If your entire business is dependant on this person then they are, in a way, your defacto co-founder. But you give them no ownership.
The developer probably would say that you aren't holding up your end of the agreement.
Regardless, you can either come to terms with this person, which probably involves giving them some small degree of ownership or a more fair rate, or try to sue them.
By the way, I assume that you are massively underpaying them in addition to not giving them any ownership. If you were to add up all of the time the system has been in development, how many days is it? Then times 3 hours per day? And divide by the total compensation.
Have you been paying them at least minimum wage?
Do what must be done. If necessary, go public yourself and see whose attention your project gets. Adapt/pivot accordingly.
If he already threatened you, he's about to do it or will do it at some point in the near future, when you lost/invested even more.
Don't waste money you don't have and more importantly, don't waste time and attention.
You fucked up. It's your mistake. Own it, drink it off, adapt.
Or is there something else that you’re not mentioning that he’s getting upset at?
lawyering up can help but it gets complicated and time consuming if you are in different places.