Company turning out to be a turnaround. How to proceed?

I've been lucky enough to have the opportunity to work for the company I was planning to buy for a few months before finalizing a deal to buy out the owner over the next 3-5 years. Prior to joining the company, I had their financials through the end of 2024, met with the owner multiple times, visited the office and met with a few key employees, and had a few people I have known for a long time refer me to this owner knowing he was looking to retire. However, I have discovered many more issues than I could have imagined (and those who referred me are also dumbfounded by what I've discovered). An extremely disengaged owner, no accountability, on track for a +$500K loss in###-###-#### after a ~$100k loss in 2024), overpaid and underutilized top employees, chaotic operations and the list goes on. We were supposed to sign buyout paperwork by the end of 2025, but in mid-December I told the owner that due to the state of the business, I was in no way ready to do so. I'm assuming he is attributing my statement mostly to the financial and revenue status of the company, but there's more to it than that for me. My gut says to walk away from the deal as it's essentially a turnaround that won't be successful without his complete buy-in and participation too. A few questions: 1. I am planning to provide a last ditch effort "requirements for the deal to be feasible" list to the owner about what needs to change and be committed to by him for me to continue. However, I struggle to trust the owner to follow through even if he says he will given actions/lack thereof I've seen and experienced. Is it worthwhile for me to put this list together and send it to the owner even if I might still walk away due to my lack of trust in the owner? 2. Options on the table: Walk away, provide ultimatums and see if he agrees or not (knowing full well he may call off the deal too), give 3 more months to see where things are at and then decide. Any options I'm missing or that you would recommend I do/don't view as options? 3. If I do exit, thoughts on the best way to do so? Obviously employees know why I'm there and me exiting will certainly send things abuzz. I'm not looking to make a bad deal just for the sake of saying I've acquired something, so back to the drawing board (ETA, FT job, consulting) I would go if this didn't pan out. Note 1: Yes, the owner is key in this transaction due to the industry. I need to leverage his license, bankability, relationships, etc for operations for a few years until I can get the license myself and build those relationships. I moved from out of state to where the business is and don't have existing connections here that I need to be successful yet. Additionally, I haven't been able to focus much on networking because I've been trying to focus on getting the operations where they need to be, which I see taking a year+. Note 2: If I was acquiring this through a more traditional structure (SBA loan), this would have been an immediate no after seeing FY2025 financials in combination with###-###-#### , but the transaction value is based on the annual profitability of the company as we move forward, saving me more significant financial downside aside from the $150k-$250k I will have to put in upfront.