Document:

ACORN
ENERGY, INC.

 

Subscription
Rights to Purchase Shares of Common Stock

 

Offered
Pursuant to Subscription Rights Distributed

to
Stockholders of Acorn Energy, Inc.

 

	 	 	June
    [__], 2019

 

Dear
Stockholder:

 

This
letter is being distributed by Acorn Energy, Inc. (the “Company”) to all holders of record of shares of its
common stock, par value $0.01 per share (“Common Stock”) at 5:00 p.m., New York City time, on June 3, 2019
(the “Record Date”), in connection with a distribution in a rights offering (the “Rights Offering”)
by the Company of non-transferable subscription rights (the “Rights”) to subscribe for and purchase shares
of Common Stock of the Company. The Rights and underlying shares of Common Stock are described in the Prospectus dated June [__],
2019 (the “Prospectus”), a copy of which accompanies this letter.

 

The
Company is offering an aggregate of up to 9,975,553 shares of Common Stock in the Rights Offering, as described in the Prospectus,
at a subscription price of $0.24 per share (the “Subscription Price”).

 

The
Rights will expire and cease to have any value if not exercised prior to 5:00 p.m., New York City time, on January 3, 2018 (the
“Expiration Date”), unless the Rights Offering is extended.

 

As
described in the accompanying Offering Circular, you will receive one Right for each share of Common Stock owned at 5:00 p.m.,
New York City time, on the Record Date. The Rights will be evidenced by a non-transferable subscription rights certificate (a
“Rights Certificate”). Each Right will allow you to subscribe for 0.312 shares of Common Stock at the Subscription
Price. For example, if you owned 1,000 shares of Common Stock as of 5:00 p.m., New York City time, on the Record Date, you would
receive 1,000 Rights and would have the right to purchase 312 shares of Common Stock at the Subscription Price (for a total payment
of $74.88).

 

The
Company will not issue fractional shares. Fractional shares resulting from the exercise of the Basic Subscription Right and the
Oversubscription Privilege will be rounded to the nearest whole number, with such adjustments as may be necessary to ensure that
the Company offers no more than 9,975,553 shares of Common Stock in the Rights Offering.

 

Enclosed
are copies of the following documents:

 

	 	1.	Prospectus;
	 	 	 
	 	2.	Rights
    Certificate;
	 	 	 
	 	3.	Instructions
    as to Use of Acorn Energy, Inc. Rights Certificates; and
	 	 	 
	 	4.	A
    return envelope addressed to American Stock Transfer and Trust Co., LLC (the “Subscription Agent”).

 

Your
prompt action is requested. To exercise the Rights, you should deliver the properly completed and signed Rights Certificate and
forward it, with payment of the Subscription Price in full for each share of Common Stock subscribed for pursuant to the Rights,
to the Subscription Agent, as indicated in the Prospectus. The Subscription Agent must receive the Rights Certificate with payment
of the Subscription Price, including final clearance of any uncertified checks, prior to 5:00 p.m., New York City time, on the
Expiration Date.

 

All
exercises of Rights are irrevocable.

 

Additional
copies of the enclosed materials may be obtained from the Company. The Company’s telephone number is (410) 654-3315.

 

	 	Very
    truly yours,
	 	 
	 	Acorn
    Energy, Inc.FORM
OF LETTER TO NOMINEES

 

ACORN
ENERGY, INC.

 

Subscription
Rights to Purchase Shares of Common Stock

 

Offered
Pursuant to Subscription Rights Distributed

to
Stockholders of Acorn Energy, Inc.

 

	 	 	June
    [__], 2019

 

To
Brokers, Dealers, Banks and Other Nominees:

 

This
letter is being distributed by Acorn Energy, Inc. (the “Company”) to brokers, dealers, banks and other nominees
in connection with the rights offering (the “Rights Offering”) by the Company to subscribe for and purchase
shares of common stock, par value $0.01 per share (“Common Stock”), pursuant to non-transferable subscription
rights (the “Rights”) distributed to all holders of record (“Recordholders”) of shares of
Common Stock of the Company at 5:00 p.m., New York City time, on June 3, 2019 (the “Record Date”). The Rights
and underlying shares of Common Stock are described in the Prospectus dated June [__], 2019 (the “Prospectus
“), a copy of which accompanies this letter.

 

The
Company is offering an aggregate of up to 9,975,553 shares of Common Stock in the Rights Offering, as described in the Prospectus,
at a subscription price of $0.24 per share (the “Subscription Price”).

 

The
Rights will expire and cease to have any value if not exercised prior to 5:00 p.m., New York City time, on June 24, 2019 (the
“Expiration Date”), unless the Rights Offering is extended.

 

As
described in the accompanying Prospectus, each beneficial owner of shares of Common Stock registered in your name or the name
of your nominee is entitled to one Right for each share of Common Stock owned by such beneficial owner at 5:00 p.m., New York
City time, on the Record Date. The Rights of each Recordholder will be evidenced by a non-transferable subscription rights certificate
(each, a “Rights Certificate”) registered in the name of the Recordholder or its nominee. Each Right will allow
the holder thereof to subscribe for 0.312 shares of Common Stock at the Subscription Price. For example, if a Recordholder owned
1,000 shares of Common Stock as of 5:00 p.m., New York City time, on the Record Date, the Recordholder would receive 1,000 Rights
and would have the right to purchase 312 shares of Common Stock at the Subscription Price (for a total payment of $74.88).

 

The
Company will not issue fractional shares. Fractional shares resulting from the exercise of the Basic Subscription Right and the
Oversubscription Privilege will be rounded to the nearest whole number, with such adjustments as may be necessary to ensure that
the Company offers no more than 9,975,553 shares of Common Stock in the Rights Offering.

 

We
are asking persons who hold shares of Common Stock beneficially and who have received the Rights distributed with respect to those
shares through a broker, dealer, commercial bank, trust company or other nominee, as well as persons who hold certificates of
shares of Common Stock directly and prefer to have such institutions effect transactions relating to the Rights on their behalf,
to contact the appropriate institution or nominee and request it to effect the transactions for them. In addition, we are asking
beneficial owners who wish to obtain a separate Rights Certificate to contact the appropriate nominee as soon as possible and
request that a separate Rights Certificate be issued.

 

All
commissions, fees and other expenses (including brokerage commissions and transfer taxes), other than fees and expenses of the
Subscription Agent, incurred in connection with the exercise of the Rights will be for the account of the holder of the Rights,
and none of such commissions, fees or expenses will be paid by the Company or the Subscription Agent.

 

Enclosed
are copies of the following documents:

 

	 	1.	Prospectus;
	 	 	 
	 	2.	Rights
    Certificate;
	 	 	 
	 	3.	Instructions
    as to Use of Acorn Energy, Inc. Rights Certificates;
	 	 	 
	 	4.	A
    form of letter which may be sent to your clients for whose accounts you hold shares of Common Stock registered in your name
    or the name of your nominee;
	 	 	 
	 	5.	Form
    of Beneficial Owner Election Form; and
	 	 	 
	 	6.	Form
    of Nominee Holder Certification.

 

Your
prompt action is requested. To exercise the Rights, you should deliver the properly completed and signed Rights Certificate and
forward it, with payment of the Subscription Price in full for each share of Common Stock subscribed for pursuant to the Rights
to the Subscription Agent, as indicated in the Prospectus. The Subscription Agent must receive the Rights Certificate with payment
of the Subscription Price, including final clearance of any uncertified checks, prior to 5:00 p.m., New York City time, on the
Expiration Date.

 

All
exercises of Rights are irrevocable.

 

Additional
copies of the enclosed materials may be obtained from the D.F. King & Co., Inc., the Information Agent in connection with
the Rights Offering. You may contact them directly with any questions or comments toll-free at 866-388-7535.

 

	 	Very
    truly yours,
	 	 
	 	Acorn
    Energy, Inc.FORM
OF LETTER TO CLIENTS

 

ACORN
ENERGY, INC.

 

Subscription
Rights to Purchase Shares of Common Stock

 

Offered
Pursuant to Subscription Rights Distributed

to
Stockholders of Acorn Energy, Inc.

 

	 	 	June
    __, 2019

 

To
Our Clients:

 

This
letter is being distributed to our clients who are holders of shares of common stock, par value $0.01 per share (“Common
Stock”) of Acorn Energy, Inc. (the “Company”) as of 5:00 p.m., New York City time, on June 3, 2019
(the “Record Date”), in connection with a distribution in a rights offering (the “Rights Offering”)
by the Company of non-transferable subscription rights (the “Rights”) to subscribe for and purchase shares
of Common Stock of the Company. The Rights and underlying shares of Common Stock are described in the Prospectus dated June [__],
2019 (the “Prospectus”), a copy of which accompanies this letter.

 

The
Company is offering an aggregate of up to 9,975,553 shares of Common Stock in the Rights Offering, as described in the Prospectus,
at a subscription price of $0.24 per share (the “Subscription Price”).

 

The
Rights will expire and cease to have any value if not exercised prior to 5:00 p.m., New York City time, on June 24, 2019 (the
“Expiration Date”), unless the Rights Offering is extended.

 

As
described in the accompanying Prospectus, each holder of shares of Common Stock of the Company as of 5:00 p.m., New York City
time, on the Record Date (each, a “Recordholder”) will receive one Right for each share of Common Stock owned
at such time, evidenced by a non-transferable subscription rights certificate (the “Rights Certificate”). Each
Right entitles the holder thereof to subscribe for 0.312 shares of Common Stock at the Subscription Price. For example, if a Recordholder
owned 1,000 shares of Common Stock as of 5:00 p.m., New York City time, on the Record Date, the Recordholder would receive 1,000
Rights and would have the right to purchase 312 shares of Common Stock at the Subscription Price (for a total payment of $74.88).

 

The
Company will not issue fractional shares. Fractional shares resulting from the exercise of the Basic Subscription Right and the
Oversubscription Privilege will be rounded to the nearest whole number, with such adjustments as may be necessary to ensure that
the Company offers no more than 9,975,553 shares of Common Stock in the Rights Offering.

 

Enclosed
are copies of the following documents:

 

	 	1.	Prospectus;
	 	 	 
	 	2.	Form
    of Beneficial Owner Election Form; and
	 	 	 
	 	3.	Instructions
    as to Use of Acorn Energy, Inc. Rights Certificates.

 

THE
MATERIALS ENCLOSED ARE BEING FORWARDED TO YOU AS THE BENEFICIAL OWNER OF SHARES OF COMMON STOCK HELD BY US IN YOUR ACCOUNT BUT
NOT REGISTERED IN YOUR NAME. EXERCISES OF RIGHTS MAY BE MADE ONLY BY US AS THE RECORD OWNER AND PURSUANT TO YOUR INSTRUCTIONS.

 

Accordingly,
we request instructions from you as to whether you wish for us to elect to subscribe for any shares of Common Stock to which you
are entitled pursuant to the terms and subject to the conditions set forth in the enclosed Prospectus and other materials. However,
we urge you to read the Prospectus and other enclosed materials carefully before instructing us to exercise your Rights.

 

If
you wish to have us, on your behalf, exercise the Rights for any shares of Common Stock to which you are entitled, please so instruct
us by completing, executing and returning to us the Beneficial Owner Election Form enclosed with this letter.

 

Your
instructions to us should be forwarded as promptly as possible in order to permit us to exercise Rights on your behalf in accordance
with the provisions of the Rights Offering. The Rights Offering will expire at 5:00 p.m., New York City time, on the Expiration
Date. You are encouraged to forward your instructions to us before the Expiration Date to allow us ample time to act upon your
instructions. All exercises of Rights are irrevocable.

 

Additional
copies of the enclosed materials may be obtained from the D.F. King & Co., Inc., the Information Agent in connection with
the Rights Offering. You may contact them directly with any questions or comments toll-free at 866-388-7535.

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