Teddy reveals to Ian that he has learned to accept the fact that he is gay, but that he just isn't ready to come out yet. Teddy confesses his feelings to Ian, and they share a passionate kiss on the staircase, though they are unaware that Dixon had seen them. After Christmas break, Teddy comes back to school only to find a note in his locker demanding $50,000 or they will reveal his secret, as well as pictures of him and Ian kissing. After coming out to Silver and gaining support, Teddy finally gains enough of courage to come out to the rest of his friends. Although some are slightly uncomfortable by the news, they still accept him. Going back to Teddy's house, Ian tells Teddy how proud of him he is after all the struggles including the blackmail. Teddy quickly notices he never told Ian anything about the note in his locker, and realizes it was Ian all along. Teddy then breaks up with Ian and tells him to never speak to him again, saying he isn't the person he thought he was. Now that Ian's gone, Teddy is faced to go through the coming out process by himself. He faces some measures of hostility, but has support from Silver. Silver then takes Teddy up to the roof to hit some tennis balls to distract him from his troubles, just how Teddy used to do with Silver while dealing with her mother's cancer. Though, Teddy ends up hitting someone when he hears a scream from the ground. Teddy goes down to apologize and meets a guy named Marco, who is a soccer player at Malibu Country Day. Marco compliments Teddy's serve, and tells him someone must have gotten him really angry to hit a ball that hard. Teddy accidentally outs himself to Marco by saying "Yea, he did". Marco tells Teddy that he's been there, revealing to both Teddy and Silver that Marco could possibly be gay as well. Marco then writes his phone number on the tennis ball he hit him with, so Teddy could call him and give him a few tennis lessons. Silver then talks to Liam, Navid and Dixon to take Teddy to a gay bar as a sign of support after feeling distant from the guys in the group. As soon as they get there, right away both Teddy and Liam feel extremely uncomfortable