Grease an 8x8-inch baking dish. Preheat oven to 350 degrees F.
Place 1 cup oats in a blender or food processor and process until oats turn to a flour-like consistency. Add to a mixing bowl with additional 1 1/2 cups of oats, cinnamon, baking powder, and salt. Stir to combine.
In a separate bowl whisk together the egg, applesauce, vanilla, milk and honey. Pour into dry ingredients and stir until combined.
Grate apple and add to batter with coconut flakes. Fold into mixture. Pour into baking dish and bake for 30 minutes, or until a toothpick inserted comes out clean.
Allow to cool slightly; cut into bars and serve.