[deanfranks]

I am not an attorney, but my understanding is that you do not have to respond to the letter in any way unless they have filed a complaint. You might want to respond in a way to try to prevent them from filing a complaint (possibly provide them with conclusive prior art examples and threaten to respond by trying to invalidate their patent (expensive)). Letting them know you have no money to defend yourself is probably not a good strategic move.

Be aware that if they file a complaint you will have to have a lawyer licensed to practice in the state where the complaint is filed (PITA).