I am unclear how to actually proceed and how to recover the half done - half paid for machine before they destroy it.

I am a MN corporation offering consulting, engineering and design-build for custom machinery. I was hired by a Florida recycling company to "invent" a new process for recycling LI-Ion cell phone batteries. The agreement was to pay a sum up front to get the project going, and then make progress payments at certain milestones and review project potential. Either party could stop the project at any time if it were deemed not feasible. We have been at this for about a year. We have a prototype machine working, but it needs more refinement. The customer asked that we bring the prototype to their warehouse in Jacksonville, FL. to demonstrate it and do some test runs. They had yet not signed a purchase agreement. They said they would, but did not. I told them that before I set up the prototype machine on their location, I need the purchase agreement, the PO, and the current progress payment. I received the payment, and a PO for $200,000. But they did not sign the purchase agreement detailing all the specifications and deliverables. We did deliver, setup and run the process for about two weeks. I submitted the invoice for the next progress payment for work already completed. Now they have told me to stop work and will not pay the outstanding $60,000. They say the machine is not finished nor working they way they want it. They will not let me take the machine back to our facility to continue and complete the machine. If I want to finish the machine, they have said they will not pay me until it is complete and they like it, and that I have to do all the work on their site, and be done within 45 days. Otherwise they will dismantle the machine and sell it for salvage.