Bank of Nova Scotia Issues Autocallable Notes Linked to NVIDIA Stock with August 2029 Maturity

Structure and Automatic Call Mechanism

The Bank of Nova Scotia structured these notes with an automatic call feature that triggers under specific conditions related to NVIDIA's stock performance. If the closing value of NVIDIA common stock on any call observation date equals or exceeds the initial value established at pricing, the notes will be automatically called. Upon automatic call, investors receive a cash payment per note consisting of the principal amount plus any contingent coupon otherwise payable on the corresponding contingent coupon payment date, along with any accrued unpaid contingent coupons that have not yet been paid. Following an automatic call event, no further payments will be made on the notes.

This automatic call structure means that investors' exposure to potential upside gains in NVIDIA stock is capped at the initial value level. The bank designed this feature to limit its liability exposure while providing investors with a defined outcome if NVIDIA stock performs positively relative to the initial reference point. Investors should understand that the automatic call mechanism could be triggered at any time during the note's life, potentially shortening the investment period significantly from the expected three-year term.

Contingent Coupon Payment Terms and Memory Feature

The notes incorporate a contingent coupon mechanism with a memory coupon feature that functions differently depending on NVIDIA's stock performance on observation dates. If the notes have not been automatically called and the closing value of NVIDIA stock on any contingent coupon observation date equals or exceeds the contingent coupon barrier value, the notes will pay a contingent coupon with respect to that date. The memory feature ensures that any unpaid contingent coupons accumulate and become payable on the next contingent coupon payment date when a contingent coupon otherwise becomes payable. If the closing value on a contingent coupon observation date falls below the contingent coupon barrier value, the contingent coupon due on that date will not be paid but instead will carry forward as an unpaid contingent coupon.

The Bank emphasized that the notes do not guarantee interest payments. Investors may not receive any contingent coupons on the notes if NVIDIA's stock fails to meet the contingent coupon barrier value on observation dates. This structure creates significant uncertainty regarding income generation. The memory coupon feature offers some protection by ensuring that missed coupons can accumulate and be paid later, but only if future observation dates show NVIDIA stock performance sufficient to trigger coupon payments. Investors should carefully assess their expectations for NVIDIA stock performance relative to the contingent coupon barrier to understand the likelihood of receiving regular income payments.

Final Valuation and Maturity Payment Scenarios

The notes' maturity payment depends entirely on NVIDIA's stock performance measured from the initial value to the final value on the final valuation date. If the notes have not been automatically called and the final value equals or exceeds the barrier value, investors will receive the principal amount of their notes on the maturity date, along with any contingent coupon due with respect to the final valuation date and any accrued unpaid contingent coupons that have not yet been paid. This outcome preserves investor capital assuming the performance barrier is met.

However, if the notes have not been automatically called and the final value falls below the barrier value, investors will suffer a loss on the notes equal to the depreciation of NVIDIA stock and may lose up to 100% of the principal amount. The filing states that payment at maturity will be based solely on the reference asset return, which measures NVIDIA's performance from the initial value to the final value. This downside scenario represents a significant risk, particularly for investors who enter at higher NVIDIA stock prices. The barrier value protection disappears entirely if stock performance is sufficiently negative, exposing investors to the full depreciation of NVIDIA stock.

Credit Risk and Debt Security Status

The Bank of Nova Scotia structured these notes as unsubordinated and unsecured debt securities, meaning all payments on the notes are subject to the credit risk of the Bank itself. The filing explicitly states that any payment on the notes remains subject to the creditworthiness of The Bank of Nova Scotia. This represents a critical distinction from direct investment in NVIDIA stock, where investors would not face the issuer's credit risk. Should the Bank experience financial distress, its ability to pay investors could be compromised regardless of NVIDIA's stock performance.

The notes are not insured by the Canada Deposit Insurance Corporation pursuant to the Canada Deposit Insurance Corporation Act, nor are they insured by the U.S. Federal Deposit Insurance Corporation or any other government agency of Canada, the United States, or any other jurisdiction. This lack of insurance protection means investors bear the full credit risk of The Bank of Nova Scotia. The filing confirms that the notes will not be listed on any U.S. securities exchange or automated quotation system, limiting liquidity and potentially making secondary market transactions more difficult.

Investment Terms and Minimum Purchase Requirements

The Bank set the trade date for July 31, 2026, with expected settlement on August 5, 2026. The notes are expected to have a term of approximately three years if not automatically called prior to maturity, with the maturity date set for August 3, 2029. Investors must make a minimum investment of $1,000 and purchase in integral multiples of $1,000 in excess thereof. The original issue price is set at 100.00% of the principal amount, representing full par value at issuance.

The CUSIP and ISIN identifiers for these notes are 063941DT2 and US063941DT20, respectively. These identifiers enable investors to track and transact in the notes through securities settlement systems. The three-year term provides a medium-term investment horizon, though the automatic call feature could reduce this period significantly if triggered. The $1,000 minimum investment size makes these notes accessible to a broad range of investors, from individual retail investors to institutional buyers.

Underwriting Commission and Distribution Arrangements

Scotia Capital (USA) Inc., an affiliate of The Bank of Nova Scotia, will purchase the notes from the Bank at the principal amount and will sell the notes to other registered broker-dealers at a discount of $15.00, representing 1.50% per note. The Bank may also periodically pay third-party dealers a structuring fee of up to $4.50 per note with respect to some or all of the notes. These arrangements create the distribution chain through which individual investors access the notes.

The proceeds to The Bank of Nova Scotia are 98.50% of the original issue price after deducting the 1.50% underwriting commission. This pricing structure means that approximately $985 of each $1,000 invested flows to the Bank, with $15 retained as underwriting compensation by Scotia Capital USA and potential additional structuring fees paid to dealers. The filing discloses that Scotia Capital USA may use the final pricing supplement in market-making transactions in the notes after their initial sale and may periodically buy and sell the notes in secondary markets.

Estimated Initial Value and Secondary Market Pricing

The Bank disclosed that the initial estimated value of the notes at the time the terms are set on the trade date is expected to be between specific price points per $1,000 principal amount. This estimated value is less than the original issue price of 100.00%, representing the economic value after accounting for the Bank's internal funding costs, underwriting commissions, and structuring expenses. The Bank emphasized that the actual value of the notes at any time will reflect many factors and cannot be predicted with accuracy.

The Bank determined the initial estimated value range by reference to internal pricing models that consider factors such as the Bank's internal funding rate on the trade date and the Bank's assumptions about market parameters. The economic terms of the notes are based on the Bank's internal funding rate, which is the rate the Bank would pay to borrow funds through issuance of similar market-linked notes. The Bank's use of its internal funding rate reduces the economic terms of the notes to investors. The filing indicates that assuming all relevant factors remain constant after the trade date, the price at which Scotia Capital USA may initially buy or sell the notes in the secondary market could temporarily exceed the estimated value for approximately three months after the original issue date.

Absence of Direct NVIDIA Stock Ownership

The notes are derivative products based on the price return of NVIDIA stock, not direct investments in the company's equity. By acquiring the notes, investors will not have a direct economic or other interest in, claim or entitlement to, or any legal or beneficial ownership of NVIDIA stock, including voting rights or rights to receive dividends or other distributions. This distinction is critical because NVIDIA shareholders receive dividend payments, which note holders do not. All payments on the notes are made in cash based on formulas tied to NVIDIA's closing stock price rather than through ownership of actual shares.

The filing clearly states that the notes do not constitute a direct investment in NVIDIA's common stock. This means investors cannot exercise shareholder rights, participate in corporate actions, or benefit from dividend payments that NVIDIA may distribute. The notes' value derives solely from the Bank's performance obligation tied to NVIDIA stock price movements, making them dependent on both NVIDIA's stock performance and The Bank of Nova Scotia's creditworthiness. Investors seeking exposure to NVIDIA's business performance while retaining shareholder rights would need to purchase NVIDIA's common stock directly rather than these note securities.

Key Risks and Investor Considerations

Investment in the notes involves substantial risks that investors should carefully evaluate before committing capital. The filing directs investors to detailed risk discussions in multiple sections, including "Additional Risks" beginning on page P-11 of the pricing supplement, "Additional Risk Factors Specific to the Notes" beginning on page PS-6 of the accompanying product supplement, and "Risk Factors" beginning on page S-2 of the accompanying prospectus supplement and page 8 of the accompanying prospectus. The most significant risk is the potential loss of up to 100% of principal if NVIDIA stock declines sufficiently and the final value falls below the barrier value on the maturity date.

Additional risks include the creditworthiness risk of The Bank of Nova Scotia, the contingency of coupon payments on NVIDIA stock performance, the automatic call risk limiting upside participation, and the lack of secondary market liquidity. Investors should also consider that the notes' initial estimated value is less than the original issue price, reflecting the cost of hedging, distribution, and the Bank's funding costs. The notes offer no guarantee of interest and market conditions could significantly affect the value of the notes in the secondary market if investors need to sell before maturity.

Regulatory Status and Compliance Matters

The filing was submitted pursuant to Securities and Exchange Commission Rule 424(b)(2) under Registration Number 333-282565, indicating that this pricing supplement is part of a previously registered shelf registration statement. The preliminary pricing supplement is subject to completion and may be changed before final delivery. The Bank explicitly states that it is not selling these notes, nor is it soliciting offers to buy them, in any state where such offer or sale is not permitted.

The Securities and Exchange Commission and state securities commissions have not approved or disapproved the notes or passed upon the accuracy or adequacy of the pricing supplement, accompanying product supplement, prospectus supplement, or prospectus. The filing includes explicit notice that any representation to the contrary constitutes a criminal offense. Scotia Capital USA Inc. is identified as the underwriter and market-maker for these securities. The Bank of Nova Scotia confirmed that any payment on the notes is subject to the creditworthiness of the Bank, and the notes do not benefit from CDIC, FDIC, or other government insurance protections.