Satellogic

Phase A — Understand the business

Lens 1 · Company Overview

Satellogic is a vertically integrated Earth-observation (EO) company — it designs, builds, launches, and operates its own high-resolution imaging satellites, then sells the imagery and analytics (and, increasingly, the satellites themselves). Founded 2010 in Argentina by Emiliano Kargieman (CEO) and Gerardo Richarte; de-SPAC'd onto Nasdaq in January 2022 via Cantor's CF Acquisition Corp V. Legally domesticated to Delaware (HQ now Davidson, North Carolina), but the engineering and manufacturing base remains in Argentina (84 of 154 employees, R&D) and Uruguay (29, manufacturing).

The mission, in management's words, is to "democratize access to geospatial data … at what we believe to be the lowest cost in the industry". The thesis that makes this a company and not a science project: Satellogic claims an all-in cost of ~$1.3M per satellite, versus tens of millions for legacy EO birds. If true, that cost structure is the whole moat.

Two business lines:

1. Data & Analytics — tasking + archived imagery, the Aleph Observer persistent-monitoring product, and Constellation-as-a-Service (CaaS). Management calls this "our most predictable revenue stream." This is the recurring/subscription engine, recently rebranded the "Persistent Global Intelligence" pivot — episodic tasking → continuous monitoring on subscription.
2. Space Systems — selling or licensing whole satellites to "certain key customers" (mostly sovereign/defense). Lumpy, but high-ticket: a single in-orbit satellite sale booked $12M in April 2026.

Customers: predominantly government and defense & intelligence (D&I) today. The civilian/commercial "democratization" market is the future option, not the present P&L.

Contract structure & key terms. Revenue splits over-time (subscriptions/tasking) vs point-in-time (satellite sales). FY2025: of $17.7M recognized, $3.9M over time / $13.8M at a point in time — i.e. nearly 80% of FY25 revenue was lumpy satellite-sale / one-shot, NOT recurring. That is the inverse of how management frames the business and is a core tension (see Lens 13). Concentration is severe: in FY2025, three customers each >10% of revenue, $9.6M combined ≈ 54% of total. The contracts carry minimum-service requirements and defense-related uncertainty (named risk factors).

Lens 2 · Supply Chain

Map: upstream components → Satellogic in-house build (Uruguay) → SpaceX launch → in-orbit constellation → ground stations / cloud → end customer (mostly sovereign D&I).

Chokepoints / single-source: (1) SpaceX is the only launch provider named — a launch-cadence or pricing shock hits the constellation-refresh schedule directly (satellites have a ~3-year useful life, so the constellation must be continuously rebuilt — this is a treadmill, not a one-time capex). (2) OS as a related-party optics supplier. (3) Geographic concentration of the build in Argentina/Uruguay creates FX, political, and trade-policy exposure (the 10-Q flags the "One Big Beautiful Bill Act," export controls, and tariffs as risks).

The vertical integration is the differentiator: by owning design→manufacture→operate, Satellogic "reduce[s] intermediary costs, control[s] quality and scale[s] up more quickly". The non-ITAR design (built outside US arms-regulation scope) is a deliberate supply-chain choice that lets it sell satellites to foreign sovereigns that can't buy ITAR-controlled US hardware — a genuine, if double-edged, structural advantage.

Lens 3 · Competitive Advantages (moats)

The real edges:

1. Cost leadership. ~$1.3M all-in per satellite is the load-bearing claim. If a competitor needs 10–30× the capital per bird, Satellogic can field comparable resolution at a fraction of the constellation cost. Sub-meter (50cm NewSat / 30cm NextGen / 1m Merlin) at that price point is the differentiation.
2. Vertical integration + IP. Patented imaging technology, in-house build. Switching to "manufacture your own constellation cheaply" is hard to replicate without a decade of process knowledge.
3. Non-ITAR design. Lets foreign sovereigns buy the satellites outright (Space Systems line) — a market ITAR-bound US peers (Maxar, BlackSky) legally cannot serve the same way. This is a narrow but defensible niche.

Bargaining power — who needs whom: Weak today. With three customers = 54% of revenue and 74% of Q1-26 receivables in a single customer, the customers hold the leverage. Against suppliers, Satellogic is a small buyer of SpaceX launch capacity — also a price-taker. The moat is technological/cost, not commercial power. The bet is that cost leadership eventually converts into a wide commercial base that diversifies the customer book; that conversion is unproven.

Durability: The cost edge is the only moat that scales. Brand and network effects are negligible at this revenue. The danger is that the cost advantage is a head start, not a structural barrier — Planet Labs, Chinese state constellations, and new entrants can also drive cost down with volume manufacturing (see Lens 13).

Lens 4 · Segments

Satellogic reports one operating segment — the CODM (CEO) runs the whole company on consolidated net loss. So "segments" = revenue by line of business and by geography.

By line of business (recognition timing as the proxy, FY2025):

• Over-time (D&A / subscriptions / tasking): $3.9M
• Point-in-time (Space Systems satellite sales + one-shot): $13.8M
• → ~22% recurring / ~78% lumpy in FY25. The "predictable" D&A line is still the minority.

By geography — the most revealing trend. Q1-2026 vs Q1-2025:

By country Q1-26: US $1.88M, Australia $1.22M, Malaysia $0.81M, Albania $0.40M, All-other $1.80M. The growth is offshore and sovereign-defense-led (Asia-Pacific surge maps to the disclosed Asia-Pacific tasking deal and defense satellite sales). The US — the deepest D&I budget on earth — is declining, which is the single most important segment fact: Satellogic is not yet winning the US defense/IC franchise that bulls assume.

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Phase B — Measure performance

Lens 5 · Earnings Result (Q1 2026, reported 2026-05-12)

[All research-layer: 10-Q Q1-26, statements of operations.]

Read it correctly or be fooled by it. The headline $(118.3)M net loss / $(0.84) EPS looks catastrophic and is almost entirely non-cash and non-operating. The $(113.0)M "change in fair value of financial instruments" is the mark-to-market remeasurement of warrants, the Secured Convertible Notes, and earnout liabilities, driven UP by Satellogic's own ~200% share-price rally in the quarter. In plain terms: the stock went up, so the liabilities the company owes in stock got marked up, producing a giant paper loss. It reverses if the stock falls. The operating loss of $(6.4)M — improving 33% YoY — is the real number, and it is moving the right way.

Drivers: Service revenue +59% on tasking/CaaS; first-ever product (satellite-sale) revenue $0.7M. Cost discipline is genuine — operating loss narrowed despite revenue scaling. Depreciation fell ($1.39M vs $2.69M) as older satellites finished depreciating.

Balance-sheet flags:

• Cash $121.9M (up from $94.4M at YE25 — the Jan-2026 raises + a $32.5M financing draw landed).
• Total stockholders' equity went NEGATIVE: $(25.5)M deficit vs +$60.5M at YE25. The swing is the FV remeasurement hitting accumulated deficit (now $(523.2)M). A negative book value on a company with $122M cash is an accounting artifact of the convert/warrant marks — but it is a real covenant and optics risk.
• Secured Convertible Notes at fair value $142.6M (up from $56.1M) — again FV-inflated by the share run.
• Contract liabilities (deferred revenue) grew to $17.0M current (from $10.6M) — positive: customers prepaying for 2026 delivery.

Market reaction: The stock retreated on the Q1 print despite +80% revenue ("Q1 2026 slides: revenue surges 80% as stock retreats" ) — classic "priced for perfection after a 200% run" behavior.

Lens 6 · Earnings Calls (sentiment trend)

No transcripts on disk (transcripts=0); this lens is ``. Across the FY2025 (2026-03-19) and Q1-2026 (2026-05-12) communications, management's framing has shifted decisively toward "Persistent Global Intelligence" and subscription/recurring revenue — Kargieman: "a pivotal shift in how customers engage … providing predictable revenue streams". The narrative arc over the last ~4 reports:

• 2024 → early 2025: survival mode — going-concern doubt, cost cuts, balance-sheet repair.
• Late 2025: "going concern resolved" after the $90M raise; tone flips to growth.
• 2026: confident, milestone-driven — Merlin, defense wins, 80–94% revenue growth, RPO base.

What they started saying: "Persistent Global Intelligence," "AI-first constellation," "fully funded by customer contracts" (Merlin). What they stopped saying: going-concern / liquidity-doubt language (explicitly resolved ). The sentiment trend is genuinely improving and backed by the operating-loss trajectory — but it leans hard on Merlin, which is pre-launch.

Lens 7 · Comps

Pure-play commercial EO peers. Multiples are ``; where I cannot source a clean figure I mark it n/a rather than invent one.

5-yr avg ROE: n/a; meaningless for this cohort (all loss-making, negative equity at SATL).

The comp takeaway: Satellogic trades at ~50–60× revenue against ~$18–20M of revenue, a richer sales multiple than Planet Labs — which has ~17× the revenue, a diversified commercial base, and the largest constellation in the world. SATL's premium is a pure re-rate-on-momentum + Merlin-optionality multiple, not a fundamentals-justified one. On any normalized basis the stock is expensive; the bull case requires the revenue to compound into the multiple fast (Lens 11–12).

Lens 8 · Stock-Price Catalysts (what actually moves SATL)

`` throughout. The 5-year tape says SATL reacts to liquidity/dilution events and big sovereign-defense contract headlines, far more than to quarterly fundamentals:

• 2022 de-SPAC → −50%+ as the SPAC trade unwound; "lost more than half its value since going public in 2022".
• 2024–25 going-concern fear → repeated drawdowns; short interest spiked +19% in March 2025.
• Oct 2025 $90M raise / Jan 2026 $35M raise → dilution overhangs (+47% shares YoY) but removed bankruptcy risk — the pivot point.
• 2026 contract cadence: $30M AI-first defense (Apr 2025), $18M Aleph Observer defense, $12M satellite sale (Apr 2026), CEiiA Portugal $18M, Asia-Pacific tasking — each a positive catalyst.
• The 200% YTD melt-up (2026): "Satellogic Surges 200%, Becoming 2026's Top-Performing Space Stock". Driven by defense/EO sector enthusiasm + Merlin + balance-sheet repair, not by a step-change in trailing revenue.
• Q1-26 print → stock retreated despite +80% revenue.

Pattern: SATL is a headline-and-liquidity stock — it moves on contract press releases, capital raises, and sector beta, with high volatility (June 2026 range $5.55–$9.45 ). The market reacts to story and survival, not yet to earnings, because there are no earnings.

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Phase C — Judge people & books

Lens 9 · Management

Emiliano Kargieman — Co-founder & CEO. 25+ years building tech companies; founded Satellogic 2010, took it from a single experimental cubesat to a ~19-satellite constellation and a public listing. Founder-operator archetype, not a hired professional manager — high conviction, mission-driven ("democratize geospatial data"), willing to operate through near-death (the 2024 going-concern scare) and out the other side.

1. Track record: Built one of the largest commercial high-res constellations at a claimed industry-low cost — a genuine engineering achievement. But 15 years in, revenue is $17.7M — commercialization has badly lagged the technology. He is a better builder than seller, so far.
2. Tenure & skin in the game: Founder since inception; holds Class B super-voting stock (10.58M Class B shares ) → founder retains voting control even as Class A dilutes. Insider economic ownership not sourced precisely (no insider-transactions.csv on disk) — n/a on exact %.
3. Capital allocation: Mixed. Survived by serial dilution — +47% shares in one year via the $90M + $35M + $20M raises, plus the Tether convert. Necessary to avoid insolvency, brutal for per-share value. The $3.7M Officina Stellare stake (a supplier, with Kargieman on its board) is a related-party capital deployment to flag. ROE/ROIC are negative — no value-accretive allocation track record yet because the company has never been profitable.
4. Red flags: Related-party supplier (OS); heavy dilution; super-voting structure concentrating control; the entire enterprise rode in on a Cantor SPAC that the SEC later fined $18M (see Lens 10) — Kargieman chose that vehicle/sponsor.
5. Archetype implication: A founder-technologist running a capital-intensive hardware company that must repeatedly tap markets. The right person to build the constellation; the open question is whether he can commercialize it into a self-funding business before dilution destroys the equity.

Lens 10 · Forensic Red Flags

Forensic-analyst lens. Ground: +.

Income statement:

• The FV-of-financial-instruments line is the dominant distortion. It swung from +$25.9M (FY25 full-year gain) to −$113.0M (Q1-26 loss). This is non-cash mark-to-market on warrants + converts + earnouts, mechanically inverse to the share price. It makes GAAP net income/EPS nearly useless quarter-to-quarter — analyze operating loss and cash burn, not net loss. Not a fraud flag, but a comprehension trap that will repeatedly mislead headline readers.
• Revenue recognition: ~78% of FY25 revenue was point-in-time satellite sales — high-quality cash but lumpy and not the "recurring" story management tells.

Balance sheet:

• Negative stockholders' equity $(25.5)M — book value wiped by FV marks; cosmetically alarming, mechanically explained, but a covenant/optics risk.
• Customer concentration in receivables: 74% in one customer (Q1-26), 66% (YE25) — a single non-payment would be material.
• Inventory $2.4M and AR $10.0M are small and not outrunning revenue — no channel-stuffing signal.

Cash-flow vs earnings:

• Operating cash flow turned slightly positive (+$0.16M Q1-26 vs −$4.7M Q1-25), while GAAP showed a $118M loss — the cleanest proof the net loss is non-cash. FY25 operating cash use $26.9M, improving 25%. Capex $5.55M in Q1-26 (constellation build).
• SBC flatters non-GAAP and is a real dilution vector; adj. EBITDA loss $17.4M FY25.

The Tether convertible — the single most important structural item:

• $30M floating-rate (SOFR-based) Secured Convertible Notes issued by subsidiary Nettar to Tether Investments Limited; expandable to $50M aggregate.
• Secured on substantially all assets, including all IP. Conversion price $1.20 (vs ~$6 stock = deep in the money — ~25M shares at $30M drawn, ~41.7M at $50M ). Matures 2028-04-12. Restrictive covenants (limits on debt, liens, dividends, asset sales).
• Forensic read: a lender holding a first lien on the IP, with a deep-in-the-money convert, is both a lifeline and an overhang — it funded survival but (a) dilutes materially on conversion and (b) means Tether (a crypto-treasury entity) effectively controls the senior claim on the company's core assets. Crucially: this is a $30–50M secured-note relationship, NOT a Tether majority-equity stake. (Tether's 2025 ~70% tender offer was for Adecoagro, a different company — do not conflate. Satellogic ≠ a Tether-controlled company; Tether is its senior secured lender + strategic backer.)

Regulatory findings (required sub-section):

• SEC EDGAR EFTS — Litigation Releases: None naming Satellogic, 2021-06-20 → 2026-06-20.
• SEC AAERs: None in the search period.
• 10-K Item 3 / 10-Q Part II Item 1 (Legal Proceedings): the filings flag risks but disclose no material ongoing litigation against the company itself (the company's own disclosure).
• Non-SEC / SPAC-origin enforcement (web): the SPAC that took Satellogic public was Cantor's — Cantor agreed to pay the SEC $18M (2023) over SPAC-related disclosure lapses, and a shareholder class action over the de-SPAC settled for $12M in Aug 2023 with no admission of wrongdoing. These actions targeted Cantor/the sponsor, not Satellogic's operations — but they color the quality of the vehicle Satellogic chose to go public through.
• Verdict: No material regulatory or accounting-enforcement finding against Satellogic itself — verified via SEC EDGAR EFTS (LR, AAER), 10-K/10-Q Item 3, and web search as of 2026-06-20. The Cantor SPAC settlements are reputational context, not a SATL liability.

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Phase D — Project & stress-test

Lens 11 · Forward Projection (FY2026–FY2028 revenue & path to profitability)

No forecast.ts create is run in --watchlist mode (per skill). EPS for a company whose GAAP bottom line is dominated by FV-of-derivative marks is not forecastable with any honesty — so I project revenue and operating loss / cash burn, not GAAP EPS, and the binary that actually matters: does Merlin launch and convert, and does cash reach self-funding?

Base inputs (all labeled):

• FY25 revenue $17.7M; Q1-26 $6.1M, +80% YoY; Q4-25 +94%. Run-rate exiting Q1-26 ≈ $24M annualized.
• RPO (backlog) $64.8M, of which $29.2M within 1 year — a hard floor under near-term revenue.
• Cash $121.9M; op cash burn ~$27M/yr improving; capex ~$20–25M/yr (constellation treadmill).
• Merlin: "fully funded by customer contracts," first launch Q4-2026, deployment H1-2027.

Path to profitability: at ~72% gross margin and a roughly fixed ~$50–55M opex base, operating breakeven needs ~$70–80M revenue. That lands in the base case around FY2027–FY2028 — if the revenue curve holds. Cash adequacy: $122M cash less ~$27M/yr burn less ~$20M/yr capex ≈ ~2.5 years of runway before Merlin revenue, with the $50M Tether facility and ATM as backstops. Runway reaches the Merlin inflection — the single most important projection conclusion. The Brier-scoreable binary (would log if not in watchlist mode): "SATL achieves a positive quarterly operating result (ex-FV) by Q4-FY2027," p ≈ 0.40.

Lens 12 · Bull vs Bear

Bull case. Satellogic is the low-cost producer in a structurally supply-constrained, fast-growing market (EO ~$17B → ~$46B by 2034, ~13% CAGR ). At ~$1.3M/satellite it can field daily-revisit, sub-meter, AI-onboard imagery (Merlin) at a cost no Western peer matches, and its non-ITAR design opens sovereign satellite sales that ITAR-bound US peers can't touch. The business just crossed three inflections at once: (1) revenue re-accelerated (+80% Q1, +94% Q4); (2) the balance sheet was repaired ($90M+$35M raises, going-concern doubt explicitly removed, $122M cash, Tether's secured backing); (3) operating loss is narrowing toward a ~$70–80M-revenue breakeven that the base case reaches by ~FY2027–28. Merlin is "fully funded by customer contracts" — growth without (much) new dilution. Defense/IC demand for persistent EO is a secular tailwind (Ukraine, Middle East, China deterrence). The earnings surprise bulls want: a marquee US D&I franchise win that re-rates the customer book from "three offshore customers" to "the US government." Capital allocation is finally turning from survival to growth.

Bear case. Three things could permanently impair the equity:

1. Commercialization never matches the technology. 15 years in, revenue is $17.7M and 78% of it is lumpy satellite sales, not the recurring subscription story. If CaaS/Persistent-Global-Intelligence doesn't inflect, this is a sub-scale hardware shop forever tapping markets — and the equity gets diluted to nothing.
2. Dilution + the Tether overhang. Shares +47% in a year; a $1.20-strike secured convert on all the IP sits deep in the money and converts into ~25–42M more shares; super-voting founder control limits minority recourse. Even a successful operating company can deliver a poor per-share outcome here.
3. Valuation. ~50–60× revenue on ~$20M of revenue, after a 200% run, vs Planet Labs at a lower sales multiple with 17× the revenue. The price already discounts Merlin working. Pre-mortem (18 months out, thesis broke): Merlin's Q4-26 first launch slipped or underperformed, the US D&I win never came, Asia-Pacific revenue proved one-off, another dilutive raise hit at a lower price as the 2026 momentum unwound, and the stock round-tripped the entire 200% melt-up back toward $2–3. Multiples were far too high for a $20–35M-revenue company with customer concentration.

Contrarian view — what the market is refusing to see: Both sides. Bulls ignore that the "recurring revenue" pivot is still mostly a slide, not a P&L — and that the giant GAAP losses, while non-cash, signal an equity-value structure (converts/warrants/earnouts) that quietly transfers upside away from common holders. Bears who dismiss it as a SPAC zombie miss that the operating loss is genuinely converging, cash burn is real-but-funded, and the non-ITAR sovereign-sales niche is a defensible, under-modeled franchise. The truth is a high-variance, binary-on-Merlin name — not a compounder, not a zero.

Lens 13 · Devil's Advocate (short-seller)

Dismantling the bull case:

• Revenue is a rounding error and concentrated. $17.7M FY25; three customers = 54%, one customer = 74% of receivables. Lose one sovereign contract and a quarter implodes. The "$1.3M/satellite cost advantage" is meaningless if you can't sell enough imagery to cover a ~$50M opex base — and 15 years of trying says selling is the hard part, not building.
• The "recurring revenue" pivot is marketing. 78% of FY25 revenue was point-in-time satellite sales. Selling your own satellites to sovereigns is not SaaS — it's lumpy hardware revenue dressed as "Persistent Global Intelligence."
• The moat is a head start, not a barrier. Planet Labs already operates the largest constellation and images all of Earth's landmass daily. Chinese state-backed constellations are flooding capacity. Cost curves fall for everyone who manufactures at volume — Satellogic's edge erodes as competitors scale.
• Most dangerous underestimated competitor: not Maxar (private, legacy) — it's Chinese state EO + Planet Labs' analytics/AI layer. If the value migrates from pixels to AI-derived insight, Planet (with 17× the revenue to fund AI) out-invests Satellogic on the part of the stack that actually has margins.
• Capital allocation / governance: serial dilution (+47%/yr), a related-party optics supplier (OS, CEO on its board), a $1.20 secured convert on the entire IP held by a crypto-treasury entity (Tether), and super-voting founder control. Minority common holders are last in line on a thin slice.
• Assumptions that MUST hold for ~$6 / ~$1B: (1) Merlin launches on time (Q4-26) and converts to recurring subscription revenue; (2) revenue compounds ~60–90% for three years into a ~$70–80M breakeven; (3) no further dilutive raise at a lower price; (4) a US D&I franchise materializes. Break any one and the multiple has 50–70% downside.
• If growth disappoints 20–30%: at a 50–60× sales multiple, a revenue miss compounds with multiple compression — a 25% revenue shortfall + de-rate to a "still-generous" 15–20× sales implies the stock round-trips toward $2–3 (the pre-melt-up base).
• Single scenario that permanently impairs the business: Merlin slips/underperforms and a forced dilutive raise hits in a risk-off tape — the equity gets crushed and the Tether convert/IP lien becomes the value fulcrum. Plausibility: moderate — not the base case, but far from tail given the launch is still ahead and funding is market-dependent.

Lens 14 · Management Questions (ordered by information value)

1. Of FY2025's $17.7M revenue, only ~$3.9M was recognized over time — what is the concrete path and timeline to recurring (CaaS / Persistent Global Intelligence) becoming the majority of revenue, and what's the current recurring run-rate?
2. Merlin is described as "fully funded by customer contracts" — name the contracted dollar value backing it, the customers, and what happens to the deployment if those contracts slip or cancel.
3. Three customers were >54% of FY25 revenue and one is 74% of receivables — what is your concrete plan to de-concentrate, and which single customer is the 74%?
4. The US is your declining region while Asia-Pacific surged — why are you losing share in the world's largest D&I budget, and what is the realistic timeline to a major US government/IC franchise win?
5. The Tether Secured Convertible Notes are secured on all your IP at a $1.20 conversion price — under what circumstances would you draw the remaining capacity to $50M, and how do you think about that lien on your core assets?
6. Shares outstanding rose ~47% in the last year — what is your explicit plan to fund the business to operating breakeven without further common dilution, and at what revenue do you reach operating cash breakeven?
7. You claim ~$1.3M all-in per satellite — what exactly does that include (launch? ground? amortized R&D?), and how durable is that cost gap as Planet and Chinese constellations scale volume manufacturing?
8. Satellites have a ~3-year useful life — what is the steady-state annual capex to maintain the constellation at target size, and is that funded from operations in your plan?
9. As value in EO migrates from imagery to AI-derived analytics, how does your AI/analytics investment compare to Planet's, and what stops a better-capitalized peer from out-investing you on the insight layer?
10. Officina Stellare is both a supplier and a related party (you own 5%, you sit on its board) — how do you ensure arm's-length terms, and how material is OS to the supply chain?
11. What is the gross-margin trajectory as the mix shifts between high-margin tasking/CaaS and lower-margin satellite sales, and where does blended GM settle at scale?
12. SpaceX is your sole named launch provider — what is your contingency if launch pricing or cadence deteriorates, and have you secured launch slots for the full Merlin deployment?
13. The non-ITAR design lets you sell satellites to foreign sovereigns — how do you manage the geopolitical, end-use, and reputational risk of selling persistent-surveillance capability to sovereign customers?
14. Book value is now negative due to the FV remeasurement of converts/warrants — does this trigger any covenant, listing, or financing constraint, and how do you communicate "real" performance to investors past the GAAP noise?
15. What is the one assumption in your own plan that, if wrong, most threatens the company — and what would the first observable sign be that it's breaking?

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