WHERE YOU CAN FIND MORE INFORMATION

        We have filed with the SEC a registration statement on Form S-1, of which this prospectus is a part, including exhibits and schedules filed with the registration statement under the Securities Act with respect to the common stock we propose to sell in this offering. This prospectus does not contain all of the information set forth in the registration statement and exhibits and schedules to the registration statement. For further information with respect to our company and the common stock we propose to sell in this offering, we refer you to the registration statement, including the exhibits and schedules to the registration statement. Copies of the registration statement, including the exhibits and schedules to the registration statement, may be examined without charge at the public reference room of the SEC 450 Fifth Street, N.W., Washington, DC 20549. The SEC's toll-free number is 1-800-SEC-0330. In addition, the SEC maintains a web site, http://www.sec.gov , which contains reports, proxy and information statements and other information regarding registrants, including us, that file electronically with the SEC.

         As a result of this offering, we will become subject to the information and reporting requirements of the Securities Exchange Act and will file periodic and other reports and proxy statements and will make available to our shareholders annual reports containing audited financial information for each year and quarterly reports for the first three quarters of each fiscal year containing unaudited interim financial information.

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INFORMATION CONCERNING DEFINITIONS AND PRO FORMA FINANCIAL INFORMATION

        KMG America Corporation has entered into an agreement to purchase all of the outstanding shares of Kanawha Insurance Company with a portion of the net proceeds of this offering. The closing of the Kanawha acquisition will occur concurrently with the closing of this offering, and our obligation to complete the Kanawha acquisition is conditioned upon the completion of this offering.

        Unless the context suggests otherwise, in this prospectus, references to the "Company," "we," "us" or "our" assume the Kanawha acquisition has been completed, and as a result of the acquisition, include not only KMG America's business but also Kanawha's business. References to "KMG America" refer solely to KMG America Corporation. References to "Kanawha" refer to Kanawha Insurance Company and its subsidiaries.

        In this prospectus, the pro forma financial information gives effect to:

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this offering; and



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the use of the net proceeds from this offering as described in this prospectus, including the acquisition of Kanawha;

as if such events occurred on the first day of the applicable period, in the case of statement of income data, or on the applicable date, in the case of balance sheet data. In this prospectus, amounts are expressed in United States dollars, and the pro forma financial statements and financial statements of Kanawha have been prepared in accordance with GAAP , except as otherwise indicated.

        For your convenience, we have provided a Glossary, beginning on page G-1, of selected insurance, reinsurance and investment terms and have printed these terms in boldfaced type the first time they are used in this prospectus. All of the trade names and trademarks included in this prospectus are the property of their respective owners.

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