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Preheat oven to 350 and spray donut pans or baking sheet with nonstick cooking spray.
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Whisk together flax seeds and water. Set aside and allow to sit for at least 10 minutes.
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Meanwhile, stir together flour, baking powder, salt and lemon zest in small bowl. In a separate bowl, cream together margarine and sugar.
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Add flax mixture then milk, maybe just a bit at a time to avoid splashing, and lemon extract.
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Add in dry ingredients and blend until a uniform dough is formed. Fold in ½ cup coconut.
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If you're making the "full" donut form of this recipe, distribute dough among donut forms. I found the best way to do this was by spreading it around with my hands. Otherwise, just roll dough into 24 balls and place on baking sheet.
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Bake for 12 minutes.
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Remove from oven, allow to cool and remove from pan before glazing.