Etherstack (ASX:ESK) said its board completed an initial strategic and capital management review and plans to reorganize its share premium account through a capital reduction, subject to shareholder, court and regulatory approvals, according to a Monday filing with the Australian bourse.

The move will not reduce the number of shares, change the company's net asset position, or trigger an immediate shareholder payout, but will provide greater flexibility for future capital management, including potential dividends and share buybacks, per the filing.

The board will review these options after the current-year results, considering investment needs, cash resources, growth opportunities and broader strategic priorities to maximize long-term shareholder value, the filing added.

The company's shares fell around 5% in recent Monday trade.