Renewal. The term of Employee's employment shall be extended automatically, without further action of either party, as of thirty three (33) months after the Effective Date and on each succeeding anniversary of that date, for terms of one (1) year, unless on or before ninety (90) days prior to the last day of the term of Employee's employment or any extension thereof, the Company or Employee shall notify the other in writing of its intention not to renew Employee's employment, in which case Employee's employment shall terminate at the end of the original term or any extension thereof. If either party notifies the other of its intention not to renew Employee's employment less than ninety (90) days prior to the end of the term of this Agreement or any extension thereof, then such termination shall be effective ninety (90) days from such notice. No notice of non-renewalmay be given by either party after a renewal term has commenced. Any such renewal shall be upon such terms and conditions set forth

1

herein, unless otherwise agreed between the Company and Employee. The notice of non-renewal by either party shall in no way constitute a breach of this Agreement.

4.3Termination of Agreement. This Agreement shall terminate on the date on which all obligations of the parties hereto have been satisfied.

5. Compensation and Benefits.

5.1Base Salary. The Company agrees to pay Employee a minimum annual salary of One hundred sixty thousand ($160,000), or in the event of any portion of a year, a pro rata amount of such annual salary. Employee's base salary shall be reviewed by the Board of Directors or for possible increases prior to the start of each fiscal year, effective at the beginning of such fiscal year. Employee's salary will be payable as earned in accordance with Company's customary payroll practice.

5.2Cash Bonus. Employee will be eligible to receive annual and discretionary cash bonuses as determined by the Board of Directors.

5.3Additional Benefits. Employee will be eligible to participate in Company's employee benefit plans of general application, including without limitation pension and profit-sharing plans, deferred compensation, supplemental retirement or excess-benefit plans, stock option, incentive or other bonus plans, life, health, disability, accident and dental insurance programs, 401(k) plan, paid vacations and sabbatical leave plans, and similar plans or programs, in accordance with the rules established for individual participation in any such plan. Employee shall be entitled each year to four (4) weeks leave for vacation at full pay, provided, that at the end of each year, Employee may accrue and carry over to the next succeeding year a maximum of two (2) weeks of unused vacation. Employee shall also be entitled to reasonable holidays and illness days with full pay in accordance with the Company's policy from time to time in effect.

5.4Stock Options. Upon approval by the Board of Directors, Employee will be granted options to purchase 250,000 of the Company’s or the Company’s parent’s common stock at the closing price on the date of grant. Such stock options will vest 6/36ths on the six month anniversary of the grant date and 1/36^th per month thereafter and will expire ten (10) years from date of grant. Employee will be eligible to receive future stock grants and stock option awards in the discretion of the Board of Directors.

5.5Expenses. The Company will reimburse Employee for all reasonable and necessary expenses incurred by Employee in connection with the Company's business, provided that such expenses are in accordance with applicable policy set by the Board from time to time and are properly documented and accounted for in accordance with the policy of the Company and with the requirements of the Internal Revenue Service.

6.Proprietary Rights. Employee hereby agrees to execute an Employee Invention Assignment and Confidentiality Agreement with the Company in substantially the form attached hereto as Exhibit A.

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7. Termination.

7.1Events of Termination. Employee's employment with the Company shall terminate upon any one of the following:

(a)Ninety (90) days after the effective date of a written notice sent to Employee stating the Company's determination made in good faith that it is terminating Employee for “Cause” as defined under Section 7.2 below (“Termination for Cause”), provided, that if the “Cause” for termination is a curable failure by Employee to properly perform her assigned duties, then the Company will give Employee written notice of such failure (a “Cause Notice”), and if Employee failure to cure such failure to the reasonable satisfaction of the Chief Executive Officer within sixty (60) days after the Company gives the Cause Notice, then the Company may immediately terminate Employee's employment, and such termination will be conclusively deemed to be for “cause” hereunder; or

(b)thirty (30) days after the effective date of a written notice sent to Employee stating the Company's determination made in good faith that, due to a mental or physical incapacity, Employee has been unable to perform her duties under this Agreement for a period of not less than six (6) consecutive months or 180 days in the aggregate in any 12-month period unless Employee has been on a leave approved by the Company’s Chief Executive Officer (“Termination for Disability”); or

(c) Employee's death (“Termination Upon Death”); or

(d)the effective date of a written notice sent to the Company stating Employee's determination made in good faith of “Constructive Termination” by the Company, as defined under Section 7.3 below (“Constructive Termination”); or

(e)thirty (30) days after the effective date of a notice sent to Employee stating that the Company is terminating her employment, without cause, which notice can be given by the Company at any time after the Effective Date at the Company's sole discretion, for any reason or for no reason (“Termination Without Cause”); or

(f)the effective date of a notice sent to the Company from Employee stating that Employee is electing to terminate her employment with the Company (“Voluntary Termination”).

7.2“Cause” Defined. For purposes of this Agreement, “cause” for Employee's termination means Employee's conviction of a felony involving moral turpitude and will exist at any time after the happening of one or more of the following events:

(a)any willful act or acts of dishonesty undertaken by Employee and intended to result in substantial gain or personal enrichment of Employee at the expense of the Company; or

(b)any willful act of gross misconduct which is materially and demonstrably injurious to the Company.

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No act, or failure to act, by Employee shall be considered “willful” if done, or omitted to be done, by him in good faith and in the reasonable belief that her act or omission was in the best interest of the Company and/or required by applicable law.

7.3“Constructive Termination” Defined. “Constructive Termination” shall mean:

(a)a material reduction in Employee's salary or benefits not agreed to by Employee; or

(b)a material change in Employee's responsibilities not agreed to by Employee; or

(c)the Company's failure to comply in any material respect with any material term of this Agreement; or

(d)a requirement that Employee relocate to an office that would increase Employee's one-way commute distance by more than fifty (50) miles; or

(e)a “Change in Control” of the Company, as defined herein. A “Change in Control” means the occurrence of any of the following events: (i) any sale or exchange of the capital stock by the stockholders of the Company in one transaction or series of related transactions where more than fifty percent (50%) of the outstanding voting power of the Company is acquired by a person or entity or group of related persons or entities; or (ii) any reorganization, consolidation or merger of the Company where the outstanding voting securities of the Company immediately before the transaction represent or are converted into less than fifty percent (50%) of the outstanding voting power of the surviving entity (or its parent corporation) immediately after the transaction; or (iii) the consummation of any transaction or series of related transactions that results in the sale of all or substantially all of the assets of the Company;or (iv) any “person” or “group” (as defined in the Securities Exchange Act of 1934, as amended (the “Exchange Act”) becoming the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act) directly or indirectly of securities representing more than fifty percent (50%) of the voting power of the Company then outstanding; or (v) less than a majority of the Board of Directors are persons who were either nominated for election by the Board of Directors or were elected by the Board of Directors. A “change of control” will specifically exclude the Company’s initial stock for stock exchange with Highland Clan Creations Corp. expected to occur in May 2006.

8. Effect of Termination.

8.1Termination for Cause or Voluntary Termination. In the event of any termination of Employee's employment pursuant to Section 7.1(a) or Section 7.1(f), the Company shall immediately pay to Employee the compensation and benefits otherwise payable to Employee under Section 5 through the date of termination. Employee's rights under the Company's benefit plans of general application shall be determined under the provisions of those plans.

8.2Termination for Disability. In the event of termination of employment pursuant to Section 7.1(b):

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(a)the Company shall immediately pay to Employee the compensation and benefits otherwise payable to Employee under Section 5 through the date of termination,

(b)for three (3) months after the termination of Employee's employment, the Company shall continue to pay Employee (A) her salary under Section 5.1 above at Employee's then-current salary, less applicable withholding taxes, payable on the Company's normal payroll dates during that period, (B) her annual cash bonus pro rata for three (3) months under Section 5.2 above, (C) shall continue her benefits under Section 5.3 above, and (D) Employee’s options under section 5.4 shall continue to vest for three months after termination, and

(c)Employee shall receive other severance and disability payments as provided in the Company's standard benefit plans.

Within thirty (30) days of the Effective Date, the Company will procure disability insurance sufficient to fund its obligations to Employee hereunder, naming the Employee as payee. The Company shall maintain such insurance in force at all times that Employee is employed pursuant to this Agreement.

8.3Termination Upon Death. In the event of termination of employment pursuant to Section 7.1(c), all obligations of the Company and Employee shall cease, except the Company shall immediately pay to Employee (or to Employee's estate) the compensation and benefits otherwise payable to Employee under Section 5 through the date of termination.

8.4Constructive Termination or Termination Without Cause. In the event of any termination of this Agreement pursuant to Section 7.1(d) or Section 7.1(e),

(a)the Company shall immediately pay to Employee the compensation and benefits otherwise payable to Employee under Section 5 through the date of termination, and

(b)for twelve (12) months after the termination of Employee's employment, the Company shall continue to pay Employee (A) her salary under Section 5.1 above at Employee's then-current salary, less applicable withholding taxes, payable on the Company's normal payroll dates during that period, (B) her annual cash bonus under Section 5.2 above, and (C) shall continue her benefits under Section 5.3 above, and

(c)If the termination occurs after a Change in Control, then in addition to the foregoing benefits, all of Employee's vested and unvested options to purchase the Company's or the Company’s parent’s Common Stock shall, as of the date of employment termination, be immediately exercisable in full and shall remain exercisable for the periods specified in such options or the plans governing such options, and all shares of the Company's or the Company’s parent’s Common Stock owned by Employee shall immediately be released from any and all vesting restrictions, and Company shall pay Employee in a lump sum, in cash, on or before the fifth business day following the effective date of termination, an amount equal to Employee's salary for one year at the time of termination; provided, that if the total amount of the benefits available to Employee under this Section 8.4, either alone or together with other payments which Employee has the right to receive from the Company, would constitute a

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“parachute payment” as defined in Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), then the Company shall pay to Employee at the time of termination an additional amount such that the net amount retained by Employee, after deduction of the excise tax imposed by Section 4999 of the Code and any federal, state and local income tax and excise tax imposed on such additional amount, shall be equal to the amount payable to the Employee under this Section 8.4 as originally determined prior to the deduction of the excise tax.

9.	Miscellaneous.
	9.1	Dispute Resolution.

(a)Arbitration of Disputes. Any dispute under this Agreement shall be resolved by arbitration in the State of California, Sonoma County, and, except as herein specifically stated, in accordance with the National Rules for the Resolution of Employment Disputes of the American Arbitration Association (“AAA Rules”) then in effect. However, in all events, these arbitration provisions shall govern over any conflicting rules which may now or hereafter be contained in the AAA Rules. Any judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction over the subject matter thereof. The arbitrator shall have the authority to grant any equitable and legal remedies that would be available in any judicial proceeding instituted to resolve such dispute; provided, however, that the parties retain their right to, and shall not be prohibited, limited or in any other way restricted from, seeking or obtaining equitable relief from a court having jurisdiction over the parties.

(b)Compensation of Arbitrator. Any such arbitration will be conducted before a single neutral arbitrator who will be compensated for her or her services at a rate to be determined by the parties or by the American Arbitration Association, but based upon reasonable hourly or daily consulting rates for the arbitrator in the event the parties are not able to agree upon her or her rate of compensation.

(c)Selection of Arbitrator. The American Arbitration Association will have the authority to select an arbitrator from a list of arbitrators who are partners in a nationally recognized firm of independent certified public accountants from the management advisory services department (or comparable department or group) of such firm; provided, however, that such firm cannot be the firm of certified public accountants then auditing the books and records of either party or providing management or advisory services for either party.

(d)Payment of Costs. Employee shall bear only those costs of arbitration he or she would otherwise bear had he or she brought a claim covered by this Agreement in court.

(e)Burden of Proof. For any dispute submitted to arbitration, the burden of proof will be as it would be if the claim were litigated in a judicial proceeding.

(f)Award. Upon the conclusion of any arbitration proceedings hereunder, the arbitrator will render findings of fact and conclusions of law and a written opinion setting forth the basis and reasons for any decision reached and will deliver such documents to each party to this Agreement along with a signed copy of the award.

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(g)Terms of Arbitration. The arbitrator chosen in accordance with these provisions will not have the power to alter, amend or otherwise affect the terms of these arbitration provisions or the provisions of this Agreement.

(h)Exclusive Remedy. Except as specifically otherwise provided in this Agreement, arbitration will be the sole and exclusive remedy of the parties for any dispute arising out of this Agreement.

9.2Severability. If any provision of this Agreement shall be found by any arbitrator or court of competent jurisdiction to be invalid or unenforceable, then the parties hereby waive such provision to the extent that it is found to be invalid or unenforceable and to the extent that to do so would not deprive one of the parties of the substantial benefit of its bargain. Such provision shall, to the extent allowable by law and the preceding sentence, be modified by such arbitrator or court so that it becomes enforceable and, as modified, shall be enforced as any other provision hereof, all the other provisions continuing in full force and effect.

9.3No Waiver. The failure by either party at any time to require performance or compliance by the other of any of its obligations or agreements shall in no way affect the right to require such performance or compliance at any time thereafter. The waiver by either party of a breach of any provision hereof shall not be taken or held to be a waiver of any preceding or succeeding breach of such provision or as a waiver of the provision itself. No waiver of any kind shall be effective or binding, unless it is in writing and is signed by the party against whom such waiver is sought to be enforced.

9.4Assignment. This Agreement and all rights hereunder are personal to Employee and may not be transferred or assigned by Employee at any time. The Company may assign its rights, together with its obligations hereunder, to any parent, subsidiary, affiliate or successor, or in connection with any sale, transfer or other disposition of all or substantially all of its business and assets, provided, however, that any such assignee assumes the Company's obligations hereunder.

9.5Withholding. All sums payable to Employee hereunder shall be reduced by all federal, state, local and other withholding and similar taxes and payments required by applicable law.

9.6Entire Agreement. This Agreement constitutes the entire and only agreement and understanding between the parties relating to employment of Employee with Company and this Agreement supersedes and cancels any and all previous contracts, arrangements or understandings with respect to Employee's employment; exceptthatthe Employee Invention Assignment and Confidentiality Agreement shall remain as an independent contract and shall remain in full force and effect according to its terms.

9.7Amendment. This Agreement may be amended, modified, superseded, cancelled, renewed or extended only by an agreement in writing executed by both parties hereto.

9.8Notices. All notices and other communications required or permitted under this Agreement shall be in writing and hand delivered, sent by telecopier, sent by registered first class mail, postage pre-paid, or sent by nationally recognized express courier

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service. Such notices and other communications shall be effective upon receipt if hand delivered or sent by telecopier, five (5) days after mailing if sent by mail, and one (l) day after dispatch if sent by express courier, to the following addresses, or such other addresses as any party shall notify the other parties:

If to the Company: Raptor Pharmaceutical Inc.

9 Commercial Blvd., Suite 200

Novato, CA 94949

Telecopier: 415-382-1368

Attention: Christopher M. Starr, Ph.D.

Chief Executive Officer

If to Employee: Kim R. Tsuchimoto

167 Michele Circle

Novato, CA 94947

Telecopier: 415-892-2959

9.9Binding Nature. This Agreement shall be binding upon, and inure to the benefit of, the successors and personal representatives of the respective parties hereto.

9.10Headings. The headings contained in this Agreement are for reference purposes only and shall in no way affect the meaning or interpretation of this Agreement. In this Agreement, the singular includes the plural, the plural included the singular, the masculine gender includes both male and female referents and the word “or” is used in the inclusive sense.

9.11Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original but all of which, taken together, constitute one and the same agreement.

9.12Governing Law. This Agreement and the rights and obligations of the parties hereto shall be construed in accordance with the laws of the State of California, without giving effect to the principles of conflict of laws.

9.13Attorneys' Fees. In the event of any claim, demand or suit arising out of or with respect to this Agreement, the prevailing party shall be entitled to reasonable costs and attorneys' fees, including any such costs and fees upon appeal.

IN WITNESS WHEREOF, the Company and Employee have executed this Agreement as of the date first above written.

Raptor Pharmaceutical Inc.		Kim R. Tsuchimoto
By: Christopher M. Starr, Ph.D.
	Chief Executive Officer

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EX-23

EXHIBIT 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the use in this Current Report on Form 8-K of our report dated March 16, 2006, relating to the financial statements of Raptor Pharmaceutical, Inc. which appears in such Current Report of Highland Clan Creations Corp. on Form 8-K dated May 25, 2006.

/s/ Burr, Pilger & Mayer LLP

San Francisco, California
May 25, 2006