Help Please - Kobo Aura H2O Sideloading Problem

I have just purchased a new Kobo Aura H2O and currently own a Kobo Aura.

I went through the intial setup procedures with the H2O.

I copied a few books (free epub) to the H2O's SD card, but the reader will not add the books to the library on the device.

I tried copying to the main memory and have the same problem, the books will not display in the library on the device.

With the regular Aura, I would copy the books, and then when the device was restarted it would rebuild the library adding any new books.

I called Kobo tech support and they told me that the only way to copy a book was using Adobe Digital Edition, which I do NOT want to install on my computer.

I use calibre for library management on my PC and tried using it to transfer books the the H2O, also with no success.

Do I just have a bad device or am I doing something wrong, or has Kobo changed something making direct copying no longer a working method.

Any help would be GREATLY appreciated.

Thanks in advance.

Drew