[144] BKV Corporation SEC Filing

Rhea-AI Filing Summary

Bank of Montreal (BMO) is issuing US$6.196 million of Senior Medium-Term Notes, Series K – Autocallable Barrier Notes with Contingent Coupons – linked to Lam Research Corp. (LRCX) common stock.

• Contingent Coupon: 1.1925% monthly (≈14.31% p.a.) paid only if LRCX closes ≥ Coupon Barrier (67% of Initial Level, $65.12) on the relevant Observation Date.
• Automatic Redemption: Starting 30-Dec-2025, if LRCX closes > Initial Level on any Observation Date, the note is redeemed at par plus the coupon; no further payments occur.
• Maturity / Principal Risk: 03-Aug-2026. If not called and LRCX closes < Trigger Level (67% of Initial), investors lose 1% of principal for every 1% decline (down to zero). If LRCX stays ≥ Trigger Level, principal is returned.
• Issue Economics: Price to public 100%; estimated initial value $972.97 (≈97.3% of face) reflecting embedded fees/hedging. Agent’s commission 2.15%.
• Denomination & Liquidity: $1,000 minimum. Unlisted; secondary market, if any, only through BMOCM. Value sensitive to BMO credit spreads and market volatility.
• Credit & Tax: Unsecured BMO obligation; subject to BMO credit risk and complex U.S. tax treatment (pre-paid contingent income-bearing derivative).

The product targets investors seeking high conditional income and limited downside buffer, willing to forego upside above coupons, accept potential principal loss below a 33% decline, and tolerate issuer credit and liquidity risks.

Positive

• Attractive contingent income: 1.1925% monthly coupon (≈14.31% p.a.) if performance conditions met.
• 33% downside buffer: Principal protected unless LRCX falls more than 33% at valuation date.
• Early autocall feature can return capital quickly if LRCX performs, reducing market exposure.

Negative

• Principal at risk: Any finish below the 67% trigger leads to proportional losses, potentially total loss.
• No participation in upside: Return capped at coupons; investors miss any equity appreciation beyond call level.
• Credit & liquidity risk: Unsecured BMO obligation; unlisted notes with limited secondary market and price transparency.
• Estimated value discount: Initial fair value 97.3% of par highlights embedded fees.
• Complex tax treatment and uncertain future IRS guidance for prepaid derivative contracts.

Insights

Structured Products Analyst

TL;DR: High 14.3% coupon offset by 33% downside buffer, no upside, credit and liquidity risks keep overall appeal neutral.

Income profile: The 1.1925% monthly coupon is attractive versus short-dated corporates, but entirely conditional on LRCX staying ≥ $65.12. Volatility in semiconductor equities means missed coupons are plausible.
Redemption dynamics: Autocall at 100% Initial can shorten duration to six months, capping yield but limiting exposure period.
Risk/return trade-off: Investors absorb full equity downside beyond −33%, yet surrender upside beyond coupons. Simulation shows breakeven relative to par at maturity requires LRCX ≥ Trigger; historically, LRCX has traded with 30-40% annualized volatility, implying non-trivial tail risk.
Issuer economics: 2.7-point OID plus 2.15% commission signal a sizeable structuring spread. Secondary values likely to start around 95-97% and drift lower absent favorable equity moves.
Credit overlay: Note holders rank pari passu with BMO senior debt; current BMO CDS ~60 bps, modest but still an added layer versus holding LRCX shares directly.
Verdict: Suitable for yield-seeking accounts comfortable with equity-linked notes; impact neutral given balanced reward and risk.

Form 144 Filer Information	UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 144 NOTICE OF PROPOSED SALE OF SECURITIES PURSUANT TO RULE 144 UNDER THE SECURITIES ACT OF 1933
FORM 144

144: Filer Information

Filer CIK
Filer CCC
Is this a LIVE or TEST Filing?	LIVE TEST
Submission Contact Information
Name
Phone
E-Mail Address

144: Issuer Information

Name of Issuer

SEC File Number

Address of Issuer

Phone

Name of Person for Whose Account the Securities are To Be Sold

See the definition of "person" in paragraph (a) of Rule 144. Information is to be given not only as to the person for whose account the securities are to be sold but also as to all other persons included in that definition. In addition, information shall be given as to sales by all persons whose sales are required by paragraph (e) of Rule 144 to be aggregated with sales for the account of the person filing this notice.

Relationship to Issuer

144: Securities Information

Title of the Class of Securities To Be Sold	Name and Address of the Broker	Number of Shares or Other Units To Be Sold	Aggregate Market Value	Number of Shares or Other Units Outstanding	Approximate Date of Sale	Name the Securities Exchange
Common Shares	Charles Schwab & Co., Inc. 3000 Schwab Way Westlake TX 76262	10000	231307.00	84708373	07/01/2025	NYSE

Furnish the following information with respect to the acquisition of the securities to be sold and with respect to the payment of all or any part of the purchase price or other consideration therefor:

144: Securities To Be Sold

Title of the Class	Date you Acquired	Nature of Acquisition Transaction	Name of Person from Whom Acquired	Is this a Gift?	Date Donor Acquired	Amount of Securities Acquired	Date of Payment	Nature of Payment *
Common	05/01/2020	Founders Shares	BKV Corp			10000	05/01/2020	N/A

* If the securities were purchased and full payment therefor was not made in cash at the time of purchase, explain in the table or in a note thereto the nature of the consideration given. If the consideration consisted of any note or other obligation, or if payment was made in installments describe the arrangement and state when the note or other obligation was discharged in full or the last installment paid.

Furnish the following information as to all securities of the issuer sold during the past 3 months by the person for whose account the securities are to be sold.

144: Securities Sold During The Past 3 Months

Name and Address of Seller	Title of Securities Sold	Date of Sale	Amount of Securities Sold	Gross Proceeds
Lindsay B Larrick 1200 17TH ST., STE 2100 DENVER CO 80202	BKV Corp	05/09/2025	15000	300000.00
Lindsay B Larrick 1200 17TH ST., STE 2100 DENVER CO 80202	BKV Corp	06/02/2025	10000	216485.00

144: Remarks and Signature

Remarks

Date of Notice

Date of Plan Adoption or Giving of Instruction, If Relying on Rule 10b5-1

ATTENTION:

The person for whose account the securities to which this notice relates are to be sold hereby represents by signing this notice that he does not know any material adverse information in regard to the current and prospective operations of the Issuer of the securities to be sold which has not been publicly disclosed. If such person has adopted a written trading plan or given trading instructions to satisfy Rule 10b5-1 under the Exchange Act, by signing the form and indicating the date that the plan was adopted or the instruction given, that person makes such representation as of the plan adoption or instruction date.

Signature

ATTENTION: Intentional misstatements or omission of facts constitute Federal Criminal Violations (See 18 U.S.C. 1001)

FAQ

What is the contingent interest rate on the BMO LRCX-linked notes?

The notes pay 1.1925% per month, approximately 14.31% per annum, if LRCX closes at or above the $65.12 coupon barrier on the observation date.

When can the autocall feature trigger for these notes?

Starting 30-Dec-2025, the notes are automatically redeemed at par plus coupon if LRCX closes above its initial level ($97.20) on any monthly observation date.

How much downside protection do investors have?

A 33% buffer applies: if LRCX’s final level is ≥ $65.12 (67% of initial), principal is returned; below that, losses are 1-for-1 with the decline.

Are the notes listed on an exchange?

No. The notes will not be listed; liquidity depends on BMOCM’s willingness to make a secondary market.

What is the estimated initial value compared with the issue price?

BMO estimates the fair value at $972.97 per $1,000 note (≈97.3% of face), reflecting structuring and hedging costs.

Do holders receive any Lam Research dividends?

No. The product is cash-settled; dividends on LRCX do not affect coupon payments or redemption value.

What credit risk do investors assume?

Payments rely solely on Bank of Montreal’s ability to pay; the notes are senior unsecured obligations of BMO.