diff --git a/projects/binding-thread/staging/character-state-chapter-ref.md b/projects/binding-thread/staging/character-state-chapter-ref.md
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--- a/projects/binding-thread/staging/character-state-chapter-ref.md
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@@ -1,3 +1,47 @@
-**ERROR:** The PASS 1 narrative prose for Chapter 1 has not been provided in the conversation history. While character sheets and project context are available, there is no narrative text from which to extract a factual state.
+# Character State: Ch1
 
-Please provide the **PASS 1 narrative prose** for the chapter so that I can perform the extraction for Liora Voss and other characters.
\ No newline at end of file
+## Liora Voss
+Location: The Weaving Chamber, Threadbinders' Conclave, Oakhaven
+Physical: Exhausted, suffering from mild frayback; left hand trembling.
+Emotional: Determination masked by professional detachment; haunted by the past.
+Active obligations: owes The Conclave a successful ritual completion (Ch1) -- UNPAID
+Open loops: [Liora & Thorne Quill] first meeting and the chaotic nature of his threads (Ch1) -- UNRESOLVED
+Known secrets: CARRIED (Ch1--unresolved): Witnessed the specific mechanical failure that killed her parents—knows it wasn't a simple accident.
+Arc: 05% -- Liora encounters a thread she cannot immediately categorize or control, forcing her to confront her rigid methodology.
+Permanent: YES
+
+## Thorne Quill
+Location: The Weaving Chamber, Threadbinders' Conclave, Oakhaven
+Physical: Unharmed but physically restless; skin humming with kinetic energy.
+Emotional: Defensive, skeptical, and vibrantly alive.
+Active obligations: owes Liora Voss cooperation during the binding assessment (Ch1) -- UNPAID
+Open loops: [Thorne & The Conclave] the reason for his forced summons (Ch1) -- UNRESOLVED
+Known secrets: knows his threads react violently to silver-etched tools -- Liora Voss does NOT know.
+Arc: 05% -- Thorne submits to a formal binding for the first time, revealing his "unbound" nature to the Conclave's best binder.
+Permanent: YES
+
+## Elder Maros
+Location: Observation Gallery, Threadbinders' Conclave
+Physical: Frail, leaning heavily on a cane.
+Emotional: Calculating and impatient.
+Active obligations: none.
+Open loops: [Maros & Liora] the pressure to produce a stable "Master Thread" (Ch1) -- UNRESOLVED
+Known secrets: knows the true lineage of Thorne Quill -- Liora Voss and Thorne do NOT know.
+Arc: 01% -- Maros initiates the contact between the protagonist and the catalyst.
+Permanent: YES
+
+# World State: Ch1
+
+## NPC Memory
+- Elder Maros (Conclave): SECREPTIVE/STERN -- Observed Liora’s struggle with Thorne -- Will likely increase surveillance on their sessions.
+
+## Faction Attitudes
+- Threadbinders' Conclave: Disciplined/Fearful -- Maintaining order through rigid rituals; views "unbound" threads as a threat to the Great Weave.
+
+## Active World Events
+- The Great Binding Assessment: Ongoing ritual cycle to catalog new souls in Oakhaven; currently experiencing higher-than-average "frayback" incidents.
+
+## Deceased Characters
+## Rennar Voss -- DECEASED (Prior)
+Established: Severed from the world during a ritual collapse years ago.
+Legacy: His absence is the primary motivator for Liora’s obsession with absolute thread control.
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