Bank of Nova Scotia Issues Complex Equity-Linked Securities Tied to Amazon, Broadcom, Alphabet, and NVIDIA Stock Performance

Structure and Linkage to Four Technology Stocks

The Bank of Nova Scotia's new equity-linked securities are structured to track the performance of four major technology companies' common stock. The securities are linked to Amazon.com Inc., Broadcom Inc., Alphabet Inc. Class A common stock, and NVIDIA Corporation. A critical feature of this design is that the performance of the securities depends exclusively on the lowest-performing of these four stocks on each relevant calculation day, regardless of how well the other underlying stocks perform.

The filing states that the lowest-performing Underlying Stock on any calculation day is determined as the stock with the lowest closing price expressed as a percentage of its starting price. This structure means investors receive no benefit from appreciation in the better-performing stocks and face adverse effects if any single underlying stock declines significantly. The securities are unsecured senior debt obligations of the Bank of Nova Scotia, making all payments subject to the Bank's credit risk and not insured by the Canada Deposit Insurance Corporation, the Federal Deposit Insurance Corporation, or any other governmental agency.

Contingent Coupon Payment Terms and Memory Feature

The securities provide for contingent coupon payments on a monthly basis until the earlier of stated maturity or automatic call. The contingent coupon rate will be determined on the pricing date and will be at least 19.45% per annum according to the filing. However, these payments are conditional: the securities will pay a contingent coupon only if the lowest-performing Underlying Stock's closing price on the calculation day is at or above its coupon threshold price, which equals 60% of its starting price.

The securities incorporate a memory feature for missed coupon payments. If the closing price of the lowest-performing stock falls below the coupon threshold on one or more calculation days but subsequently recovers to at or above the threshold, the investor receives the contingent coupon payment for that subsequent month plus all previously unpaid contingent coupon payments without interest on the amounts previously unpaid. However, if the lowest-performing stock closes below the coupon threshold on every calculation day throughout the entire term, investors receive no contingent coupon payments. If the stock price falls below threshold on intermediate dates and never recovers, all missed coupon payments for those periods are forfeited.

Automatic Call Mechanism and Early Redemption

The securities incorporate an automatic call feature that triggers if the lowest-performing Underlying Stock's closing price reaches or exceeds its call threshold price of 95% of its starting price on any monthly calculation day between October 2026 and June 2029, inclusive. When an automatic call is triggered, the Bank redeems the securities at face amount plus a final contingent coupon payment and any previously unpaid contingent coupon payments. This feature means that unlike traditional bonds, these securities do not provide for fixed repayment of principal at stated maturity and are subject to potential early redemption.

The automatic call mechanism differs substantially from the coupon threshold. While coupon payments require the lowest-performing stock to reach only 60% of its starting price, automatic call requires the stock to reach 95% of starting price. This structure creates a scenario where investors could receive monthly contingent coupon payments for an extended period only to have the securities unexpectedly called for redemption if the underlying stock appreciates significantly. The filing discloses that this structure is designed to be held to maturity, with no exchange listing contemplated.

Downside Risk and Principal Loss Exposure

The securities expose investors to substantial downside risk if they are not automatically called prior to stated maturity. The filing states that if the lowest-performing Underlying Stock's closing price on the final calculation day is less than its downside threshold price of 60% of its starting price, investors will lose more than 40% of the face amount of their securities and possibly all of the face amount. This represents a significant departure from traditional senior debt securities, which typically return face value at maturity.

The disclosure emphasizes that if securities are not called prior to maturity and the stock falls below the downside threshold, investors have full downside exposure to the lowest-performing Underlying Stock from its starting price. However, investors will not participate in any appreciation of any Underlying Stock and will not receive any dividends on the underlying shares. This asymmetric risk structure means that while investors bear complete losses if the worst-performing stock declines substantially, they receive no benefit if stocks appreciate beyond the call threshold after the securities have been redeemed.

Bank's Estimated Value and Pricing Methodology

The Bank of Nova Scotia's estimated value of the securities, as disclosed in the pricing supplement, falls between $904.87 per security (90.487% of face value) and $934.87 per security (93.487% of face value) if the securities priced on the filing date. The filing notes that this estimated value excludes any profits from hedging activities and reflects the Bank's internal valuation methodology. The spread between the low and high estimated values represents approximately $30 per security or 3% of face value.

The filing contains a specific disclosure that the inclusion of dealer spread and projected profit from hedging in the original offering price is likely to adversely affect secondary market prices. Since the securities are designed to be held to maturity with no exchange listing, secondary market liquidity may be limited. The estimated values provided by the Bank represent the Bank's internal assessment of fair value, but investors should note that these are estimates and actual secondary market prices, should they become available, may differ significantly from these figures.

Offering Price, Agent Discounts, and Distribution Arrangement

The original offering price for the securities is $1,000 per security, with an agent discount of $23.25 per security, resulting in net proceeds to the Bank of Nova Scotia of $976.75 per security. Scotia Capital (USA) Inc., an affiliate of the Bank, will purchase the securities from the Bank for distribution to other registered broker dealers, including Wells Fargo Securities, LLC, or will offer the securities directly to investors. WFS will provide selected dealers with a selling concession of up to $17.50 per security and WFA may receive a distribution expense fee of $0.75 per security for securities sold by WFA.

The filing discloses that the Bank may pay additional fees of up to $3.00 per security to selected securities dealers for marketing and other services in connection with distribution. Scotia Capital (USA) Inc. or any of its affiliates or agents may use the pricing supplement in market-making transactions in securities after their initial sale. The disclosure notes that if investors purchase securities from Scotia Capital or another affiliate or agent, the final pricing supplement may be used in a market-making transaction. This arrangement creates potential conflicts of interest in secondary market trading.

Risk Concentration and Multi-Stock Linkage Implications

A fundamental risk highlighted in the filing is that investors' returns depend solely on the performance of whichever Underlying Stock is the lowest-performing stock on each calculation day. The disclosure explicitly states that investors will not benefit in any way from the performance of a better-performing Underlying Stock and will be adversely affected if any Underlying Stock performs poorly, even if another Underlying Stock performs favorably. This structure creates significant concentration risk, as the securities' performance is determined by the single worst performer among four stocks rather than an average or best-performing stock.

For example, if Amazon, Broadcom, and Alphabet appreciate while NVIDIA declines 45%, the contingent coupon payment would be missed because NVIDIA, as the lowest performer, has fallen below the 60% coupon threshold. Similarly, if NVIDIA appreciates to 98% of its starting price but all other stocks fall to 50% of their starting prices, automatic call would not be triggered because the call threshold requires the lowest-performing stock to reach 95%. This design means investors essentially short the worst-performing stock while having no upside participation in better performers.

Credit Risk and Regulatory Status of Securities

The filing emphasizes that all payments on the securities are subject to the credit risk of The Bank of Nova Scotia. As senior unsecured debt obligations, the securities are not backed by specific collateral and rank equally with other senior unsecured debt of the Bank. The disclosure states clearly that the securities are not insured by the Canada Deposit Insurance Corporation pursuant to the CDIC Act or the U.S. Federal Deposit Insurance Corporation or any other governmental agency of Canada, the United States, or any other jurisdiction.

The filing includes standard regulatory language stating that neither the Securities and Exchange Commission nor any state securities commission or other regulatory body has approved or disapproved of the securities or passed upon the accuracy or adequacy of the pricing supplement. The Bank notes that any representation to the contrary is a criminal offense. Investors should note that these complex securities carry risks not associated with investment in conventional debt securities, and the filing references more extensive risk disclosure in the accompanying product supplement, prospectus supplement, and prospectus documents.

Calculation Days and Payment Schedule

The securities operate on a monthly calculation day schedule, with the automatic call mechanism active from October 2026 through June 2029. The final calculation day occurs on the stated maturity date of August 2, 2029. Monthly contingent coupon payments are made if the lowest-performing Underlying Stock's closing price on the relevant monthly calculation day meets or exceeds the coupon threshold of 60% of starting price. The use of monthly observation dates means the securities' outcomes depend on closing prices on twelve separate calculation days between the pricing date and final maturity.

The filing discloses that the starting price for each Underlying Stock will be determined on the pricing date, and all thresholds are expressed as percentages of these starting prices. This structure means that investors cannot predict in advance whether contingent coupon payments will be made or whether automatic call will be triggered, as these outcomes depend entirely on the future stock price performance of the four underlying companies. The monthly observation frequency provides multiple opportunities for the automatic call feature to be triggered if the lowest-performing stock appreciates sufficiently.

Preliminary Pricing Status and Filing Regulatory Context

This filing is a preliminary pricing supplement dated July 22, 2026, filed pursuant to Rule 424(b)(2) under the Securities Act of 1933. The supplement relates to Registration Statement No. 333-282565 and references Product Supplement No. WF-1 dated November 8, 2024, a Prospectus Supplement dated November 8, 2024, and a Prospectus dated November 8, 2024. The filing carries a notation stating that the information in the preliminary pricing supplement is not complete and may be changed, and that the supplement and accompanying documents are not an offer to sell the securities and the Bank is not soliciting an offer to buy the securities in any jurisdiction where the offer or sale is not permitted.

The preliminary status indicates that final terms, including the actual contingent coupon rate above the minimum of 19.45%, the starting prices for each Underlying Stock, and other specific terms, have not yet been finalized. The final pricing supplement will contain these specific terms and will replace this preliminary version. Investors interested in these securities should review the final pricing supplement and accompanying disclosure documents before making any investment decisions.