Ah, I see.
I think honestly you should try to phase out the "per hour" pricing, and just somehow make it so that each connection doesn't need a separate server, as it is just routing in the end, I think it would be easier to market just as a "no BS subscription!" VPN service, which I think could have a market.
As for the California LLC, I just asked because the California LLC is kind of known for being a PITA, with the fees, privacy, etc. and from what I know, you don't actually have one unless you have physical presence, but then there's some tax filing implications if you file in e.g. Delaware or Wyoming so I don't know too well.
GL!