Ulinzi Stars were bundled out of the GOtv Shield round of 32 after falling 1-0 to Sony Sugar on Saturday.
Amos Asembeka's early strike was enough to send last year's finalists packing, with the sugar millers, qualifying for the round of 16
Coach Benjamin Nyangweso has rued missed chances as the main undoing for his charges.
"Any knockout tournament is usually the hardest, and a single mistake can eliminate you. Our match against Sony was definitely going to be tough. They scored an early goal that destabilized us, but we managed to come back stronger. We had three clear chances that we did not take, and they came back to haunt us.
"Definitely we are disappointed with the outcome. We wanted to win this tournament, but things have not gone as plannedm," Nyangweso told Goal.
Ulinzi Stars had defeated minnows Wajiji by a solitary goal in the initial phase of the competition.