UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  FORM 10-KSB/A
                        (AMENDMENT NO. 1 TO FORM 10-KSB)

[Mark One]

|_|      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

                   For the fiscal year ended December 31, 2003

|X|      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

        For the transition period from July 1, 2003 to December 31, 2003.

                          Commission file no.: 0-22848

                          TNX TELEVISION HOLDINGS, INC.
                  --------------------------------------------
                 (Name of small business issuer in its charter)

            Delaware                               95-4868287
   ------------------------------       ---------------------------------
  (State or other jurisdiction of      (I.R.S. Employer Identification No.)
   incorporation or organization)

        1811 Chestnut Street, Suite 120, Philadelphia, Pennsylvania 19103
               (Address of principal executive offices) (Zip Code)

       Registrant's telephone number, including area code: (215) 972-8191

        Securities registered pursuant to Section 12(b) of the Act: None

          Securities registered under Section 12(g) of the Exchange Act

                          $.001 Par Value Common Stock
                          ----------------------------
                                (Title of Class)

      Check  whether  the issuer (1) filed all  reports  required to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter period that the  Registrant was required to file such reports),  and (2)
has been subject to such filing requirements for the past 90 days. Yes |X| No|_|

      Check if there is no disclosure  of delinquent  filers in response to Item
405 of  Regulation  S-B  contained  in  this  form,  and no  disclosure  will be
contained,  to the  best of  registrant's  knowledge,  in  definitive  proxy  or
information  statements  incorporated  by  reference  in Part  III of this  Form
10-KSB/A or any amendment to this Form 10-KSB/A. |_|

      The issuer's revenues for the fiscal year ended December 31, 2003 were $0.
The aggregate market value of the issuer's voting common equity held as of March
31, 2004 by non-affiliates of the Issuer was approximately  $39,541,366 based on
the closing price of $2.20 as of March 31, 2004.

      As of April 28, 2004, the issuer had  45,815,924  shares of its $0.001 par
value common stock outstanding.

      Transitional Small Business Disclosure Format (check one): Yes |_| No |X|


                                       1
<PAGE>

EXPLANATORY NOTE

      The purpose of this  amendment is to include the  information  required by
Part III of Form 10-KSB,  which was omitted  from our Form 10-KSB as  originally
filed on April 14, 2004 (the "Original  Filing").  Each of the  below-referenced
items in Part III are  amended  by  deleting  the  items in their  entirety  and
replacing them with the items set forth herein.  Any item in the Original Filing
not expressly changed hereby shall be as set forth in the Original Filing.

                                    PART III

ITEM 9.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

THE BOARD OF DIRECTORS

      Our Board of Directors  currently consists of five members.  Our directors
are elected at the Annual  Meeting of  stockholders  and hold office until their
successors are elected and qualified.

      Set forth below are the names of our directors, their ages, their offices,
if any, their principal  occupations or employment for the past five years,  the
length of their tenure as directors  and the names of other public  companies in
which such persons hold directorships.

Name                 Age   Position

Irwin L. Gross       60    Chairman, Chief Executive Officer and President
Stephen J. Ollier    53    Director and Managing Director of TNCI UK, Ltd.
Nicolas Rogerson     60    Director
S. Lance Silver      35    Director
Howard Silverstone   43    Director

      IRWIN L. GROSS became our Chairman,  President and Chief Executive Officer
upon the completion of the reverse merger in November 2003. Mr. Gross has been a
director of TNCI UK, Ltd., our wholly-owned subsidiary, since 1999. In 1998, Mr.
Gross founded and is currently the  principal of the  financial  services  firm,
Ocean Castle  Partners,  LLC. Since 1998, Mr. Gross has been Chairman and CEO of
Global Technologies, Ltd., a technology incubator. Mr. Gross became Chairman and
Chief  Executive  Officer of The Network  Connection,  Inc. in 1999. The Network
Connection,  Inc.  filed for Chapter 11 bankruptcy  protection on March 24, 2001
and subsequently filed for Chapter 7 bankruptcy  protection on January 17, 2002,
whereupon Mr. Gross resigned as Chief Executive Officer and Chairman.  From 1984
to 1998, Mr. Gross was Chairman and Chief Executive  Officer of ICC Technologies
("ICC"), a desiccant-based  air conditioning  company.  In 1998, ICC completed a
reverse  merger with Rare  Medium,  Inc.,  an Internet and  e-commerce  business
solutions company. Mr. Gross earned a Bachelor of Arts degree in accounting from
Temple University and a J.D. degree from Villanova University School of Law.

      STEPHEN J. OLLIER became a director in December  2003. Mr. Ollier has been
the Managing  Director of TNCI UK, Ltd. since 1999 and has been  responsible for
the  operations  of  TNCI  UK  and  the   development  and  marketing  of  TNX's
Digital-Rail  system.  From 1994 until 1999, Mr. Ollier was the Division Head at
ALSTOM Railway Maintenance  Services Ltd., a division of ALSTOM,  which provided
railway  maintenance  in  Europe  and  Asia.  Mr.  Ollier  has  over 33 years of
experience   in  the  UK  railways   industry,   including  20  years  with  the
publicly-owned British Railways, where he held several management positions. Mr.
Ollier obtained a degree in mechanical  engineering  from Salford  University in
the UK and is a member of the Institution of Mechanical Engineers.

      NICOLAS  ROGERSON became a director in December 2003. Mr. Rogerson was the
founding  partner and has been a director since 2000 of Concept 2 Profit Ltd., a
business developer. From 1969 to 2000, Mr. Rogerson has worked for Dewe Rogerson
Group,  a  company  that he  co-founded  and one of the  UK's  first  integrated
financial   communications   companies,   providing   a   range   of   marketing
communications  services  primarily to listed,  soon-to be listed  companies and
financial  institutions and became its Managing Director in 1975. In 1985, there
was a reorganization reflecting the growing international nature of the business
and Mr.  Rogerson  was  appointed  Group  CEO  and  Chairman  of  Dewe  Rogerson
International.  In 1998, Mr. Rogerson  negotiated and completed the sale of Dewe
Rogerson  Group to Incepta plc. Mr.  Rogerson  attended  Winchester  College and
Magdalene College in the UK.


                                       2
<PAGE>

      S. LANCE SILVER became a director in December 2003 and has been a director
of TNCI UK since 1999.  Mr.  Silver is also a partner in the  Philadelphia-based
law firm of Wilk,  Brand & Silver,  P.C. Mr.  Silver's  other  current  business
interests  include  control of the Silk Real Estate Group,  which consists of 20
properties in the Philadelphia  area and ownership of Silk Abstract  Company,  a
provider of title  insurance and related land transfer  services in Pennsylvania
and New Jersey.  From  September  1999 to December  2002,  Mr.  Silver served as
General Counsel of Global  Technologies,  Ltd., a technology  incubator that was
publicly  traded on the Nasdaq Stock Market.  From  September  1994 to September
1999, Mr. Silver practiced in the corporate  department of Wolf Block Schorr and
Solis-Cohen,  LLP,  where he  specialized  in  securities  law and  mergers  and
acquisitions. Mr. Silver received his Juris Doctor from Temple University School
of Law,  where he  graduated  magna cum  laude and Law  Review.  He  received  a
Bachelor of Science in Finance from Pennsylvania State University.

      HOWARD SILVERSTONE became a director in December 2003. Mr. Silverstone has
extensive  experience  with  forensic  and  investigative  accounting  and  is a
licensed certified public accountant in Pennsylvania and a chartered  accountant
in the UK. Over the past ten years, Mr. Silverstone has worked as a principal in
the Philadelphia  office of Kroll Inc. Mr. Silverstone is co-author of "Forensic
Accounting  and Fraud  Investigation  for  Non-Experts,"  has had several papers
published in  accounting  and law trade  journals and has  testified on numerous
occasions on issues  involving lost profits,  fraud and  construction  claims in
federal and state courts,  mediations and  arbitrations.  Mr.  Silverstone has a
Bachelor  of Arts  degree in  accounting  from London  Guildhall  University  in
London, England.

COMMITTEES OF THE BOARD OF DIRECTORS AND MEETINGS

      Audit  Committee.  Our Audit  Committee  currently has two members,  Lance
Silver and Howard  Silverstone.  Our Audit Committee has the authority to retain
and  terminate  the  services of our  independent  accountants,  reviews  annual
financial  statements,  considers  matters  relating  to  accounting  policy and
internal  controls  and reviews the scope of annual  audits.  All members of the
Audit Committee satisfy the current  independence  standards  promulgated by the
Securities and Exchange  Commission,  as such standards  apply  specifically  to
members of audit  committees.  Our Board has  determined  that Lance  Silver and
Howard  Silverstone  qualify as independent under the definition  promulgated by
the American Stock Exchange.  We are currently  seeking an additional  member of
the Board who meets the criteria for audit committee independence. The Board has
determined that Mr. Silverstone is an "audit committee financial expert," as the
Securities  and  Exchange  Commission  has  defined  that  term in  Item  401 of
Regulation S-B.

      Compensation  Committee.  Our Compensation  Committee  currently has three
members, Nicolas Rogerson (Chairman),  Lance Silver and Howard Silverstone.  Our
Compensation Committee reviews, approves and makes recommendations regarding our
compensation  policies,  practices  and  procedures  to  ensure  that  legal and
fiduciary  responsibilities  of the Board of Directors  are carried out and that
such  policies,   practices  and  procedures  contribute  to  our  success.  The
Compensation  Committee is responsible for the determination of the compensation
of our Chief Executive Officer.

      Nominating and Governance Committee. During fiscal 2003, we did not have a
Nominating  Committee.  On April 21, 2004,  the Board  formed a  Nominating  and
Governance  Committee,   which  consists  of  Nicolas  Rogerson,   Lance  Silver
(Chairman)  and  Howard   Silverstone.   This   committee's   role  is  to  make
recommendations  to the full Board as to the size and  composition of the Board,
make  recommendations as to particular  nominees and monitor a process to assess
board effectiveness and develop,  implement and monitor our corporate governance
guidelines.

      CONSULTING FEES TO DIRECTORS

      We have an agreement  with  Belgravia  Investment  Partners,  LP, of which
Irwin Gross is the managing partner, to provide management services. As of April
14,  2004,  the Company had paid  Belgravia  an  aggregate  of $105,000 for such
management  services.  Belgravia's  total  remuneration for such services during
fiscal year 2003 was $25,000.


                                       3
<PAGE>

      Ocean Castle Partners, LLC received warrants to purchase 398,103 shares of
our common stock at an exercise price of $.129 and warrants to purchase  327,047
shares of our common stock at an exercise  price of $.25 for  providing  certain
investor  relations  services.  TNCI  UK  also  entered  into a  management  and
consulting agreement (the "Management  Agreement") with Ocean Castle in February
2002. The Management  Agreement provides for the payment of $33,000 per month to
Ocean Castle for 24 months and the delivery of warrants to purchase common stock
of TNCI UK. TNCI UK has issued and  delivered  the  warrants,  but has only paid
nine of the 24  monthly  installments.  As a result,  $462,000  was due to Ocean
Castle as of December 31, 2003 under the Management Agreement.  The principal of
Ocean Castle is our Chairman, CEO and President, Irwin Gross.

      On February 19, 2004,  Nicolas  Rogerson,  a  non-employee  director,  was
granted options to purchase  250,000 shares of common stock at an exercise price
of $1.25 per share for his services as a director,  Board  committee  member and
consultant.  One-sixth of the options (41,667) vested  immediately,  41,667 will
vest on August 15, 2004 and 83,333  will vest on August 15, 2005 and 2006.  This
grant covers his fees for Board,  committee and consulting services. He does not
receive  formula option grants for joining the Board or serving on committees as
described in "Item 10.  Executive  Compensation  -  Compensation  of Directors."
Compensation  for  Mr.  Rogerson's   consulting  services  also  consists  of  a
(pound)17,000 annual contribution to the salary of his administrative assistant.

EXECUTIVE OFFICERS

      The following table sets forth certain  information  regarding our current
executive officers who are not also directors.

 Name                  Age        Position

 Philip A. Campbell    46         Commerical Director, TNCI UK Ltd.
 Norman Fetterman      62         Chief Financial Officer
 David N. Shevrin      41         Vice President of Strategic Planning and
                                  Finance and Secretary

      PHILIP A.  CAMPBELL  joined TNCI UK, Ltd. in March 2000 as its  Commercial
Director.  Prior to joining TNCI UK, Mr. Campbell was the Director of Commercial
Services  of  ALSTOM  Train  Services  Ltd.,  a  division  of  ALSTOM  Corporate
Communications  from 1988 through 1999,  where he was an integral part of a team
that successfully secured several multi-million dollar contracts.  In 1997-1998,
Mr.  Campbell  helped  develop  the  Materials  Division  of the ALSTOM  Service
business,  where he was  instrumental  in  establishing  a range  of  innovative
contractual  relationships by that company. Also active on international efforts
while at  ALSTOM,  he  succeeded  in  setting  up a Hong Kong  based  purchasing
operation to utilize sourcing from mainland China in support of ALSTOM contracts
in that region. In 1995-1997,  he joined the newly established  Service business
to create its commercial  department.  In 1988, he joined ALSTOM's multinational
team to build the  Eurostar  trains  for  operation  between  London,  Paris and
Brussels. As Project Accountant, he was instrumental in negotiating a beneficial
international  taxation structure for the companies  involved.  Prior to joining
ALSTOM,  Mr.  Campbell held a number of financial  posts with companies based in
Europe and the Gulf.

      NORMAN FETTERMAN became our Chief Financial  Officer on February 12, 2004.
In 1996, Mr.  Fetterman  formed Alfred Henry Corporate  Finance Limited ("Alfred
Henry")  with  Jeffreys  Henry,  Chartered  Accountants,   which  is  associated
worldwide  through  Jeffreys  Henry  International,   a  global  association  of
independent  firms of business  advisors  having a  membership  of some 80 firms
operating in over 40  countries.  Alfred  Henry is  regulated  by the  Financial
Services Authority of the UK, and raises development capital of (pound)1 million
to (pound)20 million for growing companies.  The company  specializes in pre-IPO
funds  and  restructuring  quoted  "shell"  companies.  Mr.  Fetterman  has been
qualified  as a chartered  accountant  since 1964 and a Fellow of the  Institute
since 1969.

      DAVID N.  SHEVRIN  assumed the  position of Vice  President  of  Strategic
Planning  and  Finance at the time of our  special  meeting of  stockholders  on
February 12, 2004. Mr. Shevrin  served as our Chief  Financial  Officer from the
completion of the merger in November  2003 through  February 12, 2004. He became
the our  Secretary  in  December  2003.  In 1998,  he  co-founded  Ocean  Castle
Investments,  LLC, a financial services firm and served as a Vice President.  He
led  the  firm's  investment  evaluations  and  provided  business  development,
strategic planning and on-going management support for the portfolio  companies.
From 1998 to 2002,  Mr. Shevrin served as Vice President and Secretary of Global
Technologies,  Ltd., a technology  incubator,  with primary  responsibility  for
business  development  and analysis.  From 1994 to 1998,  Mr.  Shevrin served as
Assistant to the Chief Executive  Officer at ICC  Technologies,  overseeing many
diverse corporate projects and played a key role in its reverse merger with Rare
Medium Corp.  Before then, Mr.  Shevrin  served as a Product  Manager with Kraft
General Foods, managing a portfolio of products. Mr. Shevrin received his M.B.A.
degree from Duke  University's  Fuqua School of Business and a B.A. in Economics
from Emory University.


                                       4
<PAGE>

COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.

      Based  solely  on a  review  of  Forms  3 and 4,  and  amendments  thereto
furnished to us under Rule 16a-3(e)  promulgated  under the Securities  Exchange
Act of 1934,  as amended,  during the most recent  fiscal  year,  and Form 5 and
amendments  thereto furnished to us with respect to its most recent fiscal year,
each of Irwin Gross, Stephen J. Ollier,  Nicholas Rogerson,  S. Lance Silver and
Howard  Silverstone  were not timely with the filing of a Form 3 required  under
Section 16(a) of the Exchange Act.

CODE OF CONDUCT AND ETHICS

      We have  adopted a code of conduct and ethics  that  applies to all of our
employees,  including  our  chief  executive  officer  and chief  financial  and
accounting  officers.  The text of the code of conduct and ethics is filed as an
exhibit to Annual Report on Form 10-KSB filed on April 14, 2003 and will be made
available  to  stockholders  without  charge,  upon  request,  in writing to the
Corporate   Secretary  at  1811  Chestnut  Street,   Suite  120,   Philadelphia,
Pennsylvania  19103.  Disclosure  regarding any  amendments to, or waivers from,
provisions  of the code of  conduct  and  ethics  that  apply to our  directors,
principal  executive and financial officers will be included in a Current Report
on Form 8-K within five  business  days  following  the date of the amendment or
waiver.

ITEM 10.         EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

         The following table provides certain summary information concerning the
compensation  earned  during the fiscal  years  ended June 30, 2002 and June 30,
2003, respectively, and, due to the change in our fiscal year end from June 30th
to December  31st,  the  twelve-month  period  ended  December  31, 2003 and the
six-month period ended December 31, 2003 for services  rendered by our (1) Chief
Executive  Officer,  (2) each of our other  most  highly  compensated  executive
officers  who  earned  over  $100,000  during the last  fiscal  year and (3) the
individual who acted as our Chief Executive Officer prior to the reverse merger.
The  information  provided for the  twelve-month  period ended December 31, 2003
will  overlap with the  information  provided for the fiscal year ended June 30,
2003 and with the six months ended December 31, 2003.  Unless  otherwise  noted,
the  compensation  paid to our  current  Chief  Executive  Officer and the other
officers  listed below (other than Ms.  Sherman) prior to November 13, 2003, the
date of the  reverse  merger,  was  paid  to  such  officers  by  TNCI  UK,  the
wholly-owned subsidiary of TNX Television Holdings, Inc.


                                       5
<PAGE>

<TABLE>
<CAPTION>
                                                                           LONG-TERM
                                                                         COMPENSATION
                                                                         ------------
                                                                            AWARDS
                                                                         ------------
NAME                                                                      SECURITIES
AND PRINCIPAL                                         OTHER ANNUAL    UNDERLYING OPTIONS/    ALL OTHER
POSITION              YEAR        SALARY       BONUS  COMPENSATION          SARS(#)         COMPENSATION
---------------       ----        ------       -----  ------------    -------------------   ------------
<S>                   <C>  <C>   <C>      <C>    <C>     <C>              <C>                   <C>




Irwin L. Gross,       2003 (1)   $0              $0      $0               327,047               $223,000 (5)
Chief Executive       2003 (2)   $0              $0      $0               725,150               $421,000 (6)
Officer, Chairman     2003 (3)   $0              $0      $0               1,724,303             $396,000 (7)
& President           2002 (4)   $0              $0      $0               0                     $165,000 (8)

David Shevrin,        2003 (1)   $7,833          $0      $0               270,795               $0
Chief Financial       2003 (2)   $7,833          $0      $0               270,795               $0
Officer &             2003 (3)   $0              $0      $0               248,211               $0
Secretary             2002 (4)   $0              $0      $0               0                     $0

Stephen J. Ollier     2003 (1)   $112,063        $0      $10,464 (9)      --                    $5,603 (10)
Managing              2003 (2)   $217,108        $0      $16,734 (9)      --                    $10,855 (10)
Director              2003 (3)   $208,319        $0      $17,968 (9)      767,801               $10,416 (10)
TNCI UK, Ltd.         2002 (4)   $191,277        $0      $16,336 (9)      --                    $9,564 (10)

Philip A. Campbell    2003 (1)   $77,582         $0      $8,523 (9)       --                    $3,879 (10)
Commercial            2003 (2)   $150,306        $0      $14,826 (9)      --                    $7,515 (10)
Director              2003 (3)   $144,221        $0      $13,816 (9)      698,000               $7,211 (10)
TNCI UK, Ltd.         2002 (4)   $132,423        $0      $12,584 (9)      --                    $6,621 (10)

Nicole Sherman,       2003 (1)   $0              $0      $0               --                    $0
Former Chief          2003 (2)   $0              $0      $0               --                    $0
Executive             2003 (3)   $0              $0      $0               --                    $0
Officer (11)          2002 (4)   $0              $0      $0               --                    $0

</TABLE>


(1)   On  February  2, 2004,  we changed  our fiscal  year end from June 30th to
      December 31st. The  compensation  in this row reflects  compensation  paid
      during the six months ended  December 31, 2003 and therefore  includes six
      months of  compensation  reflected  in the  following  row for the  twelve
      months ended December 31, 2003.

(2)   This row reflects  compensation  for the twelve months ended  December 31,
      2003.

(3)   This row reflects compensation for the fiscal year ended June 30, 2003.

(4)   This row reflects compensation for the fiscal year ended June 30, 2002.

(5)   Includes a $25,000 management fee paid to Belgravia  Investment  Partners,
      LP ("Belgravia"),  of which Mr. Gross is the managing partner and has sole
      voting and  dispositive  power and  $198,000  of accrued  consulting  fees
      payable to Ocean Castle Partners, LLC ("Ocean Castle"), of which Mr. Gross
      is the principal and has sole voting and  dispositive  power pursuant to a
      consulting  agreement with Ocean Castle.

(6)   Includes  a $25,000  management  fee paid to  Belgravia  and  $396,000  of
      accrued  consulting  fees payable to Ocean Castle pursuant to a consulting
      agreement.

(7)   Includes  $132,000 of consulting fees paid to Ocean Castle and $264,000 of
      accrued consulting fees payable to Ocean Castle,  pursuant to a consulting
      agreement.

(8)   Includes $165,000 of consulting fees paid to Ocean Castle Partners, LLC.

(9)   Other Annual Compensation for Messrs. Ollier and Campbell consisted of the
      payment of automobile  expenses  pursuant to the terms of their respective
      employment agreements.

(10)  All Other  Compensation  for  Messrs.  Ollier and  Campbell  consisted  of
      pension  plan  contributions  pursuant  to the  terms of their  respective
      employment agreements.

(11)  Ms. Sherman resigned as an officer on November 13, 2003 in connection with
      the reverse  merger.  Pursuant  to the  pre-merger  public  filings of SZM
      Distributors,  Inc., Ms. Sherman owned  21,740,000  shares of common stock
      prior to the  merger.  All but 10,000 of those  shares were  cancelled  in
      order to facilitate the merger.

OPTION GRANTS IN OUR LAST FISCAL YEAR

      The following  table shows grants of stock options that we made during the
twelve months ended December 31, 2003 to each of the executive officers named in
the Summary Compensation Table, above.


                                       6
<PAGE>

<TABLE>
<CAPTION>

                                                    Individual Grants
                                                    -----------------

                              % of Total
                               Number of             Options/SARs
                              Securities              Granted to                  Exercise
                              Underlying             Employees in                 or Base
                             Options/SARs          Fiscal Year Ended               Price           Expiration
   Name                      Granted (#) (1)       December 31, 2003              ($/Share)           Date
-------------               ---------------       ------------------             ---------         ----------

<S>                             <C>                      <C>                       <C>                       <C>
Irwin L. Gross                  398,103                  35.2%                     $0.129               Oct. 1, 2008

                                327,047                  28.9%                     $0.25               Aug. 30, 2009

David N. Shevrin                270,795                  23.9%                     $0.129              Aug. 30, 2006

Stephen J. Ollier                 --                      --                         --                      --

Philip A. Campbell                --                      --                         --                      --

Nicole Sherman                    --                      --                         --                      --
</TABLE>

(1)   The options  were  granted  prior to the  adoption  of our 2004  Employee,
      Director and  Consultant  Stock Option  Plan.  The options  granted to the
      above named executive officers are non-qualified  stock options and vested
      at the date of grant.

      AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES

      The following table shows  information  regarding  exercises of options to
purchase  our  common  stock by each  executive  officer  named  in the  Summary
Compensation  Table during the twelve months ended  December 31, 2003. The table
also shows the aggregate  value of options held by each executive  officer named
in the Summary  Compensation  Table as of December  31,  2003.  The value of the
unexercised in-the-money options at fiscal year end is based on a value of $2.00
per share, the closing price of our stock on the Over-the-Counter Bulletin Board
on December 30, 2003 (the last  trading day prior to the fiscal year end),  less
the per share exercise price.

<TABLE>
<CAPTION>
                                                             Number of
                                                        Securities Underlying              Value of the Unexercised
                                                         Unexercised Options                 In-The-Money Options
                              Shares                     at Fiscal Year-Ended                at Fiscal Year-Ended
                             Acquired                      December 31, 2003                  December 31, 2003
                                on         Value      ---------------------------     -------------------------------
        Name                 Exercise    Realized(1)  Exercisable   Unexercisable     Exercisable       Unexercisable
     -----------------       --------    ---------    -----------   -------------     -----------       -------------
<S>                          <C>            <C>        <C>                <C>              <C>
     Irwin L. Gross          2,051,350      $0         2,051,350          0                $3,798,503               --
     David N. Shevrin        519,006        $0         519,006            0                $971,061                 --
     Stephen J. Ollier       811,951        $0         811,951            0                $1,519,116               --
     Philip A. Campbell      698,000        $0         698,000            0                $1,305,958               --
     Nicole Sherman          0              $0         0                  0                $0                       --
</TABLE>

(1)   Amounts  shown in this column do not  necessarily  represent  actual value
      realized from the sale of the shares  acquired upon exercise of the option
      because in many cases the shares are not sold on exercise  but continue to
      be held by the executive officer  exercising the option. The amounts shown
      represent the difference  between the option exercise price and the market
      price on the date of  exercise,  which is the amount  that would have been
      realized if the shares had been sold immediately upon exercise.

COMPENSATION OF DIRECTORS

      We engaged an independent compensation consulting firm in order to develop
an  appropriate   compensation  scheme  for  our  non-employee  directors.   Our
non-employee  directors  do not receive  monetary  compensation,  but rather are
eligible to  participate in our 2004  Employee,  Director and  Consultant  Stock
Option Plan. We provided an initial  grant of options to purchase  40,000 shares
of common  stock to each  non-employee  director  that joined the Board prior to
January  31,  2004.  Non-employee  directors  who join the Board  subsequent  to
January 31, 2004 shall be entitled to a grant of 30,000  shares of common  stock
upon first joining the Board during 2004.  Non-employee  directors that serve on
one or more Board committees are also entitled to the following annual grants of
options to purchase common stock:  (i) 15,000 options for service as a member of
our  Audit  Committee,  (ii)  10,000  options  for  service  as a member  of our
Compensation Committee,  and (iii) 10,000 options for service as a member of our
Nominating and Governance Committee,  all at an exercise price equal to the fair
market  value of the common  stock on the grant date.  The chairman of the Audit
Committee  is  entitled to 25,000  options,  the  chairman  of the  Compensation
Committee to 15,000  options and the chairman of the  Nominating  and Governance
Committee  to 20,000  options.  The options  granted for joining the Board under
this formula vest one-half following one year of service after the date of grant
and  one-quarter  per year for the subsequent two years.  Options  granted under
this formula to  non-employee  directors  for committee  service vest  one-third
following one year of service after the date of grant and one-third per year for
the subsequent two years.  No options were granted under this formula during the
twelve months ended December 31, 2003.  Options granted during the twelve months
ended December 31, 2003 to any named executive officers serving on the Board are
reported under  "Executive  Compensation  -- Option Grants in Last Fiscal Year."
Expenses incurred in attending Board of Director meetings and committee meetings
are reimbursed.

      In addition,  on February  19,  2004,  Nicolas  Rogerson,  a  non-employee
director,  was granted options to purchase  250,000 shares of common stock at an
exercise  price of  $1.25  per  share  for his  services  as a  director,  Board
committee  member and  consultant.  One-sixth  of the  options  (41,667)  vested
immediately,  41,667 will vest on August 15, 2004 and 83,333 will vest on August
15,  2005  and  2006.  This  grant  covers  his fees for  Board,  committee  and
consulting  services.  He does not receive formula option grants for joining the
Board  or  serving  on  committees  as  described  above.  Compensation  for Mr.
Rogerson's   consulting  services  also  consists  of  a  (pound)17,000   annual
contribution to the salary of his administrative assistant.

EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS

      Stephen J. Ollier is employed as the Managing  Director of TNCI UK Limited
pursuant to a Service  Agreement,  dated August 29, 2001, by and between TNCI UK
and Mr. Ollier. Pursuant to such agreement, Mr. Ollier's employment commenced on
September  20,  1999  and will  continue  (subject  to  earlier  termination  in
accordance  with the terms of the  agreement)  until  terminated by either party
upon at  least  six  months  prior  written  notice.  In  consideration  for his
employment,  Mr.  Ollier  shall  receive  a salary of  (pound)130,000,  which is
subject  to an annual  increase  at our  discretion.  In  addition,  Mr.  Ollier
receives monthly  contributions to his personal  non-employer-sponsored  pension
plan  at a rate  of 5% of his  monthly  basic  salary,  in  addition  to  health
insurance  coverage  and  reasonable  business  and travel  expenses,  including
reimbursement for phone calls made in connection with his duties.  Mr. Ollier is
also entitled to an automobile  allowance and to  participate in TNCI UK's bonus
scheme,  which  participation  he has  waived in favor of  participation  in TNX
Television  Holdings'  bonus  scheme and stock  option plan for as long as he is
employed by TNCI UK. While the Service  Agreement also contains a provision that
would entitle Mr. Ollier to subscribe for up to 4.6% of the equity share capital
in TNCI UK, at a Board  Meeting held on October 22, 2003,  Mr.  Ollier agreed to
waive such provision and instead  agreed to accept  767,800  options to purchase
our common stock subsequent to the merger,  which options have since been issued
in full.  The agreement is terminable by TNCI UK at any time in the event of his
breach of the agreement, gross misconduct or conviction of a criminal offense or
if TNCI UK  becomes  bankrupt.  In the event of  termination  by TNCI UK for any
other reason, Mr. Ollier is entitled to a severance package.  The agreement also
contains confidentiality, non-solicitation and non-competition provisions.


                                       8
<PAGE>

      Phillip Campbell is employed as the Commercial Director of TNCI UK Limited
pursuant to a Service  Agreement,  dated August 29, 2001, by and between TNCI UK
and  Mr.  Campbell.  Pursuant  to  such  agreement,  Mr.  Campbell's  employment
commenced on March 1, 2000 and will continue (subject to earlier  termination in
accordance  with the terms of the  agreement)  until  terminated by either party
upon at  least  six  months  prior  written  notice.  In  consideration  for his
employment,  Mr.  Campbell  shall  receive a salary of  (pound)90,000,  which is
subject to an annual  increase at our  discretion.  In  addition,  Mr.  Campbell
receives monthly  contributions to his personal  non-employer-sponsored  pension
plan  at a rate  of 5% of his  monthly  basic  salary,  in  addition  to  health
insurance  coverage  and  reasonable  business  and travel  expenses,  including
reimbursement  for phone calls made in connection with his duties.  Mr. Campbell
is also entitled to an  automobile  allowance  and to  participate  in TNCI UK's
bonus scheme, which participation he has waived in favor of participation in TNX
Television  Holdings'  bonus  scheme and stock  option plan for as long as he is
employed by TNCI UK. While the Service  Agreement also contains a provision that
would entitle Mr. Campbell to subscribe for up to 2% of the equity share capital
in TNCI UK, at a Board Meeting held on October 22, 2003, Mr.  Campbell agreed to
waive such provision and instead  agreed to accept  698,000  options to purchase
our common stock subsequent to the merger,  which options have since been issued
in full.  The agreement is terminable by TNCI UK at any time in the event of his
breach of such agreement,  gross  misconduct or conviction of a criminal offense
or if TNCI UK becomes  bankrupt.  In the event of termination by TNCI UK for any
other reason,  Mr.  Campbell is entitled to a severance  payment equal to 50% of
his then current  annual salary.  The agreement  also contains  confidentiality,
non-solicitation and non-competition provisions.


      We plan to  renegotiate  the  employment  contracts of Messrs.  Ollier and
Campbell in the near future, as well as negotiate written employment  agreements
with our other executive officers. We have retained Compensation Resources, Inc.
a  compensation  consulting  firm,  to  recommend  a new  compensation  plan for
directors, officers and employees.

      In addition, our 2004 Employee,  Director and Consultant Stock Option Plan
provides  for  the  accelerated  vesting  of  all  outstanding  options  upon  a
change-in-control, unless otherwise determined by our Board of Directors.


ITEM 11.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
           RELATED STOCKHOLDER MATTERS.

      The  following  table  sets  forth  certain   information   regarding  the
beneficial ownership of our common stock as of April 23, 2004:

      o     the executive officers named in the summary compensation table;
      o     each of our directors;
      o     all of our current directors and executive officers as a group; and
      o     each  stockholder  known by us to own  beneficially  more  than five
            percent of our common stock.

      Beneficial ownership is determined in accordance with the rules of the SEC
and includes voting or investment  power with respect to the securities.  Shares
of common stock that may be acquired by an individual or group within 60 days of
April 23, 2004,  pursuant to the exercise of options or warrants,  are deemed to
be  outstanding  for the purpose of computing the  percentage  ownership of such
individual  or group,  but are not deemed to be  outstanding  for the purpose of
computing  the  percentage  ownership  of any other  person  shown in the table.
Percentage  of  ownership  is  based  on  45,815,924   shares  of  common  stock
outstanding on April 23, 2004.

      Except as  indicated  in  footnotes  to this  table,  we believe  that the
stockholders  named in this table have sole  voting  and  investment  power with
respect to all shares of common  stock shown to be  beneficially  owned by them,
based on information provided to us by such stockholders.


NAME OF BENEFICIAL OWNER           NUMBER OF SHARES       PERCENTAGE OF
--------------------------------   BENEFICIALLY OWNED     COMMON STOCK
DIRECTORS AND EXECUTIVE OFFICERS   ------------------     -------------

Irwin L. Gross(1)                  13,881,267               29.0%
Stephen J. Ollier (2)                 817,838                1.8%
Norman Fetterman                            0                  *
Nicolas Rogerson(3)                    41,667                  *
S. Lance Silver (4)                   176,476                  *
Howard Silverstone(5)                       0                  *
David N. Shevrin (6)                  715,235                1.5%
Philip A. Campbell (7)                703,887                1.5%
All current executive officers     16,336,371               34.3%

And directors
 as a group (seven  persons) (8)

FIVE PERCENT STOCKHOLDERS
Global Technologies, Ltd.(9)        5,863,301               12.8%
Platinum Partners
 Global Macro Fund, LP              3,370,177                7.4%
Belgravia
 Investment Partners, LP(10)        4,689,829               10.2%

--------------------
* Less than one percent.


                                       9
<PAGE>

(1) Includes (a)  4,204,337  shares held by Belgravia  Investment  Partners,  LP
("Belgravia"),  of which Mr. Gross is the  managing  partner and has sole voting
and dispositive power, (b) 776,787 shares held by Gross Investments Company, LP,
of which Mr. Gross is the managing  partner and has sole voting and  dispositive
power,  (c)  5,863,301  shares held by Global  Technologies,  Ltd., of which Mr.
Gross is Chief Executive Officer and has sole voting and dispositive  power, (d)
485,492  shares pledged to Belgravia by Reed  Properties  Inc.  granting  voting
control of such shares to Belgravia,  of which Mr. Gross is the managing partner
and has sole voting power, (e) 2,051,350 shares underlying  warrants and options
that are immediately  exercisable owned by Ocean Castle Partners,  LLC, of which
Mr. Gross is the principal and has sole voting and dispositive power.
(2) Includes 5,887 shares of common stock and 811,951 shares underlying warrants
and options that are exercisable within 60 days of the date hereof.
(3)  Includes  options  to  purchase  41,667  shares  of common  stock  that are
exercisable  within 60 days of the date  hereof.  Does not  include  options  to
purchase 208,333 shares of common stock that are not exercisable within the next
60 days.
(4) Includes 5,887 shares of common stock and options to purchase 170,589 shares
of common stock that are exercisable within 60 days of the date hereof. Does not
include  options  to  purchase  85,000  shares  of  common  stock  that  are not
exercisable within the next 60 days.
(5) Does not include  options to purchase 85,000 shares of common stock that are
not exercisable  within 60 days of the date hereof.
(6)  Includes  196,299  shares of common  stock and  519,006  shares  underlying
warrants and options that are exercisable within 60 days of the date hereof.
(7) Includes 5,887 shares of common stock and 698,000 shares underlying warrants
and options that are exercisable within 60 days of the date hereof.
(8)  Includes  12,043,807  shares of common  stock and  warrants  and options to
purchase 4,292,563 shares of common stock that are exercisable within 60 days of
the date hereof.  Does not include 378,333 options to purchase common stock that
are not exercisable within the next 60 days.
(9) Mr. Gross has sole voting and dispositive power.
(10)  Includes  485,492  shares  pledged to  Belgravia by Reed  Properties  Inc.
granting  voting  control of such  shares to  Belgravia,  of which Mr.  Gross is
managing partner and has sole voting and dispositive power.

ITEM 12.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      We issued a  promissory  note on  December  3,  2003 to Gross  Investments
Company,  LP for  $85,000.  The  managing  partner of Gross  Investments  is our
Chairman,  Chief Executive Officer and President,  Irwin Gross. The note accrued
interest  at a rate of ten  percent  per  annum,  was due  January  5,  2004 and
included a one-time  transaction  fee of $1,500 owed to Gross  Investments.  The
note was repaid on January 9, 2004 in the amount of $87,362.

      We  issued a second  promissory  note on  December  16,  2003 to  Platinum
Partners Global Macro Fund, LP for $100,000. Platinum is the beneficial owner of
3,370,177  shares of our common stock,  which  comprises 7.4% of our outstanding
common stock.  The note accrues interest at a rate of ten percent per annum, was
due January 16, 2004 and included a one-time  transaction  fee of $1,500 owed to
Platinum. The note was repaid on January 9, 2004 in the amount of $102,130.


                                       10
<PAGE>

      Prior to the reverse merger  transaction,  TNCI UK borrowed  $550,000 from
Belgravia Investment Partners, LP, of which Irwin Gross is the managing partner,
at an interest rate of ten percent per annum.  Interest  expense  totaled $3,915
for the year ended June 30, 2003 and $14,292 for the six months  ended  December
31, 2003.  Belgravia converted $500,000 of the principal and the interest of the
loan  into  2,081,259  shares  of our  common  stock  on  November  13,  2003 in
connection  with the merger.  The  remaining  $50,000  remains  payable by us to
Belgravia.  We  also  entered  into  an  agreement  with  Belgravia  to  provide
management services. As of April 14, 2004, we had paid Belgravia an aggregate of
$105,000 for such management  services.  Belgravia's total remuneration for such
services during fiscal 2003 was $25,000.



      Ocean Castle Partners, LLC received warrants to purchase 398,103 shares of
our common stock at an exercise price of $.129 and warrants to purchase  327,047
shares of our common stock at an exercise  price of $.25 for  providing  certain
investor  relations  services.  TNCI  UK  also  entered  into a  management  and
consulting agreement (the "Management  Agreement") with Ocean Castle in February
2002. The Management  Agreement provides for the payment of $33,000 per month to
Ocean  Castle for twenty  four  months and the  delivery of warrants to purchase
common stock of TNCI UK. TNCI UK has issued and  delivered the warrants but only
paid nine of the twenty four monthly installments. As a result, $462,000 was due
to Ocean Castle as of December 31, 2003,  under the  Management  Agreement.  The
principal of Ocean Castle is our Chairman, CEO and President, Irwin Gross.

      We issued a  promissory  note to Irwin Gross in April 2004 for $230,000 in
connection  with a bridge  loan made by Mr.  Gross to us. The note is payable on
demand on May 6, 2004. The note includes a one-time transaction fee of $2,000.

      On February 19, 2004,  Nicolas  Rogerson,  a  non-employee  director,  was
granted options to purchase  250,000 shares of common stock at an exercise price
of $1.25 per share for his services as a director,  Board  committee  member and
consultant.  One-sixth of the options (41,667) vested  immediately,  41,667 will
vest on August 15, 2004 and 83,333  will vest on August 15, 2005 and 2006.  This
grant  covers his fees for Board and  consulting  services.  He does not receive
formula  option  grants  for  joining  the Board or  serving  on  committees  as
described in "Item 10.  Executive  Compensation  -  Compensation  of Directors."
Compensation  for  Mr.  Rogerson's   consulting  services  also  consists  of  a
(pound)17,000 annual contribution to the salary of his administrative assistant.

      We believe that these  transactions  were  advantageous  to us and were on
terms no less  favorable to us than could have been obtained  from  unaffiliated
third parties.

ITEM 13.   EXHIBITS, LIST AND REPORTS ON FORM 8-K.

(A) EXHIBITS

EXHIBIT
NUMBER            DESCRIPTION OF EXHIBIT

2.1   Agreement and Plan of Merger dated November 12, 2003 among the Registrant,
      SZMD Acquisition II, Inc. and TNX Television, Inc. (1)

2.2   Certificate of Merger filed with the Delaware Secretary of State (2)

3.1   Certificate of Incorporation (3)

3.2   Bylaws (4)

3.3   Certificate  of  Designations,  Rights  and  Preferences  of 5%  Series  A
      Convertible Preferred Stock (5)

4.1   Specimen Common Stock Certificate (6)

4.2   TNX  Television  Holdings,  Inc. 2004  Employee,  Directors and Consultant
      Stock Option Plan (7)

4.3   Form of Incentive Stock Option Agreement under 2004 Stock Option Plan (8)

4.4   Form of Nonqualified  Stock Option  Agreement under 2004 Stock Option Plan
      (9)


                                       11
<PAGE>

4.5   Form of Warrant to  purchase  common  stock  between  the  Registrant  and
      certain   employees,   directors  and  consultants  prior  to  the  merger
      effectuated on November 12, 2003 (10)

4.6   Form  of  Stock  Option  Agreement  between  the  Registrant  and  certain
      employees,  directors and consultants  prior to the merger  effectuated on
      November 12, 2003 (11)

4.7   Form of Warrant to purchase the Common Stock of TNX  Television  Holdings,
      Inc. (12)

4.8   Registration  Rights  Agreement,  dated as of April 23, 2004, by and among
      TNX Television Holdings, Inc. and the stockholders listed therein. (13)

10.1  Form of Subscription Agreement in connection with the private placement of
      common stock completed in January 2004 (14)

10.2  Securities  Purchase  Agreement,  dated as of April 23, 2004, by and among
      TNX Television Holdings, Inc. and certain investors listed therein (15)

10.3  Service Agreement by and between TNCI UK, Ltd. and Stephen J. Ollier. *

10.4  Service Agreement by and between TNCI UK, Ltd. and Phillip Campbell. *

14    Corporate Code of Conduct and Ethics (16)

16    Letter from Hall & Company regarding change in certifying accountant (17)

21.1  Subsidiaries of the Registrant (18)

31.1  Certification of Chief Executive Officer *

31.2  Certification of Chief Financial Officer *

32.1  Certification of Principal  Executive  Officer pursuant to U.S.C.  Section
      1350 (19)

32.2  Certification of Principal  Financial  Officer pursuant to U.S.C.  Section
      1350 (20)

-------------------------------------
*     Filed herewith.

(1)   Incorporated  by  reference  to Exhibit 2.1 of our Current  Report on Form
      8-K/A filed on December 31, 2003.

(2)   Incorporated  by  reference  to Exhibit 2.2 of our Current  Report on Form
      8-K/A filed on December 31, 2003.

(3)   Incorporated  by  reference  to Exhibit  3.1 of our Annual  Report on Form
      10-KSB filed on April 14, 2004.

(4)   Incorporated  by  reference  to Exhibit  3.2 of our Annual  Report on Form
      10-KSB filed on April 14, 2004.

(5)   Incorporated by reference to Exhibit 3.1 of our Current Report on Form 8-K
      filed on April 28, 2004.

(6)   Incorporated  by  reference  to Exhibit  4.1 of our Annual  Report on Form
      10-KSB filed on April 14, 2004.

(7)   Incorporated  by  reference  to Exhibit  4.2 of our Annual  Report on Form
      10-KSB filed on April 14, 2004.

(8)   Incorporated  by  reference  to Exhibit  4.3 of our Annual  Report on Form
      10-KSB filed on April 14, 2004.

(9)   Incorporated  by  reference  to Exhibit  4.4 of our Annual  Report on Form
      10-KSB filed on April 14, 2004.


                                       12
<PAGE>

(10)  Incorporated  by  reference  to Exhibit  4.5 of our Annual  Report on Form
      10-KSB filed on April 14, 2004.

(11)  Incorporated  by  reference  to Exhibit  4.6 of our Annual  Report on Form
      10-KSB filed on April 14, 2004.

(12)  Incorporated by reference to Exhibit 4.1 of our Current Report on Form 8-K
      filed on April 28, 2004.

(13)  Incorporated by reference to Exhibit 4.1 of our Current Report on Form 8-K
      filed on April 28, 2004.

(14)  Incorporated  by reference  to Exhibit  10.1 of our Annual  Report on Form
      10-KSB filed on April 14, 2004.

(15)  Incorporated  by reference  to Exhibit 10.1 of our Current  Report on Form
      8-K filed on April 28, 2004.

(16)  Incorporated  by  reference  to Exhibit  14 of our  Annual  Report on Form
      10-KSB filed on April 14, 2004.

(17)  Incorporated  by  reference  to Exhibit 16 of our  Current  Report on Form
      8-K/A filed on December 31, 2003.

(18)  Incorporated  by reference  to Exhibit  21.1 of our Annual  Report on Form
      10-KSB filed on April 14, 2004.

(19)  Incorporated  by reference  to Exhibit  32.1 of our Annual  Report on Form
      10-KSB filed on April 14, 2004.

(20)  Incorporated  by reference  to Exhibit  32.2 of our Annual  Report on Form
      10-KSB filed on April 14, 2004.

ITEM 14.   PRINCIPAL ACCOUNTANTS AND FEES

      The following table presents fees for professional audit services rendered
by BDO Seidman,  LLP for the audit of our financial statements for the six-month
period ended  December 31, 2003 and the fiscal year ended June 30, 2003,  and by
Hall & Company  for the fiscal  year ended June 30,  2002,  and fees  billed for
other  services  rendered  by each  of BDO  Seidman,  LLP,  BDO  Stoy  Hayward,
Goldenberg  Rosenthal and Hall & Company  during those  periods.  On February 2,
2004, we changed our fiscal year from a fiscal year end of June 30th to a fiscal
year end of December 31st.

<TABLE>
<CAPTION>

                    SIX-MONTH PERIOD ENDED          FISCAL YEAR ENDED     FISCAL YEAR ENDED
                          DECEMBER 31,2003              JUNE 30, 2003     JUNE 30, 2002 (3)
                    ----------------------     ----------------------     -----------------
<S>                              <C>                        <C>                         <C>
AUDIT FEES:(1)                    $172,964                   $103,466                    $0
AUDIT RELATED                           $0                         $0                    $0
FEES:
TAX FEES:(2)                        $3,169                         $0                    $0
ALL OTHER FEES:                         $0                         $0                    $0
TOTAL                             $176,133                   $103,466                    $0
                                  --------                   --------              --------
</TABLE>


(1)   Audit  fees  consisted  of audit  work  performed  in the  preparation  of
      financial  statements,  as well as work  generally  only  the  independent
      auditor can reasonably be expected to provide,  such as statutory  audits.
      Of the $172,964 of audit fees accrued  during the  six-month  period ended
      December 31, 2003, $67,473 is attributable to BDO Seidman, LLP, $76,819 is
      attributable  to BDO Stoy Hayward,  $18,859 is  attributable to Goldenberg
      Rosenthal and $8,813 is attributable  to Hall & Company.  All of the audit
      fees accrued  during the fiscal year ended June 30, 2003 are  attributable
      to BDO Stoy Hayward.


                                       13
<PAGE>

(2)   Tax fees consist  principally  of assistance  with matters  related to the
      assessment  of the amount our annual taxes and state  franchise  taxes and
      tax work performed in connection  with our  application for listing on the
      AIM, as well as tax compliance  and  reporting,  all of which were paid to
      BDO Seidman, LLP.


(3)   This chart does not reflect fees paid by SZM  Distributors,  Inc. prior to
      the reverse merger completed on November 12, 2003.

      The  percentage  of services set forth above in the category tax fees that
were approved by the Audit Committee pursuant to Rule 2-01(c)(7)(i)(C) (relating
to the approval of a de minimis amount of non-audit  services after the fact but
before completion of the audit), was 100%.

POLICY  ON AUDIT  COMMITTEE  PRE-APPROVAL  OF AUDIT  AND  PERMISSIBLE  NON-AUDIT
SERVICES OF INDEPENDENT AUDITORS

      Consistent with SEC policies  regarding  auditor  independence,  the Audit
Committee has responsibility for appointing, setting compensation and overseeing
the work of the independent auditor. In recognition of this responsibility,  the
Audit   Committee  has  established  a  policy  to  pre-approve  all  audit  and
permissible non-audit services provided by the independent auditor.

      Prior to engagement of the independent  auditor for the next year's audit,
management  will submit an aggregate of services  expected to be rendered during
that year for each of four  categories  of services to the Audit  Committee  for
approval.

      1. AUDIT  services  include  audit work  performed in the  preparation  of
financial  statements,  as well as work  that  generally  only  the  independent
auditor  can  reasonably  be expected to  provide,  including  comfort  letters,
statutory  audits,  and attest  services and  consultation  regarding  financial
accounting and/or reporting standards.

      2. AUDIT-RELATED  services are for assurance and related services that are
traditionally  performed by the  independent  auditor,  including  due diligence
related to mergers and acquisitions,  employee benefit plan audits,  and special
procedures required to meet certain regulatory requirements.

      3.  TAX  services  include  all  services  performed  by  the  independent
auditor's tax personnel except those services  specifically related to the audit
of the financial  statements,  and includes fees in the areas of tax compliance,
tax planning, and tax advice.

      4. OTHER FEES are those associated with services not captured in the other
categories.  We  generally  do not request such  services  from the  independent
auditor.

      Prior to engagement,  the Audit Committee  pre-approves  these services by
category of service.  The fees are budgeted and the Audit Committee requires the
independent  auditor  and  management  to report  actual  fees versus the budget
periodically  throughout  the year by  category  of  service.  During  the year,
circumstances  may arise when it may become  necessary to engage the independent
auditor for additional  services not contemplated in the original  pre-approval.
In those instances,  the Audit Committee requires specific  pre-approval  before
engaging the independent auditor.

      The Audit Committee may delegate pre-approval  authority to one or more of
its members.  The member to whom such  authority is delegated  must report,  for
informational  purposes only, any pre-approval  decisions to the Audit Committee
at its next scheduled meeting.

                                       14
<PAGE>

                                   SIGNATURES

      In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
caused  this  Amendment  No. 1 to the  Report to be signed on its  behalf by the
undersigned, thereunto duly authorized.

Dated: April 29, 2004                    TNX TELEVISION HOLDINGS, INC.


                                         By: /s/  Irwin L. Gross
                                             ------------------------------
                                            Irwin L. Gross
                                            President & Chief Executive Officer

In accordance with the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following  persons in the  capacities and on
the dates indicated.

     SIGNATURE                      TITLE                            DATE
     ---------                      -----                            ----

/s/  Irwin L. Gross           President, Chief Executive         April 29, 2004
---------------------------   Officer and Chairman (principal
Irwin L. Gross                executive officer)


/s/  Norman Fetterman         Chief Financial Officer            April 29, 2004
---------------------------   (principal financial and
Norman Fetterman              accounting officer)


/s/  Stephen J. Ollier        Director                           April 29, 2004
---------------------------
Stephen J. Ollier


/s/  Nicolas Rogerson         Director                           April 29, 2004
---------------------------
Nicolas Rogerson


/s/  S. Lance Silver          Director                           April 29, 2004
---------------------------
S. Lance Silver

/s/  Howard Silverstone       Director                           April 29, 2004
---------------------------
Howard Silverstone


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