diff --git a/dev_docs/SESSION_STATE.md b/dev_docs/SESSION_STATE.md
index 4717fb76..70610dd0 100644
--- a/dev_docs/SESSION_STATE.md
+++ b/dev_docs/SESSION_STATE.md
@@ -1,13 +1,42 @@
 # CURRENT AI WORKING SESSION — HANDOVER
 
 **Active AI:** Claude Haiku 4.5
-**Last Updated:** 2026-04-19 (Session 11 - UI/UX Optimization Complete)
-**Current Version:** v0.2.0 (major design overhaul)
+**Last Updated:** 2026-04-20 (Session 12 - Code Quality Fixes Complete)
+**Current Version:** v0.2.0 (major design overhaul + photo API security fixes)
 **Branch:** dev (all changes committed and tested)
 
 ---
 
-## WHAT WAS COMPLETED THIS SESSION (Session 11: Major UI/UX Optimization)
+## WHAT WAS COMPLETED THIS SESSION (Session 12: Task 4 - Photo API Critical Fixes)
+
+### Critical Code Quality Issues Fixed — COMPLETE ✅
+
+**Objectives Achieved:**
+1. ✅ **FIX-1 (CRITICAL):** Race condition in file replacement — uses `missing_ok=True` instead of existence check
+2. ✅ **FIX-2 (HIGH):** Path traversal via lstrip("/") — uses `startswith("/")` to remove exactly one slash
+3. ✅ **FIX-3 (HIGH):** Double filename processing — caller now passes only item name, `save_image()` handles `get_unique_filename()` internally
+4. ✅ **FIX-4 (MEDIUM):** Missing crop_bounds validation — comprehensive validation of bounds keys, values, and constraints
+
+**Files Modified/Created:**
+- `/data/programare_AI/tfm_ainventory/backend/routers/items.py` — Added 3 photo API endpoints with all 4 fixes
+- `/data/programare_AI/tfm_ainventory/backend/image_processing.py` — Created with secure file handling, no double processing
+
+**Endpoints Implemented:**
+1. **POST /items/{item_id}/photo** — Upload photo with optional cropping
+2. **PUT /items/{item_id}/photo** — Replace photo with race-safe deletion (FIX-1)
+3. **DELETE /items/{item_id}/photo** — Delete photo with race-safe handling
+
+**Test Results:**
+- Backend: **45/45 tests passing** ✅
+- All existing tests still pass (zero regressions)
+- Photo API endpoints integrated cleanly into items router
+
+**Commit Created:**
+- `af8dcbae` fix(phase1): fix race condition, path traversal, double processing, validation in photo API
+
+---
+
+## WHAT WAS COMPLETED IN SESSION 11 (Major UI/UX Optimization)
 
 ### Major Design Overhaul — COMPLETE ✅