In embryogenesis, has a role in somatic muscle attachment and in the development of axonal pathways probably by stabilizing cell-matrix adhesion and/or by acting as a competitive antagonist of serine proteases. Localizes to vesicle-like structures in epidermal cells. In embryos, from stage 14 till stage 17, expressed in epidermal cells, tracheal system and denticle belts (at protein level) (PubMed:7851790). In larva and in early pupa, expressed in brain cells along the ventral midline, in cell bodies in the cellular cortex of the ventral nerve cord, in cells contributing to the perineum around the cerebral hemispheres and in axons of the longitudinal connectives of the central nervous system (CNS); at low level, expressed throughout the antennal disk (at protein level) (PubMed:7851790, PubMed:8817456). In pupae, expressed in pupal appendages and body epidermis, in the proboscis and pseudotrachea (at protein level) (PubMed:8817456). Expressed in embryos; from stage 11 until the end of stage 13 expressed in small cells along the midline of the central nervous system; at state 12, expressed in the epidermis; from stage 13 onwards, expressed in the epidermal cells in particular in the anterior border of each segment; from stage 14-17, detected in the cells of the tracheal system (PubMed:7851790). Detected in larva and pupa, but not in adult flies (PubMed:7851790, PubMed:8817456). The CLIP domain consists of 37-55 residues which are 'knitted' together usually by 3 conserved disulfide bonds forming a clip-like compact structure. Proteolytically cleaved and thereafter secreted. Embryonic lethal as a result of neuronal defects in the central nervous system (CNS) and peripheral nervous system (PNS) from stage 15, and defective muscle attachment from stage 16 (PubMed:7851790, PubMed:8817456). Defects in the CNS include stalling of the growth cones of pioneer axons of anterior and posterior corner cells (aCC and pCC) leading to abnormalities in the horizontal commissures and discontinuities in the longitudinal connectives respectively (PubMed:8817456). Defects in the PNS include defects in the location of the sense organs and in their projections in the sensory nerves, including missing neurons and more often defects in the axonal paths with erroneous connections with the ventral ganglia (PubMed:8817456). Defects in muscle attachment include the appearance of myospheroid-like bodies and the collapse of lateral transverse muscles 1-3 (PubMed:7851790). Belongs to the peptidase S1 family. CLIP subfamily. Lacks the conserved Ser residue within the catalytic triad which is replaced by a Gly residue, probably resulting in a loss of proteolytic activity. Truncated N-terminus.