diff --git a/dev_docs/SESSION_STATE.md b/dev_docs/SESSION_STATE.md
index 063405cd..bdabe0a4 100644
--- a/dev_docs/SESSION_STATE.md
+++ b/dev_docs/SESSION_STATE.md
@@ -3,7 +3,34 @@
 **Active AI:** Claude Haiku 4.5
 **Last Updated:** 2026-04-19
 **Current Version:** v1.10.16 (version saved and merged to master)
-**Branch:** refactor/ai-friendly (AI-Friendly Code Refactoring)
+**Branch:** refactor/ai-friendly (DO NOT MERGE to dev until all phases complete + user consent)
+
+---
+
+## STATUS: 🟡 IN PROGRESS — PHASE 4 VALIDATION (E2E SELECTORS INCOMPLETE)
+
+### Phase 4 Validation Summary
+- ✅ Backend (Pytest): **41/41 tests passing**
+- ✅ Frontend (Vitest): **291/291 tests passing**
+- ⚠️ E2E (Playwright): **1/16 login tests pass** — selectors still need fixing
+
+### E2E Infrastructure Status
+- Backend runs on port **8916**, Frontend on port **8917**
+- `playwright.config.ts` configured for port 8917 with `reuseExistingServer: true`
+- `data-testid` attributes added to 10+ component files (see commits since b294a51a)
+- 97 total `data-testid` values needed — most added, some still mismatched with UI
+
+### Next Steps for Next Session
+1. Fix remaining E2E selectors — run login workflow test to see current failures:
+   ```bash
+   cd /data/programare_AI/tfm_ainventory
+   source backend/venv/bin/activate && python -m uvicorn backend.main:app --port 8916 &
+   cd frontend
+   NEXT_PUBLIC_API_URL=http://localhost:8916 npm run dev -- --port 8917 &
+   npm run e2e -- --workers=1 e2e/workflows/1-login.spec.ts
+   ```
+2. OR: Skip to Phase 5 (code refactoring) — 332 unit tests provide strong safety net
+3. Phase 5 = actual code refactoring (smaller files, cleaner module organization)
 
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