Shares in Tern PLC (AIM:TERN) fell 10% to 4.28p after it said it had decided not to invest more in industrial software provider Konektio.
The investment company had a 28% stake after investing £100,000 in a £1.2 million equity fundraise by Konektio's parent InVMA Limited in May.
But having committed to invest a minimum of £0.28 million in the second tranche of the fundraise, Tern said it has decided not to invest.
This was due to "the business performance of Konektio and, in particular, Konektio's monthly recurring revenue growth not having met Tern's expectations".
As a result, 75% of Tern's holding in Konektio will be transferred to a valueless class of Konektio deferred shares.
"Tern does not, at this time, envisage providing any more funding to Konektio and the company will look to realise value from its remaining holding in Konektio in due course," it said.