diff --git a/.planning/STATE.md b/.planning/STATE.md
index b5374bd..78cfa36 100644
--- a/.planning/STATE.md
+++ b/.planning/STATE.md
@@ -3,15 +3,15 @@ gsd_state_version: 1.0
 milestone: v1.0
 milestone_name: milestone
 status: executing
-stopped_at: Completed 01-02-PLAN.md
-last_updated: "2026-04-09T09:15:38.954Z"
-last_activity: 2026-04-09
+stopped_at: Phase 1 complete
+last_updated: "2026-04-09"
+last_activity: 2026-04-09 -- Phase 1 verified and complete
 progress:
   total_phases: 3
   completed_phases: 1
   total_plans: 2
   completed_plans: 2
-  percent: 100
+  percent: 33
 ---
 
 # Project State
@@ -21,62 +21,45 @@ progress:
 See: .planning/PROJECT.md (updated 2026-04-09)
 
 **Core value:** Secrets never enter the Claude Code environment
-**Current focus:** Phase 1 - Minimal Viable Sandbox
+**Current focus:** Phase 2 (next)
 
 ## Current Position
 
-Phase: 1 of 3 (Minimal Viable Sandbox)
-Plan: 2 of 3 in current phase
-Status: Ready to execute
-Last activity: 2026-04-09
+Phase: 1 of 3 (Minimal Viable Sandbox) -- COMPLETE
+Plan: 2 of 2 in phase 1
+Status: Phase 1 complete, ready for Phase 2
+Last activity: 2026-04-09 -- Phase 1 verified and complete
 
-Progress: [░░░░░░░░░░] 0%
+Progress: [███░░░░░░░] 33%
 
 ## Performance Metrics
 
 **Velocity:**
 
-- Total plans completed: 0
-- Average duration: -
-- Total execution time: 0 hours
-
-**By Phase:**
-
-| Phase | Plans | Total | Avg/Plan |
-|-------|-------|-------|----------|
-| - | - | - | - |
-
-**Recent Trend:**
-
-- Last 5 plans: -
-- Trend: -
-
-*Updated after each plan completion*
 | Phase 01 P01 | 1min | 2 tasks | 3 files |
-| Phase 01 P02 | 1min | 2 tasks | 1 files |
+| Phase 01 P02 | 1min | 2 tasks | 1 file |
 
 ## Accumulated Context
 
 ### Decisions
 
-Decisions are logged in PROJECT.md Key Decisions table.
-Recent decisions affecting current work:
-
--
-
-- [Phase 01]: Claude Code discovered from host PATH at runtime, not bundled as runtimeInput
+- [Phase 01]: Claude Code provided via nix-claude-code flake (ryoppippi/nix-claude-code), not host PATH
 - [Phase 01]: readlink -f required to resolve NixOS profile symlinks to real nix store paths for bwrap visibility
+- [Phase 01]: SANDBOX_PATH built via makeBinPath in flake.nix to prevent host PATH leakage
+- [Phase 01]: SHELL set to nix store bash path, not /bin/bash (doesn't exist in tmpfs root)
+- [Phase 01]: --shell flag added for manual sandbox debugging
+- [Phase 01]: SSL cert verification failure is a host-level NixOS issue, not sandbox-specific
 
 ### Pending Todos
 
-None yet.
+None.
 
 ### Blockers/Concerns
 
-- Research flags: verify `comma-with-db` packaging in current nix-index-database flake, verify `--clearenv` in nixpkgs bwrap version, test daemon socket bind-mount behavior
+- SSL cert verification fails system-wide (host + sandbox) -- NixOS/OpenSSL issue, not claudebox
 
 ## Session Continuity
 
-Last session: 2026-04-09T09:15:38.952Z
-Stopped at: Completed 01-02-PLAN.md
+Last session: 2026-04-09
+Stopped at: Phase 1 complete
 Resume file: None