The Destruction of Project P.E.G.A.S.U.S. was the battle that had started the Chitauri Invasion. The outcome of the battle was the complete destruction of almost all the work done in the Project P.E.G.A.S.U.S. facility and Hawkeye, Erik Selvig, and other S.H.I.E.L.D. agents falling under Loki's mind control.

Background

The events in Puente Antiguo, New Mexico spurred the World Security Council to order Nick Fury to divert the majority of S.H.I.E.L.D. resources into Project PAGASUS and Phase 2, a program designed to unlock the secrets of the Tesseract and create weapons based on their findings.

Loki was defeated by Thor and fell into Yggdrasil itself, transporting him to the Sanctuary. Loki came into contact with the Other, a servant of Thanos, who offered to make a pact that would allow him to become ruler of the Earth while Thanos would take the Tesseract.

Loki accepted, and Thanos gave Loki control of the Chitauri and provided him with the Scepter that was powered by the Mind Stone. It acted as both a very powerful weapon, and also as a mind control device, bending those who were touched by the gem's power to its will.

Accepting the deal without fear of failure, Loki turned his focus back to Earth in search of a suitable agent, someone close to the Tesseract. He found Erik Selvig, a friend of Thor's and renowned astrophysicist, who had been tasked with unlocking the secrets of the mysterious cube. In time, Selvig came to understand some of the Tesseract's capabilities, and through Loki's influence, developed equipment that would focus some of that power.