Valid points mentioned above.
Your schematic shows no resistor at the base of the transistors. Usually a resistor is needed to limit bias current.
You report 1.2 V on those wires. If there were no resistors you ordinarily should read 0.6 V. So perhaps your schematic is a simplified schematic?
In any case you must install components to make sure the signal swings up and down by a few volts. The 7404 inputs need to have the signal go above and below certain volt levels, in order for it to decide whether the incoming signal is hi or low.