History
Phase 2 was part of a plan initiated by S.H.I.E.L.D. after Thor landed in New Mexico to create weapons using the Tesseract to protect Earth.[1]
In response to the events in New Mexico and the revelation of alien worlds and powers beyond Earth, the World Security Council scrapped the Avengers Initiative in favor of a more practical approach: the development of weapons.
Phase 1 of Tesseract project was known as Project P.E.G.A.S.U.S. which dealt with harnessing the near-limitless energy of the Tesseract.
Phase 2 was to have dealt with S.H.I.E.L.D.'s creation of Tesseract powered weapons for the defense of Earth from alien threats. To this end, Nick Fury ordered all of the weapons confiscated from Hydra to be collected and studied.
In an early success for Phase 2, S.H.I.E.L.D. scientists were able to retro-fit the Destroyer into the Destroyer Armor Prototype Gun. Which Agent Coulson used against Loki.
After the Chitauri invasion of New York, and the removal of the Tesseract from Earth, Phase 2 was effectively ended.[2]