I'm considering purchasing a company where about 15% of its revenue has not been reported and is absent from the Seller's Discretionary Earnings (SDE). This unreported revenue is said to flow directly to the bottom line, making the valuation quite appealing when factored in.

However, I have a couple of concerns: - how can I verify this unreported revenue amount, given it's not reported on the income or cash flow statements? Could acquiring a business with a history of underreporting create any legal or financial liabilities for me? Does an asset purchase vs. a stock purchase shield me from liability?

I would really appreciate insights from anyone who has experience with similar situations. Thank you in advance for your help!