Talk to an attorney ASAP! I know you “have exhausted [your] money (no outer funding) and have no clients yet” but there are likely startup attorneys out there willing to work with you. Another avenue worth exploring is reaching out to UK law schools. If they’re anything like US law schools then there might be some applicable (IP or business) clinics within the law schools willing to work with bootstrapped entrepreneurs like you. After a quick Google here are some links that might be useful to you:
- An titled “Small businesses shouldn’t be afraid of seeking legal advice” published in The Guardian.
In terms of keeping your inner peace, take a deep breath. Any successful business goes through a “oh sh**” moment, granted yours may be a little more stressful than the typical stressors that businesses face. Ideally a business will put in place preventative actions to avoid these types of problems but it happens all the time that they choose not to because of time, cost etc. Rather than pointing out what you could have done, it’s time to respond appropriately.
If you feel that you’ve reached the ceiling in terms of negotiating with the other company yourself then you really need to reach out to an attorney. Experienced IP and business attorneys have handled numerous cases similar to yours so it really is so invaluable to consult with one. Although my companyis based in the US, feel free to reach out to me regarding strategies in finding proper representation in the UK. Good luck!