Darren Young's missed spot-kick for Alloa proved crucial as they lost 5-4 on penalties to Peterhead in the Ramsdens Challenge Cup first round.
Ryan McCord's drive put Alloa ahead but Peterhead levelled on the half-hour when Bryan Beasley fired home.
Rory McAllister's 60th-minute strike gave the hosts the lead but Maxwell Wright levelled from close range.
After a goalless extra time, penalties ensued and Young's miss allowed Beasley to fire the winning spot-kick.
Peterhead: Jellema, Donald, Sellars, MacDonald, McBain, Conway (Sharp 76), Redman, Watson, Beasley, McAllister, Bavidge (David Ross 87). Subs Not Used: Duffy, Scott Ross, Davidson.
Goals: Beasley 30, McAllister 60.
Alloa: Bain, Michael Doyle, Harding, Gordon, Docherty, Ross McCord (Caddis 91), Young, Ryan McCord, Holmes, One (Campbell 71), Cawley (Wright 64). Subs Not Used: McDowall, O'Brien.
Booked: Bain, Ryan McCord, Gordon.
Goals: Ross McCord 16, Wright 73. Peterhead win 5-4 on penalties
Ref: Gary Hilland