Alright, so I love a lot of what's going on on here and there's some I don't. The music kicks ass, the art style is awesome and the control feels great, not so fast I feel like I'm flying but faster than a brisk jog. I think the color could use a little more contrast or differentiation in palette.
One issue I noticed came from the sights. To start, it feels like the center dot reticle is only a vague estimation of the bullet's potential hit area, almost like the real reticle is a lot bigger, and if anything besides an enemy is in that cone it registers a no-hit. That or the scenery has much bigger hitboxes than the sprites let on.
Lastly is the health/damage, this feels like the biggest one. If I remember correctly, a lot of old 3d shooters with 2d sprites used medium speed projectiles instead of hitscan weapons. The scarcity of health and the nature of hitscan weapons made progress feel more like a gamble than any real increase in skill. This came down mostly to damage not really being avoidable in certain situations. Since the audio and visual cues for incoming damage are in, or extremely close to, the same frame damage is dealt, the only way to avoid damage is avoid like of sight, which is an issue when you need to do the shooties too. There were a few situations where I'd pop around a corner where I knew an enemy was, kill them as quickly as possible and still take damage because the AI decided to fire and doesn't seem to miss.
Now all that wouldn't be an issue in a more modern game with the magic reassembling flesh of today's super-soldier protagonists with regenerating health, but if health is a fixed pickup or rare drop, it NEEDS to be the player's fault every time damage is taken, otherwise it's just up to chance.
Now maybe I didn't spend enough time with the game to really get a feel for it, or I've some misconceptions on the mechanics, but I'm only being so nitpicky because I really love the base game this is building on. I hope you find this all fair and useful, and best of luck in the res of development! I look forward to seeing what comes of this!