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Yes factory reset and your kobo is back to software version as it was sold. Factory installs current software when it is manufactured as they get updates. The problem is after factory reset it wants to connect to desktop Kobo software and that will install latest version of Kobo software back on your e-reader. This might fix your problem or maybe not. All books and related data on kobo is gone including SQlite data base. Books on SD card is not erased. Kobo books you bought will be installed to Kobo unless they are marked not to load.
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