I think reeshau is right and the problem is that the company is not free to grant options at any price. I'm pretty sure that, for an ISO, the strike price when the grant is awarded must not be less than the current FMV. Since they seem to be willing to offer you a different strike price that's still below the current FMV, are these grants not ISOs?
There are a few tax things to consider here, if the options are ISOs.
First, if you do what reeshau suggested and do a no-cash exercise, the gains are taxed as income. I'm also pretty sure this will convert the entire grant from ISO to NQSO. This means you no longer have the option of getting any gains taxed as long term capital gains.
Second, exercises of ISOs are treated as a realization event under the AMT, so when you exercise an ISO, you will pay AMT on the difference between the strike price and the FMV. While you get an AMT credit for this when you subsequently sell the resulting shares, the AMT can often be a much larger cost than the cost of exercising the shares themselves.
In your example, exercising 15,500 options at a $ 0.23 strike price will cost you $3565. Sounds like a good deal. BUT, if the FMV is $5.10, you will incur an AMT of 15,500*(5.10-0.23) = $75485 when doing that. Make sure you keep this is mind so you can afford to pay it when tax time comes around.
As for whether this was a bad deal, I guess that depends on your risk tolerance and whether the stock is liquid or nor. While a higher strike price means you have to spend more to exercise, they're also offering you more shares. If you want to cash out immediately, the fact that the gain is the same means that you get the same gain while risking more funds to do it.
However, if you plan to exercise and hold with the hope of the stock going up, it's a different situation. As the value of the shares goes up, having more of them means that the gains will go up more. At some point, the extra cost to exercise the options becomes outweighed by the extra gains.
I know all about the situation of not being able to afford to exercise (not just the strike price but the resulting AMT as well) or be willing to risk the cash. What I did was to bootstrap the process by initially exercising a few shares, like a few grand's worth, and hold them. After > 1yr, when I could sell them for LTCG, I did so, using the proceeds to exercise more shares (and putting some of it away to pay the AMT next year). By doing this repeatedly, I exercised my entire grant without risking more than a few grand of my other savings. This only works if the shares are at least somewhat liquid and the share price goes up. (Obviously, if the share price doesn't go up, there's no point in exercising the options anyway.) You get less gains this way, since you're selling some of the shares at lower price, but the reduction in downside was more than worth it for me.
